Christopher Steele, the former British intelligence officer despised by Donald Trump, was a personal friend of the president’s daughter, Ivanka, Sky News understands.
President Trump has repeatedly attacked the ex-MI6 officer because of his role in compiling a so-called dossier of allegations about ties between his 2016 election campaign and the Kremlin, including lurid claims about then candidate Trump and prostitutes in Moscow. The president has denied all such allegations.
The friendship between Ms Trump and Mr Steele – which stretched from 2007 to 2015 and included business discussions – contrasts with the president’s characterisation of him as a “Trump hater”.
A reference to the friendship was made in a report released on Monday by a US Justice Department watchdog into the origins of an inquiry by the Federal Bureau of Investigation (FBI) into claims of ties between the Trump election campaign and Russia.
It cleared the FBI of any political bias in launching its Russia inquiry – code-named Crossfire Hurricane – in July 2016. This undermines allegations to the contrary by Mr Trump.
However, Inspector General Michael Horowitz, who wrote the report, found that numerous mistakes were made by the FBI during the course of its investigation.
Of particular focus was the covert surveillance of a former adviser to the Trump campaign called Carter Page. The watchdog said the FBI had a legal “authorised purpose” to request a judge for approval to conduct the surveillance.
But Mr Horowitz found a total of 17 “basic and fundamental” errors and omissions in the original application and all subsequent renewals to the Foreign Intelligence Surveillance Court (FISA). Those errors made the case appear stronger than it was, he wrote.
In a sign that the 436-page report is also not the final chapter in a long-running dispute – largely down partisan lines – over Russia’s role in the 2016 polls, Mr Trump’s attorney general attacked the FBI even though it was cleared of political bias.
“The inspector general’s report now makes clear that the FBI launched an intrusive investigation of a US presidential campaign on the thinnest of suspicions that, in my view, were insufficient to justify the steps taken,” William Barr said.
Mr Barr has launched another investigation into the Russia file, which has yet to conclude.
Mr Steele, who cooperated with investigators, features heavily in the inspector general’s analysis.
The report explores his relationship with the FBI from after he co-founded a corporate intelligence company called Orbis Business Intelligence when he retired from MI6 in 2009.
It sets out how information provided by Mr Steele from 2010 helped the FBI in significant investigations such as a corruption probe against FIFA over Russia securing the 2018 World Cup as well as efforts to uncover Russian doping in world athletics.
The FBI began a contractual relationship with the former intelligence officer in 2013. It characterised him as a confidential human source, but Mr Steele told investigators this was not the case. Instead he said his company had a commercial relationship with the bureau.
The report said an FBI officer who dealt with Mr Steele – referred to as Handling Agent 1 – said that “the FBI found Steele’s information to be valuable and that it warranted compensation”.
He received a total of $95,000 (£76,266) between 2014 and 2016, though nothing related to election work.
The report went on to recount how Mr Steele was separately contracted by a company called Fusion GPS to gather information on any ties between the Trump campaign and Russia. Mr Steele said he believed the claims he uncovered were so alarming he felt compelled to share them with Handling Agent 1.
This information was not the trigger for the FBI launching its Russia investigation but the claims about Russian interference chimed with what other sources were saying.
The report quotes James Comey, who was director of the FBI at the time, saying he “believed those themes from the Steele reporting were ‘entirely consistent with information developed by the [US intelligence community] wholly separate and apart from the [Steele] reporting,’ as well as consistent with what ‘our eyes and ears could also see'”.
However, the inspector general appeared to cast doubt over some of the content of Mr Steele’s reporting.
The watchdog report said it “found that the FBI’s interviews of Steele, his primary sub-source, a second sub-source, and other investigative activity revealed potentially serious problems with Steele’s descriptions of information in his reports”.
It was not clear how the inspector general could have known all the sources relied upon by Mr Steele. A response from Orbis to this allegation was not immediately available.
The former MI6 officer was quoted in the document as telling investigators his reports “were not designed to be finished products” and instead were “to be briefed off of orally versus consumed as a written product”.
He pushed back on claims that his work was ‘opposition research’ and biased, saying that his reputation would be damaged if he allowed any particular bias to influence his findings.
The report said: “He stated that if anything he was ‘favourably disposed’ toward the Trump family before he began his research because he had visited a Trump family member at Trump Tower and ‘been friendly’ with [the family member] for some years.
“He described their relationship as ‘personal’ and said that he once gifted a family tartan from Scotland to the family member.”
Sky News understands that this family member is Ivanka Trump. She was gifted Macleod tartan after her paternal Scottish grandmother.
Ms Trump first met Mr Steele at a dinner in 2007 when he was still a member of the Secret Intelligence Service (MI6), according to a source with knowledge of the meeting.
The White House did not respond to a request for comment.