by Luke Harding
Fusion’s research would be similar to what he had done before. That meant investigating difficult corruption cases or the business activities of post-Soviet figures. There would still be a public interest dimension, only this time private clients would pay. Fusion was very good at what it did and—Simpson admitted—expensive.
In 2009 Simpson met Steele. They knew some of the same FBI people and shared expertise on Russia. Fusion and Orbis began a professional partnership. The Washington- and London-based firms worked for oligarchs litigating against other oligarchs. This might involve asset tracing—identifying large sums concealed behind layers of offshore companies.
Later that year Steele embarked on a separate and sensitive new assignment that drew on his knowledge of covert Russian techniques. And of soccer: in Moscow he had played defense as a fullback. The client was the English Football Association, the FA. England was bidding to host the 2018 soccer World Cup. England’s main rival was Russia. There were joint bids, too, from Spain and Portugal, and the Netherlands and Belgium. His brief was to investigate the eight other bidding nations, with a particular focus on Russia.
It was rumored that the FSB had carried out a major influence operation, ahead of a vote in Zurich by the executive committee of FIFA, soccer’s international governing body. A second vote was to take place at the same time for the 2022 World Cup. One of the countries bidding was the desert emirate of Qatar.
According to Steele, Putin was a reluctant backer of Russia’s World Cup bid and only became engaged from mid-2010, when it appeared Moscow might lose. Putin then summoned a group of oligarchs. He instructed them to do whatever was necessary to achieve victory, including striking personal deals with FIFA voters.
Putin’s method, Steele said, was unseen. “Nothing was written down. Don’t expect me or anyone to produce a piece of paper saying please X bribe Y with this amount in this way. He’s not going to do this.” He added: “Putin is an ex-intelligence officer. Everything he does has to be deniable.” The oligarchs were brought in to disguise the Kremlin’s controlling role, Steele said, according to The Sunday Times.
Steele “lit the fuse” of something bigger, as one friend put it.
Steele discovered that FIFA corruption was global. It was a stunning conspiracy. He took the unusual step of briefing an American contact in Rome, the head of the FBI’s Eurasia and Serious Crime Division. This led to a probe by U.S. federal prosecutors. And to the arrest in 2015 of seven FIFA officials, allegedly connected to $150 million in kickbacks, paid on TV deals stretching from Latin America to the Caribbean. The United States indicted fourteen individuals.
By this point, of course, Russia had won its bid to host the World Cup. England—the country that invented soccer—scraped just two votes.
The episode burnished Steele’s reputation inside the U.S. intelligence community and the FBI. Here was a pro, a well-connected Brit, who understood Russian espionage and its subterranean tricks. Steele was regarded as credible.
Between 2014 and 2016, Steele authored more than a hundred reports on Russia and Ukraine. These were written for a private client but shared widely within the State Department and sent up to Secretary of State John Kerry and to Assistant Secretary of State Victoria Nuland, who was in charge of the U.S. response to the Ukraine crisis. Many of Steele’s secret sources were the same sources who would supply information on Trump.
One former State Department envoy during the Obama administration said he read dozens of Steele’s reports on Russia. The envoy said that on Russia, Steele was “as good as the CIA or anyone.”
Steele’s professional reputation inside U.S. agencies would prove important the next time he discovered alarming material, and lit the fuse again.
—
Trump’s political rise in the fall of 2015 and the early months of 2016 was swift and irresistible. The candidate was a human wrecking ball who flattened everything in his path, including the Republican Party’s aghast, frozen-to-the-spot establishment. Marco Rubio, Jeb Bush, Ted Cruz—all were batted aside, taunted, crushed. Scandals that would have killed off a normal presidential candidate made Trump stronger. The media loved it. Increasingly, so did the voters.
Might anything stop him?
The front-runner was Jeb Bush, but he struggled. Trump called him “low-energy.” During the primaries, conservative website The Washington Free Beacon commissioned Fusion to investigate Trump. The Washington Free Beacon was backed by one of Trump’s wealthy opponents, Paul Singer, a New York hedge fund billionaire and Republican donor. Singer dropped out after Trump became the presumptive nominee. Senior Democrats seeking to elect Hillary took over the Trump contract. The new client was the Democratic National Committee. A lawyer working for Hillary’s campaign, Marc E. Elias, retained Fusion and received its reports.
The world of private investigation is morally ambiguous—a sort of open market in dirt. Information on Trump was of no further use to Republicans, but it could be of value to Democrats.
Before this, in early spring 2016, Simpson approached Steele. Steele started to scrutinize Paul Manafort, Trump’s new campaign manager. From April, Steele investigated Trump on behalf of the DNC, Fusion’s anonymous client. All Steele knew at first was that the client was a law firm. He later told Mother Jones: “It started off as a general inquiry.” Trump’s organization owned luxury hotels around the world.
One obvious question for him, Steele said, was: “Are there business ties to Russia?”
Over time, Steele had built up a network of sources. He was fiercely possessive of them: who they were he would never say. A source might mean practically anybody. It could be someone famous: for example, a well-known foreign government official or diplomat with access to secret material. Or it could be someone obscure—a lowly chambermaid cleaning the penthouse suite in a five-star hotel.
