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What Does the ‘Doomsday Investor’ Get out of Trump?

[Note the byline. This post may contain speculative content. / ~Rayne]

There’s a particularly interesting long read by Sheelah Kolhatkar in this week’s New Yorker, entitled, Paul Singer, Doomsday Investor.

If you’re not into investment and Wall Street machinations, you might go to sleep on this one. Even the subhead is a bit of a snooze if you’re not interested in the world of money:

The head of Elliott Management has developed a uniquely adversarial, and immensely profitable, way of doing business.

This blurb could describe almost any manager on Wall Street if they’ve broken with trends and employed some testosterone-enhanced swagger at some point in their career.

But stay with this one, the payoff is in the latter half of the article. Perhaps you already know of Paul Singer — just roll to the latter half.

Singer is a major funder of Washington Free Beacon, which some of you will recognize as a conservative online media outlet. It’s not very big and its output is rather predictable once you grasp its apparent ideology.

You may also remember this outlet as the progenitor of the competitive intelligence dossier on then-candidate Donald Trump, which eventually ended with Free Beacon and picked up again with law firm Perkins Coie on behalf of the Hillary Clinton campaign. The folio eventually included the Steele dossier once Free Beacon’s research contractor Fusion GPS was signed on by Perkins Coie and Fusion GPS hired Christopher Steele’s UK-based firm Orbis Business Intelligence to provide additional overseas content.

Free Beacon admitted it was the origin of the initial pre-Steele Trump dossier, copping to it on October 27, 2017 — long after part of the Steele dossier had been published by BuzzFeed and after Fusion GPS’ Glenn Simpson had been interviewed by the Senate Intelligence Committee (August 22, 2017) but before an interview with the House Permanent Select Committee on Intelligence (November 14, 2017).

What’s particularly interesting about the New Yorker article is the description of dossiers compiled and used as leverage to muscle a certain type of performance from business managers. Singer’s team at his hedge fund Elliott Management uses them with what appears to be practiced ease for profit as in this example:

The pressure that Elliott exerts, combined with its fearsome reputation, can make even benign-sounding statements seem sinister. In 2012, Elliott made an investment in Compuware, a software company based in Detroit. Arbitration testimony by former Compuware board members hints at just how negatively they interpreted some of Elliott’s actions. During an early meeting, one of them testified, Cohn presented folders containing embarrassing personal information about board members, which they saw as a threat to publicize the contents. Cohn allegedly mentioned the daughter of one board member, and commented disapprovingly on the C.E.O.’s vintage Aston Martin, a car that few people knew he owned. The company’s co-founder, Peter Karmanos, accused Elliott of “blackmailing” Compuware’s board, and reportedly remarked that the fund “can come in, rip apart the pieces” of a company, and “try to have a fire sale and maybe make twenty per cent on their money, and they look like heroes.”

Cohn told me that Compuware’s executives were “very firmly in that fear camp.” He was surprised that material on their professional backgrounds—which he says was all those folders contained—was “interpreted as a dossier of threatening personal information,” and noted that driving an Aston Martin looked bad for a C.E.O. whose biggest customers were Detroit automakers. Compuware was ultimately sold to a private-equity firm.

The really nifty trick Singer pulled off outside of Elliott Management is his arm’s length relationship to the Washington Free Beacon as a funder though the Free Beacon uses research dossiers prepared by contractors in much the same way as Elliott Management.

Conversion of Washington Free Beacon from a nonprofit 501(c)4 news outlet to a for-profit business in August 2014 also assured additional distance and privacy for Singer. A nonprofit is obligated to file reports with the government which are available to the public. For-profit businesses that are privately held do not.

And for-profit news outlets can do all manner of research and not have to share it with the public, protected by the First Amendment (“reporters’ privilege,” however, does have a limit — see Branzburg v. Hayes, 408 U.S. 665 (1972))

One can only wonder what kind of research Washington Free Beacon has collected but not actually shared with the public in reporting. Has funder Paul Singer or his business Elliott Management had access to this research?

One can only wonder, too, what it is that Paul Singer has obtained from the Trump presidency, as Singer has been depicted as anti-Trump:

… The Beacon has a long-standing and controversial practice of paying for opposition research, as it did against Hillary Clinton throughout the 2016 Presidential campaign. Singer was a vocal opponent of Trump during the Republican primaries, and, last year, it was revealed that the Beacon had retained the firm Fusion GPS to conduct research on Trump during the early months of the campaign. By May, 2016, when it had become clear that Trump would be the Republican nominee, the Beacon told Fusion to stop its investigation. Fusion was also hired by the Democratic National Committee, and eventually compiled the Christopher Steele dossier alleging collusion between the Trump campaign and the Russian government. … (Emphasis mine.)

With so little daylight between Singer and Free Beacon and the abrupt end of Free Beacon’s intelligence research when Trump became the Republican Party’s presumptive nominee for president, one might wonder why the research halted if Singer was so anti-Trump.

Or are there benefits for a “Doomsday Investor” to having someone so easily compromised and predictably narcissistic in the White House — benefits none of the GOP primary candidates nor Hillary Clinton offered? Was the Free Beacon’s initial dossier on Trump prepared not to find fault in order to deter his election, but instead to provide leverage?

Note once again the Free Beacon is “a privately owned, for-profit online newspaper” according to its About Us page. Yet the outlet doesn’t have advertising — only a single banner slot off the front page which might be a donation rather than a sold spot — and a store selling Free Beacon branded items, the kind typically used for promotional swag. If this is a for-profit business, what’s it selling?

Treat this as an open thread.

10 Years Out: What’s with the Bear in the Middle?

[NB: Check the byline — it’s me, Rayne. I am not a registered financial representative or a lawyer; this post is based on my own observations and opinions. As always, your mileage may vary.]

On a chilly March evening ten years ago tonight, I was yelling at loved ones: Sell. For gods’ sake, SELL.

My own household had moved its investments from a number of mutual funds to guaranteed income. Every fund in the portfolio to that point contained a chunk of an investment bank and was therefore exposed to what I felt was sure to come.

It was obvious to anyone who was really paying attention that something was really off. Trying to buy a house in 2004 was almost impossible where I live, in spite of the ongoing migration of manufacturing jobs offshore. In the target price range for a 2000-square foot house, there were only a handful of homes listed and they all needed more than $50K in improvements. The nearby farmers’ fields were full of a new crop: single-family homes, mostly 3-bedroom and up, had eaten acres and acres in less than a year. It was insanity — there was no way this pace could be maintained, not with my state’s problematic over-reliance on the automobile industry.

Instead of buying an existing home, I built a new one. It didn’t make sense to spend $50K on improvements requiring a lot of construction if I couldn’t guarantee I could hire a contractor when new construction was so hot. I didn’t build in the top end neighborhood, either. I left myself some room in case I had to leave the area quickly for a new job; I also left room for the market to improve.

Except it didn’t. The last landscaping contractor must have pulled away from my new home in 2005 just as the bubble began to deflate. There were signs it was going to get worse, too, what with fuel prices skyrocketing. Banks increasingly offered crazy terms on mortgages just so they could something, anything, not taking the hint the market was saturated. Given the number of people relying too heavily on adjustable rate mortgages with ridiculously low entry rates, the increased gasoline price costing the average family more than $1000 a year was certain to cause credit card defaults and foreclosures.

Something ugly was coming.

~ ~ ~

In March 2008 — almost exactly a month after the Washington Post published an op-ed by New York’s then-Governor Eliot Spitzer exhorting action on subprime mortgages — 85-year-old  American investment bank Bear Stearns crashed and burned.

After urgent, fancy foot work by the Federal Reserve Bank, J.P. Morgan and other key investors, settlements were made with bail out money and remnants of the firm were ultimately snapped up by J.P. Morgan for what amounted to the cost of Bear Stearn’s headquarters building, about $2 per share. By St. Patrick’s Day, Bear Stearns was no more, completely subsumed.

It would be another six months before the next large investment bank crashed — Lehman Brothers — taking the global economy with it.

~ ~ ~

At the time the crash was blamed on lax controls on lending to home buyers, encouraging an excess of subprime mortgages, combined with investment banks’ more recent taste for collateralized debt obligations bundling mortgages into tranches for slicing up and trading.

But not all of the trash loans were residential mortgages stuffed into tranches. Some of the loans were to developers and contractors who were building commercial facilities and multi-family buildings. Some of these loans were packaged into funds which were more like offshore corporations.

The two funds triggering Bear Stearns’ meltdown were just that: offshore funds incorporated in the Cayman Islands in 2003, holding various assets including tranches of poorly-collateralized mortgages, managed by Bear Stearns Asset Management (BSAM). What mortgages were in these two funds the public doesn’t really know; were they single-family residential mortgages or commercial facilities mortgages, or some combination? The information is out there somewhere but it’s not at the public’s fingertips.

The financial media still paints a messy picture even a decade later, blaming Bear Stearns management but not its own persistent failure to provide a more comprehensive and accessible picture of the financial industry’s health.

These two funds collapsed because too many mortgages within their CDOs failed; the effect on the bank was like pulling out two critical load-bearing pieces in a game of Jenga. The cascading demand for cash to resolve the failures may have pushed other investment banks’ equally sketchy funds to fail as well, crashing the entire heap nearly a decade ago.

~ ~ ~

It was a surprise blast from the unpleasant past to see Bear Stearns’ name pop up in the middle of recent testimony before the House Permanent Subcommittee on Intelligence. Fusion GPS’ Glenn Simpson cited the investment bank as a source of financing for Donald Trump and some sketchy condominium development.

[SIMPSON]… There’s the Trump vodka business that was earlier. And then ultimately, you know, what we came to realize was that the money was actually coming out of Russia and going into his properties in Florida and New York and Panama and Toronto and these other places.

And what we, you know, gradually begun to understand, which, you know, I suppose I should kick myself for not figuring out earlier, but I don’t know that much about the real estate business, which is I alluded to this earlier, so, you know, by 2003, 2004, Donald Trump was not able to get bank credit for — and if you’re a real estate developer and you can’t get bank loans, you know, you’ve got a problem.

And all these guys, they used leverage like, you know, — so there’s alternative systems of financing, and sometimes it’s — well, there’s a variety of alternative systems of financing. But in any case, you need alternative financing.

One of the things that we now know about how the condo projects were financed is that you have to — you can get credit if you can show that you’ve sold a certain number of units.

So it turns out that, you know, one of the most important things to look at is — this is especially true of the early overseas developments, like Toronto and Panama — you can get credit if you can show that you sold a certain percentage of your units.

And so the real trick is to get people who say they’ve bought those units, and that’s where the Russians are to be found, is in some of those pre-sales, is what they’re called. And that’s how, for instance, in Panama they got the credit of — they got a — Bear Stearns to issue a bond by telling Bear Stearns that they’d sold a bunch of units to a bunch of Russian gangsters.

