In July, 2015, Patrick Byrne, the founder of the online discount retailer Overstock, delivered a twenty-minute talk at FreedomFest, the annual libertarian conference in Las Vegas. Other speakers included the venture capitalist Peter Thiel; John Mackey, the chief executive officer of Whole Foods; and the Presidential candidate Donald J. Trump. Byrne’s talk, entitled “Turtles All the Way Down: How the Crypto-Revolution Solves Intractable Problems on Wall Street,” was a version of one he had given many times before. It touched on several of his interests, including the kind of liberalism usually referred to as libertarianism, the flaws in the structure of the stock market which make it vulnerable to manipulation, and how a blockchain-based financial system could eliminate those flaws. After the talk, a line of people waited by the stage to speak to Byrne. Standing a little apart from them was a young woman with thick red hair, a pale, wide face, and a Russian accent. Introducing herself as Maria Butina, she said that she was the president of a Russian gun-rights group. Judd Bagley, a former Overstock executive who accompanied Byrne to the conference, recalled that, after the exchange, Byrne had “a little sparkle in his eye.”
At the time, many people in the business world considered Byrne to be an almost clairvoyant entrepreneur. In early 2000, years before Amazon and eBay popularized the practice known as “dropshipping,” Overstock, which sells furniture and household goods, allowed third-party venders to send items directly to customers through its Web site. In 2004, a year before Amazon Prime was introduced, Byrne launched Overstock’s Club O membership program, which gave shoppers a year’s worth of shipping for a flat fee. And in 2014 Overstock became the first major retailer to accept bitcoin for purchases.
Byrne is the son of John J. Byrne, an insurance magnate whom Warren Buffett, a family friend, once called “the Babe Ruth of insurance.” Patrick Byrne has a Ph.D. in philosophy from Stanford and regularly cites Friedrich Hayek, Martin Luther King, Jr., and the conservative economist Thomas Sowell in conversation. Former employees describe a memory trick he likes to perform, in which he studies a deck of cards for a few minutes and then recites back the order of the cards, one by one. “When he’s on, he’s smart, charming, complex, and brilliant,” Marc Cohodes, who was once a critic of Overstock and is now an investor in the company, told me. Byrne is also a showman; in 2014, he arrived at the breaking-ground ceremony for Overstock’s new headquarters, in the suburbs of Salt Lake City, by parachute, tearing off his flight suit to reveal a tuxedo.
Byrne was best known for waging a sensational legal battle with several investment firms and stock traders in the early two-thousands. He accused them of colluding to drive down the stock prices of various companies, including his own—a claim that seemed unlikely, even preposterous. He was mocked for the outlandish, bullying ways in which he presented his findings. “Everyone said for years, ‘Patrick Byrne is crazy,’ ” John Welborn, an economics lecturer at Dartmouth College who has worked as a consultant for Byrne, told me. But, shortly after the financial crisis began, Byrne’s suspicions were confirmed, and regulators soon cracked down on the practice he’d described.
Since then, Byrne has fashioned himself as a whistle-blower on financial malfeasance, using his Web site, Deep Capture, as a platform. The posts on the site are filled with cartoonish euphemisms (“Men in Black” for F.B.I. agents) and bombastic prose (“I swam around on Wall Street 2005-2008 drawing fire from the Establishment”), and they feature blocks of italicized text, lists, layers of footnotes, endnotes, and links to further reading. Byrne’s accounts of his battles with high finance include descriptions of yearslong collaborations with the F.B.I. and Mafia plots to kill him. Critics note that Byrne often exaggerates his importance, includes only details that support his theories, and has made false claims about his adversaries. (In 2016, a Canadian court found that he had committed libel against a businessman and ordered him to pay a million dollars.) David Luban, a professor of law at Georgetown University who has known Byrne since teaching him as an undergraduate, observed that improbable things seem to happen to Byrne with remarkable frequency. “He’s a hard man to bet against,” Luban said. “So many of his stories that have seemed utterly incredible turn out to be true.”
