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Trump ally NOT Russia agent but American spy

Issued: 2018-03-12

Melissa Lyttle for BuzzFeed News

Felix Sater has been cast as a Russian mafioso, a career criminal, and a key business associate of President Donald Trump — but he spent more than two decades as an intelligence asset who helped the US government track terrorists and mobsters. “Greed is my go-to weapon.”

In the sprawling Trump-Russia investigation, one name constantly pops up: Felix Sater. In story after story, Sater is described as Donald Trump’s former business partner, a convicted stock swindler who was born in the Soviet Union, worked in Russia, tried to win Trump a deal in Moscow, and even helped broker a Ukrainian peace plan that Vladimir Putin would have loved.

Basically, he’s portrayed as something just short of a Russian spy.

Effectively, he has been a spy — but for the United States. For the first time, BuzzFeed News has verified the surprising sweep of Sater’s undercover work and many of his specific exploits. He worked as an asset for the CIA and the Defense Intelligence Agency (or DIA) and tracked Osama bin Laden. Then he worked for more than a decade for the FBI, providing intel on everything from the mob to North Korea’s drive for nuclear weapons. He still operates as a source for the bureau, according to two current FBI agents.

He did some of this work to fend off prison time after he admitted guilt in a stock scam — but he had started helping the US government before then, and he continued to report back to the FBI after the agreement ended. Today, as he is being questioned about Trump's business deals and ties to Russia, he has built relationships with at least six members of special counsel Robert Mueller’s team, some going back more than 10 years.

Fragments of Sater’s work for the government have leaked out, partly because Sater himself has bragged about “building Trump Towers by day and hunting Bin Laden by night.” But his “cloak-and-dagger claims of chasing down terrorists” were often dismissed as “wildly unlikely,” while Sater himself remained “an obsession of the many investigators — professional and amateur — searching for Trump’s Russia connection.”

Now BuzzFeed News has obtained the statement Sater gave under oath to House Intelligence Committee investigators at his attorney’s office in December, interviewed him extensively, and corroborated many details of his spy-thriller account through legal documents, emails, letters, and interviews with 10 current and former law enforcement and intelligence officials familiar with his undercover work.

“At the direction of the FBI,” the Department of Justice stated in a newly unsealed court filing, Sater traveled to the Middle East after 9/11 to collect “valuable intelligence” on “key leaders in al Qaeda,” and he helped “in a number of other areas, including Russian organized crime.” In other court filings, the Justice Department said Sater’s work on behalf of the United States “involves 18 foreign governments” as well as “various families of La Cosa Nostra,” and that his help was “of an extraordinary depth and breadth.”

Specific exploits confirmed by BuzzFeed News include:

He obtained five of the personal satellite telephone numbers for Osama bin Laden before 9/11 and he helped flip the personal secretary to Mullah Omar, then the head of the Taliban and an ally of bin Laden, into a source who provided the location of al-Qaeda training camps and weapons caches.

In 2004, he persuaded a source in Russia’s foreign military intelligence to hand over the name and photographs of a North Korean military operative who was purchasing equipment to build the country’s nuclear arsenal.

Sater provided US intelligence with details about possible assassination threats against former president George W. Bush and secretary of state Colin Powell. Sater reported that jihadists were hiding in a hut outside Bagram Air Base and planned to shoot down Powell’s plane during a January 2002 visit. He later told his handlers that two female al-Qaeda members were trying to recruit an Afghan woman working in the Senate barbershop to poison President Bush or Vice President Dick Cheney.

He went undercover in Cyprus and Istanbul to catch Russian and Ukrainian cybercriminals around 2005. After the FBI set him up with a fake name and background, Sater posed as a money launderer to help nab the suspects for washing funds stolen from US financial institutions.

The CIA, DIA, FBI, and leaders of the House Intelligence Committee all declined to comment.

Over the past month, two BuzzFeed News reporters met frequently with Sater in Los Angeles, where he’s been living since February and which seems to suit him. He’s tan. He had his Porsche shipped over from Long Island. He gets the good table at Delilah, a see-and-be-seen West Hollywood nightclub. He said he is telling his full story, long kept secret by the government, to clear his name. “I am being given no choice because of the ongoing Trump investigations,” he said. “The media lies about me.”

The revelations about his clandestine work for the United States complicate an already complicated figure, revealing a man who thrives on mixing espionage, politics, and business, often playing one off the other to his own advantage.

