Crime in Progress

by Glenn Simpson;Peter Fritsch;

  “Okay, what do you guys got?” Elias said, turning the conversation back to the substance of the case. “Plenty,” Simpson replied.

  Fritsch and Simpson ran through some highlights of Fusion’s Trump public record research thus far: the Trump University scam, his history of not paying his debts, his hypocrisy on immigration, and the mounting evidence that he was lying about his wealth. The most perplexing element of the work to date, they told him, was Trump’s intense and long-lasting fascination with Russia—and his failure to consummate any meaningful deal there. His business world intersected repeatedly with the Russian Mafia in New York, while the sudden re-emergence of Manafort—a consultant who had remade the Kremlin’s favorite Ukrainian politician in Manafort’s own image—was a major red flag.

  “We think you guys will really want to pay attention to the Russia angle,” Fritsch said. It was obvious from Elias’s reaction that the Russia element was new to him. “Can you tell me more?” he said.

  Trump’s affiliations with Russians of all kinds, Simpson said, went way back to the opening of Trump Tower in the early 1980s, when known Russia-connected mobsters like David Bogatin began scooping up units, often to obscure the source of criminal profits. The five luxury condos Bogatin bought in 1984 were later seized by the feds as part of a massive money-laundering case. This would soon emerge as a distinct pattern, they told Elias. In project after project, from Florida to Panama to Toronto, Russians with dubious résumés and questionable pasts turned out in great numbers to buy Trump-branded units.

  Elias was intrigued, if a bit befuddled by all the names and dates. He wasn’t in a hurry, and his face said: Keep going. Simpson cracked open his MacBook to walk him through some documents.

  As Trump’s own financial travails grew in the late 1980s, so did his outreach and ties to Russia. In 1987, he took an all-expenses-paid trip to Moscow at the invitation of the Soviet ambassador to the United States. While there, he and his then-wife, Ivana, toured several sites for a proposed Trump Tower. No deal seemed likely, but soon after he came back Trump spoke of running for the White House and took out a full-page ad in several U.S. papers arguing that the United States should stop spending so much to defend foreign countries, foreshadowing the pro-Russian, anti-NATO stance he would take on the campaign trail thirty years later.

  Trump tried again in 1996 to cook up a big Moscow project, Simpson and Fritsch told Elias, this time with the help of Howard Lorber, one of Trump’s only true friends and a broker for wealthy Russians seeking real estate investments in the United States. That project, too, fell flat. The Trumps kept trying to kindle something, making repeated trips to Moscow to view potential sites or talk to possible partners.

  While Trump hadn’t succeeded in investing in Russia, they said, the Russians had definitely begun making an investment in Trump. Many had troubling backgrounds, and they highlighted the criminal record of Felix Sater and Trump’s history of lying about their relationship. By 2008, Donald Trump Jr. was boasting that Russians “make up a pretty disproportionate cross-section of a lot of our assets.” Five years later, in Moscow for the Miss Universe pageant, Trump again suggested that he was deep into talks for a Trump skyscraper. (Only much later would investigators uncover that his own representatives were trying to cook up a Trump project in Moscow even as he campaigned to be president.)

  In other words, Fritsch and Simpson stated what seemed obvious: The party of Ronald Reagan, whose antipathy to the Soviet Union had helped precipitate its collapse, might have real qualms about a nominee with such close ties to the remnants of what Reagan had called the Evil Empire.

  This angle was all new to Elias, and he loved it. The research book the DNC had put together on Trump, he said, contained none of this stuff. Fusion’s research team would soon be hired and given wide latitude to go where the story led it.

  * * *

  —

  Formalizing the engagement with Perkins Coie, Elias’s firm, would take weeks.