For a decade, Byrne, who is a prominent figure in libertarian circles, was the chair of an educational foundation launched by the free-market economists Milton and Rose Friedman. On his second day at FreedomFest, after he spoke on a panel, Maria Butina approached him again. This time, she said that she was a special assistant to the deputy governor of Russia’s central bank, Alexander Torshin. According to Byrne, she told him, “We know about you, we know about your relationship with Milton Friedman, we watch your videos on YouTube about liberalism.” She asked if she could meet with him privately, and Byrne invited her to have lunch in his suite.
Byrne told me that he immediately wondered if Butina was a “red sparrow”—a reference to the 2013 novel that was turned into a film starring Jennifer Lawrence, in which a former ballerina becomes a spy for the Russian government, seducing and killing her targets. Before their lunch, Byrne said, he crafted sharp weapons from two coat hangers, which he stashed under the bed and under the sofa, and made a mental note to keep a close watch over his food and drink.
He was surprised to discover that Butina was an intellectual. They spent an hour and a half talking about Chekhov, Dostoyevsky, John Locke, and the Austrian school of economics. Butina said that she had been born in Siberia and placed in an élite educational program. She claimed to be close to several oligarchs, a few of whom were powerful politicians who believed that she could become President someday. She invited Byrne to speak about cryptocurrency and liberalism at an event in Russia, and, before she left, she proposed that they stay in touch as he planned his visit.
Byrne said that he knew “the number you were supposed to call if you had something strange happen to you, like a good-looking Russian gal comes up to you and says, ‘We want you to come to Russia.’ ” He claims that he reported the interaction, assuming that it would reach the F.B.I., which would likely instruct him to stay away from Butina. Instead, he said, federal agents came to see him, and after some discussion they gave him permission to meet with her again.
Byrne is a bachelor who likes to say that his “Acts I and II” of a relationship are “dynamite,” but that he has “no Act III.” What followed was an on-and-off romantic affair that lasted for a year and a half. During this time, Byrne claims, he was informing on Butina to the F.B.I. (The F.B.I., in accordance with policy, will not confirm any meetings or relationship with Byrne.) Byrne described the twists and turns of his exchanges with Butina and with his F.B.I. handlers in a widely circulated series of posts, written in his digressive, heavily footnoted style, that he published on Deep Capture in the summer of 2019. They lay out a complex narrative reminiscent of the plot of a John Le Carré novel. Byrne explains that, in time, he came to distrust the federal agents he was working with, believing that they were manipulating him and setting up Butina. In July, 2018, Butina was arrested and charged by the Department of Justice with acting as an unregistered foreign agent for the Russian government. She was sentenced to eighteen months in prison. By then, Byrne’s suspicions about the F.B.I. had crystallized into a belief that he had been part of a plot by high-ranking members of the Obama Administration to commit political espionage, in an attempt to control the next President.
Butina’s arrest came at a time when the country was fixated on stories of Russian interference in the 2016 election. That month, the special counsel Robert Mueller indicted a dozen Russian intelligence officials. Butina, a beguiling and ambitious young woman who courted powerful men and fetishized guns, captured the public imagination. New details continued to emerge: Days after the election, she had held a costume birthday party at which she was dressed as Empress Alexandra and reportedly boasted about being involved in the Trump campaign’s communications with Russia. She had enjoyed a Thanksgiving dinner with Representative Mark Sanford, Republican of South Carolina. She’d attended a Styx concert with J. D. Gordon, a Trump campaign aide, and had befriended the anti-tax activist Grover Norquist. Then, in July, an article appeared detailing her affair with Byrne.
