House Dems blast Trump insider in new report, allege profit motive in push for Saudi nuclear plan

PHOTO: Tom Barrack, Miriam Adelson and Sheldon Adelson greet U.S. President-elect Donald Trump on the West Front of the U.S. Capitol on January 20, 2017, in Washington, D.C.PlayChip Somodevilla/Getty Images, FILE
WATCH House Oversight Committee Democrats blast Trump insiders in new report

A longtime Trump insider has been pushing a proposal to build dozens of nuclear power plants in Saudi Arabia while seeking to avoid restrictions on the transfer of U.S. nuclear technology and has at times stood to profit from the effort, according to an investigative report by the House Oversight Committee.

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"Today's report reveals new and extensive evidence that corroborates Committee whistle-blowers and exposes how corporate and foreign interests are using their unique access to advocate for the transfer of U.S. nuclear technology to Saudi Arabia," said Rep. Elijah Cummings, the Maryland Democrat who chairs the committee.

The 50-page report, which relied on 60,000 documents and statements from whistle-blowers inside the administration, was made public Monday. It focuses on the actions of Thomas Barrack, a wealthy Los Angeles businessman who oversaw President Donald Trump's inaugural committee, as well as earlier efforts by retired Lt. Gen. Michael Flynn to push a Saudi nuclear energy plan. Investigators said they found evidence that "private parties with close ties to the President wield[ed] outsized influence over U.S. policy towards Saudi Arabia."

"These new documents raise serious questions about whether the White House is willing to place the potential profits of the President's friends above the national security of the American people and the universal objective of preventing the spread of nuclear weapons," according to the report.

The investigative report was completed late last week but is being released on the heels of a barrage of critical tweets by President Trump targeting the Maryland Democrat and his Baltimore district. There is no indication Trump knew the report was imminent.

The White House did not cooperate with the investigation, providing none of the documents requested. Congressional investigators said documents they did recover showed that some Trump administration officials used personal email accounts to communicate with executives from private companies pushing the plan. In several instances, it was "unclear" if those officials "took steps to preserve this email as required by the Presidential Records Act," the report said.

The White House declined to comment.

Committee Republicans, in a report issued last week, pushed back on the Democrats' review, saying the Trump administration did not act inappropriately in contemplating the potential transfer of nuclear technology to Saudi Arabia.

Republicans also argued that Barrack had no conflicts by promoting the nuclear proposal because he ultimately did not join the administration.

The investigation focuses on company called IP3 International, which is run by a group of retired American generals, and their years-long effort to promote a plan to sell dozens of nuclear power plants to Saudi Arabia and other Gulf countries. The company has been aided in its efforts by two well-known Trump advisers: Flynn and Barrack, a California investment executive who has deep ties in the Middle East.

The report alleges that Flynn and later Barrack helped push the proposal during the 2016 campaign, in the White House and later during briefings with senior White House officials including Trump's son-in-law Jared Kushner and ultimately President Trump. IP3 officials also briefed cabinet officials including Secretary of State Mike Pompeo and Secretary of Energy Rick Perry, according to the report.

Barrack promoted the effort as part of what he called a "Middle East Marshall Plan" despite concerns from some White House officials and lawmakers that Saudi Arabia's true goal was to obtain technology for nuclear weapons, which could heighten tensions in the unstable region.

Ahead of the report's release, a spokesman for Barrack spoke with The New York Times about allegations that the longtime Trump friend used his connections to assist foreign interests, telling the newspaper Barrack had no incentive to lobby on behalf of any particular country or countries in the Persian Gulf because his business interests and policy concerns span the entire region.

"There is zero pay to play here," Barrack's spokesman told The Times, adding that there was no evidence either he or his company had profited from his interactions with the administration.

A spokesperson for Barrack told ABC News in a statement after the report was released: "Tom Barrack has been cooperating with the Committee on Oversight and Reform of the U.S. House of Representatives and has provided the documents the Committee requested. Mr. Barrack's engagement in investment and business development throughout the Middle East for the purpose of better aligned Middle East and US objectives are well known, as are his more than four decades of respected relationships throughout the region. Mr. Barrack's consistent attempts to bridge the divide of tolerance and understanding between these two great cultures is etched in the annals of time. This is not political it is essential. Mr. Barrack has never had a position in the Trump administration."

Reached by phone Monday, retired Rear Adm. Michael Hewitt, the CEO of IP3, declined to comment on the report ahead of its release.

In a February statement responding to the committee's interim report, IP3 defended its efforts, arguing the group was working to empower the U.S. nuclear industry and counteract Russian and Chinese efforts to export nuclear technology in the Middle East and other regions.

Flynn's involvement in the effort came before and during the 2016 campaign and included emails to executives at IP3's predecessor in which he touted his access to the Russian ambassador and boasted of meeting Russian President Vladimir Putin at a December 2015 dinner in Moscow. Flynn served initially as Trump's national security adviser but was forced out and later pleaded guilty to lying to the FBI during the investigation into Russian meddling in the 2016 campaign.

