The Senate Republicans’ explosive report on Hunter Biden’s oligarch-linked finances includes a side narrative on how Democrats, the senators say, tried to sabotage the investigation and protect Democratic presidential nominee Joseph R. Biden.
The report, headed by Senate Finance Committee Chairman Charles E. Grassley of Iowa and Homeland Security and Governmental Affairs Committee Chairman Ron Johnson of Wisconsin, tells of intrigue and backbiting as they fought Democratic heavyweights in both chambers.
They say the Democrats concocted a story about a Ukrainian operative and then fed it to friendly “liberal press outlets.”
During a staff interview with a State Department official, the Democrats inserted into the record information from pro-Russia Ukrainian politician Andrii Derkach, who the U.S. says distributes anti-Biden disinformation. They then told the press that the inserts were proof that Mr. Grassley and Mr. Johnson were conspiring with a Russian propagandist.
The Sept. 23 Republican report says the senators never communicated with Mr. Derkach. It sums up the opposition’s complicated media strategy: “Democrats laundered their unclassified speculation through classified analysis of intelligence reporting to fabricate a veneer of credibility in an effort to shield their claims from public scrutiny. Those false claims were then leaked to friendly media outlets, which reported them as fact.”
Sen. Gary C. Peters of Michigan, the top Democrat on the homeland security panel, released a counterreport that did not back off the Russia angle. He said Mr. Grassley and Mr. Johnson were lodging the same conflict of interest allegations against Hunter Biden that Russian disinformation specialists were throwing at presidential candidate Biden.
“In promoting these allegations, the Chairmen have provided a successful platform for the foreign disinformation campaign of known Russian agent Andrii Derkach,” Mr. Peters wrote. “The Russian-backed propaganda of Ukrainian lawmaker Andrii Derkach is central to the Chairmen’s claims.”
Mr. Peters added, “Mr. Derkach attended the Dzerzhinsky Higher School of the KGB in Moscow and his father served as a KGB officer for decades before becoming head of independent Ukraine’s intelligence service in the late 1990s.”
The Dzerzhinsky school is the former name of Moscow’s current federal security academy.
Mr. Peters also said the Republican chairmen violated Treasury Department guidelines by publishing confidential wire transfer data.
“The Republican Chairmen’s use of confidential Treasury documents to justify its unsubstantiated allegations and personal attacks against Vice President Biden’s family is grossly irresponsible,” the minority report said. “The information in the documents cited by the Republicans has not been verified, and we are not aware of any other Congressional committee ever releasing this sort of information in this manner.”
Mr. Grassley and Mr. Johnson say their point is that they never spoke with the Ukrainian. They depict themselves as fighting through an alliance between Democrats and news media to release a documented report on how Hunter Biden “cashed in” on his father’s vice presidency.
As a lawyer and investor, Hunter Biden took in millions of dollars in consulting fees from a Russian oligarch, a corrupt Ukrainian energy magnate and wealthy Chinese investors tied to the Communist Party, according to Treasury Department documents.
Treasury reports also said Hunter Biden sent thousands of dollars to Ukrainian and Russian women linked to prostitution and human trafficking.
The Republicans’ report spends a separate section on the internal party squabble. In November 2019, they requested that the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) provide any suspicious activity reports on Hunter Biden, the Ukrainian firm Burisma Holdings where he was a board member; and other entities.
The suspicious activity reports paper trail showed, for example, that Hunter Biden received one wire transfer of $3.5 million from an oligarch whom the U.S. government views as corrupt and closely tied to Russian President Vladimir Putin. The money arrived the same month, February 2014, that Mr. Putin unleashed his invasion of Ukraine’s Crimea.
“SARs often contain evidence of potential criminal activities, such as money laundering and fraud, and at the time, there was no evidence that SARs existed for the individuals mentioned in the request,” the Republicans said.
They said they did not release the letter publicly because of its sensitivity, but a copy showed up a week later in a Reuters story. It did not contain a Treasury stamp, meaning the letter likely came from the Senate.
In February, Democrats on the homeland security panel began telling reporters that Treasury was producing documents about Hunter Biden. Sen. Ron Wyden of Oregon said the evidence was of “questionable origin.”
As a backdrop, the two Republican senators tell of episodes in which Mr. Wyden conducted a Democratic investigation and did not share material with the majority. In addition, Mr. Wyden’s staff tried to tip off a State Department official about the contents of another person’s transcribed interview.
“The Chairmen’s staff immediately interceded to stop the communication and made clear that such a disclosure would negatively affect the integrity of the investigation,” the Republican report said.
Meanwhile, House Democrats got into the Senate mix. They requested the same State Department documents provided to Mr. Grassley and Mr. Johnson.
The Democrats’ big guns acted in July. Senate Minority Leader Charles E. Schumer of New York, Sen. Mark R. Warner of Virginia, House Speaker Nancy Pelosi of California and Rep. Adam B. Schiff of California, chairman of the House Permanent Select Committee on Intelligence, wrote to the FBI that Congress was the target of a foreign disinformation campaign.
The letter’s targets were Mr. Grassley and Mr. Johnson and their joint Biden probe. A classified attachment contained Democrats’ speculation that the chairmen may have received information from the Ukrainian Mr. Derkach, whom Treasury would later sanction. The Derkach angle was quickly leaked to news media.
An article appeared in Politico that said, “Packets Sent to Trump allies are Part of Foreign Plot to Damage Biden.”
Republicans say the spun-up leak was false and they had never received information from Mr. Derkach. The FBI counterintelligence officials told the committee that there was no reason not to continue the investigation.
One story Mr. Derkach was peddling was that Burisma made payments to Joseph Biden through Hunter’s investment firm, Rosemont Seneca Partners.
The two Republican senators said, “This claim about direct payments made to Joe Biden is not evaluated in the Committees’ report of investigation, nor has it ever been cited as a predicate for any of the Committees’ information requests.”
Democrats were able to insert Mr. Derkach’s name and a document into the record during an interview with State Department official George Kent.
Mr. Grassley and Mr. Johnson argued: “Thus, the Ranking member introduced disinformation into the record, not the chairman. The Democrats’ July 13, 2020 letter relied on foreign disinformation to create a false and harmful innuendo about the Chairmen’s oversight work. That innuendo was then wrapped in a classified attachment in an apparent effort to fabricate a veneer of credibility and shield their analysis from public scrutiny before being disseminated to news media, which reported their speculation as fact.”
The Democratic media campaign was not confined to Politico. MSNBC also carried Republican-Derkach stories.
Sen. Richard Blumenthal of Connecticut wrote in an op-ed in The Washington Post that said Mr. Johnson “is moving ahead with an investigation into presumptive Democratic presidential nominee Joe Biden’s family using documents provided to the senator by the son of a former KGB officer.”
Mr. Grassley and Mr. Johnson called Mr. Blumenthal’s claims “baseless.”
“Together, these networks of Democratic offices and liberal press outlets have worked to weave fact with fiction in order to construct a false narrative designed to undercut and discredit the Chairmen’s investigation and its eventual findings,” the Republican report said.
Mr. Grassley and Mr. Johnson threw allegations back at Mr. Blumenthal and a Democratic colleague, Sen. Chris Van Hollen of Maryland.
The Republicans said that “for years the senators peddled and pushed the now-debunked Russian collusion narrative and used the ‘Steele dossier’ — a Democrat bought-and-paid-for document filled with Russian disinformation — to do so.”
“Yet Democrats had no qualms about disseminating information from the dossier far and wide, reading parts of the dossier into the Congressional Record, and using its allegations as the basis for years of investigations and false claims against the Trump administration,” the Republicans said.