  The biggest sticking point was the matter of indemnification. In 2013, Fusion had been drawn into a defamation lawsuit against Mother Jones by a rich Romney donor and campaign finance official who had concluded—wrongly—that Fusion was behind an unflattering article about him published the previous year. Mother Jones eventually won that suit, but Fusion had to defend against a third-party subpoena that sought to expose its client and its work. That had cost the company tens of thousands of dollars in legal fees—costs its client declined to cover. If something like that happened again, Fusion wanted to know it wouldn’t again be stuck with the legal fees. Trump was famously litigious, and the last thing Fusion wanted was a legal fight with a vindictive tabloid figure with a long history of aggressive litigation.

  The potential for an ugly, public fight is one big reason most private consultants like Fusion eschew political work. (A pay scale below that of commercial work is the other.) In a political battle with high stakes, there is a huge incentive to attack the credibility of anyone bearing bad tidings about a candidate or elected official, however well substantiated.

  In the end, Perkins Coie would not guarantee to cover Fusion’s costs in a legal fight. That realization was the point when Fusion might have said to Elias: Thanks, but no thanks. Fusion’s partners, in fact, discussed bailing on the project but eventually decided the risk was worth it. The Trump project was just too important and interesting a research subject.

  The costliest component of the work, they told Elias, would be some on-the-ground reporting they envisioned doing outside the United States. They ran through Trump’s many trouble-plagued projects in developing countries and business dealings abroad; the budget would need to include funding for foreign investigators in Mexico and other countries. The riskiest bit of fieldwork, which they didn’t yet share with Elias, would be in Russia. They knew just the guy for the job: a Russian-speaking former spy. They figured they could do that work discreetly. No one would ever find out about it.

  By the time Fusion decided to turn to Christopher Steele in May 2016, the firm had amassed a mountain of research about Trump’s business past, his ties to Russia, and his reliance on questionable investors. Manafort’s arrival had magnified the sense that Russia might be seeking inroads into the Trump campaign.

  To take stock of where the work stood, Simpson and Fritsch asked Berkowitz, the lead researcher on Project Bangor, to draft a document that would round up all the various strands of their work to date. “Donald J. Trump—Research Summary” ran to 105 single-spaced pages with 665 footnotes. The word “Russia” appeared twenty-eight times, and “mafia” twenty-five times. Trump, the document noted in the last line of its executive summary, “has significant associations to the Russian and Italian mafia at home and abroad.”

  In early May, Fritsch asked Berkowitz to expand on the Russia angle. The result was a fifteen-page memorandum Fritsch described in a May 19 email to Berkowitz as “a true tour de sleaze.” Its first line: “Donald Trump’s connections to Vladimir Putin’s Russia are deeper than generally appreciated and raise significant national security concerns.” The memo went on to describe the work done by Trump advisers Manafort and Carter Page and other players on behalf of Russian oligarchs and companies, and cataloged Manafort’s financial dealings with Deripaska. It also highlighted the preponderance of Russian money coursing through Trump projects in New York, Toronto, and Panama—most notably the signature Trump Tower in midtown Manhattan.

  The memo recounted Trump’s many trips to Russia in search of real estate investment deals and left many questions unanswered. How to explain the Russian fascination with a New York developer who kept slipping into bankruptcy and was constantly scrambling for new lenders willing to support his next project? Why did Russians keep dangling business deals that never seemed to go anywhere? Why was Felix Sater so close to the Trumps, even traveling to Moscow with Ivanka and Don Jr. in 2006?

  Maybe Trump did this out
of desperation, or maybe it was just a failure to vet his business partners properly. Or, quite possibly, there was a more sinister explanation. Either way, Fusion had the sense that it couldn’t answer some of the crucial questions surrounding Trump’s conduct through open records alone. It needed a new avenue of inquiry to get a better feel for what was happening within Russia itself, where open-source research left much to be desired.

  Simpson and Fritsch needed to hire someone to talk to people inside Russia—a risky enterprise, especially in the context of a presidential campaign. They needed someone they could trust to be ultra-discreet. As important, they needed someone who wouldn’t rip them off. Human reporting from distant locales was shot through with fraud; many in the private consulting world just made stuff up.

  There was only one firm that checked those boxes: Orbis. Simpson put in a call to Steele: Let’s meet soon.