In August, Byrne suddenly resigned from Overstock, the company that had been at the center of his life for two decades. Hours after his resignation, he appeared on the Fox Business Network wearing a red “Make America Grateful Again” baseball cap. When the host, David Asman, asked him why he had resigned, Byrne smiled, saying that he had left Overstock in a “perfect place.” But, he said, “I’ve been warned that, if I come forward to America, the apparatus of Washington is going to grind me into dust.” He made a pummelling gesture with his hands. “I have to get that away from the company.” He claimed that he had been unwittingly drawn into a scheme of high-level corruption—he referred to “fishy” orders from “honorable federal agents”—that was part of a plot perpetrated by the deep state against Trump and other political leaders. He jumped from subject to subject, twice almost breaking into tears. To viewers, it looked like a moment of psychological unravelling. Nearly all his claims were exaggerated, false, or unproven. “The bottom line is: it’s a big coverup,” Byrne said, sounding anguished. “There was political espionage conducted against Hillary Clinton—Hillary Clinton, Marco Rubio, Cruz, and Donald Trump.” He continued, “This isn’t a theory of mine—this isn’t a political position. I was in the room when it happened. I was part of it.”
In the past five years, conspiracy theories that might once have seemed fringe have come to be embraced by millions of Americans. One of the most prominent, QAnon, holds that leading Democrats engage in Satan worship and in child-trafficking rings. Another suggests that Supreme Court Justice Anthony Kennedy was coerced into stepping down, in 2018, to protect his son, formerly a Deutsche Bank employee, from being implicated in the ongoing Russia investigation. Byrne’s beliefs about a deep-state plot rivalled these in baroque complexity and seemed equally fantastical. Marc Cohodes, the Overstock investor, said that Byrne looked “like a nut.” But other people close to Byrne suggested that his ideas, like many conspiracy theories, might contain seeds of truth. Jonathan Johnson, who replaced Byrne as the C.E.O. of Overstock, recalled the mid-two-thousands, when Byrne was pilloried during his crusade against Wall Street. “From 2005 to 2008, he was made to look crazy, and in 2008 he was vindicated,” Johnson told me. “I don’t know all the facts on this, as I did with the Wall Street stuff. But I do know Patrick, and it won’t surprise me at all if he is vindicated again.”
Last month, Butina published a memoir in Russia, “Prison Diary,” about her time in D.C. and her experience in the American penal system. Her description of the romance with Byrne is broadly consistent with his, although he suggests that she was better connected politically than she claims to have been. Robert Driscoll, Butina’s attorney, told me, “Although Patrick’s story seems far-fetched, the parts of it that I could verify with Maria I was pretty much able to verify. It makes me not dismiss the rest of what he says out of hand, even though some of it’s pretty wild.”
Byrne has insisted that he is not a Trump supporter, but his Deep Capture posts feature a common right-wing theory that has been promoted on social media, on Fox News, and by President Trump: that coöperation between the Trump campaign and Russia, which sparked an F.B.I. investigation, was a hoax perpetrated by Democrats, or, as Trump has put it, a “collusion delusion.” Shortly after Trump was elected, he began warning his followers that longtime employees of the federal government would try to sabotage his agenda. In May, 2019, Attorney General William Barr appointed John Durham, the United States Attorney for the District of Connecticut, to look into the origins of the F.B.I.’s Russia investigation, and into what Barr has described as political spying against Trump.
In late January, I met Byrne at his suite in the Gramercy Park Hotel, in Manhattan, where he was staying. He had just returned from Southeast Asia, where he had devoted himself to scuba diving and writing the Deep Capture posts about Butina. He is broad-shouldered, with dirty-blond hair and a weathered, square-jawed face. He seemed at once energized and exhausted, restlessly opening snacks from the minibar and searching for a pencil and a pad of paper. “When I’m talking to people, I often take notes or sketch things out,” he said, rubbing his forehead. He mentioned Barr, whom he considered a hero, and said that Durham’s investigation would reveal the extent of the conspiracy in which he was an “unknowing pawn,” and would result in “a stack of indictments.” He hinted at revelations that, he said, he was not yet at liberty to share. “At the very latest, after the coming election, I will reveal something, no matter who wins,” he told me. “There are basically two different realities emerging. And, unfortunately, the truth is not really either of them.”