Democratic Donors Paid $50 million for New Anti-Trump Research

Steele, FusionGPS hired by Penn Quarter Group

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April 27, 2018

Anti-Trump researchers are continuing to conduct investigations of President Trump and were paid $50 million by unidentified donors in blue states, according to a House intelligence committee report made public on Friday.

The heavily redacted final report of the House Permanent Select Committee on Intelligence said the panel is continuing to probe efforts by former British intelligence officer Christopher Steele, author of the discredited anti-Trump dossier, and the research firm FusionGPS that hired Steele on behalf of the Democratic National Committee and Clinton campaign during the election.

The continuing anti-Trump opposition research operation was contained in a footnote on page 113 of the 243-page report. It identified the Penn Quarter Group as the research firm that hired Steele and FusionGPS. [Disclosure: The Washington Free Beacon was once a client of Fusion GPS. That relationship ended in January 2017. For more information, see here.]

The footnote identified former Senate intelligence committee staff investigator Daniel J. Jones, head of the Penn Quarter Group (PQG), as leading the new anti-Trump campaign.

Jones and a spokesman for the Penn Quarter Group, that describes itself as a "research and investigative advisory," could not be reached for comment. An email sent to an address on the company's website was not returned.

"In late March 2017, Jones met with FBI regarding PQG, which he described as 'exposing foreign influence in Western elections,'" the report said.

Jones was described as the chief author of the Senate Select Committee on Intelligence study of the CIA's terrorist detention and interrogation program and a former employee of the Daschle Group.

Jones's name appears to be blacked out in the footnote in several places but was identified in one sentence.

The report said the FBI was told that PQG was being funded by 7 to 10 wealthy donors located primarily in New York and California who provided about $50 million for the research.

The donors were not identified in the report.

The company hired Steele and an associate, along with FusionGPS, "to continue exposing Russian interference in the 2016 presidential elections," the report said.

The information obtained by the investigations will be shared with policymakers on Capitol Hill and news outlets, the report said.

The research company also plans to share its entire investigatory findings with the FBI.

The committee is also conducting a second line of inquiry into how Steele dossier information was supplied to the FBI by former State Department official Jonathan M. Winer.

The report said Winer gave 100 reports by Steele to Russia experts at the State Department and also supplied Steele and the FBI with information from former journalist Cody Shearer and a Clinton associate that alleged the Russians had obtained compromising information on Trump of a sexual and financial nature.

The committee report also identified multiple failures by intelligence and security agencies in not responding to the Russian intelligence operation to influence the 2016 election.

The report also stated that then-director of national intelligence James Clapper leaked details of a classified presidential intelligence briefing to CNN's Jake Tapper and other journalists.

Clapper, currently a national security analyst for CNN, also misled the committee about his contacts with the press related to the discredited Democratic Party-funded dossier produced by former British intelligence officer Christopher Steele.

The report on alleged Russian collusion between Moscow and the Trump presidential campaign found no evidence of cooperation or conspiracy by the Republicans.

The heavily redacted report, however, suggested Russia colluded with the Democrats in supplying disinformation about Trump through the Steele dossier.

"Using a series of intermediaries, the Democratic National Committee (DNC) and Hillary for America (Clinton campaign) paid a research firm to conduct opposition research on candidate Trump and his ties with Russia," the report said.

"As part of this effort, research from numerous purported Russian sources was obtained and provided to the Clinton campaign, thereby constituting indirect, but substantial, links 'between Russia and individuals associated with political campaigns' relevant to the 2016 U.S. election," the report said.

President Trump seized the report to denounce ongoing investigations into Russian collusion.

"'No evidence' that the Trump Campaign 'colluded, coordinated or conspired with Russia,'" the president tweeted. "Clinton Campaign paid for Opposition Research obtained from Russia—Wow! A total Witch Hunt! MUST END NOW!"