And, of course, they didn’t put that in the underwriting information, they just said, we’ve sold a bunch of units and here’s who bought them, and that’s how they got the credit. So that’s sort of an example of the alternative financing. … [bold mine, excerpt pages 95-96]

The timing mentioned, 2003-2004, is very close to the time that Bear Stearns launched the two Cayman-based funds which failed first. Is it possible Trump’s financing provided by Bear Stearns ended up in the funds’ CDOs? Probably not — Simpson refers to bonds. But let’s look at a financial statement from one of the subject funds:

It’s difficult to tell what’s in any of the CDOs listed in this summary. Who knows what mortgages are in them or from where they originated without access to more details?

Note the bonds at the bottom — again, what’s in them? What percentage of these bonds consisted of dicey or outright fraudulent financing for construction related to money laundering? Again, we can’t tell without access to more granular details. We don’t know whether bond(s) offered to Trump developments were in Bear Stearns’ first two failed funds or if they helped cause the eventual financial pyroclastic flow toward Bear Stearns’ end.

~ ~ ~

Another thing sticks in my craw — a bit from Michael Lewis’ The Big Short:

The bond market, because it consisted mainly of big institutional investors, experienced no similarly populist political pressure. Even as it came to dwarf the stock market, the bond market eluded serious regulation. Bond salesmen could say and do anything without fear that they’d be reported to some authority. Bond traders could explore inside information without worrying that they would be caught. Bond technicians could dream up ever more complicated securities without worrying too much about government regulation — one reason why so many derivatives had been derived, one way or another, from bonds. … [bold mine]

In other words, nobody would look askance at all at bonds sold to finance a condominium development with rather thin commitment to payment. Nobody looked askance at the ratio of CDOs to bonds, either, though Bear Stearns would try to offset the CDOs’ losses by liquidating bonds. This fund as an example couldn’t manage this offset based on the ratio alone; it would have been catastrophically worse if the collateral beneath the bonds was as fraudulent as many subprime adjustable rate mortgages in CDOs were at the time.

The root cause of the 2008 crash remains the collapse of poorly collateralized as well as fraudulent mortgages. But I have to wonder:

— With so much attention on CDOs and mortgage defaults combined with a lack of bond market adequate monitoring, how much did crappy bonds, based on fraudulent representations of collateral, contribute to the crash?

— If there was so little regulation and oversight of the bond market, how much sketchy or fraudulent project financing was in bonds on the banks’ books — including projects like Trump’s, based on promises to pay made by offshore vehicles or non-U.S. citizens?

— With so little regulation and oversight, would it have been possible for one or more nation-states using offshore finance vehicles to “weaponize” banks’ books? How many of the crappy bonds contributing to the 2008 crash were based on poorly collateralized pre-sales to Russian oligarchs and gangsters?

— What assurances do we have today — especially with Mick Mulvaney defunding the Consumer Finance Protection Bureau and knocking off an opportunity to look more deeply into credit reporting by killing off the Equifax investigation — that investment banks have changed their practices and ensured legitimate projects are financed?

—What assurances do we have that our legislators see the slippery slip when they approve legislation like S. 2155 just this week, weakening Dodd-Frank reforms?

~ ~ ~

Recall the state of the economy between Bear Stearns’ and Lehman Brothers’ crashes. Oil prices rose to over $150/barrel, resulting in $4/gallon gasoline. Other commodity prices rose in tandem with fuel prices. The home buyers who could least afford any change in their household expenses were the same ones targeted for subprime mortgages with shady terms; it came down to paying for gas to get to work and feeding the family, or making the mortgage payment.

The price of oil at the time had been driven up by excess speculation. Legislation passed in June 2008 requiring all commodity futures trading to require a minimum of 30% margin upfront rather than 10%. Oil prices dropped drastically and reduced in volatility almost overnight, but it was already too late. Too many home buyers could no longer afford their payments and mortgage defaults began to snowball.

Which brings me to yet another question: if the bond market could have been “weaponized” at that time, could a volatile commodities market likewise have been used as a trigger?

Are there any other weak points in our market which could be “weaponized,” for that matter?

~ ~ ~

On this tenth anniversary after the crash began with Bear Stearns’ collapse, I feel more secure about my retirement portfolio. There were no frantic phone calls to family members exhorting moves to safety this evening. My exposure to the remaining weaknesses of investment banking have been minimized as much as possible, though I remain vulnerable because I have a mortgage. Real estate isn’t the sure return it once was. Only uber-wealthy investors buying into certain urban markets come out on top. But wealthy real estate investors can still cause self-inflicted damage.

Atlanta, Georgia’s market has turned around since the crash — but it was home to another failed Trump real estate project, a 363-unit Trump Tower which went into foreclosure with pre-sales of only 100 units. (In January 2017, Trump ranted about Atlanta as Rep. John Lewis’ district, calling it “falling apart” and “crime infested.” One wonders what crime he meant…)

Hollywood, Florida had a brush with a failed Trump project:

In 2006, he and billionaire condo king Jorge Perez began selling a 23-story apartment building near Mar-a-Lago, but the project was abandoned a year later because of slow sales. Another Perez-Trump deal, the 200-unit Hollywood oceanfront tower, was foreclosed in 2010 after selling less than 15% of its units. (The building eventually opened, still Trump-branded, but without Perez.)

So did the Miami, Florida area:

Trump Sunny Isles, a three-tower residential complex outside Miami, has also struggled. Trump partnered with Perez again and another developer named Gil Dezer to build the project, which targeted wealthy Latin Americans. . . .

Unfortunately, the last two towers of the development opened in the middle of the financial crisis, and Perez bailed on them. . . .

And Puerto Rico, too, was home to a Trump-branded golf course which failed in 2015.

Though with so many failures followed by continued attempts, it’s worth asking if this is a business model. How does Trump continue to benefit from so much failure? How do the backers he has benefit from staking Trump money or title?

Trump’s business alone wasn’t the cause of the 2008 crash. There were far more players involved — millions, if we want to blame residential homeowners who were misled by banks to believe they could safely contract a mortgage in spite of either inadequate collateral or income and ultimately forced into foreclosure. But at least one of Trump’s business projects was in the mix if Fusion’s Simpson’s testimony is truthful; what would keep Trump or real estate investors like Trump from contributing to (if not causing) another crash today?

We must ask when we see that Trump’s former campaign manager Paul Manafort and his former son-in-law Jeffrey Yohai were engaged in sketchy real estate development projects the community/regional Banc of California may have deterred by forcibly shutting their accounts.

And ask again when we see a community bank like The Federal Savings Bank of Chicago involved in another of Manafort’s bank frauds.

The damage could be even worse, in the case of Trump’s son-in-law Jared Kushner, who is over his head in debt on 666 Fifth Avenue and whose family business is distressed, possibly causing geopolitical turmoil to shakedown new financing.

How many of these flimsy real estate deals and junky mortgages, loans, and bonds are there in the system when we can now see these affiliated with the president and his campaign advisers? How many of them will it take to cause another crash if legislators continue to pick away at safeguards?

Let’s hope I’m not writing another financial postmortem like this one in March 2028.

Three Things: This Matin, Think Latin

I have three things cluttering up my notes — just big enough to give pause but not big enough for a full post. I’ll toss them out here for an open thread.

~ 3 ~
Aluminum -> Aeronautics -> Stock Market and Spies
I’ve spent quite a while researching the aeronautics industry over the couple of years, trying to make sense out of a snippet in the Buryakov spy case indictment. The three spies were at one point digging into an aeronautics company, but the limited amount of information in the indictment suggested they were looking at a non-U.S. company.

You can imagine my surprise on December 6, 2016, when then-president-elect tweeted about Boeing’s contract for the next Air Force One, complaining it was too expensive. Was it Boeing the spies were discussing? But the company didn’t fit what I could see in the indictment, though Boeing’s business is exposed to Russia, in terms of competition and in terms of components (titanium, in particular).

It didn’t help that Trump tweeted before the stock market opened and Boeing’s stock plummeted after the opening bell. There was plenty of time for dark pool operators to go in and take positions between Trump’s tweet and the market’s open. What an incredible bonanza for those who might be on their toes — or who knew in advance this was going to happen.

And, of course, the media explained this all away as Trump’s “Art of the Deal” tactics, ignoring the fact he wasn’t yet president and he was renegotiating the terms of a signed government contract before he took office. (Ignoring also this is not much different than renegotiating sanctions before taking office…)

I was surprised again only a couple weeks later about Boeing and Lockheed; this time I wasn’t the only person who saw the opportunity, though the timing of the tweet and market opening were different.

Again, the media took note of the change in stock prices before rolling over and playing dead before the holidays.

There have been a few other opportunities like this to “take advantage of the market,” though they are a bit more obscure. Look back at the NYSE and S&P trends whenever Trump has tweeted about North Korea; if one knew it was coming, they could make a fortune.

A human would only need the gap as long as that between a Fox and Friends’ mention of bad, bad North Korea and a corresponding Trump tweet to make the play (although one might have to watch that vomit-inducing program to do this). An algorithm monitoring FaF program and Trump tweets would need even less time.

Yesterday was somebody’s platinum opportunity even if Trump was dicking around with U.S. manufacturers (including aeronautics companies) and global aluminum and steel producers. His flip-flop on tariffs surely made somebody beaucoup bucks — maybe even an oligarch with a lot of money and a stake in one of the metals, assuming he knew in advance where Trump was going to end up by the close of the market day. The market this morning is still trying to make sense of his ridiculous premise that trade wars are good and winnable; too bad the market still believes this incredibly crappy businessman is fighting a war for U.S. trade.

Just for the heck of it, go to Google News, search for [trump tariffs -solar], look for Full Coverage, sort by date and not relevance. Note how many times you see Russia mentioned in the chronologically ordered feed — mine shows exactly zero while China, Korea, Germany are all over the feed. I sure hope somebody at the SEC is paying as much attention to this as cryptocurrency.

I suppose I have to spell this out: airplanes are made of aluminum and steel, capisce?

~ 2 ~
Italian Son
One niggling bit from Glenn Simpson’s testimony for Fusion GPS before the Senate Intelligence Committee has stuck with me. I wish I could time travel and leave Simpson a note before testimony and tell him, “TELL US WHAT YOU SEE, GLENN!” when he is presented with Paul Manafort’s handwritten notes. The recorder only types what was actually said and Glenn says only the sketchiest bit about what he sees. Reading this transcript, we have only the thinnest amount of context to piece together what he sees.

Q. Do any of the other entries in here mean anything to you in light of the research you’ve conducted or what you otherwise know about Mr. Browder?

A. I’m going to — I can only speculate about some of these things. I mean, sometimes —

MR. LEVY: Don’t speculate.

