Former prime minister Jean Chretien has been hired on as a “senior international adviser” to Vancouver-based Ivanhoe Mines, its subsidiaries and its sister company Ivanhoe Energy.

In a press release issued by the firm last week, Ivanhoe’s notorious chairman and billionaire, Robert Friedland, heralded Chretien’s time in office, claiming, “He helped Canadians realize the promise of their destiny as a Pacific Rim nation.” Friedland continued, “We believe that Mr. Chretien’s experience and knowledge will be a prime asset in assisting the Ivanhoe companies to continue to build their businesses through opportunities that will be encountered in the energy and mineral resource sectors around the world during what is becoming the Asian Century.”

Chretien’s hiring raises troubling questions whether Ivanhoe has bought his support not just to advance the firm’s well publicized project in Mongolia but also to assist in removing Myanmar Ivanhoe Copper Company Limited (MICCL) from the American Burma sanctions list. MICCL is Ivanhoe’s 50-50 joint venture with the Burmese military regime which operates Burma’s largest mine.

Just days before President Bush left office this past January the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) added MICCL to the U.S. government’s Burma sanctions list. Ivanhoe has so far declined to comment publicly on this major development.

Although the Harper government imposed sanctions against Burma in 2007, Ivanhoe was exempted from the Canadian sanctions because they were already in Burma prior to 2007. When Ivanhoe’s joint venture was added to the American Sanctions list in January the picture became much more complicated.

The American sanctions list is designed to target the Burmese junta’s senior leadership, their business cronies and the financial networks that continue to prop up the violent military dictatorship. According to the Treasury Department when a firm or individual is added to the sanctions list “any assets the designees may have subject to U.S. jurisdiction are frozen, and all financial and commercial transactions by any U.S. person with the designated companies and individuals are prohibited.”

Up until very recently Ivanhoe appeared to be in the clear as there was wide speculation that the Obama administration would lift the sanctions against Burma. With the recent re-arrest of pro-democracy leader Aung San Suu Kyi and the ongoing show trial against her it now appears that Obama will keep the sanctions in place.

The fact that Ivanhoe’s joint venture with the Burmese military regime is on the U.S. sanctions list, is a major embarrassment for the firm and may make it harder for Ivanhoe to raise finances for their other projects due to fears that Ivanhoe will face the wrath of the American sanctions. Buying the support of a former Canadian Prime Minister will only boost Ivanhoe’s efforts to remove their joint venture with Burma’s murderous generals from the American sanctions list.

Despite denials Ivanhoe Mines still owns 50 per cent stake in Burma

In October 2006 Ivanhoe’s partner in its long stalled Mongolia project, Rio Tinto, acquired a 9.95 per cent stake in Ivanhoe Mines in a deal that stated that Ivanhoe was withdrawing from Burma. In February 2007, Ivanhoe announced that it had “sold” its 50 per cent stake in MICCL operator of Burma’s largest mine to an “independent third party trust” in return for a guarantee that when the trust sells the stake Ivanhoe will then be paid. After more than two and half years Ivanhoe continues to refuse to disclose the identity of the members of the blind trust, its structure or its activities. The Burmese military regime continues to own the other 50 per cent of MICCL.

The “blind trust” is extremely convenient for Ivanhoe because the firm can continue to own a 50 per cent stake in the mine and claim they’ve pulled out of Burma. Residents living near the Monywa mine believe that Ivanhoe has refused to address toxic pollution caused by the mine which has severely impacted neighboring farmland.

In May of this year Burma’s pro-military business weekly the Myanmar Times, reported that the Monywa copper mine run by MICCL resumed production after a year long hiatus. According to Deutsche Presse, production stopped in April 2008 after a deal with an Australian explosives supply firm expired. MICCL managing director Glenn Ford boasted to the Myanmar Times that the mine was “one of the lowest-cost production mines in the world.”

At the end of 2007 Ivanhoe, citing a lack of knowledge about what was occurring at MICCL’s Monywa copper mine, claimed that it was “prudent to record a $134.3 million write-down” in the value of their 50 per cent holding in the Burmese joint venture thus reducing its value to zero. Ivanhoe continues to own a 50 per cent stake in the joint venture as the trust has been unable to find a buyer for Ivanhoe’s Burmese holdings.

How a mine that is officially valued at zero by Ivanhoe’s accountants could still continue to produce highly valued copper remains a question that Ivanhoe refuses to explain. That for two years Ivanhoe has been able to claim in their financial statements and annual reports that the value of their Monywa assets is zero and yet the mine continues to be one of the lowest cost producers of copper in the world, is a testament to the incredibly anemic Canadian stock regulators.

Ivanhoe includes other Chretien insiders

Chretien is not the first former government official to be hired by Ivanhoe Mines — earlier this year the company hired Chretien’s former chief of staff Eddie Goldenberg and Allan Gotlieb former Canadian Ambassador to the U.S., to lobby the Canadian government about the firm’s Mongolian mining interests. The Ivanhoe board includes Howard Balloch was Jean Chretien’s point man during the 1995 Quebec referendum. The Canadian Friends of Burma have filed a formal complaint with the Canadian commissioner of lobbying over concerns regarding Mr. Gotlieb’s and Goldenberg’s filings with the commissioner.

Tin Maung Htoo is Executive Director of the Canadian Friends of Burma (CFOB) and Kevin McLeod is a member of the CFOB’s board of directors.