House report lays bare White House feud over Saudi nuclear push
A consulting firm once linked to former national security adviser Michael Flynn is continuing to push President Donald Trump to endorse a plan to build nuclear reactors in Saudi Arabia, despite warnings from whistleblowers that their earlier efforts appeared to violate U.S. law, House Democrats said in a report Tuesday.
The consultants from the firm IP3 International, which organized a White House meeting between the president and nuclear industry executives last week, were involved in pushing a “Middle East Marshall Plan” in the early days of the Trump administration that sparked concerns about Flynn’s conflicts of interest. That plan would have involved building dozens of nuclear reactors across the region, in a way that would have circumvented U.S. laws designed to prevent the spread of nuclear weapons.
Flynn, who is awaiting sentencing after pleading guilty to unrelated charges of lying to the FBI, has acknowledged he advised a subsidiary of IP3 about its nuclear plan.
“The whistleblowers who came forward have expressed significant concerns about the potential procedural and legal violations connected with rushing through a plan to transfer nuclear technology to Saudi Arabia,” the report prepared for Democrats on the House Oversight and Government Reform Committee said.
In addition, the panel said, “They have warned of conflicts of interest among top White House advisers that could implicate federal criminal statutes.”
The report does not indicate IP3 did anything illegal, but it is the most thorough accounting to date of how the firm used its connections to advance its concept through potentially conflicted Trump administration officials.
The report’s release comes amid the Trump administration’s efforts to beat out competitors from Russia and China to develop multibillion-dollar nuclear power plants in Saudi Arabia — and after Trump drew sharp criticism for downplaying Saudi Crown Prince Mohammed bin Salman’s role in the killing of Washington Post columnist Jamal Khashoggi in the Saudi Consulate in Istanbul last year.
And it comes ahead of a trip by Jared Kushner, the president’s son-in-law and adviser, to the Middle East later this month to discuss economic development.
IP3 organized a meeting with Trump last week where executives from companies such as Westinghouse, General Electric, Exelon, Centrus Energy, NuScale, TerraPower and LightBridge pitched the president to help them win contracts in the Middle East and elsewhere. The Trump administration is already on board with that effort, and Energy Secretary Rick Perry traveled to Saudi Arabia as recently as December to discuss a nuclear power deal, including developing a so-called 123 agreement that would limit the Saudi nuclear program to civilian uses.
That 123 agreement, named for a section of the U.S. Atomic Energy Act, is designed to prevent the spread of nuclear weapons, an increasing source of tensions in the Middle East following Trump’s decision to pull out of the Iranian nuclear pact. Salman has said the kingdom would quickly move to develop nuclear weaponsif Tehran succeeded in obtaining them.
But IP3 executives were preparing to move ahead with a deal to build nuclear plants in Saudi Arabia without an agreement to limit the country’s program to a civilian energy production, according to the House report.
Based on accounts and documents provided by whistleblowers, the report said one of IP3’s top officials delivered the firm’s nuclear plan to Flynn on Jan. 28, 2017 to pass along to Trump, and another document at the same time for Trump to recommend to the National Security Council. The firm kept pushing its idea through various channels even though political and career officials warned it circumvented national security protocol.
In another letter to Salman, IP3’s co-founders boasted of the inroads the firm had made with the Trump administration, even after the president forced Flynn out in February 2017 for lying to Vice President Mike Pence about his contacts with Russia. Three of the officials who signed the letter — retired Gen. Jack Keane, retired Rear Adm. Michael Hewitt and former Reagan administration national security adviser Robert “Bud” McFarlane — attended last week’s meeting with Trump.
“The agreements by President Trump and Mohammed bin Salman have established the framework for our unique opportunity to take the next steps with IP3 and the Kingdom of Saudi Arabia,” Keane, Hewitt, McFarlane and retired Gen. Keith Alexander wrote in a March 17, 2017, letter to the crown prince.
Also pressing the case for the Saudi plan at the White House were former NSC official Derek Harvey, as well as Trump confidant Tom Barrack — who has major business ties in the Middle East — and ex-Trump deputy campaign manager Rick Gates, a former Paul Manafort associate who has since pleaded guilty to conspiring against the United States and making false statements.
But whistleblowers warned the White House against the nuclear plan. One unidentified official in the Democrats’ report told NSC staff they “absolutely should not include the issue” in Trump’s briefing materials and called IP3’s plan “a scheme for these generals to make some money.”
Now, with a civilian nuclear program push gaining steam at the White House, security experts have raised concerns about the process, and the re-emergence of IP3 similarly troubled them.