A. Just would be guesses.

Q. Okay.

A. I can skip down a couple. So “Value in Cyprus as inter,” I don’t know what that means.”Illici,” I don’t know what that means. “Active sponsors of RNC,” I don’t know what that means. “Browder hired Joanna Glover” is a mistaken reference to Juliana Glover, who was Dick Cheney’s press secretary during the Iraq war and associated with another foreign policy controversy. “Russian adoptions by American families” I assume is a reference to the adoption issue.

Q. And by “adoption issue” do you mean Russia prohibiting U.S. families from adopting Russian babies as a measure in response to the Magnitsky act?

A. I assume so.

Bold mine, to emphasis the bit which has been chewing away at me. “Illici” could be an interrupted “illicit”; the committee and Simpson use the word or a modifier, illicitly, eight times during the course of their closed door session. It’s not a word we use every day; the average American Joe/Josie is more likely to use “illegitimate” or the even more popular “illegal” to describe an unlawful or undesirable action or outcome.

(I’m skeptical Manafort was stupid enough to begin scratching out “illicit” and catch himself in time, but then I can’t believe how stupid much of this criminality has been.)

But the average American Joe/Josie doesn’t travel abroad, speak with Europeans often, or speak second languages. The average white Joe/Josie may be three or more generations from their immigrant antecedents.

Not so Mr. Manafort, who is second generation Italian on both sides of his family. He may speak some Italian since his grandfather was an immigrant — and quite likely Catholic, too. Hello, Latin masses in Italian American communities.

Did Manafort mean “illici,” a derivative of Latin “illicio,” which means to entice or seduce? Or was it a corrupted variant of Latin “illico,” which means immediately?

Or is Manafort a bad speller who really meant either “elici”, “elicio,” or “elicit,” meaning to draw out or entice?

Like Simpson, these are just guesses. Only Manafort really knows and I seriously doubt he’ll ever tell what he meant.

~ 1 ~
If you haven’t checked your personal online privacy and cybersecurity recently, give Privacy Haus’s checklist a look. Nearly all of the items I’ve already addressed but I tried one of the items suggested as a fix to an ongoing challenge. Good stuff!

~ 0 ~
That’s it, have at it in this open thread! One last thing: if you didn’t read Marcy’s op-ed, Has Jared Kushner Conspired to Defraud America? in Wednesday’s NYT, you should. You’re going to need it as part of a primer going forward.

The Ohrs’ Activities Raise New Questions about the December 13 Dossier Report

In recent days, Republicans have leaked details about the actions of Bruce and Nellie Ohr with respect to the Fusion GPS dossier on Trump. Yesterday, Glenn Simpson confirmed those details in a filing in Fusion’s efforts to prevent the House Intelligence Committee from obtaining more details about Fusion’s finances.

The bank records reflect that Fusion contracted with Nellie Ohr, a former government official expert in Russian matters, to help our company with its research and analysis of Mr. Trump[.]

[snip]

I disclosed that I met with Bruce Ohr, at his request, after the November 2016 election to discuss our findings regarding Russia and the election[.]

In short, this revelation means that Fusion employed the wife of then Associate Deputy Attorney General Bruce Ohr to conduct research on Trump’s Russian ties. Ohr met with Christopher Steele before the election, and met with Simpson after the election.

This probably means that this reference, in HPSCI’s request for documents, is to Nellie Ohr.

Which in turn would man that Fusion paid Ohr on March 22, April 6, May 25, July 13, August 2, September 1, October 5, November 1.

That would mean the payments to Steele are either item 2 or 4 in this analysis. That’s significant because both of those entities received payments in January.

I’m interested in all that for two reasons. First, the record conflicts on whether DOJ ever paid Steele.

WaPo reported that Steele had reached a verbal agreement that the FBI would pay him to continue his investigation of Russia’s involvement with Trump after still unnamed Democrats stopped paying him after the election. CNN then reported that FBI actually had paid Steele for his expenses. Finally, NBC reported Steele backed out of the deal before it was finalized.

If Ohr met with Steele after the election (and after Perkins Coie reportedly stopped paying for Steele’s work), it means it’s possible DOJ paid him, contrary to some reports. Steele has claimed (in otherwise dubious court filings) that he was neither pair nor affirmatively solicited information for the last report, dated December 13.

The December 13 report was by far the most inflammatory one, alleging that Trump’s campaign paid for the hack of the DNC. It’s also at the center of some of the lawfare surrounding the dossier, Webzilla’s multiple lawsuits.

This is by no means definitive. But the circumstances of the December 13 report will come out one way or another. Thus far, the story about it is bad. And it could get far worse.

Three Months After Problematic John Sipher Post, Just Security Makes Clear It Let Known Errors Sit for Two Months

This post was first published on September 6, the same day John Sipher’s post was published. Because of something that happened today, December 10, I’m reposting it in its entirety, along with the two updates that make it clear when Just Security corrected one of the egregious errors I pointed out on September 6 two months later, around November 4, they didn’t credit me. In other words, they let a significant error sit for two months (and presumably haven’t even reviewed all the other problems I point out here, in spite of an extended conversation Ryan Goodman and I had about this post on September 6). Given the lefties are still making some of the same errors (notably, when Rachel Maddow hid how badly the Steele dossier was on the hack-and-leak by not mentioning the Guccifer 2.0 publications), the continued errors are telling. 

If I were to write this post now, it’d show a bunch more problems. But I believe the analysis from September stands up.


I generally find former CIA officer John Sipher’s work rigorous and interesting, if not always persuasive. Which is why I find the shoddiness of this post — arguing, just as Republicans in Congress and litigious Russians start to uncover information about the Christopher Steele dossier, that the dossier is not garbage  — so telling.

I don’t think the Steele dossier is garbage.

But neither do I think it supports the claim that it predicted a lot of information we’ve found since, something Sipher goes to great pains to argue. And there are far more problems with the dossier and its production than Sipher, who claims to be offering his wisdom about how to interpret raw intelligence, lets on. So the dossier isn’t garbage (though the story behind its production may well be). But Sipher’s post is. And given that it appears to be such a desperate — and frankly, unnecessary — attempt to reclaim the credibility of the dossier, it raises questions about why he feels the need.

Making and claiming accuracy for a narrative out of raw intelligence

Sipher’s project appears to be taking what he admits is raw intelligence and providing a narrative that he says we should continue to use to understand Trump’s Russian ties.

Close to the beginning of his piece, Sipher emphasizes that the dossier is not a finished intelligence report, but raw intelligence; he blames the media for not understanding the difference.

I spent almost thirty years producing what CIA calls “raw reporting” from human agents.  At heart, this is what Orbis did.  They were not producing finished analysis, but were passing on to a client distilled reporting that they had obtained in response to specific questions.  The difference is crucial, for it is the one that American journalists routinely fail to understand.

[snip]

Mr. Steele’s product is not a report delivered with a bow at the end of an investigation.  Instead, it is a series of contemporaneous raw reports that do not have the benefit of hindsight.

Sipher explains that you need analysts to make sense of these raw reports.

The onus for sorting out the veracity and for putting the reporting in context against other reporting – which may confirm or deny the new report – rests with the intelligence community’s professional analytic cadre.

He then steps into that role, an old clandestine services guy doing the work of the analysts. The result, he says, is a narrative he says we should still use — even in the wake of eight months of aggressive reporting since the dossier came out — in trying to understand what went on with the election.

As a result, they offer an overarching framework for what might have happened based on individuals on the Russian side who claimed to have insight into Moscow’s goals and operational tactics.  Until we have another more credible narrative, we should do all we can to examine closely and confirm or dispute the reports.

[snip]

Looking at new information through the framework outlined in the Steele document is not a bad place to start.

How to read a dossier

One thing Sipher aspires to do — something that would have been enormously helpful back in January — is explain how an intelligence professional converts those raw intelligence reports into a coherent report. He describes the first thing you do is source validation.

In the intelligence world, we always begin with source validation, focusing on what intelligence professionals call “the chain of acquisition.”  In this case we would look for detailed information on (in this order) Orbis, Steele, his means of collection (e.g., who was working for him in collecting information), his sources, their sub-sources (witting or unwitting), and the actual people, organizations and issues being reported on.

He goes to great lengths to explain how credible Steele is, noting even that he “was the President of the Cambridge Union at university.” I don’t dispute that Steele is, by all accounts, an accomplished intelligence pro.

But Sipher unwisely invests a great deal of weight into the fact that the FBI sought to work with Steele.

The fact that the FBI reportedly sought to work with him and to pay him to develop additional information on the sources suggest that at least some of them were worth taking seriously.  At the very least, the FBI will be able to validate the credibility of the sources, and therefore better judge the information.  As one recently retired senior intelligence officer with deep experience in espionage investigations quipped, “I assign more credence to the Steele report knowing that the FBI paid him for his research.  From my experience, there is nobody more miserly than the FBI.  If they were willing to pay Mr. Steele, they must have seen something of real value.”

This is flat-out dumb for two reasons. First, it is one of the things the GOP has used to discredit the dossier and prosecution — complaining (rightly) that the FBI was using a document designed as opposition research, possibly even to apply for a FISA warrant. If the FBI did that, I’m troubled by it.

More importantly, the actual facts about whether FBI did pay Steele are very much in dispute, with three different versions in the public record and Chuck Grassley claiming the FBI has been giving conflicting details about what happened (it’s likely that FBI paid Steele’s travel to the US but not for the dossier itself).

WaPo reported that Steele had reached a verbal agreement that the FBI would pay him to continue his investigation of Russia’s involvement with Trump after still unnamed Democrats stopped paying him after the election. CNN then reported that FBI actually had paid Steele for his expenses. Finally, NBC reported Steele backed out of the deal before it was finalized.

If the FBI planned to pay Steele, but got cold feet after Steele briefed David Corn for a piece that made explicit reference to the dossier, it suggests FBI may have decided the dossier was too clearly partisan for its continued use. In any case, citing a “recently retired senior intelligence officer” claiming the FBI did pay Steele should either be accompanied by a “BREAKING, confirming the detail no one else has been able to!” tag, or should include a caveat that the record doesn’t affirmatively support that claim.

After vouching for Steele (again, I don’t dispute Steele’s credentials), Sipher lays out the other things that need to happen to properly vet raw intelligence, which he claims we can’t do.

The biggest problem with confirming the details of the Steele “dossier” is obvious: we do not know his sources, other than via the short descriptions in the reports.  In CIA’s clandestine service, we spent by far the bulk of our work finding, recruiting and validating sources.  Before we would ever consider disseminating an intelligence report, we would move heaven and earth to understand the access, reliability, trustworthiness, motivation and dependability of our source.  We believe it is critical to validate the source before we can validate the reliability of the source’s information.  How does the source know about what he/she is reporting?  How did the source get the information?  Who are his/her sub-sources?  What do we know about the sub-sources?  Why is the source sharing the information?  Is the source a serious person who has taken appropriate measures to protect their efforts?

