Frank Giustra, the Canadian mining magnate and Clinton Foundation board member, has gone to great lengths recently to shoot down claims that his work with the former president presents a conflict of interest.
But a review of Canadian court documents and other records raises questions over whether Giustra is truly an above-the-board businessman.
The 57-year-old Giustra, who bears the haircut of Caesar, the stature of Napoleon, and was described to The Daily Caller as a “puppet-master,” has interests in a wide variety of industries — including the film industry and the olive oil business.
But his main interest is in mining, and he has made millions investing in shell companies in the industry and turning them for massive profit. Technically, Giustra is the CEO of Fiore Financial, but he is heavily involved and invested in numerous companies, including Endeavour Financial, and its offshoot, the Cayman Islands-based Endeavour Mining.
In Dec. 2008, Endeavour Financial and Rusoro Mining, a company controlled by Russian businessman Andre Agapov, attempted a hostile takeover of Gold Reserve Inc. (GRI), a mining company based in Spokane, Wash.
The rub was this: in 2004, GRI entered a contract with Endeavour in which it paid the company $1.2 million for consultation services while Endeavour had both equity and debt investments in the company. GRI alleged that it was not aware of Endeavour’s investment in Rusoro, and that the Giustra-controlled company breached its confidentiality and engaged in an obscene case of a conflict of interest.
Two Canadian judges sided with GRI in separate rulings in February and April 2009. Giustra and his right-hand man, Gordon Keep, were named by GRI in a lawsuit in 2010, and Endeavour and Rusoro eventually agreed to a multi-million dollar settlement with GRI in 2012.
Stanley Beck, an arbitrator and the former chair of the Ontario Securities Commission, offered scathing testimony during the case.
“I am not aware of any case in which the financial adviser of a company, who is subject to a confidentiality agreement, has subsequently appeared as the financial adviser to a hostile bidder for that same company,” Beck stated, according to court documents.
Another mining industry insider familiar with the companies and the lawsuit told The Daily Caller that Endeavour’s double-dealing was “unprecedented” and that Endeavour’s “financial advisory business suffered…because people were literally appalled.”
Endeavour Financial morphed into a mining company after the ruling, said the insider, who spoke on the condition of anonymity.
Clinton’s first documented meeting with Giustra occurred in Jan. 2005 when the former president spoke via satellite for an event arranged by Giustra to discuss tsunami relief. By June, Clinton’s team reached out to Giustra to seek use of the tycoon’s luxurious MD-87 private jet.
“The plane is a business tool,” Giustra told The Globe and Mail in 2008. “No more, no less.”
Clinton has used that so-called business tool 26 times since meeting Giustra, according to The Washington Post. Giustra has accompanied Clinton on 13 of those trips.
— Frank Giustra (@Frank_Giustra) September 25, 2014
Clinton and Giustra developed a closer partnership when, in Sept. 2005, they flew to Kazakhstan on Giustra Air. There Giustra negotiated a deal for a contract that gave one of his companies, UrAsia Energy, access to three uranium mines. Clinton and Giustra also met with Kazakh president Nursultan Nazarbayev, with whom Clinton claimed he wanted to discuss his philanthropic work on HIV/AIDS.
As author Peter Schweizer lays out in “Clinton Cash,” his book about the Clinton Foundation and its many wealthy donors, HIV/AIDS was a strange project for Clinton to undertake in Kazakhstan. As of 2005, only between 0.1 and 0.3 percent of the country’s population suffered from the disease.
After their meetings, Clinton issued a public statement in support of Nazarbayev. That backing was out of line with U.S. policy towards the dictator, who had just won an election with a 90-plus percent showing at the polls.
Weeks after the trip, Giustra donated $31 million to the Clinton Foundation.
But that was just a taste of what was to come. In 2007, Giustra pledged $100 million to form the Clinton-Giustra Sustainable Growth Initiative (CGSGI), which is now known as the Clinton-Giustra Enterprise (CGE) Partnership. The CGE Partnership also has a Canadian arm, which has been the recipient of millions of dollars in donations from “Friends of Frank,” as they are known.
The Clinton-Giustra Kazakhstan trip was reported by The New York Times in 2008 and is revisited in detail in Schweizer’s “Clinton Cash.”
The book, and another Times article, furthered the story by tying together Giustra’s UrAsia to Uranium One, which was eventually absorbed by Russia’s energy agency, Rosatom. Hillary Clinton’s State Department, and other agencies, approved a series of stock transactions that allowed Rosatom to acquire a majority stake in Uranium One. The deal enriched a number of Giustra associates (and Clinton donors) and helped put 20 percent of U.S. uranium deposits under Russian control.