Flynn's attorney, Sidney Powell, called the report a "smear campaign" by Democrats.

"Special counsel investigated all of these matters, and General Flynn cooperated extensively--answering all their questions on all their Middle East issues and everything else," Powell told ABC News in an email Monday. "It would be wonderful for the country if Mr. Cummings could do something constructive for the country for a change."

More recent efforts to lobby the Trump White House on the Saudi nuclear plan appeared to be spearheaded in part by Barrack, the report said. A billionaire financier and chairman of Trump's inauguration committee, Barrack worked on several fronts to push the plan. The report alleged that he and other proponents would have had the potential to reap sizeable financial rewards if the deal went forward.

Barrack, the report said, "was negotiating directly with President Trump and other White House officials to seek powerful positions within the Trump Administration—including Special Envoy to the Middle East and Ambassador to the UAE—at the same time he was promoting the interests of U.S. corporations seeking to profit from the transfer of nuclear technology to Saudi Arabia."

He was also "taking steps for his own company, Colony NorthStar, to profit from the same proposals he was advancing," according to the report. That included an effort to acquire a leading American nuclear company that would have played a key role in the project.

Flynn promotes nuclear plan

New documents obtained by the committee reveal how Flynn, who is waiting to be sentenced for lying to the FBI and was caught secretly working for Turkish interests during the campaign, advocated for the proposal before and during his stint as a Trump campaign adviser and later in the White House.

PHOTO: In this Feb. 1, 2017, photo, then-National Security Adviser Michael Flynn arrives for the daily news briefing at the White House, in Washington. Carolyn Kaster/AP, FILE
In this Feb. 1, 2017, photo, then-National Security Adviser Michael Flynn arrives for the daily news briefing at the White House, in Washington.

The project was on his agenda on his now-infamous 2015 trip to Moscow, when he attended a gala for Russian media outlet RT and sat with President Vladimir Putin before joining Trump's campaign team. Ahead of that trip to Russia, Flynn emailed business associates saying he would "relay any messages to specific people" about the proposal to transfer nuclear technology to the Middle East.

In June of 2016, as he was advising Trump's campaign, Flynn was emailing Rear Adm. Michael Hewitt, a co-founder and CEO of IP3, about "trying to find time" to meet with then-Saudi Deputy Crown Prince Mohammad bin Salman in Washington later that month.

"Maybe we get a call in today," he said to Hewitt, according to an email cited in the report. "Aware of MBS visit," Hewitt replied. Getting support from the hill to get on his calendar."

After Trump's win in the election, Hewitt and other boosters of the project began aggressively working to secure support for the plan. IP3 officials traveled to Saudi Arabia in December of 2016 to solicit $120 million in funding for the project and conveyed "strong, unequivocal support for this program from the Trump administration," retired Gen. Keith Alexander wrote in an email cited in the report.

Flynn's role in the Trump administration was instrumental to their pitch. Ahead of the inauguration, Robert "Bud" McFarlane, a proponent of the nuclear proposal, said in an email to Flynn that his support for the "Marshall Plan" "had a palpable impact on the tone and substance of all of our meetings" in Saudi Arabia, according to an email cited in the report.

McFarlane, 81, who resigned as President Ronald Reagan's national security adviser during the Iran-Contra scandal and later pleaded guilty in 1988 to charges involving the withholding of information from Congress, has been a global consultant in the security and energy sectors in recent years.

Barrack renews lobbying effort

As Flynn continued to consult on the project in 2017, Barrack, a prominent Trump support with longstanding business ties to the Middle East, worked to secure a prime place of influence inside the White House.

While he was in talks with Trump about a role as special envoy to the Middle East or ambassador to the United Arab Emirates, Barrack was communicating with advocates for the Saudi nuclear plan, including then-National Security Council deputy director KT McFarland and McFarlane, according to the report.

Barrack met with Trump at the White House about the Middle East Marshall Plan on the same day the president met with Saudi Deputy Crown Prince Mohammed bin Salman at the White House, correspondence between Barrack's secretary and the White House cited in the report shows.

Barrack told a business associate he briefed Trump before and after his meeting with the Saudi deputy crown prince and helped facilitate the prince's visit, according to text messages cited in the report. Those text messages also indicate that Jared Kushner, the president's son-in-law and a White House senior adviser, participated on a call with Sheikh Mohammed bin Zayed Al-Nahyan, the Crown Prince of Abu Dhabi and leader of the United Arab Emirates who is closely aligned with Saudi Arabia.

Barrack later emailed Kushner about his potential role in the administration.

"After thinking through our discussion this week, it might be an interesting idea to have the Special Envoy position hold responsibility for implementing the economic agenda and related action items that will arise out of your Saudi-sponsored summit," he wrote, according to the report.

