(Adds IP3 comment, paragraph 17)
By Jonathan Landay and Timothy Gardner
WASHINGTON, July 29 (Reuters) - Tom Barrack, a billionaire friend of U.S. President Donald Trump, pursued a plan to buy Westinghouse Electric Corp even as he lobbied Trump to become a special envoy to promote the building by the firm of nuclear power plants in Saudi Arabia, said a congressional report released on Monday.
While Barrack failed in both efforts, the report provides fresh evidence of the ease with which some corporate and foreign interests have gained access to Trump and other senior members of his administration.
Documents obtained by the Democratic-led U.S. House of Representatives Oversight Committee 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,” the report said.
The report is the second from the panel’s investigation into the plan to construct 40 nuclear power plants in Saudi Arabia and elsewhere in the Middle East. The plan was supported by Trump’s first national security adviser Michael Flynn, Barrack, Trump’s inaugural committee chairman, and a consortium of firms led by retired U.S. military commanders and former White House officials called IP3.
One company was Westinghouse, the only U.S. manufacturer of large reactors, which was bought out of bankruptcy by Brookfield Asset Management last August.
The report comes alongside a number of other investigations into the administration being conducted by the panel chaired by Representative Elijah Cummings - including into the use of personal texts and emails for official business by Trump’s daughter, Ivanka, and her husband, Jared Kushner.
Trump attacked Cummings, an African American from Baltimore, in weekend tweets that the president’s critics denounced as racist.
Monday’s report was based largely on thousands of documents provided by unidentified private companies. The White House, the report said, provided no documents, while other federal agencies submitted some.
The committee may subpoena White House documents, it said.
Documents showed that Barrack negotiated with Trump and other White House officials to seek “powerful positions,” including special Middle East envoy, as he took steps to profit from the civil nuclear scheme he advocated.
A previous committee report, published in February, said efforts to advance the nuclear power scheme began during Trump’s 2016 presidential campaign.
Trump officials have continued meeting with IP3 even though White House lawyers in January 2017 instructed staff to cease work on the plan over concerns that Flynn was breaking conflict of interest laws, according to that report. Flynn, fired by Trump in February 2017, advised IP3 while serving on his campaign and transition team, said both reports.
White House lawyers also worried that promoters of IP3’s so-called “Middle East Marshall Plan” sought to transfer U.S. nuclear know-how to Saudi Arabia even as they pushed back on Riyadh’s behalf against certain safeguards, the reports said. Known as the “Gold Standard,” the safeguards are designed to prevent nuclear weapons development. IP3 called the standard a “total roadblock,” Monday’s report said.
Barrack has been cooperating with the oversight committee and provided it with requested documents, a spokesman said. Barrack’s investments and business development in the region are for a “better aligned Middle East,” he said. “This is not political it is essential.”
The White House did not immediately respond to requests for comment.
IP3 said the report linked misunderstandings about the oversight over the transfer of nuclear energy technology to foreign nations with conspiracy theories and allegations “to create an arbitrary and contrived story that doesn’t reflect the reality that occurred.”
Texts and emails showed that Barrack sought to shape Trump’s approach to Gulf Arab states early on by sharing a draft of a Trump campaign speech with Rashid al-Malik, an Emirati businessman. Malik circulated the draft to Emirati and Saudi officials, Monday’s report said.
Barrack then shared Malik’s suggestions about the speech with Paul Manafort, a political consultant who chaired Trump’s campaign at the time, the report said. Manafort was convicted in 2018 of bank fraud and tax evasion in charges that grew out of former Special Counsel Robert Mueller’s investigation into Russia’s interference in the 2016 election.
The New York Times on Sunday reported that federal prosecutors investigating foreign influence on Trump’s campaign are examining Barrack’s exchanges with Malik.
Neither Barrack, chairman of Colony Capital, a private equity firm, nor Malik are registered as lobbyists for foreign interests with the Justice Department.
Barrack, the report said, began communicating days before Trump’s inauguration with IP3 co-founder Robert “Bud” McFarlane, a national security adviser to the late President Ronald Reagan. In an email to Barrack following a Jan. 23, 2017, meeting, McFarlane said it would be fitting for Trump to name Barrack as his “personal representative to promote the execution” of the nuclear reactor scheme.
Documents also showed that in mid-2017, Barrack, his company and IP3 discussed purchasing Westinghouse out of bankruptcy in partnership with Saudi Arabia’s sovereign wealth fund, which is headed by Saudi Crown Prince Mohammed bin Salman, and other investors, the report said.
Barrack ultimately failed, with two other U.S. investment firms, to purchase Westinghouse.
But after Brookfield Asset Management announced in January 2018 its winning bid for the company, Barrack asked Brookfield Chief Executive Bruce Flatt whether he could join the venture, the report said. There is no evidence Barrack was successful.
Days after buying Westinghouse, Brookfield announced it agreed to a 99-year lease on a Manhattan building owned by Kushner’s family - a deal that saved the Kushner Companies’ property.
The report also cites a series of documents showing how the nuclear power scheme was discussed between IP3, Barrack and senior administration officials. Those talks appear to have included a White House meeting between Trump, Barrack and other Colony employees on the same day that Trump met with the Saudi crown prince, on March 14, 2017 the report said. (Reporting by Jonathan Landay and Timothy Gardner; Editing by Tom Brown and Lisa Shumaker)