• An updated version of the Justice Department inspector general’s report revealed the FBI opened a counterintelligence investigation in October 2016 on an alleged source for the Steele dossier.
• The IG faulted the FBI for failing to disclose details about the source, who Christopher Steele said unwittingly provided information that ended up in the dossier.
• Steele also told the FBI that he believed the source to be a “boaster” and “embellisher.” 

The FBI opened up a counterintelligence investigation in October 2016 against a Belarusian-American businessman who Christopher Steele said was an unwitting source for his infamous anti-Trump dossier, according to a newly unredacted version of a Justice Department inspector general’s report.

The FBI failed to disclose the investigation against the alleged source — called Person 1 in the report — to Justice Department attorney  and in applications submitted to the Foreign Intelligence Surveillance Court (FISC) surveillance warrants against former Trump campaign aide Carter Page.

The report also said the FBI failed to tell the surveillance court that Steele told investigators during a meeting on Oct. 3, 2016 that he considered Person 1 to be a “boaster” and “embellisher” who “may engage in some embellishment.”

Despite those red flags, the FBI relied on information that Steele attributed to Person 1 to represent in Foreign Intelligence Surveillance Act (FISA) applications that there was probable cause to believe that Page was a Russian agent. (RELATED: DOJ Watchdog Finds ‘Significant Inaccuracies’ In FBI’s Surveillance Applications)

Investigators also failed to tell the FISC in applications to renew surveillance against Page that Steele’s primary source disputed some of the information in the dossier that was attributed to Person 1.

Steele’s main source, who is called “Primary Sub-Source” in the report, told FBI agents in January 2017 that he shared unverified “rumors” and bar-room talk with Steele, who in turn reported the information as confirmed.

The sub-source said he spoke by phone once to someone he believed to be Person 1. Steele has disputed his chief source’s claims and said in a statement Tuesday that he “meticulously” documented and recorded conversations with the person.

Sergei Millian, who is Person 1, has vehemently denied being a source for Steele’s dossier ever since news outlets reported him as such on Jan. 24, 2017, two weeks after BuzzFeed News published the salacious dossier.

Whether or not Millian did provide information that ended up in the dossier, Steele represented to the FBI that Millian was an unwitting source for several bombshell claims in the document.

It is unclear whether Steele’s information about Millian is what sparked the FBI’s decision to investigate him. Nine days after Steele’s meeting, the bureau’s New York Field Office opened up a counterintelligence investigation on Millian. Nine days after that, the FBI applied for its first FISA warrant against Page. The inspector general (IG) said the Steele dossier played a “central and essential” role in the FBI’s decision to apply for FISAs on Page.

The information about the investigation of Millian was redacted in a version of the IG report released Monday. But the information was unmasked in a version of the report released Wednesday. The report said the FBI and Justice Department declassified the information.

Steele, a former British spy, attributed claims in four of his memos to Millian, who has worked in real estate and as an interpreter.

Steele pinned some of the dossier’s most salacious allegations on Millian. Steele said Millian was one of two sources for the salacious claim that President Donald Trump was with prostitutes in Moscow in 2013, according to the IG report. Millian was also alleged to be a source for the claim that Page and former Trump campaign chairman Paul Manafort were part of a “well-developed conspiracy of co-operation” with the Kremlin.

The IG report said the FBI was unable to corroborate any of the information.

Unexplained in the IG report is why Steele identified Millian with differing code names and alternative descriptions in the dossier.

Steele referred to Millian as “Source D” in a memo dated June 20, 2016, while Millian was called “Source E” in a memo dated July 28, 2016, according to the report. In a memo from July 30, 2016, Steele calls Millian a “Russian émigré figure” close to the Trump campaign. In a memo dated Aug. 10, 2016, Millian is an “ethnic Russian associate” of Trump.

The IG report blasts the FBI for withholding information about Steele and his sources from its FISA applications against Page.

“We believe the FBI should have specifically and explicitly advised [Justice Department’s Office of Intelligence] about the FBI’s assessment that this particular sub-source relied upon in the FISA application was Person 1, that Steele had provided derogatory information regarding Person 1, and that the FBI had an open counterintelligence investigation on Person 1,” the report says.

The report said that witnesses interviewed in the IG investigation said that the Justice Department typically informs the FISC when sources are themselves subjects of investigations.

“Those facts were relevant to [Office of Intelligence’s] assessment of the strength of the information in the FISA application and, based on what we were told was the Department’s practice, likely would have been included by OI in the application so that the FISC could consider the information in deciding whether to grant the requested FISA authority,” the report says.

After the IG report was released, Millian appeared to acknowledge on Twitter that he was Person 1, but he disputed ever saying what the dossier says he told Steele’s primary source. Millian, who has locked down his Twitter account, also lamented the revelation that he was the target of a counterintelligence investigation.

Millian has been one of the more mysterious figures to emerge from the saga surrounding the dossier.

He gave an interview to ABC News on July 27, 2016 in which he suggested that he had close ties to the Trump campaign, as well as to the Kremlin. Days before the interview, Millian had reached out to former Trump campaign adviser George Papadopoulos to arrange an introductory meeting. They first met on July 30, 2016 and remained in contact through January 2017.

Millian has also said in the past to have brokered real estate deals for the Trump Organization. Michael Cohen, a former lawyer for Trump, told news outlets in 2017 that Millian misrepresented his ties to Trumpworld.

All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact licensing@dailycallernewsfoundation.org.