“I see a problem that the Trump administration is giving time to IP3 and their ideas,” said Chen Kane, director of the Middle East nonproliferation program at the Middlebury Institute of International Studies, in an interview with POLITICO.
“The fact that the people previously pushing this scheme got the meeting with the president after all their attempts to get meetings elsewhere throughout the administration is suspicious,” said a former senior congressional staffer who worked on nuclear matters.
The White House and IP3 did not immediately respond to requests for comment Tuesday.
IP3 has repeatedly denied that it ever employed or paid Flynn in any capacity despite the fact Flynn listed that he served as an adviser to its subsidiary, IronBridge Group Inc., on his financial disclosure.
“Mike Flynn was never in IP3, he was never paid by IP3, he never advised IP3, he never had a stake in IP3,” Hewitt told POLITICO after last week’s meeting with Trump.
IP3 officials, however, acknowledge they have a relationship with Flynn and that they continue to support efforts to build reactors in the Middle East. McFarlane said they were all connected through ACU Strategic Partners, a company that for years had pushed a similar idea of building nuclear reactors in the Middle East through a consortium of companies. McFarlane said he, Hewitt and others left ACU when its managing partner, Andrew Copson, suggested they partner with Russia for the project.
“Mike [Flynn] then was chosen, appointed to the job in the Trump administration and it’s fair to say we had — IP3 as individuals — had said, ‘Mike, we’re not up for working with Russia,’” McFarlane, who described his role at ACU as “participating in meetings,” told POLITICO last week.
The report released Tuesday covers a period through March 2017, which the committee acknowledged was a narrow time frame. But its contents underscore experts’ worries that Flynn and his administration allies are continuing to push for a rushed and politically compromised nuclear cooperation deal with Saudi Arabia.
Those security and ethical quandaries compelled NSC legal adviser John Eisenberg to issue a directive stopping all work on the IP3 nuclear plant proposal and the Middle East Marshall Plan concept, the report said. Another source familiar with IP3’s activities during this period separately told POLITICO that NSC staff were forbidden from meeting with IP3 officials.
“According to the whistleblowers, on March 24, 2017, multiple employees raised to the NSC Legal Advisor their concerns, including a detailed description of reported unethical and potentially illegal actions by General Flynn and Mr. Harvey,” the report said. “In response to these concerns, National Security Advisor H.R. McMaster reportedly informed NSC staff that they should cease working on the IP3 proposal. However, NSC staff remained concerned because the same individuals continued their work on IP3’s proposal.”
McFarlane told POLITICO that around that time, it became “impossible” to get meetings with NSC officials.
McFarlane sent the firm’s nuclear expansion plan to Flynn and deputy national security adviser K.T. McFarland on Jan. 28, 2017, eight days after Trump’s inauguration. It was a ghost-written memo from Flynn to Trump and another draft memo “for the president to sign” directing other agencies to give Barrack the lead on implementing IP3’s plan.
“Tom Barrack has been thoroughly briefed on this strategy and wants to run it for you. He’s perfect for the job. Rex and Jim are supportive of Tom’s focus on this also,” the draft memorandum with Flynn’s name on it said. “Rex” and “Jim” apparently referred to then-Secretary of State Rex Tillerson and then-Defense Secretary Jim Mattis.
“In the enclosed memo you would call upon the relevant cabinet officers to lend their support to this historic program. I recommend that you sign it,” the memo continued.
IP3 has its eyes on Saudi Arabia’s plans to build two nuclear reactors, as it hopes the companies it collaborates with could provide security training, workforce development and other services should a U.S. firm land the contract, McFarlane said. He said IP3 has “no formal relationships” with companies. Westinghouse Electric Co., considered the only U.S. firm that could readily build reactors, is in the running for a Saudi contract.
But Saudi Arabia has stymied the efforts by refusing to sign an International Atomic Energy Agency protocol to permit expanded inspections beyond verifying the location of nuclear material. The U.S. has never signed a 123 agreement with a nation that hasn’t committed to that step.
Saudi Arabia also has said it won’t forswear uranium enrichment and reprocessing, the steps necessary to make nuclear weapons. The United Arab Emirates inked a 123 agreement with such a provision. But Saudi Arabia noted that the Iran nuclear deal that Trump walked away from did not forever ban that country from those steps, as the terms were due to sunset after 2031. That’s put U.S. negotiators in a tight spot.
“The U.S. has an interest in not seeing the expansion of enrichment and reprocessing technology in the region. It would be a mistake to compromise these principles too far,” said Thomas Countryman, who was President Barack Obama’s top arms control and nuclear proliferation official at the State Department. He nonetheless called the interest from U.S. nuclear companies in building Saudi reactors “a natural partnership” given the nations’ long-standing economic relationship.