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The Role of Campaign Finance Laws in the Ukraine Scandal

Lev Parnas and Igor Fruman have been indicted for breaking multiple election laws.

December 19, 2019

On December 10, the House unveiled two articles of impeachment against President Trump: one for abuse of power and the other for obstruction of Congress. The House chose to go narrow on these impeachment articles and primarily focus on Trump’s attempts to get the government of Ukraine to investigate former Vice President Joe Biden, a political rival, in exchange for U.S. military aid and a possible White House visit.

Two hitherto unknown men named Lev Parnas and Igor Fruman, associates of Trump’s personal lawyer Rudy Giuliani, have popped up during the investigation into the Ukraine scandal, and their case sheds light on the role campaign finance laws could play in the impeachment process. 

As we all know by now, during a July 25 call with Ukrainian President Volodymyr Zelensky, Trump asked him “to do us a favor though” after Zelensky mentioned badly needed military aid to fight Russia. Trump also suggested that Zelensky’s aides reach out to Giuliani.

Giuliani, by his own admission, travelled to Ukraine to dig up dirt that might help Trump’s 2020 reelection. He appears to have been working with Parnas and Fruman.

In October, Parnas and Furman — both immigrants from the former Soviet Union who became naturalized Americans — were arrested at Dulles International Airport with one-way tickets to Europe in October. Parnas apparently had five cell phones on him at the time.

The Department of Justice charged them, along with two other individuals, with making illegal campaign donations for their personal financial gain.

Public records show that Parnas and Fruman incorporated an energy-trading company named Global Energy Producers and used it to donate $325,000 to pro-Trump super PAC America First Action and $15,000 to a super PAC that supported West Virginia Attorney General Patrick Morrisey’s 2018 bid for the Senate (he was defeated).

This would have been perfectly legal post-Citizens United (and its follow-on DC Circuit case SpeechNow) if the money had actually been from Parnas and Fruman and they spent it under their real names, but prosecutors allege that they acted as straw donors and the money came from elsewhere. Under campaign finance law, you are not allowed to give money in the name of another person. This is what got conservative pundit Dinesh D’Souza convicted of a campaign finance crime (Trump pardoned him for this crime).

Parnas and Furman are also accused of illegally facilitating payments from foreign nationals into American elections. According to the DOJ, they helped arrange two $500,000 wires transfers in late 2018 to be sent “from overseas accounts to a U.S. corporate bank account controlled by Furman and another individual.” 

And the money got around. According to the indictment, the money went to America First Action, as well as “state and federal candidates and politicians in Nevada, New York, and other states.” According to the Tampa Bay Times, Parnas and Fruman — both Florida residents — contributed $50,000 to Gov. Ron DeSantis’s political committee through a shell company. Both appeared at DeSantis’ inauguration in January 2019, and Parnas reportedly sought to join DeSantis’s transition team. 

Parnas and Furman appear in the House Intelligence Committee impeachment inquiry report 103 and 41 times, respectively. Parnas shows up an additional 85 times in the House Judiciary Committee’s impeachment report with Fruman appearing 38 times.

Prosecutors say the pair played a role in getting the U.S. ambassador to Ukraine, Marie Yovanovitch, recalled. In its indictment, the DOJ describes Parnas’s meeting with “Congressman-1”, seeking the Congressman’s help in getting the ambassador fired. Who Congressman-1 is isn’t totally clear from the indictment itself. The Washington Post suggests that Congressman-1 is former Texas congressman Pete Sessions. 

And it also appears that Parnas was in contact with more members than just Congressman-1. For instance, other evidence shows that Parnas appears to have telephoned House Intelligence Committee Ranking Member Devin Nunes as call records included in a House impeachment report clearly document. Nunes has avoided explaining what he and Parnas talked about, including in one call on April 12 for 8 minutes and 34 seconds.

The story of Parnas and Furman is likely just getting started. In early December, federal prosecutors in Manhattan said that they expected to file additional charges as investigators sift through more evidence. On December 11, prosecutors asked for Parnas’s bail to be revoked because he is fight risk since he was not forthcoming about receiving $1 million from a Russian source in September. We don’t know whether Parnas and Furman will play an even bigger role in the impeachment saga. But it could get even more interesting.

The views expressed are the author’s own and not necessarily those of the Brennan Center.