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A copy of the little-publicized second dossier in the Trump-Russia affair, acquired by RealClearInvestigations, raises new questions about the origins of the Trump investigation, particularly about the role of Clinton partisans and the extent to which the two dossiers may have been coordinated or complementary operations.

Sidney Blumenthal, who passed the Shearer dossier on to Jonathan Winer at the State Department. (Top photo: anti-Trump sartorial statement.)

The second dossier -- two reports compiled by Cody Shearer, an ex-journalist and longtime Clinton operative -- echoes many of the lurid and still unsubstantiated claims made in the Steele dossier, and is receiving new scrutiny. Over the weekend, Rep. Devin Nunes, chairman of the House Intelligence Committee, said in a TV interview that his panel is shifting its focus concerning the genesis of the Russia investigation from the FBI to the State Department. This probe will include the Shearer dossier.

In late September 2016, Sidney Blumenthal, a close Clinton confidant and colleague of Shearer’s, passed Shearer’s dossier on to State Department official Jonathan M. Winer, a longtime aide to John Kerry on Capitol Hill and at Foggy Bottom.

According to Winer’s account in a Feb. 8, 2018 Washington Post op-ed, he shared the contents of the Shearer dossier with the author of the first dossier, ex-British spy Christopher Steele, who submitted part of it to the FBI to further substantiate his own investigation into the Trump campaign.  Steele was a subcontractor working for the Washington, D.C.-based communications firm Fusion GPS, which was hired by Hillary Clinton’s 2016 presidential campaign and the Democratic National Committee to compile opposition research on her Republican opponent.

Jonathan Winer, who passed Shearer material on to Christopher Steele.

Steele’s 35-page dossier was used as evidence in October 2016 to secure from a secret court a surveillance warrant on volunteer Trump campaign adviser Carter Page. Among issues the intelligence panel will likely want clarified is whether the FBI also used Shearer’s material as evidence in obtaining the FISA warrant.

Shearer did not respond to phone calls and emails seeking comment. Attempts to reach Winer by email were unsuccessful. And efforts to reach Blumenthal through his publisher were unsuccessful.

The copy of the Shearer memo provided to RealClearInvestigations is made up of two four-page reports, one titled “Donald Trump—Background Notes—The Compromised Candidate,” the other “FSB Interview” – the initials standing for the Russian Federal Security Service.

The only Trump campaign figures named are Donald Trump himself and his former campaign manager, Paul Manafort, misspelled as “Manniford.” Shearer may be hinting at a third person when he quotes, without substantiation, a Turkish businessman saying a Russian source knows of a “cut out” or intermediary through whom the prospective “president of the U.S.” would communicate “into President Putin’s office." The version of the two memos RCI has seen is undated.

Christopher Steele, whose dossier has many similarities to the Shearer dossier.

For the first report, Shearer claims he interviewed journalists and various media personalities, as well as the unnamed Turkish businessman with “excellent contacts within the FSB.” The businessman appears to be relaying information from what Shearer describes as the Turk’s “FSB guy.” The second report, “FSB Interview,” is an account of an interview with a source identified as an FSB agent. It’s not clear if the Turkish businessman’s FSB source in the first report is the same person Shearer interviews in the second. Neither is named.

The first Shearer report, “Donald Trump—Background Notes,” begins much like the Steele dossier. It alleges that Trump has been compromised by Russia and has engaged in illegal financial transactions with Russian figures: “At a time in the early l990’s when he was under severe financial stress Donald Trump visited Moscow in search of investors,” writes Shearer.

“Since the Trump name wasn’t worth much at that stage,” Shearer continues, “Trump’s only luck was in establishing relationships with oligarchs who needed someone to help them launder their money; which is what Trump did in return for some capital.” Shearer offers no source for these allegations, or proof of these transactions.

Like the Steele dossier, Shearer’s memo passes along unsubstantiated gossip about Trump’s sex life: According to Shearer’s FSB source, it was “From observing Trump for years in previous visits to Moscow, the FSB knew he had a weakness for women.”

