The multimillionaire CEO of Overstock.com engaged in a sexual relationship with Russian spy Maria Butina with the encouragement of the FBI but did not follow their directions when they told him to rekindle it, he has claimed.

Patrick Byrne met Butina for the first time at FreedomFest, an annual libertarian convention in Las Vegas, in July 2015. He told the Washington Examiner that Butina approached him after his keynote speech, telling him she was the leader of a gun rights organization in Russia, but he “brushed her off.” Butina later approached him again and said she worked for a top official at the Central Bank of Russia and invited him to speak there.

By his account, the 57-year-old CEO, who said he holds a low-level security clearance, reported the contact with Butina, 30, to the U.S. government. The FBI then gave him a "green light" to get to know Butina. The two began a romantic relationship, which ended in March 2016. Four months later, he said, the FBI asked him to rekindle the relationship with Butina.

“The second period, I did it because I was instructed to rekindle it. However, I decided that was not the right thing to do,” Byrne said. “But I was told where the orders came from, and the orders came from high enough that I accepted the orders. I just want America to know that I didn’t lay a finger on her that second time.”

Story continues below

Byrne said this second phase with Butina lasted until March 2017, and that he was swept up in "political espionage," meeting with the FBI to discuss her.

The revelation of Butina’s relationship with Byrne marks another twist in the case in which Butina was portrayed as using sex to infiltrate political groups, including the National Rifle Association. Prosecutors later walked back that assertion, which Butina’s lawyer slammed as sexist.

Butina had cultivated political connections through her boyfriend Paul Erickson, 57, a longtime Republican operative. He has not been charged in the case but was indicted in February for wire fraud and money laundering.

Butina's lawyer Robert Driscoll has accused the Justice Department of hiding the role of Patrick Byrne in their surveillance and investigation of his client.

She pleaded guilty in December to failing to register as a foreign agent with the Justice Department while she acted at the direction of Alexander Torshin, a longtime figure in Russian politics, since at least 2015. She was sentenced to 18 months in prison in April.

Driscoll said Byrne “has confirmed that he, indeed, had a ‘non-standard arrangement’ with the FBI for many years, and that beginning in 2015 through Maria’s arrest, he communicated and assisted government agents with their investigation of Maria. During this time, he stated he acted at the direction of the government and federal agents by, at their instruction, kindling a manipulative romantic relationship with her.”

He said the FBI denied having any information on his relationship with Butina.

Federal prosecutors said Butina was a national security threat who worked to find Americans who could eventually provide intelligence to the Kremlin. Butina’s lawyers pushed back, saying she came to America to study and wanted to improve relations between Washington and Moscow. She would have registered as a foreign agent had she known she had to, she said during her sentencing hearing.

Driscoll told the Washington Examiner he suspected there were other people who provided the FBI with information on Butina, but said he believed only Byrne had a romantic relationship with her.

She is the only Russian national arrested in the U.S. government’s investigation into Moscow's interference in the 2016 presidential election, though charges were not brought against her by former special counsel Robert Mueller.

Mueller brought charges against 25 Russians, including 12 intelligence officers, and three Russian companies over the course of his investigation, though none have been arrested by the U.S.

Robert Anderson, the former assistant director of the FBI’s Counterintelligence Division and the Justice Department’s expert witness in the case, said in a court filing that the Kremlin would be able to use the information Butina passed to Torshin about Republicans and the National Rifle Association “for years to come in their efforts to spot and assess Americans who may be susceptible to recruitment as foreign intelligence assets.”

Driscoll said in a letter to the Justice Department: “As time passed, Byrne became more and more convinced that Maria was what she said she was — an inquisitive student in favor of better U.S.-Russian relations — and not an agent of the Russian government or someone involved in espionage or illegal activities. He states he conveyed these thoughts and the corroborating facts and observations about Maria to the government."

The Justice Department did not immediately respond to the Washington Examiner. The FBI declined to comment.