The Yellowcake Connection

CIA officer Mary McCarthy was fired for leaking a possibly trumped—up story about a secret network of CIA—run prisons in Europe. Ms. McCarthy's pattern of political donations, her Clinton administration White House service, and her extensive network of ties to other important Clintonista figures has set off a blogstorm of data mining and speculation.

One aspect of her background so far comparatively unexamined is her West African uranium connection. She served in a key government position concerned with West African nations producing yellowcake uranium at the same time that Joseph Wilson was working in the area. The two may be considered members of the 'yellowcake community' within the Clinton national security apparatus of the 1990s.

There are more questions than answers for the moment, but yellowcake uramium is not only of strategic importance for WMD puposes, it is also a highly profitable commodity traded under UN supervision and restrictions, a set of circumstances known to produce extraordinary opportunities for both profit and corruption, as in Oil—for—Food. These comparatively still waters may run deep. Investigators equipped with both subpoena power and security clearance may be called for.

Mary McCarthy held positions in both African and Latin American analysis desks at Langley while Wilson was U.S. Ambassador to the Gabonese Republic from 1992 to 1995.  Gabon was a producer of yellowcake uranium.  Wilson's powerful position in Gabon from 1992 to 1995 raises questions about his official trip to Niger to discredit President Bush's claim that Iraq had sought quantities of uranium from Africa. 

During his time in Gabon, Wilson must have been deeply  knowledgeable about uranium production and trade there, and must have been familiar with officials of the French energy giant COGEMA, now consolidated into the French Areva Group, a firm closely involved with the French government which appoints members of its board. Joe Wilson has his own French connection.

So, who better to send to Africa to dig up dirt to refute intelligence findings of both the US and Great Britain concerning the Iraq—Africa yellowcake trade? 

The UN's Yellowcake Loophole

But this begs the question: how could yellowcake deals proceed with nations that were already under restrictions established in the UN's Non—proliferation Treaty (NPT), and presumably under the watchful eye of the International Atomic Energy Agency (IAEA)? 

The answer is simple: in 1972 the IAEA itself enacted changes to its own regulations that allowed certain nuclear materials to be maintained and traded even by countries known to be covertly developing a nuclear capability or who supported terrorist groups.

It is important to understand that yellowcake cannot be directly introduced to the enrichment process.  It must first be converted to uranium dioxide.  In its final report, the Iraqi Survey Group (ISG)  noted that Iraq had over 4,500kg of natural uranium dioxide that was under IAEA safeguards.  There was also over 6.5 tons of uranium dioxide that had not been declared to the IAEA and was therefore not monitored by the UN.  Saddam had a huge amount of material that given the proper equipment could have been immediately enriched to make nuclear fuel for a reactor or a nuclear weapon.

Then there was the problem of the 500 tons of yellowcake, some of which had slipped under the IAEA radar.  But a key notation appears on the ISG inventory next to all of the yellowcake finds at Al—Tuwaitha: not subject to safeguards according to INFCIRC/153 corrected. 

So, according to the ISG, the baseline material that is used to manufacture uranium dioxide, which is required to be under IAEA safeguards, is itself not subject to those same safeguards!  In other words, the UN has regulated a loophole to countries that might want to manufacture enriched nuclear fuel by allowing them to have the milled yellowcake to start the enrichment process.  The regulation explains the rationale for this deceptive practice:

To avoid hampering the economic and technological development of the State or international co—operation in the field of peaceful nuclear activities, including international exchange nuclear material...[and] To avoid undue interference in the State's peaceful nuclear activities, and in particular in the operation of facilities....

The Information Circular is very specific that safeguards shall not apply to material in mining or ore processing activities — that means milled yellowcake.  You read that right; not all of Iraq's uranium was subject to safeguards  — so that ostensibly it could aid in its economic development.  Therefore, any tin pot dictator could acquire and trade in processed yellowcake, just as long as they declared it to the IAEA.  Apparently, the UN felt that it could ferret out any hidden equipment or facilities that could be used to enrich converted uranium. 

Thanks to the release and analysis of the huge collection of seized documents and recordings, we now know that the UN's confidence in preventing banned equipment from being imported to Iraq was wildly misplaced.

This regulatory loophole also answers the question of why Saddam was allowed to retain this yellowcake at Al—Tuwaitha, even though his known nuclear reactors and enrichment labs were long ago destroyed and never repaired.  It's because he could; and possibly because the profit potential of trading in yellowcake is very lucrative.

The value of uranium has skyrocketed  in the last three years.  When Operation Iraqi Freedom was winding down in April of 2003, the spot price of milled yellowcake was $10.75 per pound; the current price has boomed to $41.00 per pound.  Today, the former dictator's stockpile of yellowcake is worth well over $41 million.  The market price will probably increase since the global demand for oil is finally causing developed nations to take another look at nuclear power in order to reduce demand for petroleum.

Speaking of dealing in commodities, this whole affair brings us back to square one and Mary McCarthy.  One of her previous employers was Beri, SA.  Possibly by coincidence Beri provides a Mineral Extraction Risk Assessment  service for up to 145 countries that are expected to show rapid growth in oil, gas, and mineral extraction capacity.  If one had advance access to economic intelligence and had fostered close business ties over the years with uranium producers, huge financial gains would be possible.  Could the Wilson—McCarthy—Africa connection may indicate another instance of US intelligence and Foreign Service personnel taking advantage of regulatory loopholes and lax security in third world countries for personal gain?

There have been many indicators since the Iraq War started that the CIA's internal war against the administration is much more than ideological.  For some in the CIA, the Global War on Terror is not just about the struggle for democracy and freedom to protect our national interest.  