Shearer’s FSB source told him “that he knew that Trump eventually learned that he had been flipped in a honeypot operation in Moscow.” Shearer’s memo echoes the most notorious, and salacious, item in the Steele dossier. Shearer’s FSB source claims that Trump was “filmed twice in Moscow in November 2013, during the Miss Universe pageant. Once in the presidential suite of the Ritz Carlton Hotel.” The FSB source “believes a copy of the sex videos is in Bulgaria, Israel and FSB political unit vaults in Moscow."

Shearer claims that his Turkish businessman source is able to confirm in 15 minutes with a phone call to his “FSB guy” that Trump was “compromised.” Shearer writes in the first report that he has “asked the FSB source for documentation, photos and other related materials and talking sources who will verify this story.” Evidently, none were made available to Shearer.

Devin Nunes's House committee is looking into the Shearer dossier.

As in the Steele dossier, Shearer’s ostensible Russian sources explain that the explicit purpose of the FSB operation is to elect Trump. The Turk’s FSB source says it was “launched with a wild­-eyed fantasy of electing someone president of the U.S. who communicated through a cut out into President Putin’s office.”

Again as in the Steele dossier, there are allegations of Russia stealing Clinton emails and tampering with voting machines. According to the Turkish businessman’s contact: “The Trump operation also involved hacking his opponents and trying to alter votes on election day.”

The Shearer memos also describe a split in Russia’s ruling circles, a la the Steele dossier. One side is eager to help Trump, another thinks it’s unwise to get in the middle of American politics. Shearer’s FSB source presents himself as a member of the moderate faction. He claims he is spilling the beans to Shearer in order to help restore U.S.-Russia relations. Shearer’s source says: “By helping expose and embarrass Putin in regards to what he has done with Trump—which has spiraled out of control—might eventually improve relations between the U.S. and Russia; because what he has done is dangerous.”

Was the Shearer Dossier Used for the FISA Warrant?

Rep. Nunes is not the first Republican to question what role the Shearer memo may have played in the FBI’s investigation into the Trump team and its possible role in securing the warrant under the Foreign Intelligence Surveillance Act. Chairman Charles Grassley and Sen. Lindsey Graham of the Senate Judiciary Committee alluded to the Shearer document in a memorandum attached to a Jan. 4, 2018 letter to FBI Director Christopher Wray and Deputy Attorney General Rod Rosenstein referring Steele to the Department of Justice for a criminal inquiry. In their redacted classified memorandum, the two Republican senators hint at the possibility that the FBI’s probe into the Trump team’s possible ties to Russia is the result of an operation managed by the Clinton inner circle.

Sens. Charles Grassley, pointing, and Lindsey Graham, far left.

“One memorandum by Mr. Steele that was not published by BuzzFeed is dated October 19, 2016,” write Grassley and Graham. “Mr. Steele’s memorandum states that his company ‘received this report from [REDACTED] US State Department,’ that the report was second in a series, and that the report was information that came from a foreign sub-source who ‘is in touch with [REDACTED], a contact of [REDACTED], a friend of the Clintons, who passed it to [REDACTED].’ It is troubling enough that the Clinton campaign funded Mr. Steele’s work, but that these Clinton associates were contemporaneously feeding Mr. Steele’s allegations raises additional concerns about his credibility.”

Writing in his Feb. 8 Washington Post op-ed about getting the Shearer memo from Sidney Blumenthal in  September 2016, Obama State Department official Winer explained that soon after the Blumenthal meeting, he met with Christopher Steele. Winer had known Steele, a longtime associate who often used Winer as his point of contact at the State Department. Steele had shown Winer the memos he’d written on Trump’s possible ties to Russia.

