Wednesday, February 20, 2008

Getting rich on enriched uranium

Yevgeny Adamov, former Russian atomic energy minister, was sentenced today to five and a half years in prison for fraud and embezzlement. (Court gives 5-1/2 yrs in prison to 4 yrs suspended sentence in Adamov case, Russia ex-minister sent to prison).

Adamov was first arrested in 2005 in Switzerland, at the request of the U.S. for defrauding the United States of $US 9 million of funds designated for helping Russia to improve security at its nuclear facilities. Adamov fought extradition to the U.S. to face charges filed in Pittsburgh. Federal prosecutors there said that Adamov and Mark Kaushansky, a former Westinghouse nuclear engineer and Ukrainian immigrant, formed two shell companies to funnel US Department of Energy funds to their bank accounts in Pittsburgh and Delaware during the late 1990s. Adamov was fired by Vladimir Putin in 2001.

How is it that Adamov wound up facing charges in Russia rather than in the United States when the Swiss authorities who arrested Adamov in 2005 did so at the behest of the US authorities? This makes for a rather curious story. After months in a Swiss jail, Adamov was the one who requested going back to Russia. Why? Russia's Defense and Security, citing informed sources, argues that what scared Adamov most of all was the
...prospect of the Americans finding out the details of how he sold Iran a package of documents about building a top-secret deuterium reactor. Such a reactor is capable of producing plutonium, and plutonium can be used to produce nuclear weapons.

Iran paid Adamov handsomely for this "gift." ...And in 1999, with the prosecutors already investigating, Adamov and his colleagues attempted to establish contacts with Iranian specialists outside their normal job duties. Then the Federal Security Service (FSB) got involved."

But it seems the FSB was a bit too late. "Dr. Adamov" had already sent off the blueprints for a heavy water reactor and received a fairly generous payment from Iran. One of his former deputies, who asked to remain anonymous, confirmed this in an interview with us.

"At first, Adamov wanted a barter deal," says the source. "In exchange for the heavy-water reactor blueprints, he asked the Iranians for marble. A lot of marble - since marble is fairly cheap over there. But Iran always pays cash, and Adamov allowed himself to be 'persuaded.'"

But how did Adamov manage to transfer classified documents to Iran and avoid the Prosecutor General's Office investigation concerning nuclear cooperation with Iran? What's more, at the hottest moment, when investigators were on his tail, he found himself in the position of nuclear energy minister! Mikhailov was dumbfounded when he found out who had replaced him in the minister's office on Ordynka Street.

Who helped Adamov?

"The minister's position was secondary for him", say sources at the Nuclear Energy Ministry, "Boris Berezovsky and Roman Abramovich pushed him into taking that job, assisted by the Kremlin officials, saying it was only 'for a while.' Then he was promised the office of prime minister."

What prevented him from taking it? Or who? Most people involved state, that it was Yuri Shekochikhin, a journalist, that contrived to hand in all the discreditable documents to the United States. An American journalist sent Shekochikhin's message to the FBI. President Putin was no doubt informed of the FBI's interest in the Adamov affair. Putin signed the documents on dismissal of Adamov in November 2001, and not by mere chance.

("Adamov's Persia File, Nadezhda Popova, source: Moskovskii Komsomolets, Defense and Security, October 12, 2005).

Helping Adamov fight extradition to the US, and defending him in the Federal Court in Pittsburgh, is Covington & Burling attorney Lanny A. Breuer, special White House counsel who represented former President Bill Clinton during his impeachment hearings.

The ties to the Clintons go further than simply sharing an attorney. It was during the Clinton presidency, the Megatons to Megawatts program was initiated. Russia sold the United States low-grade uranium fuel obtained from enriched weapons-grade uranium recovered from nuclear warheads. The American agent in these contracts, including the exchanges in which Adamov is alleged to have skimmed $9 million, was US Enrichment Corporation. The Clinton administration pushed to privatize the USEC in a 1998 public offering that yielded $1.9 billion. Outside consultants and investment bankers who handled the USEC deal pocketed $78 million from this deal. ("The art of the (raw) deal," Bruce B. Auster, US News & World Report, April 24, 2000). One of the Washington lobbyists most prominently pushing for privatization was Susan Thomases, close friend, private lawyer, and one-time chief scheduler to Hillary Clinton ("With friends like Hillary," Michael Isikoff, Newsweek, August 14, 1995).

The flow of US federal money to "Megatons to Megawatts" continues. Last July, Senator Hillary Clinton and Rep. Ellen Tauscher reintroduced legislation in both chambers of Congress they said would safeguard fissile materials and prevent nuclear terrorism. The Clinton-Tauscher bill would increase funding to several federal agencies, including the Department of Energy's "Megatons to Megawatts" initiative to aid Russia and other nations in "downblending" their highly enriched uranium.

Meanwhile, US prosecutors in Pittsburgh doubt that Yevgeny Adamov will ever face trial in the United States (Russian with Pittsburgh ties found guilty of fraud, Former Russian official guilty of stealing nuclear safety funds.

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|| headland, 1:48 PM

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