Even for a known bomb-thrower like Patrick Byrne, the former CEO of Utah-based Overstock.com, the allegations are explosive.
The 56-year-old founder of the online retail firm, who resigned Aug. 22, acknowledged that he’d had an intimate relationship with Maria Butina, later convicted of being a Russian agent, and he did so in a statement published under company letterhead. And in the process of explaining how he’d romanced the 30-year-old former student and power lifter, he revealed himself to be a confidential informant for the FBI.
The “Men in Black,” as Byrne referred to them, even encouraged him to rekindle the liaison at one point and the CEO went along, thinking he was helping with a broader U.S. investigation that he said was later “hijacked” into political espionage against Hillary Clinton and Donald Trump and Republican Sens. Ted Cruz and Marco Rubio.
He’d come forward with claims of a “Deep State conspiracy," Byrne went on to say, on the advice of business magnate and longtime associate Warren Buffett, the venerated Berkshire Hathaway CEO, whom Byrne called his “Omaha Rabbi.”
And suddenly it was all tumbling out on Fox News and CNN, with Byrne saying in a series of appearances that his claims reached the top echelons of U.S. power. He has since followed up in more detail with two lengthy, diary-like posts on DeepCapture.com, one of his websites.
Blowback from his revelations was expected to be so intense, Byrne said a week later he felt compelled to step away from the discount retail and blockchain company he’d helped build over 20 years.
“I’m not getting chased out. This is me ejecting — and I have to,” Byrne said of his resignation as Overstock CEO and board member, after first promising no further comment.
“I’ve been warned that if I come forward to America, that the apparatus of Washington is going to grind me into a dust,” Byrne said on Fox News. “That’s going to happen and I have to get that away from the company. That’s only right.”
Many of his wide-ranging claims remain publicly unsubstantiated. Here’s some of what we know and don’t know:
Who is this guy?
Highly educated, a martial arts expert and cancer survivor, Byrne created Overstock.com in 1999. He helped build the Midvale-based discount home-goods shopping site into a publicly traded company with nearly $1.8 billion in revenues and 1,400 employees in Utah. The firm unveiled a $100 million new campus headquarters known as the Peace Coliseum in Midvale in 2016 —shaped like a large peace sign.
He has since led Overstock into heavy investments in more than a dozen blockchain technology companies, tying the firm’s future closely to Bitcoin and other cryptocurrencies.
Byrne is also known for an eccentric, outspoken approach that has at times sent his company’s stock price on wild swings. He claimed in years prior to the Great Recession that Overstock was being targeted by a conspiracy headed by the so-called “Sith Lord” on Wall Street, intent on destroying the firm with illegal stock trading tactics.
He’s also been a player in Utah politics. Byrne was a leading donor to the school voucher movement, with he and his family giving more than $4 million to a 2007 campaign to defeat a citizens’ referendum. That ballot measure passed by a wide margin, marking the end of voucher program previously approved by the Utah Legislature.
Byrne also gave $850,000 to help then-Overstock executive Jonathan Johnson challenge Gov. Gary Herbert for his seat in 2016. Johnson beat Herbert at that year’s GOP convention, only to lose to him in a primary.
Johnson has officially taken over for Byrne as Overstock’s interim CEO.
Did he really have an affair with a Russian agent?
By all indications, yes.
Butina pleaded guilty in December to acting as an unregistered foreign agent for Russia. Her Washington, D.C.-based attorney confirmed to The Salt Lake Tribune that Byrne’s outline of their affair matches Butina’s recollections.
“The timeline is generally right,” Butina’s lawyer Robert Driscoll said.
They met at a FreedomFest conference in Las Vegas in July 2015, devoted to libertarian ideas, reportedly a pet topic for both Byrne and Butina. They hit it off, kept in touch via text and “got together a number of times,” according to Driscoll.
By Byrne’s account, when Butina eventually said she’d been sent to the U.S. to make contact with him, his previous dealings with federal law enforcement led him to think he needed to clear the relationship with the FBI.
“I used to have a very, very low security clearance,” Byrne, a bachelor, told one Fox News interviewer. “I was given a green light to meet her again. She turned that into a physical relationship.”
He said they “dated for about six months” — a time frame Driscoll also confirmed.
By March 2016, as the affair progressed, Byrne said based on his conversations with Butina, “she clearly was swanking around more and more in big shot Republican circles, including people like Don Jr.,” referring to President Donald Trump’s son.
Driscoll said Byrne’s claims that Butina often voiced her aspirations for meeting well-placed U.S. officials seem to jibe as well. “It’s fair to say that both in Russia and when she came over [to the U.S.], she was a bit of a climber and was always looking for opportunities to meet people.”
But Driscoll likened Butina’s actions to those of a typical socially ambitious millennial, not a Russian intelligence asset. “She was doing all this stuff,” he said, “but it was more as a free agent.”
Butina ostensibly invited Byrne to give a speech in Russia, then meet with key oligarchs and Russian officials — including a private audience with President Vladimir Putin. “At that point,” Byrne claimed in a TV interview, “I was told to ‘break up with her and get her out of your life.’ “
Byrne said he did. But in July 2016, he claims FBI officials told him to rekindle the relationship, citing “a national security emergency.” Byrne said he did that too, although he said that from then on, he sought to create the impression it was a romantic relationship, but “it was all a lie.”