Douglas Hanson is the national security correspondent of The American Thinker

CIA officer Mary McCarthy was fired for leaking a possibly trumped—up story about a secret network of CIA—run prisons in Europe. Ms. McCarthy's pattern of political donations, her Clinton administration White House service, and her extensive network of ties to other important Clintonista figures has set off a blogstorm of data mining and speculation.

One aspect of her background so far comparatively unexamined is her West African uranium connection. She served in a key government position concerned with West African nations producing yellowcake uranium at the same time that Joseph Wilson was working in the area. The two may be considered members of the 'yellowcake community' within the Clinton national security apparatus of the 1990s.

There are more questions than answers for the moment, but yellowcake uramium is not only of strategic importance for WMD puposes, it is also a highly profitable commodity traded under UN supervision and restrictions, a set of circumstances known to produce extraordinary opportunities for both profit and corruption, as in Oil—for—Food. These comparatively still waters may run deep. Investigators equipped with both subpoena power and security clearance may be called for.

Mary McCarthy held positions in both African and Latin American analysis desks at Langley while Wilson was U.S. Ambassador to the Gabonese Republic from 1992 to 1995.  Gabon was a producer of yellowcake uranium.  Wilson's powerful position in Gabon from 1992 to 1995 raises questions about his official trip to Niger to discredit President Bush's claim that Iraq had sought quantities of uranium from Africa. 

During his time in Gabon, Wilson must have been deeply  knowledgeable about uranium production and trade there, and must have been familiar with officials of the French energy giant COGEMA, now consolidated into the French Areva Group, a firm closely involved with the French government which appoints members of its board. Joe Wilson has his own French connection.

So, who better to send to Africa to dig up dirt to refute intelligence findings of both the US and Great Britain concerning the Iraq—Africa yellowcake trade? 

The UN's Yellowcake Loophole

But this begs the question: how could yellowcake deals proceed with nations that were already under restrictions established in the UN's Non—proliferation Treaty (NPT), and presumably under the watchful eye of the International Atomic Energy Agency (IAEA)? 

The answer is simple: in 1972 the IAEA itself enacted changes to its own regulations that allowed certain nuclear materials to be maintained and traded even by countries known to be covertly developing a nuclear capability or who supported terrorist groups.

It is important to understand that yellowcake cannot be directly introduced to the enrichment process.  It must first be converted to uranium dioxide.  In its final report, the Iraqi Survey Group (ISG)  noted that Iraq had over 4,500kg of natural uranium dioxide that was under IAEA safeguards.  There was also over 6.5 tons of uranium dioxide that had not been declared to the IAEA and was therefore not monitored by the UN.  Saddam had a huge amount of material that given the proper equipment could have been immediately enriched to make nuclear fuel for a reactor or a nuclear weapon.

Then there was the problem of the 500 tons of yellowcake, some of which had slipped under the IAEA radar.  But a key notation appears on the ISG inventory next to all of the yellowcake finds at Al—Tuwaitha: not subject to safeguards according to INFCIRC/153 corrected. 

So, according to the ISG, the baseline material that is used to manufacture uranium dioxide, which is required to be under IAEA safeguards, is itself not subject to those same safeguards!  In other words, the UN has regulated a loophole to countries that might want to manufacture enriched nuclear fuel by allowing them to have the milled yellowcake to start the enrichment process.  The regulation explains the rationale for this deceptive practice:

To avoid hampering the economic and technological development of the State or international co—operation in the field of peaceful nuclear activities, including international exchange nuclear material...[and] To avoid undue interference in the State's peaceful nuclear activities, and in particular in the operation of facilities....

The Information Circular is very specific that safeguards shall not apply to material in mining or ore processing activities — that means milled yellowcake.  You read that right; not all of Iraq's uranium was subject to safeguards  — so that ostensibly it could aid in its economic development.  Therefore, any tin pot dictator could acquire and trade in processed yellowcake, just as long as they declared it to the IAEA.  Apparently, the UN felt that it could ferret out any hidden equipment or facilities that could be used to enrich converted uranium. 

Thanks to the release and analysis of the huge collection of seized documents and recordings, we now know that the UN's confidence in preventing banned equipment from being imported to Iraq was wildly misplaced.

This regulatory loophole also answers the question of why Saddam was allowed to retain this yellowcake at Al—Tuwaitha, even though his known nuclear reactors and enrichment labs were long ago destroyed and never repaired.  It's because he could; and possibly because the profit potential of trading in yellowcake is very lucrative.

The value of uranium has skyrocketed  in the last three years.  When Operation Iraqi Freedom was winding down in April of 2003, the spot price of milled yellowcake was $10.75 per pound; the current price has boomed to $41.00 per pound.  Today, the former dictator's stockpile of yellowcake is worth well over $41 million.  The market price will probably increase since the global demand for oil is finally causing developed nations to take another look at nuclear power in order to reduce demand for petroleum.

Speaking of dealing in commodities, this whole affair brings us back to square one and Mary McCarthy.  One of her previous employers was Beri, SA.  Possibly by coincidence Beri provides a Mineral Extraction Risk Assessment  service for up to 145 countries that are expected to show rapid growth in oil, gas, and mineral extraction capacity.  If one had advance access to economic intelligence and had fostered close business ties over the years with uranium producers, huge financial gains would be possible.  Could the Wilson—McCarthy—Africa connection may indicate another instance of US intelligence and Foreign Service personnel taking advantage of regulatory loopholes and lax security in third world countries for personal gain?

There have been many indicators since the Iraq War started that the CIA's internal war against the administration is much more than ideological.  For some in the CIA, the Global War on Terror is not just about the struggle for democracy and freedom to protect our national interest.  

Douglas Hanson is the national security correspondent of The American Thinker