The thing is, we actually know answers to two of these questions. First, Steele’s sources shared the information (at least in part) because they were paid. [Update, 11/15: According to CNN, Glenn Simpson testified that Steele did not pay his sources. That somewhat conflicts with suggestions made by Mike Morell, who said Steele paid intermediaries who paid his sources, but Simpson’s testimony may simply be a cute legal parse.] That’s totally normal for spying, of course, but if Sipher aspires to explain to us how to assess the dossier, he needs to admit that money changes hands and that’s just the way things are done (again, that’s all the more important given that it’s one of the bases the GOP is using to discredit the report).

More importantly, Sipher should note that Steele worked one step removed — from London, rather than from Moscow — than an intelligence officer otherwise might. The reports may still be great, but that additional step introduces more uncertainty into the validation. It’s all the more important that Sipher address these two issues, because they’re the ones the GOP has been and will continue to use to discredit the dossier.

Ultimately, though, in his section on vetting the document, Sipher doesn’t deal with some key questions about the dossier. Way at the end of his piece, he questions whether we’re looking at the entire dossier.

We also don’t know if the 35 pages leaked by BuzzFeed is the entirety of the dossier.  I suspect not.

He doesn’t raise two other key questions about the provenance of the dossier we’ve been given, some of which I laid out when the dossier came out when I also noted that the numbering of the dossier by itself makes it clear it’s not the complete dossier. Importantly: is the copy of the dossier leaked to BuzzFeed an unaltered copy of what Steele delivered to Fusion, in spite of the weird textual artifacts in it? And how and why did the dossier get leaked to BuzzFeed, which Steele has told us was not one of the six outlets that he briefed on its contents.

Finally, Sipher includes the obligation to “openly acknowledge the gaps in understanding” outside of the section on vetting, which is telling given that he notes only a few of the obvious gaps in this dossier.

Sipher claims the dossier predicted what wasn’t known

So there are a lot of aspects of vetting Sipher doesn’t do, whether or not he has the ability to. But having done the vetting of checking Steele’s college extracurricular record, he declares the dossier has proven to be “stunningly accurate.”

Did any of the activities reported happen as predicted?

To a large extent, yes.

The most obvious occurrence that could not have been known to Orbis in June 2016, but shines bright in retrospect is the fact that Russia undertook a coordinated and massive effort to disrupt the 2016 U.S. election to help Donald Trump, as the U.S. intelligence community itself later concluded.  Well before any public knowledge of these events, the Orbis report identified multiple elements of the Russian operation including a cyber campaign, leaked documents related to Hillary Clinton, and meetings with Paul Manafort and other Trump affiliates to discuss the receipt of stolen documents.  Mr. Steele could not have known that the Russians stole information on Hillary Clinton, or that they were considering means to weaponize them in the U.S. election, all of which turned out to be stunningly accurate.

Now as I said above, I don’t believe the dossier is junk. But this defense of the dossier, specifically as formulated here, is junk. Central to Sipher’s proof that Steele’s dossier bears out are these claims:

  • Russia undertook a coordinated and massive effort to disrupt the 2016 U.S. election to help Donald Trump
  • The Orbis report identified multiple elements of the Russian operation including
    • A cyber campaign
    • Leaked documents related to Hillary Clinton
    • Meetings with Paul Manafort and other Trump affiliates to discuss the receipt of stolen documents

As I’ll show, these claims are, with limited exceptions, not actually what the dossier shows. Far later into the dossier, the reason Sipher frames it this way is clear. He’s taking validation from recent details about the June 9, 2016 meeting.

Of course, to determine if collusion occurred as alleged in the dossier, we would have to know if the Trump campaign continued to meet with Russian representatives subsequent to the June meeting.

The Steele dossier was way behind contemporary reporting on the hack-and-leak campaign

I consider the dossier strongest in its reports on early ties between Trump associates and Russians, as I’ll lay out below. But one area where it is — I believe this is the technical term — a shit-show is the section claiming the report predicted Russia’s hacking campaign.

Here’s how Sipher substantiates that claim.

By late fall 2016, the Orbis team reported that a Russian-supported company had been “using botnets and porn traffic to transmit viruses, plant bugs, steal data and conduct ‘altering operations’ against the Democratic Party leadership.” Hackers recruited by the FSB under duress were involved in the operations. According to the report, Carter Page insisted that payments be made quickly and discreetly, and that cyber operators should go to ground and cover their tracks.

[snip]

Consider, in addition, the Orbis report saying that Russia was utilizing hackers to influence voters and referring to payments to “hackers who had worked in Europe under Kremlin direction against the Clinton campaign.” A January 2017 Stanford study found that “fabricated stories favoring Donald Trump were shared a total of 30 million times, nearly quadruple the number of pro-Hillary Clinton shares leading up to the election.”  Also, in November, researchers at Oxford University published a report based on analysis of 19.4 million Twitter posts from early November prior to the election.  The report found that an “automated army of pro-Trump chatbots overwhelmed Clinton bots five to one in the days leading up to the presidential election.”  In March 2017, former FBI agent Clint Watts told Congress about websites involved in the Russian disinformation campaign “some of which mysteriously operate from Eastern Europe and are curiously led by pro-Russian editors of unknown financing.”

The Orbis report also refers specifically to the aim of the Russian influence campaign “to swing supporters of Bernie Sanders away from Hillary Clinton and across to Trump,” based on information given to Steele in early August 2016. It was not until March 2017, however, that former director of the National Security Agency, retired Gen. Keith Alexander in Senate testimony said of the Russian influence campaign, “what they were trying to do is to drive a wedge within the Democratic Party between the Clinton group and the Sanders group.”

Here’s what the dossier actually shows about both kompromat on Hillary and hacking.

June 20: In the first report, issued 6 days after the DNC announced it had been hacked by Russia, and 5 days after Guccifer 2.0 said he had sent stolen documents to WikiLeaks, the dossier spoke of kompromat on Hillary, clearly described as years old wiretaps from when she was visiting Russia. While the report conflicts internally, one part of it said it had not been distributed abroad. As I note in this post, if true, that would mean the documents Natalia Veselnitsaka shared with Trump folks on June 9 was not the kompromat in question.

July 19: After Guccifer 2.0 had released 7 posts, most with documents, and after extended reporting concluding that he was a Russian front, the second report discussed kompromat — still seemingly meaning that dated FSB dossier — as if it were prospective.

July 26: Four days after WikiLeaks released DNC emails first promised in mid-June, Steele submitted a report claiming that Russian state hackers had had “only limited success in penetrating the ‘first tier’ of foreign targets. These comprised western (especially G7 and NATO) governments, security and intelligence services and central banks, and the IFIs.” There had been public reports of FSB-associated APT 29’s hacking of such targets since at least July 2015, and public reporting on their campaigns that should have been identified when DNC did a Google search in response to FBI’s warnings in September 2015. It’s stunning anyone involved in intelligence would claim Russia hadn’t had some success penetrating those first tier targets.

Report 095: An undated report, probably dating sometime between July 26 and July 30, did state that a Trump associate admitted Russia was behind WikiLeaks release of emails, something that had been widely understood for well over a month.

July 30: A few weeks before WikiLeaks reportedly got the second tranche of (Podesta) emails, a report states that Russia is worried that the email hacking operation is spiraling out of control so “it is unlikely that these [operations] would be ratcheted up.”

August 5: A report says Dmitry Peskov, who is reportedly in charge of the campaign, is “scared shitless” about being scapegoated for it.

August 10: Just days before WikiLeaks purportedly got the Podesta tranche of emails, a report says Sergei Ivanov said “Russians would not risk their position for the time being with new leaked material, even to a third party like WikiLeaks.”

August 10: Months after a contentious primary and over two weeks after Debbie Wasserman Schultz’s resignation during the convention (purportedly because of DNC’s preference for Hillary), a report cites an ethnic Russian associate of Russian US presidential candidate Donald TRUMP campaign insider, not a Russian, saying the email leaks were designed to “swing supporters of Bernie SANDERS and away from Hillary CLINTON and across to TRUMP.” It attributes that plan to Carter Page, but does not claim any Russian government involvement in that strategy. Nor would it take a genius for anyone involved in American politics to pursue such a strategy.

August 22: A report on Manafort’s “demise” doesn’t mention emails or any kompromat.

September 14: Three months after Guccifer 2.0 first appeared, the dossier for the first time treated the Russians’ kompromat as the emails, stating that more might be released in late September. That might coincide with Craig Murray’s reported contact with a go-between (Murray has been very clear he did not ferry the emails themselves though he did have some contact in late September).

October 12: A week after the Podesta emails first started appearing, a report states that “a stream of further hacked CLINTON materials already had been injected by the Kremlin into compliant media outlets like Wikileaks, which remained at least “plausibly deniable”, so the stream of these would continue through October and up to the election, something Julian Assange had made pretty clear. See this report for more.

October 18, 19, 19: Three reports produced in quick succession describe Michael Cohen’s role in covering up the Trump-Russia mess, without making any explicit (unredacted) mention of emails. See this post on that timing.

December 13: A virgin birth report produced as the US intelligence community scrambled to put together the case against Russia for the first time ties Cohen to the emails in unredacted form).

What the timeline of the hacking allegations in the Steele dossier (and therefore also “predictions” about leaked documents) reveal is not that his sources predicted the hack-and-leak campaign, but on the contrary, he and his sources were unbelievably behind in their understanding of Russian hacking and the campaign generally (or his Russian sources were planting outright disinformation). Someone wanting to learn about the campaign would be better off simply hanging out on Twitter or reading the many security reports issued on the hack in real time.

Perhaps Sipher wants to cover this over when he claims that, “The Russian effort was aggressive over the summer months, but seemed to back off and go into cover-up mode following the Access Hollywood revelations and the Obama Administration’s acknowledgement of Russian interference in the fall, realizing they might have gone too far and possibly benefitted Ms. Clinton.” Sure, that’s sort of (though not entirely) what the dossier described. But the reality is that WikiLeaks was dropping new Podesta emails every day, Guccifer 2.0 was parroting Russian (and Republican) themes about a rigged election, and Obama was making the first ever cyber “red phone” call to Moscow because of Russia’s continued probes of the election infrastructure (part of the Russian effort about which both the dossier and Sipher’s post are silent).

