/Two Giuliani Ukraine associates indicted on campaign finance charges

Two Giuliani Ukraine associates indicted on campaign finance charges

According to the indictment, Parnas and Fruman agitated for her removal at the behest of an unnamed Ukrainian government official, and hid the source of political donations they made in order to further that goal.

Ahead of her May dismissal, Giuliani had complained about Yovanovitch to Trump. At the time, Giuliani was working with the Ukraine-born Parnas and the Belarus-born Fruman to dig up dirt on Biden, whose son Hunter served on the board of a Ukrainian natural gas company. In May, the former New Yorker mayor described Parnas and Fruman as his clients.

Meanwhile, House investigators on Thursday also subpoenaed Parnas and Fruman over their work with Giuliani as part of the ongoing impeachment probe. Lawmakers are seeking documents related to their efforts to remove Yovanovitch, as well as materials related to any role they played in pressuring Ukraine to investigate the Bidens.

Giuliani on Thursday declined to comment.

According to the indictment, Parnas and Fruman made contributions to political action committees and to an unnamed “Congressman-1” in order to enhance their political influence. The document says that after making the maximum allowable contribution to Congressman-1, Fruman donated again to the congressman, but illegally made the gift under Parnas’s name.

The congressman appears to be former Texas Republican Rep. Pete Sessions, who, according to campaign finance disclosures, received maximum donations from Parnas and Fruman last June.

In May 2018, Sessions wrote a letter to Secretary of State Mike Pompeo raising concerns about Yovanovitch. Sessions, who lost reelection by 7 points last year to Democrat Colin Allred, did not immediately respond to requests for comment. The former lawmaker is running again for Congress in 2020 to replace Republican Rep. Bill Flores, who represents a heavily red district.

The indictment alleges that Parnas and Fruman undertook their efforts partly at the behest of an unnamed Ukrainian government official.

To further the scheme, Fruman and Parnas used a sham company incorporated in Delaware, Global Energy Producers LLC, or GEP, that never reported revenue, according to the indictment. Instead, Parnas and Fruman allegedly used the firm’s name on campaign contribution reports to hide their access to large sums of money from creditors.

“In truth and in fact, the donations … did not come from GEP funds,” the indictment alleges. “Rather the funds came from a private lending transactions between Fruman and third parties and never passed through the GEP account.”

According to the indictment, donations of $325,000 to one political committee and $15,000 to another were falsely made in the name of GEP. The first committee matches the description of America First Action, one of the biggest pro-Trump super PACs, which reported a $325,000 donation from GEP last May.

In a statement, Kelly Sadler, a spokeswoman for the PAC, confirmed the donation. She noted that when the organization placed the funds in a “segregated bank account” when a complaint was filed in July 2018 about the donation. There is also a legal action regarding the funds in Florida, according to Sadler.

“We take our legal obligations seriously and scrupulously comply with the law and any suggestion otherwise is false,” she said.

While digging for dirt in Ukraine, Parnas and Fruman were also working with Giuliani to seek a deal to supply gas to Ukraine’s state-owned energy company Naftogaz, according to an Associated Press report.

But neither Fruman, nor Parnas nor GEP appear in government LNG export permit applications. And neither of the men were known to have any experience in the natural gas industry, said Charlie Riedl, head of the trade association Center for Liquefied Natural Gas.

“I can’t say that I’ve seen them anywhere in this space whatsoever,” Riedl said in an interview. “I don’t even know who they are.”

“GEP had no existing business, was not funded with bona fide capital investment, and was not engaged in energy trading,” the indictment alleges.

House investigators’ have also subpoenaed documents related to any work the pair did on behalf of Naftogaz.

The indictment also alleges a separate scheme in which Parnas, Fruman and two other U.S. citizens used political donations as part of an effort to get licenses for a planned marijuana venture. The ultimate source of the political donations, according to the indictment, was an unnamed Russian businessman who funded the venture.

A lawyer for Parnas and Fruman, John Dowd, did not respond to requests for comment.

Attorney General William Barr first got briefed on the New York case in February after his Senate confirmation, according to a Justice Department official who spoke to The Washington Post. The newspaper also reported Barr had been briefed more recently on the probe and learned Wednesday the men would be charged and taken into custody.

Adav Noti, former counsel at the Federal Election Commission, and current senior director at Campaign Legal Center, praised the indictment, saying, “There’s ample evidence to establish each of those criminal violations.”

Parnas and Fruman spent the night in federal custody after being arrested Wednesday at Dulles International Airport.

At an initial appearance on Tuesday at the federal courthouse in Alexandria, Va., U.S. District Judge Michael Nachmanoff worked through the logistics of a detention hearing for Parnas and Fruman, given that the men will be extradited to New York.

In the courtroom, Parnas and Fruman — wearing simple t-shirts and black pants — shook their heads as they declined an interpreter. Otherwise, they remained silent.

The duo was represented, at least temporarily, by the same attorneys who defended former Trump campaign manager Paul Manafort, Kevin Downing and Tom Zehnle, during his own legal battles. Downing said the defendants were still in the process of obtaining lawyers and wouldn’t comment on how he came to represent them.

A prosecutor from the Southern District of New York, Nick Roos, did most of the talking for the government. The Manhattan prosecutor noted that a judge had been assigned to the case in New York and that a conference hearing had been scheduled there for next Thursday.

The two sides agreed to a bail package that severely restricts travel for Parnas and Fruman and confines them to hone detention with GPS monitoring. Each of the defendants had to give a $1 million secure bond.

Thursday’s hearing in northern Virginia was the same one where Nachmanoff also dealt with Henry Frese, the 30-year-old counterterrorism analyst from the Defense Intelligence Agency who was arrested Wednesday morning and charged with leaking classified government information to two journalists.

Maggie Severns, Ally Mutnick, Ryan Lizza and Daniel Lippman contributed to this report.

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