The Democratic National Committee (DNC) and Hillary Clinton's presidential campaign partially funded the investigation that produced the controversial "Steele Dossier," according to a 24 October 2017 report by the Washington Post citing "people familiar with the matter." Both CNN and Fox News said they had independently confirmed the Post's reporting via anonymous sources.
Previous reports by the New York Times and others had stated that unnamed "Democratic supporters of Hillary Clinton" contributed funding to the opposition research on presidential candidate Donald Trump that became known as the Steele Dossier, but this was the first time a direct link to the DNC or the Clinton campaign was established.
Nicknamed for Christopher Steele, a former British intelligence officer hired by the Washington, D.C. investigative firm Fusion GPS to gather potentially damaging information about Trump in 2016, the dossier details alleged Russian efforts to gain leverage over Trump by various means, including the gathering of "kompromat" (potentially scandalous, morally compromising materials) and proposing lucrative business in Russia, as well as an alleged series of backroom meetings between Russian officials and members of the Trump campaign.
While the most salacious allegations contained in the dossier (such as the claim that Trump was videotaped consorting with prostitutes in a Moscow hotel room) remain uncorroborated, CNN reported in February 2017 that some of the meetings that allegedly took place between Trump campaign officials and agents of the Russian government had been confirmed by sources familiar with U.S. intelligence intercepts.
The research was actually initiated in 2015 by "a wealthy Republican donor who strongly opposed Mr. Trump," according to the New York Times, but when that source of funding dried up the San Francisco law firm Perkins Coie brokered a deal to keep it going on behalf of the Democrats. The Post reported:
Marc E. Elias, a lawyer representing the Clinton campaign and the DNC, retained Fusion GPS, a Washington firm, to conduct the research.
After that, Fusion GPS hired dossier author Christopher Steele, a former British intelligence officer with ties to the FBI and the U.S. intelligence community, according to those people, who spoke on the condition of anonymity.
Elias and his law firm, Perkins Coie, retained the company in April 2016 on behalf of the Clinton campaign and the DNC. Before that agreement, Fusion GPS’s research into Trump was funded by an unknown Republican client during the GOP primary.
The Clinton campaign and the DNC, through the law firm, continued to fund Fusion GPS’s research through the end of October 2016, days before Election Day.
Fusion GPS gave Steele’s reports and other research documents to Elias, the people familiar with the matter said. It is unclear how or how much of that information was shared with the campaign and the DNC and who in those organizations was aware of the roles of Fusion GPS and Steele. One person close to the matter said the campaign and the DNC were not informed by the law firm of Fusion GPS’s role.
Although both Elias and Fusion GPS declined to comment publicly on the arrangement, a DNC spokeswoman appeared to confirm that such an arrangement did exist even as she denied that the current DNC chairman was involved in it:
[Chairman] Tom Perez and the new leadership of the DNC were not involved in any decision-making regarding Fusion GPS, nor were they aware that Perkins Coie was working with the organization.
Former Clinton campaign spokesman Brian Fallon denied knowing of the dossier before the election, but defended it as an example of legitimate opposition research:
“The first I learned of Christopher Steele or saw any dossier was after the election,” Fallon said. “But if I had gotten handed it last fall, I would have had no problem passing it along and urging reporters to look into it. Opposition research happens on every campaign, and here you had probably the most shadowy guy ever running for president, and the FBI certainly has seen fit to look into it. I probably would have volunteered to go to Europe myself to try and verify if it would have helped get more of this out there before the election.”
While simultaneously seeking to discredit it, Trump and congressional Republicans had been demanding the release of information on who funded the Steele Dossier ever since its existence was first made public in late 2016. Trump himself issued such a demand as recently as 19 October:
Workers of firm involved with the discredited and Fake Dossier take the 5th. Who paid for it, Russia, the FBI or the Dems (or all)?
— Donald J. Trump (@realDonaldTrump) October 19, 2017
Trump's tweet followed on the heels of an 18 October appearance by two Fusion GPS executives before the House Intelligence Committee during which both invoked their Fifth Amendment rights and declined to testify. The committee's Republican leader, Devin Nunes (California), issued a subpoena for the firm's bank records.
On 25 October, the nonpartisan watchdog group Campaign Legal Center (CLC) filed a complaint alleging that the DNC and Clinton campaign had violated campaign finance laws by failing to accurately disclose the purpose and recipient of payments made through the Perkins Coie law firm to Fusion GPS for opposition research, "effectively hiding these payments from public scrutiny." The complaint, which said the bulk of the disbursements were identified as paying for "legal services," asked the FEC to investigate whether its disclosure rules had in fact been broken.
Responding on behalf of the DNC and Clinton campaign, Perkins Coie partner Graham M. Wilson said in a statement to LawNewz.com that the complaint was baseless:
Hillary for America and the DNC complied with all campaign finance laws, including their obligations to appropriately report and describe the purpose of all of their expenditures. This research work was to support the provision of legal services, and payments made by vendors to sub-vendors are not required to be disclosed in circumstances like this. This complaint fails to even note the Federal Election Commission’s affirmation in 2013 of the relevant rule, notes no authority to the contrary, and is patently baseless.
Both organizations faced fines in the event an investigation determined they had violated Federal Election Campaign Act (FECA) regulations. In March 2022, The Associated Press reported that both the DNC and the Clinton campaign had agreed to settle and accept civil penalties without conceding wrongdoing. The former agreed to $105,000 in penalties, the latter to $8,000.