Patrick Byrne

  

Byrne’s story of informing for the “deep state” sounds outlandish, but it should be investigated

Former Overstock.com CEO Patrick Byrne came to me months ago with a wild, difficult tale. I told him any story would have to come with a caveat.

“There’s not going to be any way to tell this,” I told him, “without explaining to readers you’re a different sort of dude.”

Unable to confirm enough of his story, I ended up hesitating. The tale is now out, and Byrne, whom I’ve known and liked for almost a decade, is taking a beating in the press. It’s unfortunate, and the import of his story is going unnoticed because reporters are focusing instead on Byrne’s eccentricities.

Byrne, a 56 year-old e-commerce pioneer, resigned as Overstock CEO last month, in the wake of revelations he had an affair with Russian Maria Butina (I’m not using the words “Russian agent” because the term is misleading: Butina was not convicted of espionage).

Byrne said he was asked to carry out “fishy” orders regarding Butina by the “Men in Black,” i.e. senior federal law enforcement officials, who encouraged him to pursue a relationship with the Russian.

Byrne gave live interviews about this to CNN and Fox. CNN characterized their interview as “at times bizarre.” Fox Host Martha MacCallum asked Matthew Whitaker, a former acting Attorney General and Iowa prosecutor, if he found Byrne credible. Whitaker replied: “It’s hard for me to say.”

The story seems too outlandish to be real. However, parts can be confirmed. At minimum, Byrne’s story raises questions about Butina’s prosecution.

Butina, now 30, was arrested last summer. A flurry of breathless reports depicted her as a real life “Red Sparrow” who traded sex for information in an effort to “infiltrate Republican circles.”

However, the government never made an espionage case, charging her with an obscure technicality: acting as an unregistered foreign agent. Special Counsel Robert Mueller declined to take her case and didn’t interview her until “briefly” at the end of his probe, suggesting federal authorities never expected to find much under this rock. Was Butina really a spy, or was this a Burn After Reading-style farce — a parade of half-smart Americans outthinking themselves?

Byrne’s story suggests the latter.

He definitely had the affair. A source unconnected to Byrne confirmed months ago that he and Butina did indeed have a series of “trysts” across a period of years, beginning in July of 2015. Robert Discoll, Butina’s lawyer, confirmed the romance to the New York Times. But to weigh the rest of his story, readers first need to be acquainted with Byrne’s unique persona.

Imagine a pro-weed-legalization Bruce Wayne, and you’re close to picturing Patrick Byrne. Tall and square-shouldered with shaggy blond hair, the CEO is a famed eccentric, given to dressing in tieless Asian suits and quoting philosophy texts while surrounded, seemingly always, by attractive women and mysterious dudes with defense backgrounds.

Byrne’s father, Jack, helped build the GEICO empire and was known as “the Babe Ruth of insurance.” Patrick emerged from a cancer scare in his twenties with new ambition and founded Overstock.com. A carpe diem mentality and heavy partying appetite led him into friendships with celebrities, including former NBA player Brian Williams, a.k.a. Bison Dele.

When Dele was killed in a triple homicide at sea off Tahiti in 2002, Byrne says he helped the FBI attempt to reel in the suspect, Dele’s brother, Miles Dabord. This was, Byrne says, the beginning of a decade-plus arrangement with law enforcement.

Byrne aroused the ire of Wall Street in the mid-2000s when he complained about naked short selling, a little understood form of securities settlement corruption.

Byrne’s flair for conspiratorial asides and far-flung literary allusions (he’ll describe fraud schemes using both Alice in Wonderland and The Matrix as metaphors) often leads reporters to think he’s crazy.

He’s not — he’s a rich bachelor with strange hobbies — but he does speak like a man pitching or living out a movie script. The problem is, his life is somewhat like a movie, a difficult starting point for reporters.