Winer asserted that in reading Shearer’s memo, he was “struck … how some of the material echoed Steele’s but appeared to involve different sources.” He shared Shearer’s memo with Steele, who described it as “potentially ‘collateral’ information,” presumably to buttress his own findings. The FBI, as Winer explained, had asked Steele to provide any supporting information. From the Grassley-Graham letter, it appears that Steele gave the FBI the Shearer report titled “FSB Interview,” “the second in a series.” He either withheld the first, "The Compromised Candidate" report, or Winer never gave it to him.

During the same period, late summer and early fall, the FBI was seeking a FISA warrant on Carter Page. A Department of Justice spokesperson declined comment when RCI emailed to ask if the Shearer memo was used as part of the Steele dossier to secure the warrant on Page’s communications that was granted Oct. 21, 2016.

When news of the Shearer memo broke more than a year later, the Guardian reported in a Jan. 30, 2018 article that the FBI “is still assessing details in the ‘Shearer memo’ and is pursuing intriguing leads.” The memo, the Guardian explained, “was initially viewed with skepticism, not least because he had shared it with select media organizations before the election.”

Even as his FSB memo was provided to the FBI before the election,  it appears that Shearer was shopping his information to press outfits while also comparing rumors with leading journalists. Shearer’s first report, “The Compromised Candidate,” is a record of various journalists and media personalities explaining how they’ve heard the same rumors, and even tried, unsuccessfully, to report the story that Shearer is pushing in the second report.

For instance, according to the first report, Brian Ross from ABC News told Shearer that he, too, heard Trump was “compromised sexually in Moscow right before the beauty contest he was hosting.”

Ross was suspended by ABC News after incorrectly reporting that Trump had directed campaign adviser, and later National Security Adviser, Michael Flynn to make contact with Russian officials before the 2016 election. Shearer writes in his memo that Ross told him that if there were a “talking head source” who could corroborate Shearer’s claims regarding Trump’s sexual activities in Russia, “[Ross] would fly to Moscow to tape and air for broadcast” an interview with the source. After I emailed Ross for comment, an ABC spokesperson responded to say that ABC does not “comment on our reporting process.”

Robert Baer.

In the same report, Shearer quotes a conversation with former CIA officer Robert Baer, again hinting at another intermediary between the Trump campaign and the Russian government. Shearer writes that Baer told him “the Russians had established an encrypted communication system with a cut out between the Trump campaign and Putin.”

Baer told RCI that “he’d heard that story from acquaintances at the New York Times who were trying to run the story down.”

Baer said he remembered speaking with Shearer about Trump and Russia in “March or April” of 2016. If Baer’s memory is correct then Shearer was investigating the Trump story at around the same time the Clinton campaign and the DNC hired Fusion GPS to compile opposition research on the Trump campaign.

Shearer writes in his first report that he was told by Alan Cullison of the Wall Street Journal that Fusion GPS principals, and former Journal reporters, Glenn Simpson and Peter Fritsch (Shearer misspells both names in the memo) had been hired by the DNC to “rack [sic] down Trump compromised story.”

In a Feb. 9, 2018 Wall Street Journal story about the Shearer memo and the appearance of a Journal employee, Cullison, in one of Shearer’s two reports, a spokesman for Dow Jones & Co., publisher of the Journal, disputed Shearer’s claim.

“Among the many inaccuracies in Mr. Shearer’s account of his conversations with our reporter in summer 2016 is his claim that the Journal knew who was funding Fusion GPS’s efforts,” Steve Severinghaus told the Journal . “The WSJ reporter had no such knowledge until it became public.”

The inaccuracies in Shearer’s account fuel suspicions that he misidentified the source of the information on who was funding the Steele dossier. What matters is that Shearer knew who was paying for Fusion GPS’s work on Trump. More important, if Steele received both of Shearer’s reports in September 2016, that would contradict the information in the FBI’s warrant application that said Steele didn’t know who was paying for his work. The source of the funding was right there in Shearer's first memo. The FBI's warrant application, however, says Simpson “never advised Source No. 1 [Mr. Steele] as to the motivation behind the research into candidate’s #1 [Mr. Trump’s] ties to Russia.” If Steele had both of Shearer’s reports, he knew he was being paid by the DNC.