Giustra and the Clintons were also together in Bogota in June 2010 when Hillary made a major concession to Colombian president Álvaro Uribe.
Giustra, who had business interests in Colombia’s oil, mining and timber industries, first met Uribe in 2005 at a Clinton Global Initiative function.
In 2007, Giustra formed a Colombian oil company, Pacific Rubiales, which proceeded to grow at a phenomenal rate. The company was able to purchase an oil company with close ties to the Colombian government that had just been made private. The Colombian government also granted Pacific the rights to build a pipeline.
In July 2007, Pacific Rubiales announced that it was donating $2.2 million to the new CGSGI. Matching funds would be provided by other longtime Giustra associates — companies like Canaccord and GMP Securities, which have underwritten numerous Giustra deals.
— Frank Giustra (@Frank_Giustra) August 7, 2014
According to a press release in which Giustra is quoted, the $4.4 million total pledge amounted to one percent of the $440 million raised by Pacific Rubiales to continue its Colombian crude oil operations.
While Giustra stated that the Pacific Rubiales deal and the one percent donation “shows other companies how they can help make a real difference in developing countries,” the company has been accused of using heavy-handed tactics to thwart labor strikes.
Whether because of the Pacific Rubiales consortium’s donations to the Clinton Foundation or because of the dictates of U.S. policy, Hillary Clinton helped Pacific Rubiales’ interests.
In June 2010, Giustra, Bill and Hillary Clinton traveled to Colombia and held separate meetings with Uribe. After a morning meeting with Bill, Uribe met with Hillary several hours later. In that meeting, she expressed support for a U.S.-Colombia trade agreement, a reversal of her position from the 2008 presidential campaign trail.
In doing so, the U.S. relieved pressure on Colombia to improve its human rights records, especially in the realm of labor relations.
The gist of “Clinton Cash,” which has led to a massive, coordinated rebuttal from the Hillary Clinton presidential campaign, is that without the access that only Clinton could provide, Giustra would not have met leaders like Uribe or Nazarbayev who may have helped his business dealings. And without Giustra, Clinton would not have the convenience of a private luxury jet or to millions of dollars of donations from wealthy Canadian miners.
“My money is more effective backing Clinton than any other person I can think of on this planet,” Giustra told The Globe and Mail in 2008.
The Clintons have denied that the appearance of quid pro quo is not as it appears. Giustra has done the same.
“I sold all of my stakes in the uranium company – Uranium One – in the fall of 2007, after it merged with another company,” Giustra said after The Times published its report on the Kazakh deal last month.
While it may be true that Giustra does not directly hold Uranium One stock, he is still tied to the company through his investments in other mining companies and mining financiers. Many of his close associates were still closely involved in Uranium One well into Hillary Clinton’s tenure at the State Department.
Ian Telfer, who was the chairman of Uranium One when it was acquired by Rosatom, donated $2.35 million to the Canadian arm of the Clinton Foundation through his charity, the Fernwood Foundation.
Frank Holmes, the CEO of U.S. Global Investors, held $4.7 million in shares with Uranium One as of 2011. He donated between $250,000 and $500,000 to the Clinton Foundation. Neil Woodyer, who was an adviser to Uranium One and founded Endeavour Mining with Giustra, donated between $50,000 and $100,000 to the foundation.
Many of the companies and their executives are likely among the 1,100 donors that the Clinton Foundation has admitted were not disclosed. That despite a promise the Clintons made in 2008 to disclose all of its donors.
A July 2013 archived page from the Clinton-Giustra Sustainable Growth Initiative website sheds some light on what companies have donated to and sponsored the Canadian wing.
The list includes names like Endeavour Mining, Gold Fields, Gran Colombia Gold, Pacific Rubiales, Rusoro, and, curiously, Uranium One.
GMP Securities and Holmes’ U.S. Global Investors are also listed as sponsors. Both companies, described to TheDC as being part of a “triumvirate” along with Endeavour, have helped arrange financing deals for Giustra’s numerous mining industry deals and were involved in the Uranium One deal.
A request for comment sent to Giustra’s Fiore Financial email account was not returned. The Clinton-Giustra Enterprise Partnership also did not respond to a request for comment.
The Canadian arm of the foundation has claimed that Canadian law prohibits the disclosure of donors without their permission, though the claim has been widely disputed.
