Dispatch October 17, 2019

The Who, What, and Why of the Parnas and Fruman Indictment

Lev Parnas and Igor Fruman, two members of President Donald Trump’s legal team, were arrested for campaign-finance violations while apparently trying to flee the country. According to the indictment, Parnas and Fruman allegedly laundered money through a pro-Trump 2020 political action committee while lobbying for the removal of US Ambassador to Ukraine Marie Yovanovitch—who was indeed removed in May.

This scheme appears to be designed to take advantage of Ukrainian corruption to score a deal in the gas sector. For that to happen, they needed to get rid of the Ambassador and get the new Ukrainian government on board.

But they weren’t just working for themselves. They were working directly for Rudy Guiliani, Trump’s lawyer, and therefore for Trump himself. They were part of Trump’s legal team and his extortion effort in Ukraine. (The pair have not entered a plea regarding the charges.)

What They Did: Parnas and Fruman were allegedly part of an international conspiracy with one or more Ukrainian government officials to get a U.S. official fired.

  • According to the indictment, Parnas and Fruman were working on behalf of “one or more Ukrainian government officials” to get U.S. Ambassador to Ukraine Marie Yovanovitch removed from office.
  • To do so, the pair allegedly illegally laundered money into Republican campaigns and super PACs. That includes a $325,000 donation to the most prominent Trump-supporting super PAC, America First, the sources of which they allegedly concealed from the U.S. government.
    • Since their arrest, Parnas and Fruman have become a “Where’s Waldo” of Republican politics: They’ve donated to several major candidates and their PACs, including House Minority Leader Kevin McCarthy.
    • Parnas in particular has been spotted with top GOP figures, especially in their home state of Florida, where he’s been photographed alongside Governor Ron DeSantis.
  • They allegedly used that money to buy influence with members of Congress, including “a then-sitting U.S. Congressman” (since identified by news reports as former Representative Pete Sessions) who they successfully enlisted in their efforts to oust Yovanovitch. (Sessions has denied any wrongdoing and claimed to have no knowledge of Parnas and Fruman’s scheme.)

Who They Worked With: Parnas and Fruman appear to be key players in the president’s extortion scheme.

  • According to numerous press reports, Parnas and Fruman have been working with Trump’s personal lawyer Rudy Giuliani since late 2018, when they helped him connect with members of Ukrainian President Petro Poroshenko’s inner circle. When Poroshenko lost his reelection campaign, they immediately set out to get in with Zelensky’s advisers as well.
  • They worked hand-in-hand with Giuliani to push Ukraine to investigate two of Trump’s favorite conspiracy theories: that the Russia investigation was a hoax (it wasn’t) and Democrats were the real colluders (they weren’t); and that Joe Biden illegally pressured the Ukrainian government to fire a prosecutor who was investigating his son (he didn’t).
  • Ousting Yovanovitch was a key part of that effort: According to The Wall Street Journal, Trump’s outside allies, most notably Giuliani, convinced him to push Yovanovitch out the door by telling the president she was standing in the way of his efforts to extort the Ukrainian government for personal gain.
    • Yovanovitch has testified that she was let go under such unusual circumstances that even the Deputy Secretary responsible for firing her assured her she’d done nothing wrong.
    • She also repotedly told Congress that Giuliani pushed for her removal because “individuals who have been named in the press as contacts of Mr. Giuliani”—a likely reference to Parnas and Fruman—“may well have believed that their personal financial ambitions were stymied by our anti-corruption policy in Ukraine.”
    • Meanwhile, Gordon Sondland, the Ambassador to the EU who seems to have played a key role in pushing Trump Giuliani’s extortion scheme, is expected to testify that Yovanovitch “was an able and professional diplomat, and that he had no issues with her whatsoever.”
  • That’s what led Parnas and Fruman’s lawyer John Dowd—who, perhaps not coincidentally, also represented Trump as late as March 2018—to write to Congress that Parnas and Fruman “assisted Mr. Giuliani in connection with his representation of President Trump,” effectively billing them as members of Trump’s legal team.
  • There are even signs they were paying Giuliani for his help: While ostensibly working for Trump for free, Giuliani received $500,000 from a company called Fraud Guarantee, which Parnas co-founded. (Giuliani has confirmed that he received the money, but says that he “know[s] beyond any doubt the source of the money is not any questionable source.” Dowd has declined to comment on his clients’ behalf, saying, “What I know is privileged.”)
    • Where that money came from remains unknown. One possibility: Dmytro Firtash, a Ukrainian oligarch who’s reportedly previously hired both Parnas and Fruman and who, according to a 2013 indictment, is “an ‘upper-echelon’ associate of Russian organized crime.” (Parnas has declined to comment on what he did for Firtash, but claims that Firtash has been wrongfully accused. Firtash claims the charges against him are politically motivated.)

Why They Did It: Parnas and Fruman allegedly tried to profit from their proximity to the president—and may have roped administration officials into the effort.

  • Along with getting Yovanovitch fired, Parnas and Fruman were reportedly trying to get the Ukrainian government to change the board of the Ukrainian state-run energy company Naftogaz.
  • Why? So they could pave the way for lucrative deals with the oil-and-gas company they started with a Trump mega-donor, 45 Energy Partners—a clear reference to their proximity to the 45th (Through Dowd, Parnas and Fruman have denied any wrongdoing, calling the efforts “an attempt to do legitimate business that didn’t work.”)
  • Also trying to change Naftogaz’s board: Energy Secretary Rick Perry, “whose slate of candidates included a fellow Texan who is one of Perry’s past political donors.” (Through a spokesperson, the Department of Energy has denied that Perry’s efforts were related to Parnas and Fruman’s.)

Trump has already begun trying to distance himself from Parnas and Fruman, telling reporters he doesn’t know the two men who’ve taken photos with him dating back to at least 2014, dined with his son, and worked closely with his personal lawyer on the president’s personal project. But with Giuliani reportedly under investigation as well for his business with the duo, it’s clear that Trump won’t be able to run away from the evidence of his corruption for long.