Industry coalition’s push to win over the Trump administration is concerning officials on Capitol Hill who are fearful that it could threaten U.S. national security.
ERIN BANCO | thedailybeast.com
When President Donald Trump took the stage in the East Room of the White House earlier this month to give his first speech on the environment, nuclear energy executives and industry leaders held their breath. They exchanged text messages with fellow colleagues during the speech’s broadcast, wondering aloud to one another if Trump had taken the bait.
Since the fall of 2016, the executives have built an underground coalition along with academics, technology experts and well-connected politicos, including some lobbyists, to get the president and his administration to support—even promote—an American nuclear energy comeback. The industry has declined in recent years due mostly to the closing of critical nuclear infrastructure and plants. Between 2010 and 2018, only one new nuclear power plant came online in the United States.
But the coalition had a plan for a big return by way of exporting U.S. nuclear technology overseas. The comeback, as the coalition saw it, would come via Saudi Arabia and would rely on using President Trump and his son-in-law Jared Kushner’s cozy relationship with the country’s de facto ruler Crown Prince Mohammed Bin Salman. Riyadh had launched its Vision 2030—a project to decrease the country’s reliance on oil by building up its other economic sectors, including nuclear—and it was looking for tenders to build its first reactors.
With that, the American nuclear executives saw a way back into the fold and deployed a force to secretly convince the White House and Capitol Hill to consider a nuclear deal with Saudi Arabia and to soften its stance on requiring Riyadh sign on to the strictest of nuclear safeguards.
That convincing came with a promise: If the administration backed American nuclear enterprises in Saudi it could fulfill one of its main policy goals—countering Russia and China. The coalition leaned on Trump officials to help them push forward its case, including former National Security Adviser Michael Flynn and Trump adviser Tom Barrack. Barrack is now under investigation in New York for his lobbying work. The New York Times reported that investigators have asked Barrack about his work related to the Saudi nuclear deal. Flynn, who left the administration in February 2017, was later indicted by Robert Mueller’s special counsel’s office and plead guilty to charges of lying to the FBI about his communications with then Russian Ambassador Sergei Kislyak.
The coalition’s campaign is still being carried out, predominantly behind closed doors.
“Nuclear energy is desperate in this country to land business and they see Saudi as one of their few opportunities, ” said Miles Pomper, a senior fellow at the James Martin Center for Nonproliferation Studies. “They are trying everything.”
The coalition’s secret campaign to win over the Trump administration is concerning officials and Capitol Hill who are fearful that the plans for Saudi Arabia will move forward despite the fact that they raise legal concerns and could potentially threaten U.S. national security, according to two senior administration officials and more than half a dozen lawmakers. Congress is currently wrapping up an investigation into the origins of the coalition’s plans.
But with the president’s speech on the environment earlier this month, the nuclear energy industry saw a sign —even if small— that their campaign was working and that their plans for Saudi Arabia were still on the table. Energy Secretary Rick Perry took the stage and said what the coalition had hoped the president would have said himself, according to two executives who spoke to The Daily Beast.
“We know that by investing in innovative solutions… like our nuclear power, exporting those technologies to other countries… being able to share our technologies around the world… that’s what this President is all about,” Perry said.
And then, there was a nod of support from Trump: “What Rick has done with our nuclear supply—nuclear energy, and all forms nuclear—has been absolutely incredible,” Trump said. “That’s fantastic.”
The exchange wasn’t a direct indication that the administration was on board with everything the coalition had pitched, but nuclear energy wonks viewed the president’s words as a major win.
“It was like hearing everything we have been working toward come together for the first time,” one executive told The Daily Beast.
Getting that win wasn’t easy, the source said.
In the fall of 2016, the nuclear industry, wanting to launch a campaign to win over the incoming Trump administration, collaborated with IP3, a firm that includes former generals, diplomats, and energy experts. The firm is known for having connections to Flynn and Barrack. In a report earlier this year, the House Oversight Committee said IP3 had developed a proposal for Saudi Arabia that was “not a business plan” but rather “a scheme for these generals to make some money.” IP3 refutes that claim.
“IP3 has focused for over three years on the national security importance of being the country of choice for the peaceful, safe and secure development of nuclear power,” the firm said in a statement. “Perhaps no other issue has more bipartisan support than nuclear energy linked to national security. Despite this fact the U.S. has watched as Russia and China have grown their nuclear capacity… to edge the U.S. out of the international market.”
With IP3’s help, the nuclear industry coalition in the days leading up to Trump’s inauguration attempted to overcome a major hurdle: convincing the incoming administration to let American companies pursue nuclear work in Riyadh without a 123 Agreement—a key, legally binding commitment that requires countries doing nuclear deals with the U.S. to sign on to nonproliferation standards. The U.S. has entered into those agreements with more than 40 countries.
Nuclear energy executives traveled to Saudi Arabia in 2015 during the Obama administration to discuss a potential deal with the country and knew then that the Saudi Royal Court would not be inclined to sign such an agreement, according to three senior administration officials who spoke with The Daily Beast. Those same sources said that Saudi Arabia was wary of signing a strict agreement while the U.S. was at the same time working on a deal that it thought would one day allow Iran to develop a nuclear weapon.
