Consultant behind dossier on Trump's Kremlin ties also worked for Russian firm

Glenn R. Simpson, former Wall Street Journal investigative reporter and co-founder of the research firm Fusion GPS, arrives to testify at a closed U.S. House Intelligence Committee hearing in Washington on Nov. 14, 2017. Simpson hired a former British spy to gather opposition research on Donald Trump during the 2016 presidential race.
Glenn R. Simpson, former Wall Street Journal investigative reporter and co-founder of the research firm Fusion GPS, arrives to testify at a closed U.S. House Intelligence Committee hearing in Washington on Nov. 14, 2017. Simpson hired a former British spy to gather opposition research on Donald Trump during the 2016 presidential race. AP

The day before a Russian lawyer offering “dirt” about Hillary Clinton met in June, 2016, with Donald Trump’s son, son-in-law and campaign chairman, she was at a dinner with a Washington consultant who, presumably unbenownst to her, was investigating Trump’s ties to the Kremlin.

Further, consultant Glenn Simpson joined a second dinner attended by the lawyer, Natalia Veselnitskaya, on the day after the infamous June 9 Trump Tower meeting, Simpson said in testimony released on Tuesday. Simpson said he didn’t learn for months about her role in the intervening meeting with Donald Trump Jr., Jared Kushner and Paul Manafort.

The confluence of events Simpson described in more than 10 hours of testimony last August before lawyers for the Senate Judiciary Committee reveals how his firm straddled seemingly competing interests as it played a key, below-the-radar role in the presidential campaign. The firm, Fusion GPS, hired former British intelligence officer Christopher Steele to help it do opposition research on Trump during the 2016 campaign on behalf of Clinton’s campaign and the Democratic National Committee.

The resulting “dossier” of allegations about Trump’s Russia connections has become a lightning rod for criticism by Trump’s defenders.

Simpson’s Aug. 22 testimony has been sealed for more than four months, a decision that had become the source of partisan contention. When Republican Chairman Charles Grassley of Iowa refused to release it, even after Simpson co-authored an editorial in the The New York Times demanding that he do so, the panel’s top Democrat set off sparks on Tuesday by unilaterally releasing it herself.

“The innuendo and misinformation circulating about the transcript are part of a deeply troubling effort to undermine the investigation into potential collusion and obstruction of justice,’’ Democratic Sen. Dianne Feinstein of California said.

Grassley’s office called the decision “totally confounding” and made without consulting him. He said her decision “undermines the integrity of the committee’s oversight work and jeopardizes its ability to secure candid voluntary testimony relating to the independent recollections of future witnesses.”

President Trump attacked "Sneaky Dianne Feinstein," in a series of tweets Wednesday morning, repeating that there was no collusion between Russia and his campaign and said the release of Simpson's transcript was done in an "underhanded and possibly illegal way."

Grassley and Republican Sen. Lindsey Graham of South Carolina last week asked the Justice Department to investigate whether Steele had lied to committee investigators about his contacts with news reporters, a move that coincided with a multiple other Republican maneuvers to undercut the investigation of Trump.

In the latest shot, Trump's personal lawyer told Bloomberg News he had filed defamation suits against Buzzfeed News, which first published the dossier in January 2017, and Fusion GPS. The dossier, many of whose allegations have yet to be substantiated, alleges attorney Michael Cohen met with Russians in Europe in August or September of 2016, purportedly to ensure the Trump campaign's supposed collaboration with Russian-backed operatives was not discovered.

The 312-page transcript of Simpson’s interview also all but confirmed, as the New York Times disclosed last week, that an Australian diplomat alerted the FBI in July 2016 that a Trump foreign policy adviser, George Papadopoulos, had told him two months earlier of a separate approach by Russians offering “dirt” on Clinton and “thousands” of emails that would embarrass her.

That was the same month Steele approached the FBI, because he’d become alarmed that some of the information he was gathering rose to the level of a national security concern.

Simpson’s firm stepped into the presidential race in a big way by hiring Steele, the British intelligence service MI6’s former top Russia expert, to gather opposition research about Trump.

In his testimony, Simpson called Steele “a boy scout” who lives modestly and adheres to the highest professional standards. Simpson described beginning to conduct opposition research on Trump for a Republican client but said that work ended in the spring of 2016 when it was clear Trump would be the Republican nominee.