The quotes Sipher uses to defend his claim are even worse. The first passage includes two clear errors. The report in question was actually the December 13 one, not “late fall 2016” one. And the Trump associate who agreed (in the alleged August meeting in Prague, anticipating that Hillary might win) to making quick payments to hackers was Michael Cohen, not Carter Page. [Update, 12/10/17: Just Security has fixed this error.] Many things suggest this particular report should be read with great skepticism, not least that it post-dated both the disclosure of the existence of the dossier and the election, and that this intelligence was offered up to Steele, not solicited, and was offered for free.

Next, Sipher again cites the December 13 report to claim Steele predicted something reported in a November Oxford University report (and anyway widely reported by BuzzFeed for months), which seems to require either a time machine or an explanation for why Steele didn’t report that earlier. He attributes a quote sourced to a Trump insider as indicating Russian strategy, which that report doesn’t support. And if you need Keith Alexander to suss out the logic of Democratic infighting that had been clear for six months, then you’re in real trouble!

Sipher would have been better off citing the undated Report 095 (which is another report about which there should be provenance questions), which relies on the same ethnic Russian Trump insider as the August 10 report, which claims agents/facilitators within the Democratic Party and Russian émigré hackers working in the United States — a claim that is incendiary but (short of proof that the Al-Awan brothers or Seth Rich really were involved) — one that has not been substantiated.

In short, the evidence in the dossier simply doesn’t support the claim it predicted two of the three things Sipher claims it does, at least not yet.

The dossier is stronger in sketchy contacts with Russians

The dossier is stronger with respect to some, but not all Trump associates. But even there, Sipher’s defense demonstrates uneven analytic work.

First, note that Sipher relies on “renowned investigative journalist” Michael Isikoff to validate some of these claims.

Renowned investigative journalist Michael Isikoff reported in September 2016 that U.S. intelligence sources confirmed that Page met with both Sechin and Divyekin during his July trip to Russia.

[snip]

A June 2017 Yahoo News article by Michael Isikoff described the Administration’s efforts to engage the State Department about lifting sanctions “almost as soon as they took office.”

Among the six journalists Steele admits he briefed on his dossier is someone from Yahoo.

The journalists initially briefed at the end of September 2016 by [Steele] and Fusion at Fusion’s instruction were from the New York Times, the Washington Post, Yahoo News, the New Yorker and CNN. [Steele] subsequently participated in further meetings at Fusion’s instruction with Fusion and the New York Times, the Washington Post and Yahoo News, which took place in mid-October 2016.

That the Yahoo journalist is Isikoff would be a cinch to guess. But we don’t have to guess, because Isikoff made it clear it was him in his first report after the dossier got leaked.

Another of Steele’s reports, first reported by Yahoo News last September, involved alleged meetings last July between then-Trump foreign policy adviser Carter Page and two high-level Russian operatives, including Igor Sechin — a longtime associate of Russian President Vladimir Putin who became the chief executive of Rosneft, the Russian energy giant.

In other words, Sipher is engaging in navel-gazing here, citing a report based on the Steele dossier, to say it confirms what was in the Steele dossier.

Sipher similarly cites a NYT article that was among the most criticized for the way it interprets “senior Russian intelligence officials” loosely to include anyone who might be suspect of being a spook.

We have also subsequently learned of Trump’s long-standing interest in, and experience with Russia and Russians.  A February 2017 New York Times article reported that phone records and intercepted calls show that members of Trump’s campaign and other Trump associates had repeated contacts with senior Russian officials in the year before the election.  The New York Times article was also corroborated by CNN and Reuters independent reports.

The two reports he claims corroborate the NYT one fall far short of the NYT claim about talks with Russian intelligence officials — a distinction that is critical given what Sipher claims about Sergey Kislyak, which I note below.

Carter Page

Sipher cites the Carter Page FISA order as proof that some of these claims have held up.

What’s more, the Justice Department obtained a wiretap in summer 2016 on Page after satisfying a court that there was sufficient evidence to show Page was operating as a Russian agent.

But more recent reporting, by journalists Sipher elsewhere cites approvingly, reveals that Page had actually been under a FISA order as early as 2014.

Page had been the subject of a secret intelligence surveillance warrant since 2014, earlier than had been previously reported, US officials briefed on the probe told CNN.

Paul Manafort

I have no complaint with Sipher’s claims about Manafort — except to the extent he suggests Manafort’s Ukrainian corruption wasn’t know long before the election. Sipher does, however, repeat a common myth about Manafort’s influence on the GOP platform.

The quid pro quo as alleged in the dossier was for the Trump team to “sideline” the Ukrainian issue in the campaign.  We learned subsequently the Trump platform committee changed only a single plank in the 60-page Republican platform prior to the Republican convention.  Of the hundreds of Republican positions and proposals, they altered only the single sentence that called for maintaining or increasing sanctions against Russia, increasing aid for Ukraine and “providing lethal defensive weapons” to the Ukrainian military.  The Trump team changed the wording to the more benign, “appropriate assistance.”

Republicans have credibly challenged this claim about the platform. Bob Dole is credited with making the platform far harsher on China in the service of his Taiwanese clients. And Trump’s team also put in language endorsing the revival of Glass-Steagall, with support from Manafort and/or Carl Icahn.

Michael Cohen

Sipher’s discussion of Trump lawyer Michael Cohen is the weirdest of all, not least because the Cohen reports are the most incendiary but also because they were written at a time when Steele had already pitched the dossier to the media (making it far more likely the ensuing reports were the result of disinformation). Here’s how Sipher claims the Steele dossier reports have been validated.

We do not have any reporting that implicates Michael Cohen in meetings with Russians as outlined in the dossier.  However, recent revelations indicate his long-standing relationships with key Russian and Ukrainian interlocutors, and highlight his role in a previously hidden effort to build a Trump tower in Moscow. During the campaign, those efforts included email exchanges with Trump associate Felix Sater explicitly referring to getting Putin’s circle involved and helping Trump get elected.

Go look at that “recent revelations” link. It goes to this Josh Marshall post which describes its own sourcing this way:

TPM Reader BR flagged my attention to this 2007 article in The New York Post.

[snip]

Because two years ago, in February 2015, New York real estate trade sheet The Real Deal reported that Cohen purchased a $58 million rental building on the Upper East Side.

This is not recent reporting!! Again, this is stuff that was publicly known before the election.

More importantly, given Cohen’s rebuttal to the dossier, Marshall supports a claim that Cohen has ties to Ukraine, not Russia. The dossier, however, claims Cohen has ties to the latter, as Cohen mockingly notes.

Felix Sater

Then there are the Trump associates who are now known to have been central to any ties between Trump and the Russians that the Steele dossier didn’t cite — as least not as subjects (all could well be sources, which raises other questions). The first is Felix Sater, whom Sipher discusses three times in suggesting that the dossier accurately predicts Cohen’s involvement in the Russian negotiations.

To take one example, the first report says that Kremlin spokesman Dmitry Peskov was responsible for Russia’s compromising materials on Hillary Clinton, and now we have reports that Michael Cohen had contacted Peskov directly in January 2016 seeking help with a Trump business deal in Moscow (after Cohen received the email from Trump business associate Felix Sater saying “Our boy can become president of the USA and we can engineer it. I will get all of Putins team to buy in on this.”).

[snip]

Following the inauguration, Cohen was involved, again with Felix Sater, to engage in back-channel negotiations seeking a means to lift sanctions via a semi-developed Russian-Ukrainian plan (which also included the hand delivery of derogatory information on Ukrainian leaders) also fits with Orbis reporting related to Cohen.

Given that Sater’s publicly known links between mobbed up Russians and Trump go back a decade, why isn’t he mentioned in the dossier? And why does the dossier seemingly contradict these claims about an active Trump Tower deal?

Aras Agalarov and Rinat Akhmetshin

There are far more significant silences about two other Trump associates, Aras Agalarov and Rinat Akhmetshin.

To be fair, the dossier isn’t entirely silent about the former, noting in at one place that Agalarov would be the guy to go to to learn about dirt on Trump in Petersburg (elsewhere he could be a source).

Far, far more damning is the dossier’s silence (again, at least as a subject rather than source) about Akhmetshin. That’s long been one of the GOP complaints about the dossier — that Akhmetshin was closely involved with Fusion GPS on Magnitsky work in parallel with the Trump dossier, which (if Akhmetshin really is still tied to Russian intelligence) would provide an easy feedback loop to the Russians. The dossier’s silence on someone well known to Fusion GPS is all the more damning given the way that Sipher points to the June 9 meeting (which the dossier didn’t report, either) as proof that the dossier has been vindicated.

It was also apparently news to investigators when the New York Times in July 2017 published Don Jr’s emails arranging for the receipt of information held by the Russians about Hillary Clinton. How could Steele and Orbis know in June 2016 that the Russians were working actively to elect Donald Trump and damage Hillary Clinton?

[snip]

To take another example, the third Orbis report says that Trump campaign manager Paul Manafort was managing the connection with the Kremlin, and we now know that he was present at the June 9 2016 meeting with Donald Trump, Jr., Russian lawyer Natalia Veselnitskaya and Rinat Akhmetshin, who has reportedly boasted of his ties to ties and experience in Soviet intelligence and counterintelligence.  According to a recent New York Times story, “Akhmetshin told journalists that he was a longtime acquaintance of Paul J. Manafort.”

There’s no allegation that investigations didn’t know about June 2016 plan to hurt Hillary (indeed, the Guccifer 2.0 stuff that Sipher ignores was public to all). Rather they didn’t know — but neither did Fusion, who has an established relationship with Akhmetshin — about the meeting involving Akhmetshin. If you’re going to claim the June 9 meeting proves anything, it’s that the dossier as currently known has a big hole right in Fusion’s client/researcher list.

Sergey Kislyak

Which brings me — finally! — to Sipher’s weird treatment of Sergey Kislyak. Sipher argues (correctly) that Trump associates’ failure to report details of their contacts with Russians may support a conspiracy claim.

 Of course, the failure of the Trump team to report details that later leaked out and fit the narrative may make the Steele allegations appear more prescient than they otherwise might.  At the same time, the hesitancy to be honest about contacts with Russia is consistent with allegations of a conspiracy.

Of course, Trump’s folks have failed to report details of that June 9 meeting as well as meetings with Sergey Kislyak. Having now invested his vindication story on that June 9 meeting, he argues that reports about Kislyak (on which the NYT article he cites approvingly probably rely) are misguided; we need to look to that June 9 meeting intead.

It should be noted in this context, that the much-reported meetings with Ambassador Kislyak do not seem to be tied to the conspiracy. He is not an intelligence officer, and would be in the position to offer advice on politics, personalities and political culture in the United States, but would not be asked to engage in espionage activity.  It is likewise notable that Ambassador Kislyak receives only a passing reference in the Steele dossier and only having to do with his internal advice on the political fallout in the U.S. in reaction to the Russian campaign.

Of course, to determine if collusion occurred as alleged in the dossier, we would have to know if the Trump campaign continued to meet with Russian representatives subsequent to the June meeting.

