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Senate Testimony: Fusion GPS Helped Corrupt Russians And Venezuelans


At a hearing this morning, Senate Judiciary members will receive testimony that Fusion GPS helped advocate the interests of corrupt Russian and Venezuelan officials while hiding its foreign work from federal authorities.

Many in the media have focused on whether Donald Trump Jr. and former Trump campaign manager Paul Manafort would testify publicly at the hearing. Less well covered has been anything to do with Fusion GPS, the “commercial research and strategic intelligence firm” behind the discredited “Russian dossier” that made outrageous and salacious allegations against President Donald Trump. The title of the hearing gives a clue that this lack of media interest in Fusion GPS is misguided: “Oversight of the Foreign Agents Registration Act and Attempts to Influence U.S. Elections.”

Fusion GPS co-founder Glenn Simpson told the committee through a lawyer he would refuse to cooperate with their inquiry, after he was subpoenaed to testify. A source told Politico he reached an agreement to speak with the committee privately. Manafort and Trump Jr. will also speak privately with the committee, according to the latest updates.

Two sets of public testimony will allege wrongdoing by Fusion GPS.

Fusion GPS’s Work For Venezuelans

Thor Halvorssen is the head of Human Rights Foundation, which focuses on defense of political rights in authoritarian countries. Halvorssen’s testimony alleges that Fusion GPS operated a smear campaign against journalists who threatened to expose the laundering of proceeds from faulty Venezuelan electric power plants through American banks in a kickback scheme to pay off Venezuelan officials. It should have been big news, he said.

“Fusion GPS, however, was hired to spike these stories. Even though it was clearly acting as a public relations counsel on behalf of a foreign principal, Fusion GPS never registered under [the Foreign Agents Registration Act] and was able to engage in nefarious activities without public scrutiny.”

The backstory, according to Halvorssen, is that Derwick Associates was a Barbados company with no experience in procurement or construction, founded by young adults with no capital, and no relevant work experience. Venezuela awarded the firm 12 power plant contracts. The company got parts from around the world, he said, and overcharged the government for the used equipment to the tune of more than $2 billion.

The company’s principals all have homes in the United States and laundered most of the money through J.P. Morgan, Halvorssen said. An Andorran bank used by the firm was designated a “primary money laundering concern” by the U.S. Treasury’s Financial Crimes Enforcement Network, he said. Derwick has since been granted oil and gas concessions by the government, Halvorssen said. They are reportedly under investigation by the Department of Homeland Security, Treasury Department, and other government agencies.

“Derwick has stolen more than ten times the amount involved in the infamous 2015 FIFA corruption case and multiple times more than the tax theft in Russia that led to the murder of Sergey Magnitsky. However, there has been almost no media coverage about the Derwick case, and law enforcement activity probing Derwick has ground to a halt. One of the key reasons for this is the paid effort of Fusion GPS,” Halvorssen said.

Founded by Glenn Simpson and Peter Fritsch, both of whom worked at the Wall Street Journal for years, “Fusion GPS understands how the media operates, how to kill a story, how to manufacture enough doubt to throw off a journalistic investigation, and what it takes for an editor to disqualify a journalist from pursuing a story,” he said.

Interestingly, given Fusion GPS’ admitted role in compiling a dossier against Donald Trump, Halvorssen said that Fusion GPS’ methods of going after whistleblowers and journalists included “smear campaigns,” “dossiers containing false information,” and “carefully placed slanderous news items.”

Halvorssen said that Fusion GPS was able to kill a Wall Street Journal story on the Venezuelan scandal by having reporter José de Córdoba meet with Fritsch, his former boss at the Journal. “Mr. De Córdoba described this blatant intimidation tactic as something that made him feel uncomfortable. Mr. Fritsch sent Mr. De Cordoba a dossier containing false and derogatory information about me and about the other whistleblowers who have drawn attention to Derwick,” Halvorssen said. You can read more about that from another source here.

When he returned to the United States, De Córdoba’s supervisors received threatening letters from the law firm Derwick hired to pay Fusion GPS’s fees. The law firm is key because Fusion GPS says being paid by a law firm means all paperwork about their work for Derwick is covered by attorney-client privilege.

Stories at Bloomberg News and The Economist were also killed prior to publication, Halvorssen said.

“Corrupt government officials in dictatorships would be powerless if they didn’t have cronies in the business world, and these cronies, in turn, would be useless allies without enablers like Fusion GPS, who are eager to whitewash and profit from their crimes,” Halvorssen said. “Fusion GPS isn’t an ‘opposition research’ or a crisis communications company. Fusion GPS is a group of highly paid smear experts who function as an accessory to the crimes committed by Derwick Associates.”

Fusion GPS’s Work For Russians

Bill Browder will also testify publicly against Fusion GPS. He filed a complaint against Fusion GPS last year for the group’s failure to register as a foreign agent despite working on behalf of Russian interests to repeal the 2012 Magnitsky Act.

Browder is the founder and CEO of Hermitage, which used to be one of the largest investment advisers in Russia with more than $4 billion invested in Russian stocks. In an attempt to keep Russian oligarchs from stealing from shareholders, his firm investigated them and shared their research with domestic and international media. That worked for several years until Putin co-opted the oligarchs and received funds from them in exchange for protecting them, Browder said in his prepared testimony. He was deported and declared a threat to national security.

‘Veselnitskaya hired Glenn Simpson of the firm Fusion GPS to conduct a smear campaign against me and Sergei Magnitsky in advance of congressional hearings on the Global Magnitsky Act.’