In denying the appearance of quid pro quo, both Clinton and Giustra say they have respect for each others’ commitment to humanitarian causes. Though as The Globe and Mail noted in its 2008 Giustra profile: “until a few years ago, [Giustra] had only dabbled in philanthropy, funneling to local charities and organizing the occasional fundraiser.”
Rusoro-Gold Reserve dispute
If Giustra’s interests vis a vis Clinton are not conflicted, the same cannot be said about his dealings with Gold Reserve Inc. and Rusoro.
Giustra was the chairman of Endeavour Financial from 2001 to 2007 and is currently a major shareholder and a board member of Endeavour Mining, which is closely related to Endeavour Financial. The two entities share many of the same personnel, and Giustra’s Fiore Financial reportedly shares office space with Endeavour. A recent financial disclosure shows that Giustra holds 6.8 million shares of Endeavour Mining.
Giustra also made the initial pitch to GRI seeking its consulting business, a source familiar with the dealings told TheDC.
“Nobody would do a thing if Frank didn’t approve,” the source said.
At the time, GRI was one of only two companies with gold mining stakes in Venezuela. The company had invested $230 million since 1993 developing what is known as the Brisas Project.
In Oct. 2004, the company entered a confidential consulting arrangement with Endeavour. The arrangement allowed Endeavour to have access to confidential data related to GRI’s finances, operations, and technical specifications for the Brisas prospect.
And the prospect had huge potential. According to GRI’s website, the mine contained as much as 10 million ounces of gold and 1.4 billion pounds of copper.
Giustra first approached GRI about a merger with Rusoro in the fall of 2006, though, according to GRI, he did so “without disclosing that both he and Endeavour had a financial interest in Rusoro.”
Endeavour owned 7.5 million shares of Rusoro, 7 million stock warrants, and had loaned the company $10 million. Endeavour would also reap 5.5 million shares if the deal went through, according to court documents.
According to the source familiar with the attempted deal, Rusoro’s Agapov, who had been implicated in a 2002 Thai banking scandal, believed that he held an advantage because of his Russian nationality. He believed that would give Rusoro an advantage in dealing with Venezuela’s communist dictator Hugo Chavez, who was on friendlier terms with Russia than with the West.
According to court documents, Doug Belander, GRI’s president, also later testified that in 2007 he was told by representatives from New York investment banks that Giustra and Agapov had “expressed an interest” in combining Gold Reserve and Endeavour.
But GRI wasn’t interested.
The first takeover attempt came on Aug. 21, 2008, when Endeavour — curiously — placed a friendly takeover offer on behalf of Rusoro. But to the surprise of Rusoro and Endeavour, GRI balked, saying it had no interest in joining up with Rusoro, which GRI executives believed to be in poor financial health.
In Dec. 2008, Rusoro took a different approach by announcing that it was launching a hostile takeover. GRI shareholders weren’t interested either.
That month, GRI filed a lawsuit in Canadian court accusing Endeavour of breaching its confidentiality and of using information it had through the consulting contract to help Rusoro in its takeover attempt.
In a Feb. 2009 ruling, one judge with the Ontario Circuit Court ruled that the case raised “a serious issue that Endeavour improperly preferred the interests of its client Rusoro to those of its client Gold Reserve.”
That ruling included the testimony from Stanley Beck, who was then the chairman of GMP Securities, which had done business with Endeavour. Beck stated that during his three-plus decades in the securities industry he had not seen another case of double-dealing like the one undertaken by Endeavour and Rusoro.
Neil Woodyer, the CEO of Endeavour Mining, a longtime business associate of Giustra’s and a Clinton Foundation donor, denied any wrongdoing on Endeavour’s part.
“Endeavour Financial did not breach its confidentially with Gold Reserve,” he told TheDC through email.
Woodyer did not address questions about Giustra’s level of involvement in Endeavour or the bid for GRI.
Despite Woodyer’s denial, Endeavour and Rusoro settled with GRI in Sept. 2012.
In the settlement, Endeavour agreed to pay $1.5 million (Canadian) — more than the money it received through the consulting contact with GRI — while Rusoro agreed to pay $250,000 in cash, 2.5 million shares of common stock, and a conditional promissory note worth $1 million.
In the end, GRI did not get to mine for gold and copper in Venezuela. The Brisas project sits idle, while small-time prospectors rake through minerals easily found on the surface.
In May 2008, Chavez’s regime nationalized the mining industry. But the country is stuck because GRI secured all technical data related to the mine when it was kicked off of the plot. It would take up to 10 years for another entity to collect that data so that mining could begin.
Meanwhile, GRI has been awarded a $750 million default judgement against Venezuela and awaits payment.