Michael Isikoff.

The members of the press corps whom Simpson and Steele were briefing during that period almost certainly knew who was paying. Shearer’s notes, according to the Feb. 9, 2018 Journal article, “circulated in political and journalistic circles in Washington in late 2016.” Whoever saw both of Shearer’s reports would have known that the DNC was paying for the Fusion GPS campaign—long before the information became public a year later, in October 2017.

Cullison, who declined to comment for this story, was the Wall Street Journal’s Moscow correspondent for 20 years. The memo has him telling Shearer that since May 2016 he, too, had been looking into rumors of Trump’s activities in Moscow, including allegations of his sexual activities.

“Our reporter was unable to corroborate these allegations,” WSJ spokesperson Severinghaus said in the February Journal article, “and determined the information provided by Mr. Shearer did not meet our high standards for fair and accurate reporting.”

To this date, no journalist has been able to confirm on its own any of the incendiary allegations of Trump-Russia collusion story since the rumors surfaced during the 2016 presidential campaign. The first accounts of the Trump campaign’s possible ties to Russia were published by Michael Isikoff of Yahoo News (Sept. 23, 2016) and David Corn of Mother Jones (Oct. 31). Both were sourced to Steele’s research.

Shearer’s first report shows that the story was circulating through the press corps for months, and no one was able to confirm it.

Shearer tried to drum up interest in the collusion narrative but no one in the press was biting. No one was willing to sink time and prestige on material sourced to unnamed Russian intelligence officials that was provided by a Clinton political operative whose partner, Sidney Blumenthal, had an even more controversial reputation.

But it would be different if it came from someone else, an intelligence operative whose American handlers worked up a suitable legend of his exploits in a glamorous, allied clandestine service, and his deep knowledge of all things Russian. So what did it matter if Steele had become an executive in a corporate intelligence firm whose official cover had been blown a decade before and who hadn’t been to Russia in years? The byline of a former MI6 agent could credential a compendium of unsubstantiated rumors when the names of Clinton confederates Cody Shearer and Sidney Blumenthal could not.

Shearer, Blumenthal and Their Clinton Pedigrees

Cody Shearer was raised in a media family, which was also a Clinton family. His father was Lloyd Shearer, who wrote a Hollywood gossip column for Parade magazine under the pseudonym Walter Scott. The Shearers’ Brentwood, Calif., home, says a source who knows the Shearer family, “was a real West Coast political center. You’d find actors and TV people rubbing elbows with politicians, like Bill Clinton. The Shearer kids all hitched their wagons to the Clintons. And once he became president they all came with him to Washington.”

The eldest Shearer sibling, Derek, became Clinton’s ambassador to Finland. Cody’s late twin sister, Brooke, served as an aide to Hillary Clinton during the 1992 campaign and later worked in the Clinton White House. Brooke also worked as a private investigator for Terry Lenzner, who helped dig up dirt on one of Bill Clinton’s accusers, Paula Corbin Jones.

Brooke Shearer was married to Clinton’s former Oxford classmate Strobe Talbott, deputy secretary of state in the Clinton administration. Talbott is now president of Brookings Institution in Washington, D.C. Cody Shearer apparently traded on his brother-in-law’s position.

In the mid-’90s, during the middle of the breakup of the former Yugoslavia, Shearer represented himself to associates of Bosnian-Serb President Radovan Karadzic as an agent of the State Department. Shearer told his Serbian contacts that he was in contact with Talbott, as well as President Clinton. The Serbs gave Shearer at least $25,000 in exchange for the help he promised in ameliorating impending war crimes charges against Karadzic. It’s not clear whether his promised assistance helped, since Karadzic was found guilty of genocide, war crimes, and crimes against humanity in 2016 at the International Criminal Tribunal. Talbott reportedly knew of his brother-in-law’s efforts but was unsuccessful in stopping him.