While his hyperbolic storytelling needs to be sorted with care, Byrne’s stories tend to be directionally correct. He was denounced as a loon and conspiracy theorist in his campaign against naked short-selling; the New York Post even put a picture of a UFO over his head. Still, many of his complaints proved correct, and the SEC ended up having to rewrite some of its rules after 2008.

This is necessary preface to the Butina tale, which Byrne says began when he met an “attractive, intelligent” young Russian woman in Las Vegas in July, 2015.

The venue was FreedomFest, a forum for libertarian/conservative thinkers. Byrne was a speaker. Also speaking at that conference? Presidential candidate Donald J. Trump.

As reported in The Daily Beast in February of 2017, Maria Butina asked Trump a question at the event. Then 28, she asked a question in Byrne’s speech as well and approached him afterward. She said she represented a Russian gun rights group called Pravo Na Oruzhiye (“Right to Bear Arms”), while also being a special assistant to the deputy governor of the Russian Central Bank, Alexander Torshin.

He says he reached out to an FBI contact after that encounter to say there might be “something funny going on” with Butina. Initially, he says, the bureau was not responsive.

Later, Butina and Byrne made an arrangement to meet in New York. “We became intimate,” he says. Byrne says Butina impressed him as a being “one in a million” in terms of her drive and ability.

Byrne says Butina spoke like someone representing business interests who, while living in the present, were also trying to prepare for a post-Putin future. He could not discern whether Butina represented an “opportunity” for backchannel dialogue with Russia, or a threat.

Soon, though, “she was talking less about philosophy, and she started talking about things that made me uncomfortable,” he says. “She was basically schmoozing around with the political class.”

At one point, he says, “She said to me, ‘I want to meet anyone in the Hillary campaign, or Cruz, Rubio, or Trump.” Byrne insists she asked about both major political parties.

Byrne, who sits on the Council on Foreign Relations, had the ability to connect her with either side, but her interest in presidential politics unnerved him.

“I told Maria, this isn’t Russia,” he says. Referring to the FBI, he says he added: “If you’re reporting to a Russian official, and not disclosing yourself, they have these Men in Black here, and they don’t give a shit who you know.”

On this front, Byrne says, Butina is “not completely blameless,” saying she should have announced herself to the government somehow. Still, Byrne says he was never able to learn anything that proved she was more than what she said she was, i.e. a grad student in over her head.

Butina ended up getting into a photo with Donald Trump, Jr. in May of 2016. Byrne says he provided times and dates of her visit to Louisville in advance to authorities, but no one cared. “They said, ‘Patrick, this is just some grad student.”

“That sounded not right,” he said. “It sounded fishy. You don’t just let something like that happen.”

Byrne began to become concerned he wasn’t seeing the whole picture. He says his concern redoubled when law enforcement came back to him in 2016.

“Trump was the presumptive nominee,” Byrne says. “Federal agents showed up back in my life, and said, ‘Boy, did we make a mistake before.'”

Byrne says he was told to re-engage a relationship with Butina. “The gloves are off,” he says he was told. “Anything you can find.” The assignment, according to Bryne: Figure out what her intentions are, who she’s seeing.

The unconfirmable nature of this part of Byrne’s tale is what makes reporting it complicated. According to multiple sources I spoke with earlier this summer, Byrne in the past indeed worked with several government bodies, including several congressional committees, on enforcement issues.

However, the extent of any more recent relationship with the FBI in particular is not clear. Bureau spokeswoman Carol Cratty said simply, “The FBI has no comment.”

Byrne’s claims would be explosive if true in the smallest part. For instance, the government asserted in Butina’s sentencing memorandum that her “actions had the potential to damage the national security of the United States.”

If Byrne told authorities about Butina in July, 2015, and no real action was taken for nearly a year, that would fly in the face of the government’s assertions at sentencing about the threat she posed.

Byrne says his perception of the case was changed by two events: the congressional testimony of FBI agents Lisa Page and Peter Strzok, and the arrest of Butina on July 15. She was among other things accused of trading sex for “a position in a special interest organization.”