Eighteen months later, Russian officials seized his corporate documents, so Browder hired Sergei Magnitsky to investigate. To make a long story short, he found high levels of corruption in the Interior Ministry, Browder said. Magnitsky filed criminal complaints with law enforcement agencies but found himself arrested and threatened in an attempt to get him to pull his testimony, Browder said. His prison conditions were very bad. His health deteriorated but he wasn’t given treatment. After being beaten, he was found dead in his prison cell at the age of 37, Browder said.

“Sergei Magnitsky was murdered as my proxy. If Sergei had not been my lawyer, he would still be alive today,” Browder said, explaining how he came to seek justice via international pressure. Magnitsky wrote more than 400 complaints detailing his abuse. “As a result, we have the most well-documented case of human rights abuse coming out of Russia in the last 35 years.” Still, the Russian government did not bring any officials up on charges.

Browder met with senators Ben Cardin and John McCain, who introduced legislation to freeze assets and ban visas for those who killed Magnitsky or committed other serious human rights abuses. It passed both houses and was signed into law, even though Secretary of State Hillary Clinton opposed it. Her campaign worked to kill stories tying her opposition to her husband receiving half a million dollars to speak in Russia at the same time.

Putin retaliated by banning the adoption of Russian orphans by American families. Russia also tried to repeal the legislation. “One of the most shocking attempts took place in the spring and summer of last year when a group of Russians went on a lobbying campaign in Washington to try to repeal the Magnitsky Act by changing the narrative of what had happened to Sergei. According to them, Sergei wasn’t murdered and he wasn’t a whistle-blower, and the Magnitsky Act was based on a false set of facts,” Browder said. He named people who were behind this effort, including Natalia Veselnitskya — the lawyer who met with Trump campaign officials at Trump Tower — and lobbyists, public relations executives and investigators.

Here’s where Fusion GPS comes in. “Veselnitskaya, through Baker Hostetler, hired Glenn Simpson of the firm Fusion GPS to conduct a smear campaign against me and Sergei Magnitsky in advance of congressional hearings on the Global Magnitsky Act. He contacted a number of major newspapers and other publications to spread false information that Sergei Magnitsky was not murdered, was not a whistle-blower, and was instead a criminal. They also spread false information that my presentations to lawmakers around the world were untrue,” Browder said.

At no time did Fusion GPS or other operatives indicate that they were acting on behalf of Russian government interests or report it to the government by filing disclosures under the Foreign Agent Registration Act, Browder said. “United States law is very explicit that those acting on behalf of foreign governments and their interests must register under FARA so that there is transparency about their interests and their motives,” he said.

The Media and Fusion GPS

Ken Dilanian was one of the first reporters yesterday to note that Glenn Simpson had made an agreement to speak with the Senate Judiciary Committee. He also had a big story noting the back story of the Trump Tower meeting with Russian interests. It’s tremendously interesting and detailed, including the lengthy section devoted to debunking Browder.

Dilanian writes that the Russian interests’ American legal team “alleged that Browder’s story was full of holes — and that the U.S. and other governments had relied on Browder’s version without checking it.” He writes that an American official “said the government had been unable to independently investigate some of Browder’s claims.” He says people claimed that Magnitsky was jailed “because he was helping Browder’s companies in tax evasion.”

‘Those challenging Browder say Magnitsky died of medical neglect under circumstances sadly typical of a Russian jail.’

He writes that parties claim Browder “‘lied,’ and ‘manipulated’ evidence to cover up his own tax fraud.” He quotes lawyers for Russian interests saying, “The story was ‘contrived and skillfully sold by William F. Browder to politicians here and abroad to thwart his arrest for a tax fraud conviction in Russia.” Dilanian writes that a documentary filmaker working with Veselnitskaya “made a similar set of arguments” against Browder. The “film accuses Browder of misstating the contents of Russian court documents.”

Dilanian writes that a judge said that the Council of Europe’s 2013 report on Magnitsky was “unreliable” and “didn’t fairly examine both sides,” specifically citing Browder’s “interference with the assembly’s work.” He quotes someone saying there is “little evidence” to support Browder’s claim that riot guards beat Magnitsky with rubber batons until his death. “It’s an important point,” Dilanian writes, “because Browder’s contention is that Magnitsky was murdered to silence him. Those challenging Browder say Magnitsky died of medical neglect under circumstances sadly typical of a Russian jail.”

Dilanian’s story casts doubt on Magnitsky’s death certificate. He notes that a Russian organization that monitors human rights conditions made no mention of beatings and “says Magnitsky died after a lack of medical attention exacerbated by harsh jail conditions.” He notes that another report says “there is reasonable suspicion to believe that the death was triggered by beating” but the head of the council that produced that report later said in a court affidavit that he no longer stands by its conclusions.

Dilanian writes that the Russian interest’s lawyers filed a document saying the head of the council said some of the report’s conclusions were “copied verbatim” from Browder and his associates. He notes that last year the head of the council told NBC News “The results of official forensic expertise that used original biological materials showed no evidence of beatings.” He writes that another group said there was medical neglect and inhumane prison conditions “but it does not mention beating.” The doctor who led that review said he didn’t see evidence of beating.

It almost reads as if it were opposition research. Journalist Chuck Ross of The Daily Caller wondered if the critiques came from Fusion GPS:

Dilanian responded by referring to court records.