“Cody was the black sheep of the family,” says the Shearer family acquaintance. “No one really knew what he was going to do for a living, and lots of people are still unsure what he does. When he went to Washington, he got close to Sidney Blumenthal.”

Bill Clinton and Sidney Blumenthal.

Blumenthal is the former Washington Post and New Yorker writer who earned enmity from some of his colleagues for using his pen and position to defend the Clintons and attack their rivals. In 1997, he joined the White House as a senior adviser. When he took that job, the joke within the White House press corps was that Blumenthal should put in for “back pay.”

It surprised few veterans of the White House press corps  that Blumenthal and Fusion GPS would surface together in the Trump-Russia story.

Simpson has previously described what he does as “journalism-for-hire,” and his organization provides journalists with enough leads for stories and sources that many print and broadcast outlets in Washington and New York consider him a valued asset. And few journalists have been willing to bite the hand that feeds them. As one Fusion GPS target, William Browder, told me last year, I discovered that Glenn Simpson was so deeply embedded as a source for different stories, no one wanted to write a story about him.”

But the “Steele dossier” is an example of another kind of service that Fusion GPS offers clients—partisan attacks disguised as journalism, such as the smear campaign in defense of Venezuelan oligarchs whose corruption was revealed by journalists Alek Boyd and Thor Halvorssen.

Most famously, Fusion GPS went after Browder on behalf of Kremlin-affiliated business interests that sought to undo the U.S. sanctions legislation on Putin allies that Browder spearheaded. If it seems strange that many of the media figures attacking Trump for his ostensibly pro-Putin positions have signed up to attack an anti-Putin activist like Browder, one explanation is that they are longtime associates of Glenn Simpson and the recipients of Fusion GPS tips and leaks. 

As for Blumenthal, his fierce loyalty to the Clintons has led him to cross lines in the past, most notoriously by leading the press campaign to discredit Monica Lewinsky.

During the 2008 Democratic primaries, Blumenthal directed journalists to investigate Barack Obama’s birth certificate, suggesting that Hillary Clinton’s opponent was secretly Kenyan—a theme later picked up by Donald Trump.

With business opportunities presented by the overthrow of Moammar Gaddafi in Libya, Sidney Blumenthal was in close touch with Secretary of State Clinton via email.

Participating in the birther narrative was enough to keep Blumenthal out of Hillary Clinton’s State Department. When the newly appointed secretary of state wanted to bring him on board, Obama White House officials nixed it.

But that wasn’t enough to keep Blumenthal at bay. He was drawing a check from the Clinton Foundation when he started to email Secretary of State Clinton about the situation in Libya after the United States helped topple Moammar Gaddafi in October 2011. Blumenthal’s private intelligence unit included former CIA operative Tyler Drumheller, now deceased, and Cody Shearer.

According to a New York Times report, “much of the Libya intelligence that Mr. Blumenthal passed on to Mrs. Clinton appears to have come from a group of business associates he was advising as they sought to win contracts from the Libyan transitional government.”

One of the Clinton aides responsible for keeping Blumenthal in check was Jake Sullivan, an adviser to her 2008 campaign who became her deputy chief of staff at the State Department and later the department’s director of policy planning. Blumenthal sent 25 Libya memos to Clinton, which she frequently forwarded to Sullivan, who then distributed them to colleagues. “In many cases,” the Times reported, “Mr. Sullivan would paste the text from the memos into an email and tell the other State Department officials that they had come from an anonymous ‘contact’ of Mrs. Clinton.”

So, why did some State Department officials take Blumenthal seriously when he came forward with Shearer’s memo on Trump and Russia? Why did Jonathan Winer pass it on to Steele?

Secretary of State John Kerry and Victoria Nuland at the Kremlin in 2016.

According to his own account, Winer had known Steele since 2009. They were both working on Russia-related issues in the private sector. At the outset of Russia’s incursion into Ukraine and later annexation of Crimea, Steele shared reports he’d written for an undisclosed private client with Winer. He forwarded them to other State Department officials, like Assistant Secretary of State for European and Eurasian Affairs Victoria Nuland. Winer says that over the course of the two-year crisis, he shared more than 100 of Steele’s reports on Ukraine and Crimea with his colleagues.

