2 Giuliani Associates Tied to Ukraine Scandal Arrested on Campaign Finance Charges – The New York Times

2 Giuliani Associates Tied to Ukraine Scandal Arrested on Campaign Finance Charges – The New York Times

By Mark Mazzetti, Eileen Sullivan, Adam Goldman and William K. Rashbaum

WASHINGTON — Federal prosecutors unsealed charges on Thursday against two men who have aided President Trump’s efforts to gather damaging information in Ukraine about his political opponents, a criminal case that signaled growing legal exposure for the president’s allies as Mr. Trump tries to blunt an impeachment inquiry in Congress.

The indictment of the two men, Lev Parnas and Igor Fruman, sketched a complex scheme to violate campaign finance laws and did not accuse Mr. Trump of wrongdoing. But it revealed new details about the push to pressure Ukraine: a campaign encouraged by Mr. Trump, led by his private lawyer Rudolph W. Giuliani and assisted by obscure figures like Mr. Parnas and Mr. Fruman.

Mr. Trump continues to defend the effort, which is the focus of the impeachment inquiry that House Democrats opened last month. The new indictment, however, suggests the first criminal implications of the shadow foreign policy that Mr. Giuliani pushed on behalf of the president.

And it is another example of the extent that the messy power dynamics of Ukraine — a former Soviet republic and close American ally with a recent history of political upheaval — now dominate discussions about Mr. Trump’s future. The impeachment inquiry began after a C.I.A. officer who has worked at the White House raised alarms about a July telephone call in which Mr. Trump seemed to suggest that American military aid was contingent on Ukraine’s help in unearthing information that could help Mr. Trump politically.

Mr. Giuliani has been public about his hunt for damaging information about Democrats, and the indictment gives a more complete picture about how he seems to have subcontracted part of the work to Mr. Parnas and Mr. Fruman, two of his longtime associates.

It directly connected the two men to a key element of the pressure campaign, an effort to recall the United States ambassador to Ukraine, Marie L. Yovanovitch, after she became a focus of criticism from many of Mr. Trump’s allies. Mr. Parnas and Mr. Fruman donated money and pledged to raise additional funds in 2018 — some violating legal limits — for a congressman who was then enlisted in the campaign to oust her, court papers showed.

Geoffrey S. Berman, the United States attorney for the Southern District of New York, announced that the two men were charged with making illegal campaign donations, and law enforcement officials harshly criticized the scheme.

On Thursday, William F. Sweeney Jr., the top agent in the F.B.I.’s New York office, said during a news conference that “campaign finance laws exist for a reason.”

“The American people expect and deserve an election process that hasn’t been corrupted by the influence of foreign interests,” he said, “and the public has a right to know the true source of campaign contributions.”

“Laws make up the fabric of who we are as a nation,” Mr. Sweeney added. “These allegations aren’t about some technicality, a civil violation or an error on a form. This investigation is about corrupt behavior and deliberate lawbreaking.”

The lawmaker is named in the indictment only as “Congressman-1,” but campaign finance filings identify him as former Representative Pete Sessions, Republican of Texas. Mr. Sessions, then the chairman of the powerful House Rules Committee, wrote a letter in 2018 to Secretary of State Mike Pompeo saying that Ms. Yovanovitch should be fired for privately expressing “disdain” for the current administration.

Mr. Sessions, who lost his re-election bid last year, said in a statement that he could not confirm that he was “Congressman-1” but that he would “vigorously defend myself against any allegations of wrongdoing” and that he had no knowledge of the scheme detailed by prosecutors.

He said that he met the two men to discuss Ukraine’s bid for energy independence and that he wrote to Mr. Pompeo “separately, after several congressional colleagues reported to me that the current U.S. ambassador to Ukraine was disparaging President Trump to others as part of those official duties.”

Some Trump allies believed Ms. Yovanovitch was trying to impede their effort to dig up damaging information about former Vice President Joseph R. Biden Jr. and his son Hunter Biden, a former Ukrainian official has said, and House Democrats are looking into whether her removal was linked to Mr. Trump’s attempts to gain politically helpful information.

Lev Parnas and Igor Fruman, associates of Rudolph W. Giuliani, President Trump’s private lawyer, were charged with violating campaign finance laws on Thursday.Johannes Eisele/Agence France-Presse — Getty Images

Mr. Parnas and Mr. Fruman are witnesses in their impeachment inquiry, and Mr. Parnas had been scheduled to be questioned Thursday by investigators.

Ms. Yovanovitch was herself scheduled to appear Friday on Capitol Hill, but she remains an employee of the State Department and the Trump administration could try to block her testimony. If that happens, House Democrats have said that they are prepared to subpoena her.

Mr. Parnas and Mr. Fruman were arrested on Wednesday evening at Dulles International Airport as they held one-way tickets on a Lufthansa Airlines flight to Frankfurt. They were walking down a glass-framed jetway, boarding with first-class passengers after indulging in free drinks and food in the lounge, when two plainclothes officers stopped them, according to someone who witnessed the arrest.