This seems utterly bizarre. We know what happened after June 9, in part: Per Jared Kushner (who also is not mentioned in the dossier or Sipher’s column), immediately after the election Kislyak started moving towards meeting about Syria (not Ukraine). But in the process, Kushner may have asked for a back channel and at Kislyak’s urging, Kushner took a meeting with the head of a sanctioned bank potentially to talk about investments in his family’s debt-ridden empire. And all that is the lead-up to the Mike Flynn calls with Kislyak about sanctions relief which provide some of the proof that Trump was willing to deliver the quo that the dossier claims got offered for quids.

That latter story — of the meetings Kushner and Flynn did in the wake of the election and events that may have taken place since — is every bit as coherent a narrative as the Steele dossier or the entirely new narratives tied to the June 9 meeting (which Sipher claims are actually the Steele narrative).

Of course, neither is yet evidence of collusion. And that’s, frankly, what we as citizens should be after.

A narrative offered up by an intelligence contractor who was always trying to catch up to the central part of the story — the hack-and-leak — is not what we should be striving for. That’s why this dossier is probably mostly irrelevant to the Mueller probe, no matter how the GOP would like to insinuate the opposite. If there was collusion (or rather, coordination on all this stuff between the campaign and Russia), we should expect evidence of it. The Steele dossier, as I have noted, left out one of the key potential proofs of that, in spite of having ties with someone who attended the meeting.

All that said, it would be useful for someone responsible to respond to GOP criticisms and, where invented (such as with the claim that Steele paying sources diminishes its value), demonstrate that. It would be useful for someone to explain what we should take from the dossier.

Sipher didn’t do that, though. Indeed, his post largely suffers from the same bad analysis he accuses the media of.

Update: In the original I got the date of the final report incorrect. That has been corrected.

Update, 12/10/17: I didn’t realize it, but Just Security updated Sipher’s post to include this language, which it explains with an editor’s note saying “Editor’s note: This article was update to provide additional analysis on Carter Page.” Compare this with this. Here’s the language.

Admittedly, Isikoff’s reporting may have relied on Steele himself for that information. Isikoff, however, also reported that U.S. intelligence officials were confident enough in the information received about Page’s meeting Russian officials to brief senior members of Congress on it. There are also other indicia that are also consistent with the Orbis report but only developed or discovered later. In early December 2016, Page returned to Moscow where he said he had “the opportunity to meet with an executive from” Sechin’s state oil company. In April 2017, Page confirmed that he met with and passed documents to a Russian intelligence officer in 2013. Court documents include an intercept in April 2013 of conversations between the Russians discussing their effort to recruit Page as “as an intelligence source.” A Russian intelligence officer said of Page: “He got hooked on Gazprom … I don’t know, but it’s obvious that he wants to earn lots of money … For now his enthusiasm works for me. I also promised him a lot … You promise a favor for a favor. You get the documents from him and tell him to go fuck himself.” In late December 2016, Sechin’s chief of staff, Oleg Erovinkin “who may have been a source for ex-British spy Christopher Steele’s Trump dossier,” according to multiple reports, was found dead in the back of his car in Moscow.

But this passage introduces new errors for Sipher’s post!

First, here’s the language (in an article Just Security never links) Sipher relies on to justify using Isikoff’s Steele-based reporting to claim Steele had been proven correct.

After one of those briefings, Senate minority leader Harry Reid wrote FBI Director James Comey, citing reports of meetings between a Trump adviser (a reference to Page) and “high ranking sanctioned individuals” in Moscow over the summer as evidence of “significant and disturbing ties” between the Trump campaign and the Kremlin that needed to be investigated by the bureau.

Some of those briefed were “taken aback” when they learned about Page’s contacts in Moscow, viewing them as a possible back channel to the Russians that could undercut U.S. foreign policy, said a congressional source familiar with the briefings but who asked for anonymity due to the sensitivity of the subject. The source added that U.S. officials in the briefings indicated that intelligence reports about the adviser’s talks with senior Russian officials close to President Vladimir Putin were being “actively monitored and investigated.”

A senior U.S. law enforcement official did not dispute that characterization when asked for comment by Yahoo News. “It’s on our radar screen,” said the official about Page’s contacts with Russian officials. “It’s being looked at.”

It is true that “U.S. intelligence officials were confident enough in the information received about Page’s meeting Russian officials to brief senior members of Congress on it,” and that Harry Reid was leaking from the Steele dossier just like Isikoff was. But the “senior US law enforcement officer” does not back the identities of those Page met with, just that “it’s being looked at.”

That’s important for the way that Page’s meetings with people other than Igor Sechin have been used to claim the dossier has borne out. Not-A = A. Which is what Sipher does here, by pointing to Page saying he met with Rosneft but not Sechin. “Page says he was not referring to Sechin in his remarks,” the linked AP story says (as does Page’s congressional testimony).

Then Sipher points to language unsealed in a court filing in January 2015 that Page admitted — after reporting on it — was him. That Page was wrapped up in an earlier Russian spy prosecution is another of those things one might ask why Steele didn’t know, particularly given that the filing and the case was already public.

But the citation also exacerbates the problems with Sipher’s reliance on Page’s FISA wiretap as proof the Steele dossier proved out. As I noted above, later reports stated Page had been under FISA wiretap “since 2014, earlier than had been previously reported, US officials briefed on the probe told CNN.” That means it wasn’t the meetings in Russia, per se, that elicited the interest, but (at least) the earlier interactions with Russian spies.

Finally, Sipher points to the death of Oleg Erovinkin, something I’ve pointed to myself (and which would only be “Carter Page” analysis if Page actually had met with Sechin). Since Sipher updated this post, however, Luke Harding wrote (on page 101),

Steele was adamant that Erovinkin wasn’t his source and “not one of ours.”

As a person close to Steele put it to me: “Sometimes people just die.”

I’m not sure I find Harding entirely reliable elsewhere, and I can see why Steele would deny working with Erovinkin if the leak of his work had gotten the man killed. But if you buy Harding, then Erovinkin no longer proves the value of the Steele dossier either.

Update, 12/10: According to the Wayback Machine this change was made between October 25 and November 6. Ryan Goodman explained that he didn’t give me a hat-tip for this correction because he’s not sure whether he corrected because of me because a Daily Caller reporter also weighed in.

It is true that Chuck Ross (with whom I discuss the dossier regularly) tweeted that Sipher’s Isikoff reference was self-confirming on November 4, shortly before the change was made.

Ryan and I had a conversation about the errors in this piece on September 6, when the post first came out, both on Twitter then–late that evening–on DM. I included a link to my post and he said he was going to read it.

I guess Ryan is now confessing he never read this post, and let notice of egregious errors sit unreviewed for two months, because he didn’t like my tone.

 

How Did Christopher Steele Collect Information after Sources (Allegedly) Dried Up?

Sorry to those who think I’m overly focused on the Christopher Steele dossier, but I’m reading Luke Harding’s book on the Russian investigation, which uses the dossier as a centerpiece. I may do a longer post about what his overall narrative does, but for now there’s a weird paragraph that conveniently is in this long excerpt I want to focus on.

After introducing the first report of the dossier (the one that features the pee tape and dated, non-email kompromat), Harding writes,

The memo was sensational. There would be others, 16 in all, sent to Fusion between June and early November 2016. At first, obtaining intelligence from Moscow went well. For around six months – during the first half of the year – Steele was able to make inquiries in Russia with relative ease. It got harder from late July, as Trump’s ties to Russia came under scrutiny. Finally, the lights went out. Amid a Kremlin cover-up, the sources went silent and information channels shut down.

There are several details that conflict with known facts and/or claimed (in some cases, sworn) ones.

First, Harding suggests there were 16 reports in all. I’m not sure whether he’s suggesting the final total of reports written between June and early November was 16 or whether he’s suggesting there were 16 additional reports in all, for a total of 17. Either way the number works out (there were 17 total reports, one of which was written after November). But that makes the November reference weird. There was no report written in early November. The last known report before the election was dated October 20, and then there wasn’t another one until that December 13 one.

  • 080: June 20, 2016
  • 086: July 26, 2015 (citing events in 2016)
  • 095: not dated
  • 94: July 19, 2016
  • 097: July 30, 2016
  • 100: August 5, 2016
  • 101: August 10, 2016
  • 102: August 10, 2016
  • 136: October 20, 2016
  • 105: August 22, 2016
  • 111: September 14, 2016
  • 112: September 14, 2016
  • 113: September 14, 2016
  • 130: October 12, 2016
  • 134: October 18, 2016
  • 135: October 19, 2016
  • 166: December 13, 2016

In any case, Harding gets the December date sort of correct later in the passage. Except he describes Glenn Simpson giving John McCain the report, dated December 13, before McCain called Jim Comey about it on December 8.

Less than 24 hours later, Kramer returned to Washington. Glenn Simpson then shared a copy of the dossier confidentially with McCain, along with a final Steele memo on the Russian hacking operation, written in December.

McCain believed it was impossible to verify Steele’s claims without a proper investigation. He made a call and arranged a meeting with Comey. Their encounter on 8 December 2016 lasted five minutes. Not much was said. McCain gave Comey the dossier.

I explain the significance of these December dates in this post.

Things are even weirder with the third sentence in this passage.

For around six months – during the first half of the year – Steele was able to make inquiries in Russia with relative ease.

According to the public narrative, Steele wasn’t working for Fusion until the Democrats asked for a Russian focus in June. And the first of his released reports relies on reporting from June. But Harding here suggests Steele was working on it for the six months before that! I pointed to circumstantial evidence that Fusion paid Steele on March 22, April 6, and May 25, in payments they don’t associate with Perkins Coie, in addition to the payments that were probably to him on July 13, August 2, September 1, October 5, and November 1.

Now check out the following sentences. Starting in “late July … the lights went out and … the sources went silent and information channels shut down.”

As the timeline above makes clear, the numbering in the dossier gets funky almost immediately, but the most likely reading suggests after that first, June 20 report, there are 4 reports from late July, and the remaining 12 reports all postdate late July. Report 100, the first post-July one, is sourced to “early August 2016” (and dated August 5).

Now, maybe the paragraph is just totally screwy. But if there’s any basis in fact to it, it suggests the public timeline is wrong (something which may be backed by the payments). More importantly, it suggests Steele’s extensive (albeit very indirect) network of sources stopped providing intelligence not long after he allegedly started his inquiry.

Does the Fusion Ledger Explain Why They’ve Pled the Fifth?

When the first two Fusion employees, Peter Fritsch and Thomas Catán, testified before the House Intelligence Committee on October 18, they pled the Fifth. I’ve been wondering since then what basis they had to do so — as have the House Intelligence Committee lawyers fighting with them to obtain bank records related to their Russian related activities last year and this. Indeed, HPSCI suggests the invocation of the Fifth suggests there may be relevant and important materials still to hand over.