  * * *

  —

  Christopher Steele was back on his heels when he first met Simpson in 2010, at a noisy Italian restaurant called Franco’s in the tony London neighborhood of St. James. The year before, Steele had retired after two decades of government service and set out with a fellow MI6 colleague, Christopher Burrows, to create Orbis, a private consulting firm specializing in the collection of intelligence from a network of sources around the world. But that fall, Steele had lost his wife of twenty years, Laura, a death that devastated him and their three young children. Two mutual friends of Steele and Simpson, knowing of their shared interest in Russian organized crime and their common struggles as newly minted entrepreneurs, had arranged the meeting.

  Steele’s official government biography described him as a Foreign Office diplomat. But it was well known (at least in investigative circles) that his real employer was the United Kingdom’s Secret Intelligence Service—better known as MI6. He’d had prestigious postings in Moscow and Paris and, as head of the Russia desk at HQ, was considered one of Britain’s foremost Russia hands by a shrinking circle of Kremlinologists in the United States and the U.K. who had done battle with the Soviets during the Cold War.

  Steele was now a forty-five-year-old, recently bereaved widower working out of a serviced office in Mayfair during the day and rushing home in the afternoons to care for his three children. Steele didn’t wear his grief on his sleeve. Over lunch with Simpson, he was mostly interested in talking business opportunities and exchanging stories about various Russian oligarchs in the court of Vladimir Putin.

  Steele literally couldn’t afford to wallow in grief. Unlike many of his peers at Cambridge University and MI6, Steele didn’t come from money. He had earned his way to the elite university through hard work and a determination that came through subtly in conversation. He looked you square in the eye in meetings and listened more than he spoke, which he did with a somewhat flat affect and an accent that was firmly middle class; he smiled at the right prompts but wasn’t one to tell a joke. In short, he was a brain. Yet there were moments when he seemed to exhibit a certain melancholy that hinted at something more than just British reserve or the caution of a former spy.

  “Pete, it’s critical that we all stick together,” he once told Fritsch at the height of the furor over the dossier. “Our friendship absolutely must prevail.”

  Steele and Simpson had much in common. Born barely a month apart in 1964, both had left their longtime employers at almost the exact same time to strike out on their own in the world of private research. They shared an interest in corruption in the former Soviet Union and the movements of its oligarchs. They also knew enough about each other’s worlds to bond over mutual acquaintances and war stories seen from different perspectives. By the end of lunch, Steele and Simpson had agreed to try to do business together if possible and to refer potential clients to each other.

  On his occasional visits to Washington over the next few years, Steele would swing by Fusion’s office and trade gossip about who was up and who was down among Russians currying favor with Putin.

  Those sessions sometimes ended with pints at Maddy’s Bar & Grille, conveniently located below Fusion’s first office. In London, Steele would reciprocate at a local pub. After a beer or two—but never three—Steele would drop talk of how to gin up business and reveal a genuinely deep and warm laugh while speaking of his nature walks and a budding interest in bird-watching.

  For years, the relationship was more kinship than commerce.

  * * *

  —

  Steele was born in Yemen in 1964, on the ebb tide of the British Empire. His father, Perris, was then stationed in Aden, a British protectorate near the mouth of the Red Sea, working as a meteorologist for the military. The British would leave Aden for good in late 1967.

  The Steele family moved frequently between postings in the U.K. and Cyprus, eventually settling southwest of London in the county of Surrey, where the younger of Steele’s two sisters was born. Steele speaks proudly of his family’s roots in the Welsh coal mines. In truth, his parents were comfortably middle class. An excellent student, Steele aced his A levels, the British equivalent of the SATs, and won admission to Cambridge University, matriculating in 1982.

  In the U.K., an Oxford or Cambridge education can help burnish one’s standing in the upper class, but Steele had something of a chip on his shoulder when it came to his privileged peers. That chip and a cold determination helped him work his way to the presidency of the Cambridge Union, the university’s renowned debating society. There, he poked at the conservative core of the institution by inviting a member of the Palestine Liberation Organization to speak and taking on Margaret Thatcher’s fondness for Ronald Reagan.

