DOJ brass tied to Jack Smith appeared to nix probe into Clinton campaign funding of Steele dossier

Justice Department leaders later tied to agency special counsel Jack Smith shut down an FBI investigation tied to possible campaign finance violations carried out by Hillary Clinton’s 2016 campaign when it used cutouts to fund the opposition research firm Fusion GPS and British ex-spy Christopher Steele’s anti-Trump dossier, emails released Thursday appear to show. 

Iowa GOP Sen. Chuck Grassely, said his Judiciary Committee, which made public the messages, describes them as “internal emails” and an “electronic communication” from the FBI “exposing” the “refusal” by DOJ leaders “to open a criminal investigation into potential campaign finance violations committed by Hillary Clinton and the Democratic National Committee.” 

Grassley’s office said that this potential criminal inquiry by the bureau was shut down “despite FBI agents’ demonstration of a fact-pattern showing Clinton and the DNC intentionally concealed payments to inappropriately target then-candidate Donald Trump.”

Grassley’s office pointed out that in 2022 the Federal Election Commission had “fined Clinton and the DNC for disguising campaign expenditures to pay Fusion GPS, a political opposition research firm, to craft the debunked Steele Dossier, which falsely alleged that Trump was colluding with Russia.”

The Federal Election Commission ruled in 2022 there was “probable cause” to believe Hillary for America and the DNC violated federal laws by “misreporting the purpose of certain disbursements” and fined them.

The FEC said the DNC paid $849,407 and the Clinton campaign paid $175,000 to Perkins Coie for what was alleged in a complaint to be “opposition research done by Fusion.” The Clinton campaign falsely reported the purpose of all those payments as “legal services” while the DNC reported the purpose of most of those payments as “legal and compliance consulting.”

Clinton campaign lawyer Marc Elias hired the opposition research firm Fusion GPS, which in turn hired British ex-spy Christopher Steele in 2016. Elias has testified he was aware of Fusion’s plans to have Steele brief reporters on his anti-Trump research during the 2016 contest, met with Steele during the 2016 contest, and periodically briefed the campaign about the findings from Fusion and Steele.

Perkins Coie was paid more than $12 million between 2016 and 2017 for its work representing Clinton and the DNC. According to Fusion co-founder Glenn Simpson, Fusion was paid $50,000 per month from Perkins Coie. Elias testified it was $60,000 each month. Fusion claimed that it paid Steele $168,000 for his work. Perkins Coie claimed Fusion approached them in March 2016 while knowing that Perkins Coie represented Clinton’s campaign.

Special Counsel John Durham said members of the Clinton campaign, Fusion GPS, and Perkins Coie all played a coordinated role in pushing collusion claims and that Elias was part of the “joint venture” in 2016. 

Grassley also said Thursday that “the decision to decline the investigation” into the Clinton campaign and the DNC was made by Richard Pilger, then a leader in the DOJ’s Public Integrity Section, and by J.P. Cooney, who was working at the time within the U.S. Attorney’s Office for the District of Columbia. 

Grassley noted that Pilger “was later pivotal in reviewing and approving the opening of Smith’s Arctic Frost investigation” while Cooney “served as Smith’s Deputy Special Counsel for that investigation.”

Grassley's office made a dozen pages of internal FBI emails and records public Thursday.

The FBI Washington Field Office’s electronic communication about the aborted inquiry, dated July 2019 and made public Thursday, said the bureau was seeking a “prosecutorial consultation” from the U.S. attorney’s office in the nation’s capital and from the DOJ’s public integrity unit about “DNC and Fusion GPS FEC violations.”

The bureau’s synopsis suggested the FBI wanted to get support from federal prosecutors for “the opening of an FBI Investigation into allegations that the Democratic National Committee violated Campaign Finance Law by falsely reporting disbursements to Fusion GPS.”

The bureau wrote that it was the opinion of both the U.S. Attorney’s Office in D.C. and the DOJ’s public integrity unit that “the matter is not predicated for a criminal investigation.”

“Pilger explained to the writer that in general it is important that a fact shows concealment before opening a FECA investigation,” the FBI wrote.

"I do not, however, think this is a good candidate to open for a false reporting case,” the FBI also quoted Cooney as saying. “The FEC has approved campaigns hiring vendors—or in this case, a law firm—and that vendor contracting with third parties to provide services. Although I have not looked at the FEC report, any money paid to Fusion GPS for the dossier through PC was probably reported as legal services or something like that. Although not typically what we think of as legal services, I think that we would have an exceedingly difficult time proving it was a willfully false report. That is particularly so given that Elias, when questioned, disclosed the existence of the PC-Fusion GPS contract."

The bureau wrote that “after receiving that opinion, the FBI … will not seek to open an investigation or an Assessment.”

The DOJ under Attorney General Pam Bondi and the FBI under Director Kash Patel provided Grassley with the bureau’s electronic communication related to the Clinton-DNC campaign finance saga, his office said.

“Courageous whistleblowers came to my office years ago to sound the alarm that the Justice Department inappropriately interfered in efforts to investigate potential criminal activity committed by Hillary Clinton and her campaign,” Grassley said. 

“These records show the same partisans who rushed to cover for Clinton rabidly pursued Arctic Frost, which was a runaway train aimed directly at President Trump and the Republican political apparatus. I appreciate Attorney General Bondi and FBI Director Patel’s efforts to turn over the information I requested, and I’ll continue investigating this matter.”