It logically follows either that Plaintiff’s principals may have been perjuring themselves when they testified to a purportedly good-faith belief that their answers would tend to incriminate them, and/or that they are in possession of incriminating information of relevance to the Committee’s investigation that they have not yet disclosed.

In my last post, I noted that the House Intelligence Committee believes Fusion GPS, the intelligence firm behind the dossier, paid three or four journalists (actually, two or three journalists, plus someone who has served as a source for such information), and is trying to get records pertaining to other law firms and two businesses as well.

Looking at the exhibits Fusion submitted, however, at least suggests what they might be trying to hide.

The interesting exhibits are:

Here’s what, taken together, we learn about the 112 transactions HPSCI is trying to access but Fusion is trying to hide. The HPSCI filing describes them this way:

30 + 12 transactions associated with those who worked on the Steele or Prevezon projects

The filings make clear Fusion originally turned over 30 transactions. They are bolded in the ledger, which include:

  1. Transactions 5-11 (7 total) totaling $523,650.62 dated March 7, March 18, August 18, September 6, October 27, October 31, and October 31 (again) 2016 which are Baker Hostetler payments associated with Prevezon
  2. Transactions 46 (dated June 28), 48 (dated September 8), and 51 (dated November 2) paid to someone whose redacted name is of a length that it might be Rinat Ahkmetshin (3 total transactions)
  3. Transactions 77-81 (5 total) dated July 13, August 2, September 1, October 5, November 1 paid to a Russian expert with a short name [see the HPSCI justification page 5]; this may be Steele
  4. Transactions 83-88 (5 total) which are payments to someone else dated August 16, October 5, November 1, November 2, January 5, 2017
  5. Transactions 89-95 (7 total) which are payments from Perkins Coie dated May 24, July 15, July 29, August 31, September 30, October 28, and December 28
  6. Transactions 96-98 (3 total) which are payments to someone with a relatively short name dated August 11, September 2, and October 5

There are also 12 other transactions associated with people involved in those original transactions. They include:

  • A credit (Transaction 40) totaling $20,000 paid to Baker Hostetler on December 13, 2016
  • 7 payments associated with the redacted name person in 2, above, dated March 11, March 22, August 23, October 4, November 1 (which is listed as the same Bates stamp as one disclosed already), December 27, 2016 and January 5, 2017
  • 3 payments paid to the Russian researcher with the short name in 3, above, dated March 22, April 6, and May 25
  • A credit dated May 11, 2016 from the redacted name in 4, above

Comments:

There are four items of particular interest, here (before you get into coincidental dates).

First, the Russian expert with the short name is probably Steele (unless bullet 4 is him). If so, Fusion turned over payment information tied to the DNC work, but not payment information for something else (three payments in March through May) before the DNC came in. That may be stuff associated with Beacon’s funding of the earlier Trump dossier. Or it may be something else.

Second, Perkins Coie’s payments seem to track when the Trump reports come out. Except there is one payment for $58,669.00 (a curiously even number) in late December, after the last and most inflammatory Russian related report comes out on December 13. Admittedly, by report number, there are 31 reports between the October 19 and December 13 report publicly released, but the October 28 Perkins Coie payment of $365,275.33, by far the largest, would seem to pay for that. This suggests it is likely that Perkins Coie continued to pay for the dossier even after Trump won, contrary to what these entities have said in sworn declarations elsewhere. Given reports of John Podesta meeting with Christopher Steele after the election, I think that quite possible that Democrats paid for that last report.

Third, there is no payment even remotely associated with Baker Hostetler around the time of the Trump Tower meeting. There’s a March 18 payment and an August 18 one. This, in spite of the fact that Fox reported that Natalia Veselnitskaya met with Fusion both before and after the June 9, 2016 Trump Tower meeting.

But there is a payment — which Fusion says is not related to Prevezon or DNC — to the person with the name of the length of Rinat Akmetshin, on June 28. I asked in September who paid Akhmetshin to be at that Trump Tower meeting. Is that the June 28 payment? If so, who paid for him to be at that meeting?

19 transactions pertaining to 8 law firms

Then there are the payments pertaining to 8 law firms. The HPSCI justification says those are:

  1. Transactions 1-3 (3 total), dated March 11, March 23, and August 17
  2. Transaction 17, dated February 12
  3. Transaction 65, dated June 6
  4. Transaction 67, dated March 30
  5. Transaction 70-73 (4 total), dated June 10, July 6, September 28, 2016, and February 17, 2017
  6. Transaction 88, dated May 10
  7. Transactions 99-105 (7 total), dated June 10, July 29, August 31, October 13, November 29, December 15, January 11
  8. Transaction 106, dated September 13

We have no idea what these are, and Fusion may well be correct saying this is just investigative work for real cases. Mind you, HPSCI has said it has classified information to justify some of these requests (not necessarily limited to the law firms). So I think it is worth noting.

8 transactions probably associated with Beacon

The HPSCI filing (paragraph 26) makes it clear they’re trying to get the payment information associated with Beacon, which reportedly paid for the Republican side of the dossier. The only otherwise unaccounted for 8 Transactions are 54-61, which suggest those are the Beacon transactions. The HPSCI justification backs this, as it says the committee seeks to investigate a public claim (as they note, Beacon has confirmed its role in paying for the dossier). Except that produces some really weird dates: March 31, June 7, July 12, September 30, October 17, November 30, 2016, and January 4, February 15, 2017.

Those dates don’t make sense at all (because we were led to believe the Republican sponsored research started earlier than February), and they go well beyond the time the Republicans were said to have stopped paying.

12 credits probably associated with a media outlet, possibly  Yahoo

As noted, the HPSCI filing suggests there are payments from (not to) a media company, which might be Yahoo.

As Mr. Steele has acknowledged in other dossier-related litigation, in addition to sharing memos comprising the dossier with Mother Jones, in fall 2016 he met with at least five major media outlets at Fusion GPS’ direction. Those outlets included Yahoo News, which on September 23, 2016, reported purported meetings between Trump campaign advisor Carter Page and specified high-ranking Russian officials, attributed to a single “well-placed Western intelligence service.” Substantively similar allegations were contained in the dossier. Given Fusion GPS’ demonstrated patter of dossier-related engagement with media outlets, the Requested Records include records from [line and a half redacted].

Those appear to be transactions 32-43, dated pretty much monthly: February 17, March 21, April 19, May 18, June 15, July 20, August 17, September 19, October 19, November 16, December 14, 2016 and January 8, 2017, though they clearly track the election and transition time frame.

Business A transactions

Then there are two businesses. Those appear to be Transactions 12-16, which are payments on June 9, June 23, October 16, November 14, 2016 and January 26, 2017, and Transactions 18-31, which are mostly monthly payments from February 2016 to February 2017, though with some odd bunching during summer 2016. Both Business A and B are likely lobbying firms — see the redaction in the filing:

Business A appears to work on Ukrainian issues, as a footnote justifying its inclusion describes Trump’s shift on Ukranian policy.

The hacked documents would be in exchange for a Trump Administration policy that de-emphasizes Russia’s invasion of Ukraine and instead focuses on criticizing NATO countries for not paying their fare share – policies which, even as recently as the President’s meeting last week with Angela Merkel, have now presciently come to pass.”).

But that’s recent representation — “since January 2017.”

Business B transactions

Business B represents a variety of interests, but one of them is the kind of business that got mentioned in the Steele dossier as potentially colluding with Trump.

The “Steele Dossier” directly implicates [redacted] in potential collusion between the Trump campaign and Russia;

Both these businesses appear to have names that can be referred to as a short acronym.

Journalist (and other) transactions

There are three journalist transactions (besides those tied to Yahoo and Beacon):

  • Transactions 62-64, payments dated May 16, June 9, and September 6
  • Transactions 68-69, payments dated June 15 and August 26
  • Transactions 107-112, payments dated September 1, October 25, November 14, December 2, January 9, February 2

Then there is this:

  • Transaction 66, a payment dated December 12

This is not a payment to a journalist, per se, but to “individuals on [sic] have contributed to press stories on Russian issues relevant to its investigation.” This last payment, generally treated in the “journalist” category, appears to be tied to someone being quoted in the press, not writing their own work.

It’s interesting because this payment happens in the time period when the last, allegedly free report was being prepared.

Update, 12/12/17: The researcher with the short name may be Nellie Ohr, the wife of a DOJ official who was in the loop on the dossier.

In Defense of Subpoena for Fusion Bank Records, HPSCI Alleges Fusion Paid Journalists

The House Intelligence Committee continues to fight with Fusion GPS over records and testimony. Most specifically, they continue to fight over how many of Fusion’s bank records it should have to turn over. Yesterday, HPSCI submitted a filing that suggests a number of fairly inflammatory things about Fusion’s work, most notably that they may have paid up to four journalists and/or researchers besides Steele in conjunction in relation to topics relating to Russia, if not the dossier.

HPSCI is currently asking for:

The context in the declaration from Scott Glabe suggests the following about these requests.

The 30 initial transactions would relate to Perkins Coie and BakerHostetler, as well as the payments to Steele’s firm, though a redaction elsewhere suggests there are 6 counterparties total that Fusion has already provided records on.

HPSCI is interested in the law firms because of the way Fusion’s true clients (the Democrats and Prevezon, for example) have had law firms pay Fusion to hide their role in the project. It wants to know if those 8 law firms served as cut-outs for other Russian related work.

It is interested in Business A because it might pertain in some way to “links between Russia and individuals associated with political campaigns or any other U.S. person,” particularly some policy matter at issue in the inquiry/reflected in the dossier. HPSCI is interested in Business B because it may pertain to collusion between Russia and the Trump campaign.

With regard to journalists or researchers, Fusion has apparently already provided records related to one journalist or researcher. HPSCI is seeking records pertaining to three more. Given the reference, below, which seems to suggest an earlier redacted reference to Mother Jones, I don’t rule out the earlier one being David Corn or someone else from Mother Jones, and MoJo has a specific effort associated with Russia coverage. The 8 transactions mentioned must pertain to payments from Beacon, which funded the early work on the dossier.

The 12 transactions appear to involve payments from Yahoo to Fusion, based on the following passage:

As Mr. Steele has acknowledged in other dossier-related litigation, in addition to sharing memos comprising the dossier with Mother Jones, in fall 2016 he met with at least five major media outlets at Fusion GPS’ direction. Those outlets included Yahoo News, which on September 23, 2016, reported purported meetings between Trump campaign advisor Carter Page and specified high-ranking Russian officials, attributed to a single “well-placed Western intelligence service.” Substantively similar allegations were contained in the dossier. Given Fusion GPS’ demonstrated patter of dossier-related engagement with media outlets, the Requested Records include records from [line and a half redacted].

