Two Giuliani Associates Who Helped Him on Ukraine Charged With Campaign-Finance Violations

Prosecutors say Lev Parnas and Igor Fruman were part of a conspiracy to funnel a Russian donor’s money into President Trump’s campaign

WASHINGTON—Two Soviet-born donors to a pro- Trump fundraising committee who helped Rudy Giuliani’s efforts to investigate Democrat Joe Biden were arrested late Wednesday on criminal charges of violating campaign finance rules, including funneling Russian money into President Trump’s campaign.

Lev Parnas and Igor Fruman, two Florida businessmen, have been under investigation by the U.S. attorney’s office in Manhattan, and are expected to appear in federal court in Virginia later on Thursday, the people said. Both men were born in former Soviet republics.

House committees issued subpoenas for documents from the two men on Thursday.

Mr. Giuliani, President Trump’s private lawyer, identified the two men in May as his clients. Both men have donated to Republican campaigns including Mr. Trump’s, and in May 2018 gave $325,000 to the primary pro-Trump super PAC, America First Action, through an LLC called Global Energy Producers, according to Federal Election Commission records.

The men were charged with four counts, including conspiracy, falsification of records and lying to the FEC about their political donations, according to the indictment that outlines a conspiracy to funnel a Russian donor’s money into U.S. elections.

This Facebook screen shot provided by the Campaign Legal Center shows President Trump with Lev Parnas at the White House on May 1, 2018. PHOTO: THE CAMPAIGN LEGAL CENTER /ASSOCIATED PRESS

The group concealed their work by laundering foreign money into U.S. elections by disguising the true origin of the money, the indictment says.

Beginning in about March of 2018, Mr. Parnas and Mr. Frurman began attending fundraising events and making substantial contributions “with the purpose of enhancing their influence in political circles and gaining access to politicians,” prosecutors wrote.

The indictment Thursday alleges that Mr. Fruman intentionally misspelled his name as to further evade FEC scrutiny. Fundraising records show that an “Igor Furman” who otherwise matches Mr. Fruman made additional campaign donations totaling almost $400,000, beginning in March 2018. That would bring the pair’s contributions to about $1 million.

John Dowd, who headed Mr. Trump’s legal team until spring 2018 and is a lawyer for the two men, didn’t respond to a request for comment.

Mr. Giuliani said he hasn’t been contacted by Manhattan federal prosecutors.

Attorney General William Barr discussed the case on Thursday with federal prosecutors in Manhattan, where he was making a preplanned visit. A Justice Department official said Mr. Barr was supportive of their work on the case, on which he was first briefed shortly after being confirmed as attorney general in February. He was aware the pair would be charged and taken into custody last night, the official said.

The Campaign Legal Center, a transparency advocacy group, filed a complaint with the FEC in July 2018 calling on the commission to investigate whether Messrs. Parnas and Fruman had violated campaign-finance laws by using an LLC to disguise the source of their donations.

This Facebook screen shot provided by the Campaign Legal Center shows, from left, Donald Trump, Jr., Tommy Hicks, Jr., Lev Parnas and Igor Fruman, posted on May 21, 2018. PHOTO: THE CAMPAIGN LEGAL CENTER/ASSOCIATED PRESS

Messrs. Parnas and Fruman had dinner with the president in early May 2018, according to since-deleted Facebook posts captured in a report published by the Organized Crime and Corruption Reporting Project. They also met with the president’s son, Donald Trump Jr. , later that month at a fundraising breakfast in Beverly Hills, Calif., along with Tommy Hicks Jr. , a close friend of the younger Mr. Trump who at the time was heading America First Action. Mr. Parnas posted a photo of their breakfast four days after his LLC donated to the super PAC.

A spokeswoman for America First Action said the super PAC had placed the contribution in a segregated bank account following the complaint filed with the FEC. The donation “has not been used for any purpose and the funds will remain in this segregated account until these matters are resolved,” the spokeswoman said. “We take our legal obligations seriously and scrupulously comply with the law and any suggestion otherwise is false.”

Since late 2018, Mr. Fruman and Mr. Parnas have introduced Mr. Giuliani to several current and former senior Ukrainian prosecutors to discuss the Biden case.

Mr. Parnas in July accompanied Mr. Giuliani to a breakfast meeting with Kurt Volker, then the U.S. special representative for Ukraine negotiations. “We had a long conversation about Ukraine,” Mr. Volker wrote in his testimony to House committees last week. During that breakfast, Mr. Giuliani mentioned the investigations he was pursuing into Mr. Biden and 2016 election interference.

House committees last month sought documents and depositions from Messrs. Parnas and Fruman related to their interactions with the Trump administration, Mr. Giuliani and Ukrainian officials. The initial notice from the committees set the dates for their depositions as Thursday and Friday.

Mr. Dowd wrote a letter to the House Intelligence Committee last week advising them that he was representing Messrs. Parnas and Fruman and noting that the two men had assisted Mr. Giuliani “in connection with his representation of President Trump.” He said some of the documents sought by House Democrats last month were protected by attorney-client privilege and that a privilege review of those documents “cannot reasonably be conducted by Oct. 7,” the deadline lawmakers had set.