Barrack texted a business associate in UAE that he had floated the idea, which he said would be "to make me a special envoy to the Middle East to help them with Saudi, UAE and gulf USA cooperation…"

In the days following Trump's meeting with the Saudi deputy crown prince, IP3 leaders engaged with senior Trump administration officials to promote the nuclear proposal, including former Defense Secretary James Mattis, Energy Secretary Rick Perry and Commerce Secretary Wilbur Ross.

Barrack and Kushner discuss fate of American nuclear company

In a March 17, 2017, letter to the Saudi leader, the IP3 officials said the "agreements" between the president and the Saudi ruler "established the framework for our unique opportunity to take the next steps with IP3 and the Kingdom of Saudi Arabia." The letter also referenced a "partnership" to acquire Westinghouse Electric, a U.S.-based company that manufactures nuclear reactors.

Soon after, Barrack began corresponding with top officials at IP3 about a plan to bid for Westinghouse in what Democrats believe to be the Saudi Public Investment Fund, a sovereign wealth fund. IP3 officials met with Kushner in August on their proposal to acquire Westinghouse, which, under the agreement, would be the main partner in the effort to build more than 30 nuclear reactors in Saudi Arabia.

In a memo to Stephen Schwarzman, the CEO of Blackstone, one of the private equity firms he contacted about potentially bidding, Barrack said Saudi Arabia and the United Arab Emirates "have committed to invest in the Westinghouse acquisition and are willing to concurrently lock in Westinghouse as their primary partner on the 30+ reactors expected to be constructed … in the coming decade." Blackstone declined to partner with Colony.

While that bid for Westinghouse was unsuccessful, Barrack in January of 2018 began corresponding with a top official at Brookfield Asset Management, the firm that acquired Westinghouse, according to emails cited in the report, offering his assistance.

More than a month later, an employee at Barrack's firm firm Colony NorthStar sent a slide presentation to another associate, suggesting it had been invited to contribute $50 million to Brookfield's bid for Westinghouse.

On Aug. 1, 2018, Brookfield completed its acquisition of Westinghouse after securing final government approval for the deal from the Committee on Foreign Investment in the United States, a review board filled by Cabinet secretaries. It's not clear whether Barrack's company participated in the successful bid.

The House report notes that just two days later Brookfield agreed to a 99-year lease of 666 Fifth Avenue, a distressed building owned by Kushner Companies, Jared Kushner's family real estate firm. The property was a financial burden on Kushner Companies and the group was facing a $1.4 billion mortgage payment the following February.

A spokesperson for Kushner did not immediately respond to a request for comment from ABC News.

Generals still pursuing nuclear deal

Advocates of the Saudi nuclear plan have repeatedly raised concerns about the stringent laws governing the transfer of nuclear technology, including a provision of the United States Atomic Energy Act that would require Saudi Arabia to sign an agreement effectively promising any nuclear technology obtained from the United States would only be used for civilian purposes.

Emails cited in the report from IP3 and nuclear industry officials show that advocates for the U.S.-Saudi proposal believed the strict requirements would be a "total roadblock" for an agreement with Saudi Arabia, which has pursued a nuclear program to challenge Iran's influence in the region.

In early 2018, IP3 officials began exploring a partnership with South Korean companies in a potential effort to circumvent the strict U.S. rules and began discussing the new potential collaboration with administration officials.

"The Saudis are not interested in any agreement that provides less freedom in the nuclear arena than what the US afforded Iran, their sworn enemy … under the last administration," an executive for a company that had invested in IP3 said in an email cited in the report, a reference to Saudi concerns that the Iran nuclear deal would improve their rival's standing in the region.

Efforts to advance the idea through the administration continue. On Feb. 12, 2019, Trump and Perry met with nuclear energy company executives and IP3 officials at the White House about nuclear power in the Middle East and Saudi Arabia.

The meeting was prompted by a request from Trump to retired Gen. Jack Keane, an IP3 co-founder and director who met with the president and chief of staff Mick Mulvaney in January.

PHOTO: Former Vice Chief of Staff of the U.S. Army Gen. Jack Keane, speaks to activists gathered at the State Department before a march to the White House to call for regime change in Iran, June 21, 2019, in Washington, D.C. Alex Brandon/AP, FILE
Former Vice Chief of Staff of the U.S. Army Gen. Jack Keane, speaks to activists gathered at the State Department before a march to the White House to call for regime change in Iran, June 21, 2019, in Washington, D.C.

"No need for a letter to the President now. General Jack Keane met with the President on Friday with Mulvaney his chief of staff was [sic] in the room. Keane said the meeting could not have gone better," a nuclear energy company official wrote in a Jan. 13, 2019, email cited in the report.

ABC News' John Santucci, Katherine Faulders, Ali Dukakis and Allison Pecorin contributed to this report.

Editor's note: This updated version of the story clarifies that Blackstone never entered into a deal with Barrack's company.