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2 Giuliani Associates Arrested On Campaign Finance Violations

Oct 10, 2019
Originally published on October 10, 2019 10:12 pm

Updated at 7:15 p.m. ET

Two Florida-based businessmen who helped President Trump's personal attorney Rudy Giuliani in his efforts to dig up dirt on former Vice President Joe Biden in Ukraine have been arrested and charged with campaign finance violations in a separate matter.

Lev Parnas and Igor Fruman were arrested at Dulles International Airport outside Washington, D.C., on Wednesday night, according to the U.S. Attorney's Office in Manhattan. They were indicted by a grand jury in New York but are scheduled to make their initial court appearance in federal court in Virginia later this afternoon.

An attorney for the two men did not immediately respond to a request for comment. Giuliani declined to comment.

According to the indictment, Parnas and Fruman face two counts of conspiracy and one count each of false statements and falsification of business records. Two others, David Correia and Andrey Kukushkin, each face one count of conspiracy.

The indictment alleges the men "conspired to circumvent the federal laws against foreign influence by engaging in a scheme to funnel foreign money to candidates for federal and state office so that the defendants could buy potential influence with candidates, campaigns, and the candidates' governments."

The indictment lays out two separate conspiracies that Parnas and Fruman allegedly engaged in.

In one, court papers say, they set up a limited liability company, Global Energy Producers, through which they made $340,000 in contributions to two political action committees.

The contributions, the indictment alleges, were made in order to gain influence with politicians and help Parnas and Fruman "advance their own personal financial interests and the political interests of Ukrainian government officials, including at least one Ukrainian government official with whom they were working."

The indictment says Parnas and Fruman met with a member of Congress identified only as "congressman-1" during the 2018 election cycle, for whom they had committed to raise $20,000.

The two met with the congressman and sought his "assistance" in getting the then-U.S. ambassador to Ukraine, Marie Yovanovitch, removed. The indictment says Parnas was working on this effort, at least in part, at the request of more Ukrainian government officials.

Yovanovitch ultimately was removed from her post this spring amid complaints from Giuliani and others. In the controversial July 25 phone call between President Trump and his Ukrainian counterpart, Trump refers to Yovanovitch as "bad news" and said, "She's going to go through some things."

Yovanovitch is scheduled to testify behind closed doors on Friday as part of the House impeachment inquiry against Trump.

While the congressman is not named in the indictment, details from the document and Federal Election Commission records point to it being Texas Republican Pete Sessions, who lost his reelection bid in 2018.

In a statement Thursday evening, Sessions said he "cannot confirm" he is the unnamed congressman in the court papers. But he vowed to defend himself against allegations of wrongdoing and pointed out that the indictment said: "The defendants concealed the scheme from the candidates, campaigns and federal regulators."

Sessions confirmed that he met with Parnas and Fruman several times but says he never took any official action after those meetings.

Sessions did say, however, that after consulting with "several congressional colleagues," he wrote a letter to the secretary of state expressing concerns about Yovanovitch and her reported disparagement of Trump to others.

In a separate alleged scheme, Parnas and Fruman allegedly worked with Correia and Kukushkin to make political donations — funded by an unnamed foreign national — to politicians and candidates at the state level to try to win their help securing licenses for a recreational marijuana business.

According to the indictment, Parnas was born in Ukraine and Fruman in Belarus. Both are now U.S. citizens.

The indictment is not their only ongoing legal challenge.

They were also subpoenaed by House lawmakers as part of the impeachment inquiry for their roles helping Giuliani dig up information in Ukraine on Joe Biden and his son Hunter.

Parnas has told NPR that he worked as a fixer to help arrange meetings for Giuliani with current and former Ukrainian officials, including prosecutors.

Parnas and Fruman had been called to testify this week. Although even before their indictment, they were not expected to show up for their closed-door depositions.

President Trump, when asked about having been photographed with them, said on Thursday, "I don't know those gentlemen. Now it's possible I have a picture with them because I have a picture with everyone."

"Maybe they were clients of Rudy, you'd have to ask Rudy. I just don't know," Trump added.

Trump also said he hadn't talked to Giuliani about the matter and said, "We have nothing to do with it."

Copyright 2019 NPR. To see more, visit https://www.npr.org.