Sater, who recently turned 52, started out as a stockbroker who lost his license after he assaulted a man in a bar brawl. He helped scam investors out of tens of millions of dollars in the mid-1990s. He later emerged as a partner to the Trump Organization and a senior advisor to Trump himself, raising money for the future president and his family on projects such as Trump SoHo, the troubled hotel that nearly led to fraud charges against Ivanka Trump and her brother Donald Jr.

Even as he was helping US intelligence and law enforcement agencies, Sater racked up enemies in his business dealings. An Arizona man said Sater threatened to cut his legs off during a failed development deal. Florida investors said his company, Bayrock, ripped them off. A former colleague said in a lawsuit that the entire Bayrock operation was run by organized crime figures, and that Sater threatened to have him killed if he didn't cooperate. Sater denied doing any of these things.

Michael Cohen

But he doesn't deny that he is always looking for an angle. As the Trump campaign kicked into high gear in 2015, Sater saw an opportunity.

In emails initially revealed by the Washington Post, Sater wrote to Trump’s longtime personal lawyer, Michael Cohen, boasting about being able to finally line up a real estate development in Moscow — a deal the Trump Organization had long sought.

In one of the emails, Sater told Cohen that he could get buy-in from Putin himself and that “we will get Donald elected” in the process. Those emails have become a flashpoint in the Trump-Russia investigation — but Sater, who denied having anything to do with Russian interference in the election, told BuzzFeed News he was just doing what he’s always done: working a deal.

Did he actually know Putin?

“No, of course not.”

Did he think the Trump Moscow deal could get Trump elected?

Even Trump “is fucking surprised he became the president.”

Then why send that email?

“If a deal can get done and I could make money and he could look like a statesman, what the fuck is the downside, right?”

Sater in Los Angeles.

Born in the Soviet Union but an American citizen raised in Brooklyn, Sater was a Wall Street wunderkind who worked at top shops such as Bear Stearns and Shearson Lehman Brothers. He was whip-smart but also a hothead, and, one night in 1991, a drunk Sater got into an argument at a Midtown bar with a commodities broker. The man was coming after Sater with a beer bottle, Sater said, so he grabbed a margarita glass and hit the man in the face with it. Both men were hospitalized afterward, but Sater’s opponent took the worst of it: a badly slashed face that led to Sater spending a year in prison for felony assault.

Worse still, he was stripped of his broker’s license and became persona non grata on Wall Street. To make money, he helped start a company that purported to buy and sell Nasdaq stocks. In reality, it was an elaborate and illegal “pump and dump” stock scheme that defrauded investors out of nearly $40 million, according to court records.

Brokers, paid under the table, purchased stocks through offshore accounts controlled by Sater. Sater’s firm spun false stories about the companies to inflate their value, then dumped the overpriced stocks onto unwitting investors. Court documents show that the five main New York City mafia families were directly involved, mostly to provide muscle.

“They were there for disputes,” Sater said.

After working on what he called “the dark side of Wall Street” for 18 months, Sater said he left the business in 1995 because he “didn’t want to do dirty shit anymore.” The next year, he went to Russia to work on telecommunications deals with AT&T and others. One night, Sater was at dinner with a group of Russians in Moscow when he was introduced to an American defense contractor named Milton Blane. Sater said Blane, who died last year, followed him into the restroom that night and asked for his phone number to set up a meeting the following day.

At an Irish pub, Blane explained that he worked for the DIA and that some of the people Sater had been dining with were high-level Russian intelligence agents. “‘You’re in with a group who could deliver,’” Sater recalls Blane telling him. Blane, Sater said, asked him to work as an asset, intelligence lingo for an confidential source, but warned, “‘I want you to understand: If you’re caught, the USA is going to disavow you and, at best, you get a bullet in the head.’”

Sater's fluent Russian, his business connections, and his access to Russian military officials would have made him a prime recruitment target for any US intelligence agency in Moscow, two longtime intelligence officers said. But they also said Blane’s approach was unorthodox — recruits wouldn’t usually be told they would be disavowed, and a counterintelligence investigation would normally have taken place to ensure Sater wasn’t working for an enemy.

In any event, the Moscow meeting with Blane launched Sater’s work for the government, which would last for the better part of two decades. He said was not paid for his work — which two Justice Department officials confirmed — but did it to help his country and for the “thrill.”

One of Sater’s early operations involved the pursuit in 1998 of Stinger anti-aircraft missiles. The CIA had originally given the missiles to the mujahideen to oust the Soviets during their occupation of Afghanistan — but now the agency wanted to prevent them from falling into the hands of radicalized jihadists. Sater managed to find some, complete with their serial numbers.