“I never laid a finger on her because I knew it would disgrace our country and it would disgrace Maria,” Byrne said.
Why is Byrne going public?
Byrne said coming forward was a matter of conscience, after he was watching TV last summer and key pieces of the puzzle began falling into place. Beyond that, though, his explanations have been a little cryptic.
“This country has gone nuts,” Byrne said tearfully in another TV interview, “and especially over the last year, when I’ve realized I know what I know, every time I see one of these things, somebody drives 500 to 600 miles to gun down 20 strangers in a mall, I guess I feel a bit responsible.”
Byrne appeared to be referring to the recent mass shooting in El Paso, where the suspect drove to a Walmart and targeted people of Mexican descent. But it’s not immediately clear how his possible involvement in the Russia investigation is linked to mass shootings or the charged debates over immigration and race.
It’s also hard to know what role politics may be playing, if any. Byrne, a self-described “flag-waving hippy,” has said he didn’t vote for Trump, but also doesn’t describe himself as a Trump opponent. “He won fair and square,” he said at one point.
Byrne has implied that federal authorities appeared to be setting Hillary Clinton up for blackmail, without elaborating. At other junctures, he’s said the feds seemed to take a passive approach and ignored key information he was supplying, with the apparent intention of entrapping GOP officials.
“They just have had an attitude of sitting back and letting this Can-O-Scandal emerge,” he wrote on his blog. “Like someday, whenever they want to, they are going to grab it, shake it up, pop it open, and spray it on the Republicans.”
Byrne has said he’s handed materials to a top federal prosecutor in Connecticut, John Durham, who was selected by U.S. Attorney General William Barr to review the conduct of intelligence agencies in the initial phase of the Russia-U.S. elections investigation.
He said officials have confirmed to him that his orders came directly from Peter Strzok, who headed FBI’s counter-espionage section, led investigations into Clinton’s use of a personal email server and was a key player in the agency’s probe into Russian election interference.
Why come forward now?
Byrne said he traveled to Omaha to consult with Buffett, a legendary billionaire investor and longtime business associate and mentor to Byrne. Buffet, Byrne said, urged him to not let the matter sit in the hands of federal authorities and instead, to come forward.
Officials at Buffett’s Berkshire Hathaway headquarters did not respond to an inquiry from The Tribune seeking to confirm that claim.
But Byrne had been considering the move for months, he said. And there are other clues about his timing.
He’s been talking about selling Overstock.com’s retail side since last November and, after those plans were temporarily sidetracked, he started bringing it up again as a viable option as recently as June.
Byrne sold roughly 900,000 shares of preferred stock in the company in May, which he said in a rare and begrudging letter to shareholders at the time, was “to supplement my nominal salary with stock sales” and help fund new investments in blockchain projects and a range of charitable donations.
“Apparently, some find it unsettling and demand answers from me about why, after 20 years of working (generally without salary or compensation), I might sell several tens of millions of dollars' worth of stock,” Byrne wrote.
And in July, Overstock.com posted strong performance results for both its retail and blockchain businesses in the company’s earnings report. The retail side, in fact, returned to being profitable after lagging for most of 2018, leaving the company in what Byrne called “a perfect position” prior to his departure.
What’s been the reaction to all this?
It’s safe to say, a lot of people — including investors in Overstock — are scratching their heads.
Byrne’s initial “Deep State” news release sent the company’s shares sharply downward, shaving off nearly a third of their value in a matter of days. His resignation a week later, in turn, pushed the stock up.
The FBI has declined to comment, but James Comey, former head of the FBI, called Byrne’s claims “ridiculous” in an interview with CNN. He and former FBI Deputy Director Andrew McCabe both denied claims the FBI would have asked Byrne to conduct an affair with the suspected Russian agent.
"The FBI doesn't work that way," Comey told CNN.
Driscoll, Butina’s attorney, said the full scope of Bryne’s claims is difficult to evaluate.
“He is kind of non-linear in thought and speech and freely mixes firsthand account with assumptions and presumptions, so it can be kind of hard to unpack,” the attorney told The Tribune.
Brett Tolman, a former U.S. Attorney with ties to Utah, told a cable news interviewer that his prior dealings with Byrne lent credence to his latest claims.
“My experience with him is very fascinating,” Tolman said, “because while he’s eccentric, he has been accurate historically with me and with others.”
Johnson, Byrne’s interim successor at Overstock, echoed those remarks, based on his experience of standing “shoulder to shoulder” with him as Byrne called out the illegal dealings on Wall Street more than a decade ago.
“In 2005, ’06 and ’07, he was portrayed as crazy,” Johnson told The Tribune. “By 2008, 2009 and the financial crisis, he was viewed as having been a prophet before his time and knew just what he was talking about.
“I don’t think it’s going to take four years for him to again be seen as a real patriot who called out some bad things,” he continued. “I know Patrick wouldn’t have walked away from a company he started and has built unless he believed this, and when he believes it, I believe it.”