Mind you, I don’t understand why Yahoo would be paying Fusion if they were at the same time publishing its dirt. But the allegation is of particular interest given the way Michael Isikoff’s September story has been a central self-referential piece of “proof” dossier boosters always rely on to prove its value.

First, note that Sipher relies on “renowned investigative journalist” Michael Isikoff to validate some of these claims.

Renowned investigative journalist Michael Isikoff reported in September 2016 that U.S. intelligence sources confirmed that Page met with both Sechin and Divyekin during his July trip to Russia.

[snip]

A June 2017 Yahoo News article by Michael Isikoff described the Administration’s efforts to engage the State Department about lifting sanctions “almost as soon as they took office.”

Among the six journalists Steele admits he briefed on his dossier is someone from Yahoo.

The journalists initially briefed at the end of September 2016 by [Steele] and Fusion at Fusion’s instruction were from the New York Times, the Washington Post, Yahoo News, the New Yorker and CNN. [Steele] subsequently participated in further meetings at Fusion’s instruction with Fusion and the New York Times, the Washington Post and Yahoo News, which took place in mid-October 2016.

That the Yahoo journalist is Isikoff would be a cinch to guess. But we don’t have to guess, because Isikoff made it clear it was him in his first report after the dossier got leaked.

Another of Steele’s reports, first reported by Yahoo News last September, involved alleged meetings last July between then-Trump foreign policy adviser Carter Page and two high-level Russian operatives, including Igor Sechin — a longtime associate of Russian President Vladimir Putin who became the chief executive of Rosneft, the Russian energy giant.

In other words, Sipher is engaging in navel-gazing here, citing a report based on the Steele dossier, to say it confirms what was in the Steele dossier.

Fusion is claiming a First Amendment interest in keeping this all hidden. Me, I’m actually a bit interested in which journalists and researchers were getting and giving Fusion money.

The Cost of the Lawfare Surrounding the Steele Dossier Will Vastly Outstrip Its Original Cost

In response to Monday’s server hiccups and in anticipation that Mueller is nowhere near done, we expanded our server capacity overnight. If you think you’ll rely on emptywheel reporting on the Mueller probe, please consider a donation to support the site

Yesterday, Reuters reported that Fusion GPS has told Congress (presumably as part of the settlement on a bank subpoena reached last week) how much it got paid for the dossier on Donald Trump, and how much of that it paid Christopher Steele for his part in the dossier. Fusion got $1.02 million from Perkins Coie, of which Steele got $168K.

Fusion GPS’ statement said it had told Congress about how $168,000 was paid last year to Orbis Business Intelligence, Steele’s company.

The money paid to Orbis was taken from $1.02 million it received in fees and expenses from the Perkins Coie law firm, the statement said.

There’s some confusion about this number, however, with some claiming that Fusion had a huge markup on Steele’s labor. But that’s not right. We’ve now confirmed what we’ve seen is just part of the total dossier Fusion did on Trump. If the numbering in the dossier is any indication, there were at least 166 reports done, with 79 done between the time  started on the dossier in April and when Steele got involved in June. Of the total, we’ve seen just 17 released reports from Steele, or about 10% of the total (assuming none of his Russian-related reports were withheld). That would put his payment — over 16% of what Fusion got paid — to be a reasonable fraction (of course much of the rest of the dossier is likely domestic and less reliant on paid sources built up over decades).

In any case, as Reuters points out, it’s far less than the $12 million Trump has alleged.

But it’s also far less than what the dossier will cost in the long run. As I’ve been tracking, there are a number of strands of “lawfare” surrounding the dossier — Russian and Republican attempts to use lawsuits to make the dossier toxic. They include:

  • Alexej Gubarev’s lawsuit against Steele and his company in the UK
  • Alexej Gubarev’s lawsuit against BuzzFeed in FL (with related subpoena challenges being litigated in DC)
  • The lawsuit by Alfa Bank executives against BuzzFeed in DC (filed after consulting with top GOP lawyers Viet Dinh and Brian Benczkowski and their firm)
  • Fusion’s efforts to fight testimony and bank subpoenas in DC
  • Carter Page’s lawsuit against HuffPo and Yahoo

In addition, I would be shocked if Marc Elias doesn’t get slapped with a lawsuit or two, now that his role in funding the dossier has become known. With the exception of Page’s suit, each of those involves at least two sets of well paid lawyers to fight things out.

Which is to say that the lawfare surrounding the dossier may well end up costing $12 million, even assuming no one ever has to pay any penalties. Which seems to offer a lesson for sleazy politicos: If you’re going to pay to develop dirt on your opponent, make sure that the blowback from it doesn’t cost more in terms of dollars and damage than the actual dossier itself.

[Photo: Emily Morter via Unsplash]

Sowing Confusion about Fusion

The Surrealist artist Salvador Dali, whom you may know best for his quirky mustache and his painting featuring melting clocks, once said:

What is important is to spread confusion, not eliminate it.

Apropos, when one thinks of Surrealism as a rebellious response to predictable and rigid political dogma up to and after World War I.

Trump has indulged in surrealism throughout the last six months in office, breaking expected and legislated norms of behavior. Some of this is a deliberate effort to effect change on our government; some of it is gaslighting, to force us to look at everything differently, suspiciously, to doubt ourselves.

And some of it is simply ass covering, hiding beneath a fog of bullshit.

On Saturday morning, Fearless Leader tweeted,

This looks like part of a new strategy, to appear as if he is not and has not been sympathetic and in sync with Russia’s Putin.

Such a strategy can explain the tenuous stance on Congress’ latest Russian sanctions bill. Trump hasn’t fully committed to signing the bill; as it was passed on July 25, the bill may be pocket vetoed depending on when Congress decides to go on August break. Trump dragged his feet for a week before signing the bill today with a whiny signing statement expressing concerns about the sanctions.*

But buried in that tweet is an effort to undermine the Steele dossier by replying on Fox News to attack the consulting firm which contracted the dossier’s production. Trump himself doesn’t mention Fusion GPS nor even the dossier, but relies on the narrative Fox pushes that morning to speak for him.

(NB: timing for future reference — Trumps’s July 29 tweet is at 7:07 a.m. EDT. Embedded Fox and Friends’ tweet is 4:15 a.m. EDT with a link to a July 27 story. That’s 2:07 p.m. and 11: 15 a.m. Moscow time, respectively.)

Fox News’ article discusses hedge fund manager Bill Browder’s testimony before the Senate Judiciary Committee in relation to the Foreign Agents Registration Act. He testified on July 26 about Sergei Magnitsky, Russia’s corruption, and the Magnitsky Act; in his written statement published the previous day as well as during his testimony (video), he shared that Fusion GPS had been contracted to work against the Magnitsky Act.

This is the point which is pushed by Fox, indirectly by Trump — that Fusion GPS worked for the Russians.

We’re meant to question Fusion’s agenda; we’re meant to believe the talking point sown about that Hillary Clinton and the Democrats were working with the Russians to undermine Donald Trump.

The poisoning of Fusion’s image doesn’t originate just from Trump or Fox News as quasi-state media.

The GOP jumped into this by posting a so-helpful page about Fusion on July 25 — the same day Browder’s written statement was published, days before Trump would make a veiled allusion to Fusion’s agenda.

Which should tell us not to put any faith in GOP members of Congress doing the right thing based on how deeply the party is committed to protecting Trump’s butt.

Although the GOP may also be protecting more than Trump by poisoning Fusion’s reputation. Fusion was originally hired to do opposition work on Trump — but they were hired to do so by a Jeb Bush supporter. Though the Democratic side of the presidential race eventually had interest in Fusion’s opposition research, the work began during the GOP primary race.

The trail to the funder(s) has been conveniently fuzzed. The BBC first reported Jeb Bush or his campaign hired Fusion, but a vigorous denial and a take-down demand changed reports to say that “unidentified Republicans” were responsible for employing Fusion to do anti-Trump opposition work.

The distancing continued with claims Hillary Clinton and/or the Clinton campaign hired Fusion, though it appears the truth is closer to “Democratic supporters” did so after Trump became the GOP’s presumptive nominee in spring 2016.

“Democratic supporters” doesn’t rule out anti-Trump members of the GOP who crossed the aisle and threw behind Clinton last year.

This may explain why the GOP has been working for some time on linking Fusion to Clinton so tightly — well before Browder’s testimony last week. The party is protecting someone(s) in their ranks from not only the Trump-Russia investigation, but Trump and Russia.

There was one other witness who testified before the Senate last week who spoke of Fusion GPS. It’s telling that Trump, Fox News, other right-wing media like the Weekly Standard, and the GOP have avoided mentioning this second witness.

Human Rights Foundation’s president Thor Halvorssen’s statement to the Senate Judiciary Committee outlined Fusion’s role in a Venezuelan corruption scandal. Fusion was hired to suppressed mainstream media reporting about investigations and court cases related to the scandal, which included money laundering through at least one major American investment bank.

Venezuela is and has been in a deep state of turmoil for several years; the corruption the U.S. hasn’t read about exacerbates Venezuela’s condition. Its political crisis has finally cracked the news here, and in part because of the Trump administration’s sanctions against its leadership and the amount of Venezuelan oil products the U.S. consumes. The rise in gasoline and oil prices over the last two months may be related in part to market volatility because of Venezuela’s crisis.

And while Venezuela may be sitting on a very large oil reserve, so is Russia and whomever now owns that 19.5% share of Russia’s largest oil company, Rosneft. The fortunes of GOP investors who own shares in or entire businesses related to oil production and processing also benefit from the increase in oil prices, profits from which may help fund the GOP and its candidates. It’s no wonder, then, the GOP and right-wing media focus on tying Fusion to Clinton and Russia in any way possible while avoiding Fusion’s work related to Venezuela.

So who does Fusion really work for?

As far as I can tell, any political entity with the money to hire their services. This is the best explanation for Fusion’s Glenn Simpson refusal to testify publicly before the Senate — they are competitive intelligence and media guns for hire, and asking them to disclose who hired them in public would damage their ability to contract freely with whomever approaches them, whether Republican, Democrat, or neither in the case of corporations.

There is one other point the Trump-GOP-Fox-right-wing media can’t adequately obscure, though they have done what they could to damage Fusion’s image.

Last summer, after gathering intelligence about Team Trump’s ties to Russia, the former MI6 officer was so concerned about his findings that he approached the FBI to share what he found.

It’s both strange and interesting that the Trump-GOP-Fox-right-wing media smear campaign against Fusion hasn’t mentioned this.

Surreal, one might say.

_________
* The sanctions bill was signed while I was in the middle of writing this. I can’t write fast enough to keep up with the crazy.