Sater’s attorney, Robert Wolf, said he acted as his conduit to the CIA. As Wolf tells it, he called someone he had long known: David Kendall, Bill Clinton's lawyer, telling him that he had serial numbers for the Stinger missiles that the Clinton administration had been trying to obtain. Kendall, Wolf said, called back and said he had spoken with President Clinton and that Wolf should call Robert M. McNamara Jr., the CIA's general counsel. During the phone call with McNamara, Wolf read out the serial numbers for the Stinger missiles.

But, intelligence sources told BuzzFeed News, CIA officials were skeptical. So Sater provided photographs of the missiles — with their serial numbers and a copy of a daily newspaper to prove the photo was current. Two former intelligence officers and an FBI agent confirmed that Sater had provided the photographs, an incident they said bolstered his credibility.

Meanwhile, Wolf recalled, McNamara brokered a meeting at a restaurant near the CIA headquarters in Langley, Virginia, which was attended by Wolf and two employees of the CIA’s clandestine division: an operations officer and an attorney named Steve Hermes. For the next year or so, Wolf said, he talked regularly with Hermes by pay phone or landline when Sater wanted to pass on new information — or when the CIA wanted more intelligence. “We just went back and forth for months and months about al-Qaeda, bin Laden, and the return of the Stingers,” Wolf said.

Hermes, who has retired from the CIA, and Clinton’s spokesperson did not respond to requests for comment. Kendall declined to comment. McNamara Jr. died in 2013.

In August 1998, President Bill Clinton authorized Operation Infinite Reach — a bombing strike against al-Qaeda in retaliation for the terror attacks on the US embassies in Kenya and Tanzania, which killed 224 people. Sater, 10 current and former intelligence and law enforcement officials said, supplemented US intelligence by providing location coordinates for al-Qaeda camps that the US military ultimately bombed in Khost, Afghanistan.

BuzzFeed News also confirmed another 1998 mission, in which Sater infiltrated the Afghan precious stone market to find dealers who were laundering money for al-Qaeda. Sater found his own dealer, from New York City’s 47th Street diamond district, and brought him to the Middle East to make the ruse seem more authentic. An FBI source said the Justice Department later confirmed this detail in court filings that remain under seal. BuzzFeed News reviewed an internal government document about the mission in which an intelligence official characterized the information Sater passed on as “highly sensitive intelligence.”

But while Sater developed contacts and filtered information for America’s spies, back at home the FBI was starting to ask questions about his past.

Sater in Dubai in May, 1998.

One day in 1998, while Sater was living in Russia, a NYPD official called the FBI with an unusual tip: In a Manhattan storage locker, the police had discovered a shotgun, two pistols, and a gym bag containing a cache of documents tied to Sater.

Raymond Kerr, in charge of the FBI’s Russian organized crime task force, went down to the NYPD station to check out the records. What he found was shocking: The documents showed the inner workings of the pump-and-dump scheme, which involved more than a dozen traders and muscle from the Italian mob. Immediately, Kerr and another agent, Leo Taddeo, began hunting for Sater.

As the FBI closed in, Sater continued to work his contacts overseas. He developed a close bond with an intelligence officer working for the Northern Alliance, the Afghan militia led by Ahmad Shah Massoud, the fierce and beloved fighter called the Lion of Panjshir. As the Northern Alliance fought Islamists, its intelligence officer fed information to Sater, according to Sater and a former FBI agent.

Late in 1998, Sater was vacationing in Italy with his family when the Afghan intelligence officer called with five satellite phone numbers belonging to bin Laden. He asked Sater to pass the numbers along to officials in the US.

Then the FBI found Sater and told him he was under investigation for the stock fraud. “I never intended on fighting and I surrendered,” Sater told BuzzFeed News. “I knew I was going to cooperate.”

Sater flew back to New York City, and at his first meeting with Taddeo, the FBI agent, Sater played his trump card, turning over a piece of scrap paper on which he had jotted down bin Laden’s satellite phone numbers.

Sater pleaded guilty to racketeering in December 1998. But instead of being sentenced, Sater, like 16 other defendants in the case, signed a cooperation agreement with the US government, and his entire case file was sealed.

Signing Sater’s cooperation agreement for the Department of Justice was Andrew Weissmann, then an assistant US attorney and now a key member of the special counsel’s team. Mueller himself would be the FBI director for most of the time Sater served as a source.

The US attorney who oversaw Sater’s pump-and-dump case was Loretta Lynch, later the attorney general under President Barack Obama. While the Senate was considering her confirmation, Sen. Orrin Hatch asked Lynch about how her office handled Sater’s fraud case. In a written response, she said:


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