  Steele graduated from Cambridge in 1986 with a degree in political science and toyed with a career in journalism, of all things. One day, he answered a blind newspaper ad promising adventure and work abroad. “It just sounded like good fun,” Steele recalled.

  The mystery employer was in fact MI6, which quickly pegged him as a candidate for its prestigious Russia training program. The Cold War was still in full swing in those days, and the Soviet sphere still drew the best and brightest. Administratively, he became an employee of the Foreign and Commonwealth Office, spending the next several years in London gaining fluency in Russian and studying the country’s history and politics. In reality, he had joined Her Majesty’s secret service.

  In the spring of 1988, Steele went on a blind date with Laura Hunt, a young woman working for an accounting firm who happened to be the daughter of a Russian-speaking nuclear physicist. He chased her as relentlessly as he had the presidency of the Cambridge Union.

  In April 1990, the young couple, now engaged, moved to Moscow for MI6, returning to the U.K. to marry in July. For the next three years Steele would watch over the messy dissolution of the Soviet Union from the diplomatic cover of a post at the British embassy along the Moskva River. That cover wasn’t too deep: Steele would laugh when recalling the dopey mind games the KGB would play to remind him that he and Laura were under constant surveillance, once stealing her favorite dress shoes before a diplomatic dinner.

  When the Soviet Union finally collapsed, the suffocating surveillance of Western diplomats and suspected intelligence officers suddenly ceased—which for a brief moment seemed like a possible harbinger of a new, less authoritarian future for Russia. But the surveillance started again within days. The intrusive tails and petty harassment were indistinguishable from Soviet practices and have continued to this day. To Steele, that told him all he needed to know about the new Russia: The new boss was the same as the old boss.

  The Steeles returned to England in 1993 and had two boys. In 1998 they moved to Paris and then the French village of Bougival, where Steele worked on a variety of subjects, this time under the diplomatic cover of first secretary for financial affairs. There, they had a daughter in 2000. Steele recalls the period as among the happiest in his life.

  Much of Steele’s work during his
years with MI6 remains classified, and he refuses to discuss it, even with friends. But some details are known. After returning to Britain, he was dispatched to post-invasion Iraq to work with U.S. forces setting up the new government. This was a period when Western intelligence agencies made a hard pivot to countering Islamic terrorism. Russia and the former Soviet satellite states moved to the back burner.

  But Steele’s head stayed in Moscow. He watched from afar as Putin consolidated power and presided over an organized kleptocracy that stripped the Russian state of its wealth to enrich those close to the Kremlin. Steele, a person with a deeply held and binary view of good and evil, took corruption personally. His dislike for Putin’s Russia became far more intense after the 2006 murder in London of Alexander Litvinenko, a former KGB officer turned MI6 source, who was poisoned with radioactive polonium.

  “Despite all the decay and dysfunction, the Russians remain and probably always will be very formidable adversaries, and it is perilous to underestimate them,” Steele would say. “They also know how to play things long.” The Russian gift for deception, he would add, is perhaps one of their greatest assets. “But that’s a corollary of their greatest weakness: They are incapable of trust, which makes it impossible to have a healthy economy.”

  In 2009, Steele and Burrows decided that after decades of public service it was time to branch out on their own and make some money. They gave their notice to MI6 and launched Orbis in September. Two weeks later, Steele’s wife died, just two days after Burrows’s wife gave birth prematurely to a son. The partners would work from a small office in Farnham so they could be near their children.

  Their business would service companies throughout Western Europe on how to compete for business in emerging markets, particularly in Russia, the former Eastern Bloc states (Burrows had been stationed in Berlin at one point), and other countries in which they had served, like France and Greece. Like many firms, they would also do whatever work they could conducting due diligence research and litigation support. By 2010, a steady book of business had begun to flow their way, and they hired several junior analysts as the company grew.