The pushback prompted the coalition’s massive blitz to get the next White House to see it their way—or Saudi Arabia’s way. Flynn and Barrack were two of the individuals that helped broker meetings between officials and the coalition, according to two senior administration officials.
In tandem with Flynn’s departure from the administration, the coalition faced a setback. It continued to secure meetings with officials throughout 2017 and 2018 but it faced significant opposition from career officials who said there was little chance the U.S. would enter into a nuclear deal with Saudi Arabia without a 123 Agreement.
So, the campaign shifted gears and began pushing a different strategy: convincing the administration and Capitol Hill that Saudi Arabia should not have to commit to forgoing enrichment and reprocessing—methods used in making a nuclear weapon.
It was a bold and controversial argument, but one individuals working in the coalition thought could stick if Democratic lawmakers would tone down the tough talk on Saudi Arabia. That became nearly impossible following the killing of Jamal Khashoggi and Congress’ denouncements over the administration’s lack of response.
Since Khashoggi’s murder, IP3 and other nuclear energy experts have flooded the media with opinion articles, and academic reports, laying out the reasons why China and Russia were beating out the U.S. in the nuclear export game. Westinghouse, a nuclear energy company based in Pittsburgh, spent more than $300,000 last quarter lobbying Capitol Hill on key legislation related to the export of nuclear technology to Saudi Arabia, according to its latest disclosure form. (Westinghouse is the only U.S. company with the means to export its technology to Riyadh for the purposes of helping the country develop its nuclear sector).
Lawmakers who spoke to The Daily Beast over the last several months, both Republicans and Democrats, said advocates in the coalition presented them with detailed memos about how the U.S. could benefit from American companies clinching contracts in the country and why it supported the Trump administration’s national security goals. Those lawmakers said that they were also presented with reasons why forcing Saudi Arabia to adhere to what’s known in the industry as the “gold standard” would limit American nuclear companies’ competitiveness.
The U.S. Atomic Energy Act requires the U.S. sign the 123 Agreement with countries it plans to cooperate with on nuclear energy and sets forth conditions and controls to govern nuclear commercial transactions. In addition to a 123 Agreement, the U.S. has sought to uphold the “gold standard” in almost ever nuclear deal since 2009.
The standard, first established during the end of the George W. Bush administration when the U.S. signed a nuclear deal with the United Arab Emirates, requires foreign countries to not enrich and reprocess nuclear fuel.
For their part, Democrats on Capitol Hill say they’ve all but tuned out the nuclear energy representatives who are pushing for what they view as a dangerous and illegal plan to enter into a nuclear deal with Saudi Arabia.
“Congress has to be concerned about both the Khashoggi situation and about the efforts by the Trump administration to pursue arms sales on an emergency basis without congressional authority,” said Daryl Kimball, executive director at the Arms Control Association. “These guys [in the coalition] are very nervous now because they know their pitch is going to be more difficult to sell.”
Trump officials, including Energy Secretary Perry, have appeared before Congress several times to answer questions about the administration’s plans for a nuclear deal with Saudi Arabia. While officials have said they are committed to requiring that Saudi Arabia sign a 123 Agreement with the U.S., they have wavered on the extent to which the administration would require Riyadh adhere to additional nuclear safeguards.
The issue first drew attention after The Daily Beast reported that the Trump administration had signed at least six authorizations that allowed U.S. companies to share information with Saudi Arabia about their plans to help the country develop its nuclear sector. Those authorizations had been held from public view, according to Perry, because individual companies had requested it.
The names of the companies who received the authorizations have not been released, though several sources on Capitol Hill told The Daily Beast that the Energy Department shared them with Congress.
The news of the authorizations prompted intense scrutiny on Capitol Hill by lawmakers who, angered by the brutal killing of Khashoggi, have denounced the administration’s relationship with Saudi Arabia.
“Some of the Democrat’s staff is livid [about the 810s]. It deepens their suspicions and skepticism,” Kimball said. “And Republicans are nervous about this.”
The Daily Beast recently learned and reported that two of the authorizations doled out by the administration were approved following the murder of Khashoggi.
“The alarming realization that the Trump Administration signed off on sharing our nuclear know-how with the Saudi regime after it brutally murdered an American resident adds to a disturbing pattern of behavior,” Senator Tim Kaine (D-VA) said in a statement. “President Trump’s eagerness to give the Saudis anything they want, over bipartisan Congressional objection, harms American national security interests.”
Khashoggi’s murder and Congress’ outrage has limited the nuclear industry coalition’s ability to make headway over the last year.
As a result, some U.S. entities represented in the coalition have developed a new plan, as first reported by The Daily Beast, which includes partnering with South Korean state-run energy firms. The plan would potentially allow for Riyadh to bypass entering into a gold standard agreement, raising concerns among officials in the Trump administration that it will have little leverage in ensuring Saudi Arabia adheres to certain nuclear safeguards.
The report into the House Oversight Committee’s congressional investigation into the coalition’s plan and its development is set to be released in the coming days.