After they produced their passports to one of the officers, according to the witness, they were instructed to turn around and walk back toward the terminal, where a phalanx of uniformed and plainclothes officers waited.

At a hearing on Thursday in federal court in Northern Virginia, prosecutors argued that the men were flight risks, and a judge set bail at $1 million each. Dressed in T-shirts, Mr. Fruman and Mr. Parnas were represented by two lawyers who defended Paul Manafort, the president’s former campaign chairman who was convicted last year in the same courthouse of financial crimes associated with his own work in Ukraine.

A lawyer for the men, John M. Dowd, who was not at the hearing, declined to comment. His clients were ordered to appear in court on Thursday in New York, where the charges were filed.

The work the two men did in Ukraine for Mr. Giuliani seems to have been a mixture of business and politics. Mr. Parnas advised Mr. Giuliani on energy deals in the region and pursued his own in Ukraine even as he portrayed himself as a representative of Mr. Giuliani on the Trump-related matters.

The indictment said Mr. Parnas acted “at least in part, at the request of one or more Ukrainian government officials.” None were named, but Ms. Yovanovitch’s main critic in the Ukrainian government was Yuriy Lutsenko, then the nation’s prosecutor general who himself has a history of wielding the law as a weapon in his personal political battles.

Both Mr. Fruman and Mr. Parnas appear to have at least glancing contacts with Mr. Trump. Mr. Trump invited Mr. Fruman to a fund-raiser last year at the president’s Mar-a-Lago estate in Florida, he said in an interview with Forum Daily, a publication that bills itself as the “voice of Russian-speaking America.” The article featured a photograph of the two men, with the president giving a thumbs-up sign.

Mr. Parnas posted a photo on Twitter this spring of himself with the president and wished Mr. Trump a happy birthday. “I am honored to call you Mr. President!!!” he wrote. “And my friend!!”

The president sought to distance himself from the men as he left the White House on Thursday en route to a political rally in Minnesota.

“I don’t know those gentlemen,” Mr. Trump said. “Now it’s possible I have a picture with them because I have a picture with everybody. I don’t know about them. I don’t know what they do. I don’t know, maybe they were clients of Rudy. You’d have to ask Rudy.”

Mr. Giuliani said that no one from the Justice Department had contacted him about Mr. Parnas and Mr. Fruman. “I have to presume they’re innocent,” he said. “None of those facts that I see there make any sense to me, so I don’t know what they mean.”

He said that he was aware they were leaving the country, but he dismissed the idea that they were fleeing and said they regularly traveled to Europe on business.

Based in South Florida, Mr. Parnas and Mr. Fruman are executives of an energy company that donated $325,000 to a pro-Trump super PAC last year, which prompted a Federal Election Commission complaint by a nonpartisan campaign finance watchdog accusing the men and the company of violating campaign finance laws.

Not long before the large donation, the men created a limited liability company called Global Energy Products, which they used to funnel large contributions, according to the indictment.

Last month, Mr. Giuliani sought to minimize the significance of the campaign finance inquiry into the two men and said it was resolved. And on Thursday, he questioned the timing of the indictment. “All I can tell you about this arrest is, it comes at a very suspicious time,” he said.

Prosecutors said Mr. Parnas and Mr. Fruman, along with two other men indicted on Thursday, David Correia and Andrey Kukushkin, also funneled money to state and federal candidates in exchange for potential influence, according to court papers. The men wanted to set up recreational marijuana businesses in Nevada and other states, and were seeking political help to get access to the necessary licenses.

The plot was funded by someone identified only as “Foreign National-1” who had “Russian roots,” court papers showed.

The arrangement involved an attempt to seek licenses to sell legal marijuana in Nevada, but the defendants missed a deadline to apply for them — “two months too late to the game unless we change the rules,” Mr. Kukushkin told the unidentified foreign citizen, according to the indictment.

Mr. Correia was still at large but was expected to turn himself in, according to a law enforcement official.

Mr. Kukushkin appeared briefly in federal court in San Francisco, where the government argued that he was a flight risk who should not be granted bail, citing his connections to overseas wealth, his multiple properties in the Bay Area and his refusal to turn over his Ukrainian passport. He was to appear again on Friday in court to discuss bail.

His lawyer, Alan Dressler, did not immediately respond to a request for comment.

Mark Mazzetti, Eileen Sullivan and Adam Goldman reported from Washington, and William K. Rashbaum from New York. Reporting was contributed by Nicholas Fandos, Katie Benner and Kenneth P. Vogel from Washington; Maggie Haberman from New York; Kate Conger from San Francisco; and Zach Montague from Alexandria, Va. Susan Beachy contributed research.

An earlier version of this article misstated the custody status of two men who were indicted. Andrey Kukushkin was arrested in California, and David Correia was still at large, not the reverse.

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