The plans offered by ACU and IP3, the companies working with Michael Flynn on a scheme to sell reactors to Saudi Arabia, have many problems. Some, perhaps all, of those problems may arise from naivete about the nuclear industry and the regulations surrounding it. Looking at the plans and how they changed over time may help in understanding what these companies were doing.
As early as July 2015, Flynn led a group from AGU to Egypt and Israel to sell the program. An undated project description seems to have been developed at about that time. The project, called International Power Generators (IPG), is ambitious; it aims to “fundamentally alter regional [Middle Eastern] economic and political dynamics, reinvigorate faltering U.S. relationships with key allies, and provide the long-term industrial and economic initiatives needed to stabilize the region.”
The project would be completely funded by the Middle East governments involved, with no need for funding from the United States. It would be a partnership among the U.S., Saudi Arabia, Egypt, Jordan, Kuwait and the UAE. Israel would receive power generated by reactors in the partnership.
Enrichment of the nuclear fuel would be done in a partnership-owned facility, and spent fuel would be returned to “an approved country,” thus avoiding proliferation concerns. An enrichment and fuel fabrication facility, along with a “heavy nuclear component manufacturing plant,” would be built in the United States. The project description claims that the facilities are being designed.
The plan was for 40 reactors, of which 18 would be in Saudi Arabia, 10 or more for Egypt, and the remainder in Kuwait, the UAE, and Jordan.
The plan includes a security firm, X-Co Dynamics, “a new public/private partnership developed in concert with relevant U.S. government agencies and the countries of the Gulf Cooperation Council, to protect the nuclear power plants, related infrastructure, and the surrounding region, in order to provide zones of security, stability and prosperity for at least the full life of the reactors, approximately 80 years.” The company would “rely on leading companies in the defense and intelligence industries for state-of-the-art security tools and technologies to provide new shared intelligence awareness, enhanced warning and more effective defense architectures.”
The whole package is referred to as a Middle East Marshall Plan.
In April 2016, Fred Johnson, identified as Partner/Chief Economist for ACU, sent an email to Alex Copson outlining his understanding of the IPG project. Copson was the CEO of ACU at the time. He forwarded the message to Michael Hewitt, Robert McFarlane, Keith Alexander, James Cartwright, Michael Flynn, Jack Keane, Dennis B. Ross, Ziad Asali, G. Omar Khalidi, John Hofmeister, Kirk Donald, a redacted email address, Jan Willem Henkelman, Joseph G. Henry, Michel Bunnik, and John Tanner. Presumably this means that Copson regarded Johnson’s summary as a fair representation of his views.
This description includes Russian and Chinese participation to provide reactors and an interconnecting power grid. Most of the document describes the strategy behind the plan. The Joint Comprehensive Plan of Action limiting Iran’s nuclear activities had come into force (seen to be negative in this email), the situation in Syria had deteriorated, and dropping oil prices are given particular attention.
The plan would stabilize relations with China and Russia as well, while providing a stronger security assurance to the Middle East via the three large world powers. The scheme required China’s buying oil at above-market prices. Putting the two documents together reveals a plan both grandiose and unrealistic.
In October 2016, ACU proposed to the TVA, which was auctioning the unfinished Bellefonte Nuclear Power Plant in Alabama, that “TVA transfer Bellefonte to ACU for an equity position in the super consortium” [presumably IGP]. The plant would serve as a training center for the work in the Middle East, and large sums of money would flow to TVA and Alabama. Copson presented the proposal to TVA and said that he would have the support of Alabama’s two senators.
Contingent on IGP being funded, of course. Adding Bellefonte would seem to be an extension of the plan.
Flynn is said to have emailed Copson during Donald Trump’s inauguration on January 20, 2017, that sanctions on Russia would now be lifted. Those sanctions would have made the partnership with Russia impossible. Copson had already begun briefing members of Congress by the end of November on the project.
Copson lost the bid on the Bellefonte plant. A real estate developer, Franklin Haney, bought the plant at auction in November 2016 with the intention of selling its power to the city of Memphis, Tennessee. At Mar-a-Lago, Trump introduced Haney, who contributed $1 million to Trump’s inauguration, to a Qatari investor who was interested in the plant. That was in April of 2017 or 2018 – the article is unclear. Later, Michael Cohen became involved in the possible transaction, to Haney’s dismay.
It’s not clear when the “Middle East Marshall Plan” moved away from Russian and Chinese reactors to American reactors. By January 2017, the group was pushing American reactor suppliers to the incoming administration. By the end of January, the group provided the text of a memo for the President to sign, naming Tom Barrack, a friend and advisor to Trump, as the leader of the project for the government. Barrack’s investment company, Colony Northstar, was strategizing how to use his relationship to Trump to make money.
On February 13, 2017, Trump fired Flynn from his job as National Security Advisor, but advocacy of the plan continues to the present.
At some point, a group split off from ACU and formed IP3, which has been involved in the activities described to Representative Elijah Cummings by whistleblowers. I won’t go into the whistleblower activities in this post, except to note that those pushing the “Middle East Marshall Plan” inside the government have been unusually persistent. Jeffrey Lewis and Aaron Stein have recorded a podcast in which they try to figure out the ethical and nonproliferation sides of these activities. Cummings plans hearings on the matter.
In October 2017, IP3 stated its strategy in an article on Medium. That article painted Russia and China as competitors for reactor business in the Middle East. A power grid and security apparatus are part of this plan.
ACU’s plan was grandiose, no less than transforming the Middle East and improving relations with Russia and China simultaneously. It involved 40 nuclear reactors from multiple international suppliers, a power grid, and a security apparatus. Such a plan is usually the province of nations.
IP3’s change from Russian and Chinese suppliers to American probably came about as a realization that Congress was unlikely to back selling Russian and Chinese reactors. But that undercuts the Middle East stabilization strategy of involving Russia and China to guarantee security in the area collapses.
The security apparatus may have slipped out of the plan at some point. It is not mentioned in recent reports.
At present, the plan simply seems to be for IP3 to bring American manufacturers together to sell reactors in the Middle East. The question then arises as to what IP3 is adding to existing efforts by those manufacturers.
The willingness to change the plan so substantially suggests that it was not a robust plan to begin with. The ignorance of the need for a formal agreement (“123 agreement”) with countries receiving American nuclear technology, as documented in Cummings’s memo about the whistleblower information, suggests that nobody involved was knowledgeable about the nuclear trade or cared to research it. Money may well be the motivation, as the whistleblowers seem to believe.
Good post! Covers the ground very well.
From a purely business perspective, what also appear to be true is that most of Flynn’s wires for this project were crossed and shorted out before his plane ever took off from the U.S. to the Mideast in April 2015. See my report why money may not have been the 1st thing on Flynn’s mind nor on the agendas of the consulting firms that hired him. My report here.