It was the most explosive allegation in a presidential campaign full of them.
In 2013, it was claimed, Donald Trump frolicked among peeing prostitutes in the presidential suite of Moscow’s Ritz Carlton — and Russia’s intelligence services had a video of the incident.
The bombshell was made public in January 2017 when BuzzFeed published a collection of memos written by former British spy Christopher Steele purportedly detailing Donald Trump’s “activities in Russia.”
The allegations were based solely on hearsay, and yet, they rocketed around the world.
The so-called Steele Dossier is the most high-profile product from a secretive, little-known and little-regulated industry known as “private espionage.”
In the last decade the industry has exploded, bringing in revenue of $2.5 billion in 2018, according to an estimate from ERG Partners, an investment bank focusing on the intelligence industry. And private intelligence is an industry that has existed largely in the shadows, despite the immense influence it can sometimes wield.
“There’s this booming business out there that’s invading our privacy, profiting from deception and manipulating the news, and it’s one we have to be on guard against,” says Barry Meier, who shines a light on the recent newsmakers in private espionage with his new book “Spooked: The Trump Dossier, Black Cube, and the Rise of Private Spies” (Harper), out now.
Private intelligence began really taking off in the years after the 9/11 attacks, when career government spies began bucking the longtime tradition of not moving into the private sector.
“Private investigators once were content to lurk in the shadows,” Meier writes. “Now, politicians were hiring them to dig up dirt on opponents, companies were employing them to torpedo investigations into their activities by authorities or journalists, and dictators were using them as freelance intelligence agents.”
And few incidents illustrate the power — as well as the potential problems — with this shadow world as well as the Steele Dossier.
Christopher Steele, a 50-something former MI6 agent who had been stationed in Moscow back in the 1990s, fits the profile of those who frequently work in the private spying business, Meier says.
“They’re often a retired government spy or over-the-hill agent who is basically shopping their past and living off the skills that they developed while they were working for the government,” he says.
After retiring from MI6, Steele launched a London investigation firm called Orbis Business Intelligence.
For his work on the Steele Dossier, the former spy was contracted by Fusion GPS, a DC-based intelligence company run by two former Wall Street Journal reporters, Glenn Simpson and Peter Fritsch, who had decided to turn their journalistic investigative skills to other ends.
Simpson and Fritsch’s mission to uncover dirt on Trump started in 2015, when a billionaire Republican supporter of Marco Rubio named Paul Singer hired Fusion GPS to collect opposition research on the candidate from New York.
By April 2016, when it had become clear that Trump was going to be the Republican nominee, Singer stopped funding the operation.
Simpson and Fritsch, however, wanted to continue following leads on Trump, particularly about his activities in Russia. Through a lawyer named Marc Elias, Fusion GPS found a new patron in Hillary Clinton, who, according to ABC News, paid $1 million.
“During Clinton’s tenure as secretary of state in the Obama administration, she had taken a hostile stance toward Vladimir Putin,” the author writes. “Now any information linking Trump to Moscow could provide her with ammunition.”
Simpson considered himself a Russia expert, but now that Clinton was paying the bills, he went in search of someone “closer to the action.” He hired Steele in May 2016.
ONE of the advantages private spies have is that they are often not bound by the same rules and ethics as government officials or journalists. Operatives from outfits like Black Cube, an Israeli company that was hired by Harvey Weinstein to dig up dirt on his accusers, have been known to impersonate documentary filmmakers or befriend subjects under false pretenses in order to get close to sources.
“If a person defrauds you out of money they can be prosecuted because that’s a crime,” the author says. “But if someone is making money by defrauding you out of information, that’s totally legal.”
Rather than use subterfuge to gain intelligence, Steele simply paid a Russian “collector” named Igor Danchenko, who gathered intel on his behalf.