Normally an intelligence officer would debrief sources directly. Since Steele could no longer visit Russia, this had to be done by others or in third countries. There were intermediaries, subsources, operators—a sensitive chain. Only one of Steele’s sources on Trump knew of Steele.
Steele put out his Trump-Russia query. He waited for answers. His sources started reporting back. The information was astonishing, “hair-raising.” As he told friends, “For anyone who reads it, this is a life-changing experience.”
Steele had stumbled upon a well-advanced conspiracy that went beyond anything he had discovered with Litvinenko or FIFA. It was the boldest plot yet. It involved the Kremlin and Trump. Their relationship, Steele’s sources claimed, went back a long way. For at least the past five years Russian intelligence had been secretly cultivating Trump. This operation had succeeded beyond Moscow’s wildest expectations. Not only had Trump upended political debate in the United States—raining chaos and confusion wherever he went and winning the nomination—but it was just possible that he might become the next president.
Which opened all sorts of intriguing options for Putin.
In June 2016 Steele typed up his first memo. He sent it to Fusion. It arrived via enciphered mail.
The headline read: “US Presidential Election: Republican Candidate Donald Trump’s Activities in Russia and Compromising Relationship with the Kremlin.”
It said:
Summary
Russian regime has been cultivating, supporting and assisting TRUMP for at least 5 years. Aim, endorsed by PUTIN, has been to encourage splits and divisions in the western alliance.
So far TRUMP has declined various sweetener real estate business deals, offered him in Russia to further the Kremlin’s cultivation of him. However he and his inner circle have accepted a regular flow of intelligence from the Kremlin, including on his Democratic and other political rivals.
Former top Russian intelligence officer claims FSB has compromised TRUMP through his activities in Moscow sufficiently to be able to blackmail him. According to several knowledgeable sources, his conduct in Moscow has included perverted sexual acts which have been arran
ged/monitored by the FSB.
A dossier of compromising material on Hillary CLINTON has been collated by the Russian Intelligence Services over many years and mainly comprises bugged conversations she had on various visits to Russia and intercepted phone calls rather than any embarrassing conduct. The dossier is controlled by Kremlin spokesman, PESKOV, directly on Putin’s orders. However, it has not yet been distributed abroad, including to TRUMP. Russian intentions for its deployment still unclear.
The memo was sensational. There would be others, sixteen 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.
If Steele’s reporting was to be believed, Trump had been colluding with Russia. This arrangement was transactional, with both sides trading favors. It said Trump had turned down “various lucrative real estate development business deals in Russia,” especially in connection with the 2018 soccer World Cup, hosted by Moscow.
But he’d been happy to accept a flow of Kremlin-sourced intelligence material, apparently delivered to him by his inner circle. That didn’t necessarily mean the candidate was a KGB agent. It did signify, however, that Russia’s leading spy agency had expended considerable effort getting close to Trump—and, by extension, to his family, friends, close associates, and business partners, not to mention his campaign manager and personal lawyer.
On the eve of the most consequential U.S. election for generations, one of the two candidates was compromised, Steele’s sources claimed. The memo alleged Trump had unusual sexual proclivities. If true, this meant he could be blackmailed.
Steele’s collaborators offered salacious details. It said that Russian intelligence had sought to exploit “TRUMP’s personal obsessions and sexual perversion” during a trip to Moscow in 2013. The operation had allegedly worked. The tycoon had booked the presidential suite of the Ritz-Carlton Hotel “where he knew President and Mrs OBAMA (whom he hated) had stayed on one of their official trips to Russia.”
There, the memo said, Trump had deliberately “defiled” the Obamas’ bed. A number of prostitutes “had performed a ‘golden showers’ (urination) show in front of him.” The memo added: “The hotel was known to be under FSB control with microphones and concealed cameras in all the main rooms to record anything they wanted to.”
There was another fascinating dimension to this alleged plot, of course categorically denied by Trump. According to Steele’s sources, associates of Trump and Russian spies had held a series of clandestine meetings, in central Europe, Moscow, and elsewhere. The Russians were very good at tradecraft. Nonetheless, could this be a trail that others might later detect?
Steele’s sources offered one final piece of devastating information. They alleged that Trump’s team had coordinated with Russia on the hacking operation against Clinton. And that the Americans had secretly co-paid for it.
Steele wrote up his findings in MI6 house style. The memos read like CX reports—classified SIS intelligence documents. They were marked CONFIDENTIAL/SENSITIVE SOURCE. The names of prominent individuals were in bold—TRUMP, PUTIN, CLINTON. The reports began with a summary. They offered supporting detail. Sources were anonymous. They were merely introduced in generic terms: “a senior Russian foreign ministry figure” or “a former top level Russian intelligence officer still active inside the Kremlin.” They were given letters, starting with A and proceeding down the alphabet.
How certain was Steele that his sources had got it right and that he wasn’t being fed misinformation? The matter was so serious, so important, so explosive, so far-reaching—this was an essential question.
