What to make of the intelligence failure over the Steele Dossier?

On Jan. 11, 2017 (one day after its publication by BuzzFeed), I wrote that the Steele Dossier was bogus, a fake, and a scam. In this and subsequent articles, I explained how and why I reached this conclusion, even with the limited information available at the time. Four years later, we have definitive proof from an inspector general and a special counsel that the Steele Dossier was indeed a hoax, one that paralyzed American politics for an entire presidential term.

At the time, I expected the intelligence community to reach the same conclusion as I. All that would be required was for them to observe general rules of intelligence collection. I was wrong then. To my alarm, the FBI was taking the fake dossier seriously. We are still waiting for some kind of disavowal of the dossier from our masters of intelligence.

We should not let the frenzy of the Steele Dossier by the media and anti-Trump politicians deflect attention from the intel community’s behavior. Yes, media and politicians march to different drummers. The media sell clicks and newspapers. Media failures are to be expected, but rarely of this magnitude. Yes, politicians engage in dirty tricks that threaten to cross the line of legality, but it is hard to find another dirty trick of this magnitude. Those who dreamed up “Trump as a Russian agent” probably did not expect it to profoundly affect American political life as it did. 

Professionals who gather intelligence are supposed to be truth seekers. Let the media and politicians roll in the gutter, but not us, they would say under normal conditions.

Yet, our intelligence community, primarily the FBI, allowed an intelligence dossier compiled by a private opposition firm using anonymous private contractors interviewing anonymous Russian sources making once-in-a-century charges against a presidential candidate and then president to shape the nation’s most sensitive intelligence operations against a fictional plot cooked up by opposition politicians. That is a long sentence but it summarizes what happened.

I need only one excerpt from the Steele Dossier to illustrate why I reached the conclusion that it was a scam back in early 2017 — and why the intelligence community should have reached the same conclusion in short order. 

Here is the excerpt from the first page of the report:

“Speaking to a trusted compatriot in June 2016 sources A and B, a senior Russian Foreign Ministry figure and a former top level Russian intelligence officer still active inside the Kremlin respectively, the Russian authorities had been cultivating and supporting US Republican presidential candidate, Donald TRUMP for at least 5 years. Source B asserted that the TRUMP operation was both supported and directed by Russian President Vladimir PUTIN.”

Let’s get this straight: The dossier claims that two high-level Kremlin officials let a Steele “sub source” in on one of Russia’s deepest secrets — that then presidential candidate Trump was a Russian asset and had been one for five years! These two Kremlin sources had revealed the intelligence plot of the century, and no one was saying: “Wait a minute, this can’t be real! We need to check this out with a fine tooth comb.”

Indeed, the FBI did “check out” the dossier by constructing a spreadsheet of the dossier’s few checkable facts, such as times, dates, and places. Their exercise failed to confirm any substantive points of the dossier. But the FBI did not perform the most basic checks by asking: “Who are these sources? If they are truly Kremlin insiders, why are they talking? What is the message being imparted and for whose benefit?”

A common refrain during this early period of RussiaGate was that the dossier’s author, Christopher Steele, stood as the guarantor of its authenticity. After all, Steele was an ex-MI6 agent who served undercover in Moscow in the early 1990s and had occupied the Russia MI6 desk in London from 2003 to 2006. He had not visited Russia for 13 years. Since 2006 he owned a private intelligence firm, and it was, in this capacity, that he was hired by a D.C. opposition research firm to dig dirt on Trump.

Steele was not hired to find the truth but to dig up opposition research of salacious, weird, and incredible rumors and gossip concerning Trump and his campaign. He was no “James Bond MI6” but, rather, a hustler trying to please his anti-Trump clients with talk of “golden showers” in a luxury Moscow hotel, cloak-and-dagger meetings in Prague, and fantastic bribes for Trump campaign advisor Carter Page. Moreover, Steele did not “write” the dossier. He collated the sub source reports and puffed up the credentials of the supposed informants. Steele’s own rolodex of Russian state officials would likely have been empty after not visiting Russia for more than a decade. The sub sources were on their own. Their checks would stop if they did not deliver juicy stuff.

Gathering and evaluating raw intelligence from sources is the bread and butter of intelligence. In such work, they need to know whether the sources are who they claim to be. Is the interrogator well-trained and without personal bias? Does what the informants say make sense and check out against related facts? In the case of private intelligence-gathering, they need to know who the interrogators are as well as how they found the informant and whether the informant required payment or other inducements to talk. 

So where does this leave us? We have “sub sources” whose identity we do not know claiming to speak to two high-level officials identified by generic job titles who reveal the intelligence secret of the century. Any intelligence expert would see all kinds of red flags here. The first question to ask would be: “By any chance is all this made up?” (Indeed, Steele’s primary sub source confessed this to be the case in testimony before the FBI. Why was this not the end of the lurid Steele Dossier business?)

We know from the work of Justice Department inspector general Michael Horowitz and special counsel John Durham that Steele’s (two) sub sources were fringe figures. They were in no way “trusted colleagues” of the two purported Kremlin officials. Why would a top-level security agent active in the Kremlin want to talk to Steele’s down-and-out sub sources? Nor could the sources buy testimony. Steele’s budget was only $168,000.

As explained by a respected Russian liberal commentator: “After all, ‘sources’ of this kind in Russia … have their own palaces, yachts, private jets. It is not entirely clear why these corrupt billionaires … should reveal top-secrets to a consultant who had not visited Russia for 13 years?”

With all these red flags, the FBI, at a minimum, should have treated the dossier as radioactive and started an investigation into whether it was Russian disinformation cleverly infused into U.S. politics.

Amazingly, the FBI not only relied on it to obtain warrants from FISA courts but, after the election, the FBI agreed to pay Steele to continue gathering “intelligence” about Trump and Russia. The bureau pulled out of that arrangement after Steele was publicly identified in news reports.

We must ask why such garbage and fakery was allowed to affect public policy — namely, to influence FISA surveillance warrants of U.S. citizens, the appointment of a special prosecutor, and the use of Steele to build an impeachment case?

Why was the dossier not investigated quietly by FBI or CIA professionals, who should have swiftly discarded it and directed attention to possible Russian disinformation? I suspect that this did not happen because our intelligence experts were pulling for it to be true.

Paul Roderick Gregory is a professor emeritus of economics at the University of Houston, a research fellow at the Hoover Institution at Stanford University and a research fellow at the German Institute for Economic Research. Follow him on Twitter @PaulR_Gregory.