MARY LOUISE KELLY, HOST:

Two Florida-based businessmen have been arrested on campaign finance charges. Now, this is newsworthy because the businessmen worked with Rudy Giuliani, the president's personal attorney, to gather information in Ukraine about former Vice President Joe Biden. The U.S. attorney in Manhattan, Geoffrey Berman, told reporters today that the pair, Lev Parnas and Igor Fruman, were taken into custody yesterday outside Washington, D.C.

(SOUNDBITE OF ARCHIVED RECORDING)

GEOFFREY BERMAN: Parnas and Fruman were arrested around 6 p.m. last night at Dulles Airport as they were about to board an international flight with one-way tickets.

KELLY: So NPR justice correspondent Ryan Lucas is here with more on the case. Hi, Ryan.

RYAN LUCAS, BYLINE: Hi, there.

KELLY: These are not household names, Lev Parnas and Igor Fruman. What do we know about them? What are the charges that they are facing?

LUCAS: So Parnas was born in Ukraine; Fruman in Belarus. Both are now American citizens, and they are business partners. And they have come under scrutiny from the media recently because of the role that they played in helping Rudy Giuliani dig up dirt in Ukraine on former Vice President Joe Biden and his son.

Parnas told our colleague Jeff Brady that he's known Giuliani socially for several years. They've golfed together. And he says he worked as a fixer and translator of sorts for Giuliani on his Ukraine efforts. He helped arrange meetings with current and former Ukrainian officials, for example. That includes prosecutors. Parnas said that he attended a couple of those meetings along with Giuliani. He wouldn't get into the nature of those conversations.

The indictment unveiled today does not mention Giuliani or his Ukraine operations, though. This is a separate matter related to alleged campaign finance crimes. Parnas and Fruman face four counts in all - two conspiracy counts as well as a false statements count and a falsification of records count.

KELLY: What exactly are they - stand accused of having done?

LUCAS: Well, there are a couple of different things in the indictment. There is a $325,000 donation that they made to a pro-Trump superPAC. The donation was made via an energy company that Parnas and Fruman had set up, according to prosecutors, in order to hide their role in this donation. That's known as a straw donor scheme, hiding the real source of the funds. That is illegal.

The indictment also says that Parnas and Fruman made personal donations to an unnamed congressman, and they promised to make more donations. That won them, according to the indictment, several meetings with this congressman. And the goal of this, prosecutors say, was to get the congressman's help with a matter in Ukraine. Here's how the U.S. attorney in Manhattan, again Geoffrey Berman, talked about it.

(SOUNDBITE OF ARCHIVED RECORDING)

BERMAN: Parnas and Fruman had several meetings with Congressman 1. And at these meetings, Parnas, on behalf of a Ukrainian government official, lobbied Congressman 1 to advocate for the removal of the then-U.S. ambassador to Ukraine.

LUCAS: So Parnas and Fruman were working at the behest of a Ukrainian official to get a U.S. congressman's help to push out the then-U.S. Ambassador to Ukraine Marie Yovanovitch. Yovanovitch ultimately was removed from her post this spring under pressure from Giuliani and others.

KELLY: Incredibly complicated - and it gets more complicated with the addition to the mix of this unnamed congressman. Do we know who this congressman is?

LUCAS: So details in the indictment, particularly those about donations, match up with campaign finance records and strongly suggest that the congressman was Texas Republican Pete Sessions. Sessions was actually defeated in the 2018 midterms and lost his seat, so he is no longer in Congress.

KELLY: No longer in Congress. OK. Meanwhile, Rudy Giuliani - how problematic might this be for him?

LUCAS: Having two associates facing federal indictment is not a good thing. I reached out to him today to see if he would comment on it, and he is not talking.

KELLY: Not commenting. OK. We may not have known who - I didn't - hadn't heard of these guys before today. But lawmakers on Capitol Hill certainly had. They have been interested in Parnas and Fruman already as part of their impeachment inquiry. So I mean, where does all this go?

LUCAS: Right. The House committees leading the impeachment push requested documents and testimony from Parnas and Fruman last week. They were actually scheduled to testify this week. But the lawyer who represents both of them made clear that they were not going to show up.

Now, soon after this indictment came down today, the House subpoenaed both Parnas and Fruman for documents. It gave them a deadline of October 16. And what the House is looking for from them includes things related to what's in today's indictment, but it's also much broader. They want information on their work with Giuliani or administration officials related to everything that's gone on in Ukraine.

KELLY: Whole lot going on - NPR's Ryan Lucas, thank you.

LUCAS: Thank you. Transcript provided by NPR, Copyright NPR.