Byrne was chagrined by depictions of Butina as a cold-blooded temptress. At one point later in their acquaintance, he says she was reluctant to reconnect with him, because she had a boyfriend in Republican consultant Paul Erickson. “She said to me, ‘Patrick, I’m not a Russian prostitute,” he says.

Byrne was also disillusioned by the seemingly politicized behavior of Page and Strzok, and upset the complaint against Butina was filed the day before Donald Trump met Vladimir Putin in Helsinki. He felt this was politically motivated.

“That’s not right,” he says. Stressing that he’s not particularly a fan of the current administration, he adds, “The constitution does not say, ‘Unless Trump.'”

After Butina’s arrest, the judge in the case threw out the sex charge, saying “five minutes” of review revealed the accusation was based on a joke Butina made about how to repay a friend for helping renew her car insurance.

Butina’s attorney, Robert Driscoll, says the issue of whether or not Byrne was an FBI source did come up in Butina’s prosecution last year, before Byrne went public.

Driscoll suspected Byrne was one of a number of undisclosed confidential informants in her case. He was suspicious of numerous business offers Butina received. These included $20,000 by The Outdoor Channel to set up an interview with Vladimir Putin, and an effort by Donna Keene, wife of the former N.R.A. president, to secure 5 million barrels of Russian jet fuel.

“They ask this grad student, ‘Hey, do you know anyone who can get a ton of Russian jet fuel?” says Driscoll. “And with the interview, she basically emailed the [Russian] equivalent of whitehouse.gov to try to set it up. And failed. It was absurd.”

Driscoll wrote Assistant U.S. Attorney Erik Kenerson last October asserting, “the government conducted more than one unsuccessful ‘dangle’ operation against Maria Butina.” He asked for reports from those operations as part of pre-trial discovery.

“Orally, the defense confronted the government about whether or not [Byrne] was a [confidential informant],” says Driscoll. “We received a blanket denial.”

When Byrne came forward this summer, Driscoll wrote a letter to John Durham, the Connecticut federal prosecutor appointed by Attorney General Bill Barr to look into the origins of Russiagate. Driscoll wrote to Durham, Justice Department Inspector General Michael Horowitz, and the DOJ’s Office of Professional Responsibility, summarizing Byrne’s story and asking each office to look into his allegations.

After Butina was sentenced to 18 months, Byrne decided to go to the press. That Butina was in solitary confinement was a factor. Before talking, Byrne consulted with longtime mentor Warren Buffett, who said in a statement:

“I’ve known Patrick and his family for more than 40 years. His father, Jack Byrne, saved GEICO in 1976 and I met his three boys when they were teenagers. Both Mark, the middle son, and Patrick, the youngest, worked for Berkshire Hathaway. Patrick helped the company without pay in solving a difficult business problem.

“Patrick is very intelligent and patriotic. He comes by Omaha periodically to see me. At the most recent visit – a few weeks ago – though I know nothing about the subject he was describing, I told him to follow his conscience.”

Byrne is a dramatic and unusual personality, but he’s also shown a decent and generous side over the years, even a naïveté. It’s gotten him in trouble. When Byrne launched his campaign against naked shorting, his expectations for a happy ending nearly did him in.

I thought the world was like the Pelican Brief,” he says now. “When Julia Roberts figures out the scheme and she types it up and puts it on the internet, all the good guys swoop in. What I learned … is no, what happens is [the power structure] reveals itself.”

Reporters are finding it easy to laugh him off. Marketwatch suggested investors have indulged his weirdness before, but this tale is strange “even from him.”

Maybe, but Byrne has been right about enough things in the past that he deserves a hearing. The FBI should at least have to explain exactly what was its relationship with Byrne. Moreover, the public should note that the American who knew Maria Butina better than all but a few believes she was railroaded, and just gave up his career in an effort to make amends.

“She spent the last year in a box the size of a shower stall,” Byrne said. “I’m sorry, Maria, that I was part of a process that landed you in that stall.”