In 2010, Danchenko’s employer — a company that prepared risk assessments for firms looking to do business in Russia — went out of business. Danchenko was soon introduced to Steele by a mutual acquaintance. In 2012, “Steele paid him to take his first trip to Russia as an operative to gather information about a businessman’s possible ties to Russian organized crime,” Meier writes.
“Steele was boasting that he had this wired Russian collector that had deep connections to people in the Kremlin,” Meier says. “But it turned out that his collector was this kind of schlumpy ex-Russian lawyer who had drifted into the world of private spying.”
In turn, Danchenko got his information from a network of childhood friends and drinking buddies, who would tell him, “I just overheard such-and-such about an issue.”
The pee tape allegation came from one of Danchenko’s sources who reported there was a “well-known” rumor that Trump was into “water sports” and had indulged at the fancy Moscow hotel, Meier writes. Danchenko followed up by speaking to hotel employees, one of whom told him, “all kinds of things happen[ed]” there, which Danchenko took as corroboration.
Steele never verified the information or saw the video. He included the rumor in his memo because he felt it wasn’t his job to cherry-pick information, but rather to pass along all the unvetted, so-called “raw intelligence.”
“This is the fuel that the entire industry runs on. It’s smoke,” Meier says.
“Raw intelligence is almost like an insult to the word intelligence because it suggests there’s something intelligent to the information that’s being provided. Most of the time it’s dreck and rumors.”
The murky nature of Steele’s dossier didn’t stop the former spy and Fusion GPS from working relentlessly to pass along the intelligence to journalists and government officials — a key job of private spies. The spies and those who hire them “want to make the public aware of information they gather,” Meier says. “It doesn’t do them any good for this stuff to be gathered and to sit in some lawyer’s back room.”
Steele had for months tried to pass along the information he had collected to an FBI source, but when the G-man wasn’t interested, he and Fusion GPS stepped up their media offensive.
In fall 2016, Steele hosted an off-the-record press junket at fancy DC-based hotel the Tabard Inn, in which reporters from outlets including Yahoo! News, The New Yorker, The New York Times and CNN were cycled through to hear his presentation on the dossier, “Spooked” reportsaccording to Meier.
Inside a meeting room, over a spread of food, Simpson introduced Steele, who presented his case, though he did note that his information still needed to be confirmed.
“Even if a journalist believed Steele, there was no apparent way to independently confirm what he had said,” Meier writes. As a result, just one article appeared on the heels of the Tabard Inn meetings: a piece by Michael Isikoff from Yahoo! News about US intel officials probing Trump adviser Carter Page.
Then, in December 2016, BuzzFeed reporter Ken Bensinger attended a Fusion GPS retreat in San Francisco. At the party, Simpson told Bensinger about the dossier and the alleged pee tape. Bensinger was interested and eventually was able to photograph the dossier’s pages in the office of an aide to John McCain.
In January 2017, CNN aired a vague report that FBI director James Comey had briefed Trump about potential Russian kompromat. BuzzFeed editor Ben Smith, fearful that he was going to get scooped, made the snap decision to publish the dossier online.
From there, the unverified allegations in the Steele Dossier burst into the mainstream, and Meier says the whole saga exposed an unsavory alliance.
“It raises serious questions about how journalists and private intelligence firms interact with each other,” Meier says. “It spoke to this very hyper-partisan and fragmented media world that we’re living in now that allows disinformation to flourish on both sides of the spectrum.”
Despite some of Steele’s dossier having been debunked — most notably the accusation that Trump’s lawyer, Michael Cohen, traveled to Prague to meet with Russian spies — Meier says the private intelligence industry has not been cowed.
After being forced into hiding in 2017 when his name was revealed, Christopher Steele is now back to work with Orbis and other companies he runs. Fusion GPS is also still operational.
“They absolutely have not learned a lesson,” Meier says. “Their exploits, as unappealing as they may be to the general public, have instead become calling cards. Companies or law firms will say to themselves, ‘Hey, Black Cube was willing to do anything to trick people and scam people and get information out of people.’
“ ‘Those are the people I want working for me.’ ”