As spies and former spies knew, the world of intelligence was nonbinary. There were degrees of veracity. A typical CX report would include phrases like: “To a high degree of probability.” Intelligence could be flawed because humans were inherently unreliable. They forgot things. They got things wrong.
One of Steele’s former Vauxhall Cross colleagues likened intelligence work to delicate shading. This twilight world wasn’t black and white—rather it was a muted palette of grays, off-whites, and sepia tones, he told me. He said you could shade in one direction (more optimistically) or in another direction (less optimistically). Steele was generally in the first category.
Steele was adamant that his reporting was credible. One associate described him as sober, cautious, highly regarded, professional, and conservative. “He’s not the sort of person who will pass on gossip. If he puts something in a report, he believes there is sufficient credibility in it,” the associate said. The idea that Steele’s work was fake or a cowboy operation or born of political malice was completely wrong, he added.
The dossier, Steele told friends, was a thoroughly professional job, using professional methods. And—significantly—based on sources who had proven themselves in other areas. Evaluating sources depended on a critical box of tools: What was a source’s reporting record, was he or she credible, what was the motivation?
Steele recognized that no piece of intelligence was 100 percent right. According to friends, he assessed his work on the Trump dossier was 70 to 90 percent accurate. Over eight years, Orbis had produced scores of reports on Russia for private clients and others. A lot of this content was verified or “proven up.” And, Steele said, “I’ve been dealing with this country for thirty years. Why would I invent this stuff?”
Meanwhile, others were confirming his alarming discoveries.
—
It is known as the Doughnut. This impregnable-looking building, hollow in the middle and with a security fence around its circumference, is situated in the English town of Cheltenham. What goes on inside is secret. Although, thanks to Edward Snowden, the breathtaking scale of its mission is now better known.
The Doughnut is a key part of British intelligence gathering. It is home to the Government Communications Headquarters—the UK’s eavesdropping agency. In 2013 Snowden revealed that GCHQ has the capacity to vacuum up most of the Internet: email traffic, browsing histories, text messages, and other data, stolen in the billions from fiber optic cables or via intercepts of mobile phones.
Snowden’s leak also showed GCHQ’s close relationship with the NSA—the U.S. National Security Agency. The two agencies are practically indistinguishable. They are part of an Anglo-Saxon spying alliance, Five Eyes. This encompasses the United States, the United Kingdom, Canada, New Zealand, and Australia. Collectively, these agencies can surveil the entire planet.
On any day, their targets might include Taliban commanders in Afghanistan, the Iranian leadership, or the Stalinist hermit state of North Korea. GCHQ would routinely listen to the conversations of known or suspected foreign intelligence officers active in the United Kingdom and continental Europe. Especially Russian ones.
In late 2015 GCHQ was carrying out standard “collection” against Moscow targets. These were known Kremlin operatives already on the grid. Nothing unusual here. Except that the Russians were talking to people associated with Trump. The precise nature of these exchanges has not been made public.
According to sources in the United States and the United Kingdom, these interactions formed a suspicious pattern. They continued through the first half of 2016. The intelligence was handed to the United States as part of a routine sharing of information. Other friendly spy agencies supplied similar Trump-Russia electronic material. According to one source, the countries involved included Germany, Estonia, Sweden, Poland, and Australia. A second source suggested that both the Dutch spy agency and the French General Directorate for External Security, or DGSE, were contributors as well.
The FBI and the CIA were slow to appreciate the extensive nature of these contacts between Trump’s team and Moscow. This was in par
t due to institutional squeamishness—the law prohibits U.S. agencies from examining the private communications of U.S. citizens without a warrant.
The electronic intelligence suggested Steele was right. According to one account, the U.S. agencies looked as though they were “asleep.” “‘Wake up! There’s something not right here!’ The BND [German intelligence], the Dutch, the DGSE, SIS were all saying this,” one Washington-based source told me.
That summer GCHQ’s then head, Robert Hannigan, flew to the United States to personally brief CIA chief John Brennan. The matter was deemed so important it was handled at “director level”—face-to-face between the two agency chiefs. James Clapper, the director of national intelligence, later confirmed the stream of intelligence from Europe, declining to give details and adding: “It’s sensitive.”
After an initially slow start Brennan used GCHQ information and tip-offs from other partners to launch a major interagency investigation.
Meanwhile, the FBI was receiving disturbing warnings from a separate direction—Steele.
At this point Steele’s Fusion material was unpublished and unknown. Whatever the outcome of the election, it raised grave questions about Russian interference and the U.S. democratic process. There was, Steele felt, overwhelming public interest in passing his findings to U.S. investigators. The United States’ multiple intelligence agencies had the resources to prove—or disprove—his discoveries. He realized these allegations were—as he put it to a friend—a “radioactive hot potato.” He anticipated a hesitant response, at least at first.
In June Steele flew to Rome to brief his contact from the FBI, with whom he had cooperated over FIFA. His information started to reach the FBI in Washington. It had certainly arrived by the time of the Democratic National Convention in late July, when the website WikiLeaks first began releasing hacked Democratic emails. It was at this moment that FBI director James Comey opened a formal investigation into Trump-Russia.