According to Winer, Steele came forward with the Trump memos in mid-September 2016. Winer took notes and passed them on to Nuland. Both State Department officials agreed that Secretary of State John Kerry needed to know what Steele had found. Although her chronology differed from Winer's, Nuland recalled on CBS’s “Face the Nation” in February that after seeing the material she concluded that “this needs to go the FBI.”

Presumably, the House Intelligence Committee will ask Nuland and Winer to clarify the timeline. Perhaps that will illuminate the State Department’s role and whether it helped initiate the probe into the Trump campaign by passing Steele’s notes to the FBI. The committee may also be curious to know why former senior government officials played any role in Steele’s investigation at all.

The standard explanation for Winer and Nuland’s actions is that they trusted Steele. They knew his work on Ukraine. He was a former intelligence officer from one of America’s oldest allies, so his information on Trump had to be taken seriously. The stakes were enormous—a candidate for the highest office in the land might be compromised by a foreign, often adversarial, government.

But there’s another way to see it.

The U.S. and U.K. are part of an intelligence-sharing arrangement known as the “Five Eyes,” which includes the three other major English-speaking world powers: Canada, Australia, and New Zealand. The arrangement is premised on trust. All five members trust each other not only to share information vital to their national security but also to not collect intelligence against each other by spying on officials, or businessmen and each other’s citizens. When former British spy Christopher Steele brought his memos to Winer, one senior U.S. intelligence official explained to RCI, “Steele was violating the fundamental premise of the Five Eyes relationship.”

Jake Sullivan and Hillary Clinton.

Further, even if Winer had no idea who was funding Steele’s work or that it was opposition research, Steele was a foreign national spying on a fundamental American political institution, a presidential campaign. If he had possession of the Shearer memo disclosing that the DNC had hired Simpson and Fritsch, Winer knew at the very least that there was a politically funded campaign to find dirt on the Republican candidate—a campaign that certainly resembled Steele’s research. This appears not to have bothered Winer, who turned Shearer’s memos over to Steele.

As with Winer,  RCI tried unsuccessfully for comment from Sullivan, a well-respected foreign policy hand who was in line to become Hillary Clinton’s White House national security adviser. According to Clinton campaign Communications Director Jennifer Palmieri, she and Sullivan took the lead in briefing the press on the Trump-Russia collusion story, starting in July 2016 at the Democratic National Convention. After a Slate story asserted that a Trump organization computer server was communicating with a Russian bank, Sullivan issued a statement from the campaign under his own name, claiming, “This could be the most direct link yet between Donald Trump and Moscow. … This secret hotline may be the key to unlocking the mystery of Trump’s ties to Russia.”

What RCI wanted to ask Sullivan was whether he would have approached the Trump-Russia collusion story differently had he known of Shearer and Blumenthal’s involvement.

Glenn R. Simpson, co-founder of Fusion GPS.

As for whether the Clinton campaign was aware of the Steele dossier, there is no doubt. A long profile of Steele in the New Yorker magazine shows that Marc Elias, the lawyer for the firm that hired Fusion GPS on behalf of the campaign, “summarized some of the information to top campaign officials, including the campaign manager Robby Mook.”

If Sullivan was briefed on Steele’s investigation, it surely would’ve sounded more serious than a Cody Shearer project. Perhaps that was the point. In fact, that was Glenn Simpson’s innovation. He ran the same sort of shop Sidney Blumenthal did, and the same sort of campaign. They were both working on the collusion story. The difference is that Christopher Steele’s byline gave it the appearance of credibility—even if it included Cody Shearer’s work.

As it turned out, it didn’t really matter. So what if Blumenthal and Fusion GPS were both parts of a multi-channel Clintonworld operation to manufacture evidence against Trump to feed through various channels to the FBI? It didn’t matter so long as Hillary got elected.

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