The committee investigation involved interviews with 73 witnesses with 230 hours of testimony and the review of more than 307,900 documents.

Intelligence assessments of the Russian meddling concluded that Moscow was opposing Clinton and sought to help Trump.

The dossier contained salacious and unproven allegations of secret ties between Trump and his campaign and the Russians, including claims that Trump cavorted with prostitutes in Moscow.

The committee interviewed Trump's chief security guard during the visit to the Ritz Carlton hotel who testified that prostitutes were offered but rejected.

The dossier was used improperly by the FBI in seeking a federal court order for surveillance of Americans during the campaign, including Carter Page.

The FBI did not fully explain to the court that the evidence it was using to spy on the Republican presidential campaign was paid for by the opposition Democratic Party, specifically the Democratic National Campaign and Hillary for America.

The security guard "advised Trump of the comment, and they both laughed about it," the report said.

In addition to Tapper, several other reporters, including CNN reporters Evan Perez and Jim Sciutto, and former Washington Post reporter Carl Bernstein reported on the secret presidential briefing.

"The committee's investigation revealed that President-elect Trump was indeed briefed on the contents of the Steele dossier and when questioned by the committee, former director of national intelligence James Clapper admitted that he confirmed the existence of the dossier to the media," the report said.

On the intelligence failures, the committee found that internal administration meetings were held but no action was taken to stop the Russian operation that included the use of cyber attacks and leaked emails as well as social media and other online disinformation.

An intelligence fusion cell was set up in 2016 that included analysts from the CIA, FBI, and National Security Agency and produced reports.

Intelligence judgments about Russian leader Vladimir Putin's strategic objectives in the meddling operation "failed to meet most of the analytic standards" set by agency rules, the report said.

The panel found "significant intelligence tradecraft failings that undermine confidence in the [Intelligence Community Assessment] judgments regarding Russian President Vladimir Putin's strategic objectives for disrupting the U.S. election."

The report did not specify how the judgments were wrong but suggested that it involved intercepts of communications by Putin.

The committee also compared news reports on Russian meddling and said many of them used language similar to a classified intelligence assessment. The panel did not say who leaked the reports.

The report said senior Obama administration officials requested that the identities of Americans contained in highly classified electronic intercepts be "unmasked" and found "gaps" in procedures for identifying the Americans.

As a result, intelligence agencies imposed new restrictions on unmasking.

The only action taken during the election was a phone call from then-CIA director John Brennan telling the head of the FSB security service to stop the Russian influence campaign, and then-President Obama's discussion with Putin of the influence operation during a G-7 summit.

"The executive branch's policy response to Russia's active measures campaign included extensive deliberation, but not significant pre-election action," the report said.

The FBI also failed to notify the Trump campaign that it was investigating possible collusion between Russia and the campaign.

The bureau also failed to adequately notify victims of Russian hacking operations, including the Democratic National Committee, of the operations.

A joint statement by the Department of Homeland Security and DNI issued a month before the election decrying Russian interference was "ineffective," the report said.

The report sought to avoid blaming intelligence and security agencies by describing the lapses as "executive branch" failures over concerns about taking action that would make it appear the election was rigged, or as a result of fear of compromising sensitive intelligence sources.

The panel also said the Obama administration's response to the meddling took place after the Nov. 8, 2016 election and was described as inadequate.

Obama ordered the expulsion of 35 Russian intelligence officers operating under diplomatic cover and the closure of Russian diplomatic facilities in Maryland and New York.

The report said the FBI opened a counterintelligence investigation of the Trump presidential campaign based on information about campaign foreign policy adviser George Papadopoulos, who pleaded guilty to making false statements to the FBI in October 2017.

Former White House national security adviser Michael Flynn also pleaded guilty to making a false statement to the FBI about conversations in December 2016 with Russia's ambassador.

The report said the guilty plea was made "even though the Federal Bureau of Investigation agents did not detect any deception during Flynn's interview."