He hired Steele, a friend, shortly thereafter, when a lawyer for Clinton’s campaign and the DNC began paying Fusion GPS for the work. Steele eventually produced the controversial dossier of reports quoting sources close to the Kremlin as describing collaboration between Trump’s campaign and Russia.

Without naming Papadopoulos, Simpson testified that the FBI gave credence to Steele’s dossier because it had heard “the same thing” from inside Trump’s network. (A source familiar with the matter identified the origins of that information as the Australian diplomat’s account of what he learned over drinks with Papadopoulos at a London bar rather than any direct contact between the FBI and a Trump associate.)

Veselnitskaya, a well-connected Russian operative, represented a Russian company accused by the Justice Department of money laundering at the time she approached the Trump campaign with supposedly damaging information about Clinton. She became embroiled in a related foreign policy battle over the imposition of U.S. sanctions against the Kremlin stemming from the death of a Russian accountant and the Kremlin’s retaliatory ban on American adoptions of Russian babies.

Simpson’s firm was enmeshed in both storms.

In 2014, a Washington law firm working for the Cyprus-based Russian firm Prevezon hired Simpson to gather research to fight Justice Department allegations that Prevezon had laundered hundreds of millions of dollars through pricey Manhattan real estate.

Prevezon was one of the companies Russian accountant Sergei Magnitsky was investigating when he was imprisoned and later died in a Russian jail. The United States responded with harsh sanctions, the very sanctions at the heart of the meeting on June 9, 2016, at Trump Tower.

Committee lawyers pressed Simpson on whether he was taking money from both the Russian government, based on the Prevezon case, even as he was investigating the Kremlin’s election interference.

He said the law firm that hired him is obliged to determine the source of the money when it takes on a client, “and, to my knowledge, they did so and the (Prevezon) money was not coming from the Russian government.”

On the day before and after the Trump Tower meeting, Veselnitskaya, in New York because of the Prevezon’s ongoing court hearings, had dinner with a group that included Simpson. Simpson told committee lawyers she did not speak English, he did not speak Russian and they did not share a conversation.

At the second dinner, he said, he sat next to an author who spoke of her biography of Latin American liberator Simon Bolivar. That woman, Marie Arana, a former journalist now working for the Library of Congress, confirmed Simpson’s account in an email from Lima, Peru. She said about a dozen people dined together at the Barcelona Wine Bar in the nation’s capital. She and her husband were invited by neighbor Rinat Akmetshin, a Russia-connected lobbyist who worked with Veselnitskaya to lobby for an end to the Russia sanctions.

“We had no notion of who she was except that they were all working on the Magnitsky case,” Arana wrote. “We talked largely about South America and his (Simpson) career in journalism.”

Settlement of the Prevezon case, brought in 2013, was announced on May 12, 2017, with the Russian company paying about $5.9 million, or half what was originally sought. The announcement came two months after Donald Trump fired Preet Bharara, the U.S. attorney for the Southern District of New York, who had been overseeing the Prevezon case.

The transcript also reveals that Simpson was researching a colorful Trump associate, Felix Sater. The Russian emigre is a two-time convict. McClatchy has reported that Sater worked to bring questionable money from Kazakhstan into Trump’s Soho condo development in New York.

"We saw indications that some of the money came from Kazakhstan, among other places, and that some of it you just couldn't account for," Simpson said.

Sater was a director of the Bayrock Group that helped build Trump Soho and, even after stepping down amid news reports about his checkered past, he continued to work for the Trump Organization. Trump has claimed he doesn’t know him, but Sater and Trump's personal attorney, Michael D. Cohen, last year confirmed that they sought a Moscow hotel deal for Trump even as he ran for president in 2015 and 2016.

In the transcript, Simpson told Senate lawyers that in researching the Trump Organization he was particularly interested in Sater, whom he said had ties to Simeon Mogilevich, an alleged Russian mob leader wanted in several U.S. jurisdictions on allegations of financial fraud dating to the 1980s. Mogilevich is believed to be under loose house arrest in Moscow.

Sater said the allegation that he has a family tie to Mogilevich is “an absolute lie”; his attorney, Robert S. Wolf, called it “reckless and unsubstantiated.”

McClatchy Special Correspondent Peter Stone contributed to this report.

Kevin G. Hall: 202-383-6038, @KevinGHall

Greg Gordon: 202-383-6152, @greggordon2

David Goldstein: 202-383-6105, @GoldsteinDavidJ

This story has been updated with Felix Sater’s comment.