February 17, 2008

Giustra scrutinized for Clinton ties

Giustra scrutinized for Clinton ties

Mining tycoon wins Kazakhstan uranium deals after ex-president makes political connection

David Baines, Vancouver Sun

Published: Friday, February 01, 2008

Vancouver mining financier Frank Giustra scored some valuable uranium concessions in Kazakhstan after former U.S. president Bill Clinton introduced him to the country's president in September 2005, the New York Times reported Thursday.

Several months later, Giustra donated $31.3 million to the Clinton Foundation, and would later pledge millions more.

Giustra immediately released a statement rejecting any suggestion that his donations to the Clinton Foundation were a payoff for services rendered.

Former U.S. president Bill Clinton and financier Frank Giustra. Giustra has donated millions of dollars to Clinton's foundation.View Larger Image View Larger Image

Former U.S. president Bill Clinton and financier Frank Giustra. Giustra has donated millions of dollars to Clinton's foundation.

Shannon Stapleton, Reuters files
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"The former president did not play a role in a business deal I negotiated in Kazakhstan in 2005," he said.

"I have been doing business in Kazakhstan for more than a decade, and had been working on this deal and travelling to that country long before I even met President Clinton. . . . This deal, in fact, had been underway for almost a year and was substantially completed before President Clinton even arrived in Kazakhstan."

Questions about Clinton's and Giustra's dealings in Kazakhstan were first raised in the most recent edition of Newsweek, but were confined to a brief mention at the end of a longer story about Clinton's philanthropic pals.

Thursday's story in the New York Times was much longer -- a full page -- and provided more details, including Giustra's admission that he "may have" mentioned the uranium concessions to the president of Kazakhstan during their overnight visit.

U.S. media scrutiny of Giustra and other Clinton Foundation donors -- and any potential conflicts of interest -- is intensifying as Hillary Clinton's bid for the Democratic presidential nomination heats up.

The Times reported that on Sept. 6, 2005, Clinton flew in Giustra's private jet to Kazakhstan to announce an AIDS initiative with the Kazakhstan government.

When they landed, they were "whisked off to share a sumptuous midnight banquet" with president Nursultan Nazarbayev, the newspaper said.

During the dinner, Clinton expressed "enthusiastic support" for Nazarbayev's bid to head an international organization that monitors elections and supports democracy.

The Times said Clinton's support -- which undercut both American foreign policy and sharp criticism of Kazakhstan's poor human rights record by, among others, Hillary Clinton -- was a "diplomatic coup" for the Kazakh president.

Giustra also came away a winner. Within two days, his company, which would later evolve into UrAsia Energy, signed preliminary agreements giving it the right to buy into three uranium projects controlled by Kazakhstan's state-owned uranium agency, Kazatomprom.

UrAsia subsequently merged with a large Canadian mining company, Uranium One Inc., and the value of Giustra's stock rose to more than $45 million, according to newspaper reports.

Several months after obtaining the uranium concessions -- exactly when is not clear -- Giustra contributed $31.4 million to the Clinton Foundation.

He would later pledge another $100 million plus one half of all his future net earnings, cementing his place in Clinton's inner circle and propelling him onto the international stage.

Giustra is best known in Vancouver as the former chairman of Yorkton Securities which, along with Peter Brown's Canarim Investment Corp (now Canaccord Capital Corp.), underwrote most of Vancouver's penny stock deals.

Many of Yorkton's deals were controversial and came under heavy regulatory scrutiny. Giustra reportedly became frustrated with his inability to control his brokers, particularly a much-disciplined group in Calgary, so in early 1997, he quit to start film production company Lions Gate Entertainment.

Lions Gate was an artistic success -- many of its films were well received by movie-goers and critics -- but the company achieved only modest financial success.


n 2001, he resumed his career as a mining financier. As chairman of Endeavour Financial, a mining finance house, he launched several mining companies, most notably Wheaton River Minerals, which later evolved in GoldCorp, one of the world's largest gold producers.

In January 2005, Giustra organized a tsunami-relief fundraiser at his palatial West Vancouver home and invited Clinton. They became friends.

In September 2006, Giustra co-produced a 60th birthday gala for the former president that featured stars such as Jon Bon Jovi and raised about $21 million for the Clinton Foundation.

In June 2007, Giustra pledged another $100 million, plus 50 per cent of his future resource earnings. He is currently planning a gala fund-raiser for the foundation, to be held in Toronto in March.

dbaines@png.canwest.com


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