He also criticized the document requests as “overly broad and unduly burdensome.”

Messrs. Parnas and Fruman also worked to oust the ambassador to Ukraine, Marie Yovanovitch, whom Mr. Trump had removed from her post this spring.

In May 2018, Pete Sessions, at the time a GOP congressman from Texas, sent a letter to Secretary of State Mike Pompeo asking for her removal, saying he had been told Ms. Yovanovitch was displaying a bias against the president in private conversations.

Mr. Sessions told the Journal his letter was in line with a broader concern among members of Congress that the administration wasn’t moving swiftly enough to put new ambassadors in place. He declined to say where his information about the ambassador came from but said he didn’t follow up on his letter and didn’t hear until months later about Mr. Trump’s interest in replacing her.

The indictment references a congressman, identifiable as Mr. Sessions, whose assistance Mr. Parnas sought in “causing the U.S. government to remove or recall the then-U.S. Ambassador to Ukraine.” The indictment says those efforts were conducted “at least in part, at the request of one or more Ukrainian government officials.” Mr. Sessions didn’t respond to a request for comment.

Messrs. Parnas and Fruman told the Organized Crime and Corruption Reporting Project in July that they told Mr. Sessions last year that Ms. Yovanovitch was “bad-mouthing” the president. They later donated to his campaign.

Mr. Trump moved to oust Ms. Yovanovitch this spring after Mr. Giuliani told him that she was undermining him abroad and hindering efforts to investigate Mr. Biden. House committees are seeking Ms. Yovanovitch’s testimony.

Trump Ordered Ukraine Ambassador Removed After Complaints From Giuliani, Others

Marie Yovanovitch dismissed after Trump allies said she was blocking Biden probe and bad-mouthing president, people familiar with the matter say

President Trump ordered the removal of the ambassador to Ukraine after months of complaints from allies outside the administration, including his personal lawyer Rudy Giuliani, that she was undermining him abroad and obstructing efforts to persuade Kyiv to investigate former Vice President Joe Biden, according to people familiar with the matter.

The recall of Marie Yovanovitch in the spring has become a key point of interest in the House impeachment inquiry. A whistleblower complaint by a CIA officer alleges the president solicited foreign interference in the 2020 elections by pressing Ukraine’s president in a July 25 call to pursue investigations, including into the activities of Mr. Biden, a Democrat who is running for president.

The complaint cites Ms. Yovanovitch’s ouster as one of a series of events that paved the way for what the whistleblower alleges was an abuse of power by the president. Mr. Trump has described the call with his Ukrainian counterpart as “perfect” and the House inquiry as a “hoax.”

State Department officials were told this spring that Ms. Yovanovitch’s removal was a priority for the president, a person familiar with the matter said. Secretary of State Mike Pompeo supported the move, an administration official said. Ms. Yovanovitch was told by State Department officials that they couldn’t shield her from attacks by the president and his allies, according to people close to her.

In an interview, Mr. Giuliani told The Wall Street Journal that in the lead-up to Ms. Yovanovitch’s removal, he reminded the president of complaints percolating among Trump supporters that she had displayed an anti-Trump bias in private conversations. In Mr. Giuliani’s view, she also had been an obstacle to efforts to push Ukraine to investigate Mr. Biden and his son Hunter.

As vice president, Mr. Biden spearheaded an international anticorruption reform push in Ukraine, which included calling for the dismissal of a prosecutor the U.S. and its allies saw as soft on corruption. He had once investigated the Ukrainian gas company where Hunter Biden served on the board at a salary of $50,000 a month, according to one official with ties to the company. Mr. Trump has accused the Bidens of corruption.

In May, Ukraine’s then-prosecutor general, Yuriy Lutsenko, said he had no evidence of wrongdoing by the Bidens.

When Ms. Yovanovitch left her post in May, the State Department said she was concluding her assignment “as planned,” and that her departure date aligned with the start of a new administration in Ukraine. She was recalled at least three months before the end of the customary three-year diplomatic tenure.

Mr. Giuliani told the Journal that when he mentioned the ambassador to the president this spring, Mr. Trump “remembered he had a problem with her earlier and thought she had been dismissed.” Mr. Giuliani said he subsequently received a call from a White House official—whom he declined to identify—asking him to list his concerns about the ambassador again.

Mr. Giuliani said he gave Mr. Pompeo a nine-page document dated March 28 that included a detailed timeline of the Bidens’ dealings in Ukraine and allegations of impropriety against Ms. Yovanovitch, including that she was “very close” to Mr. Biden.

“He called me back and he said they were going to investigate,” Mr. Giuliani said of the secretary of state, saying Mr. Pompeo asked for additional documents to back up the allegations. “The reason I gave the information to the secretary was I believed that he should know that the president’s orders to fire her were being blocked by the State Department.

Neither the State Department nor the White House responded to requests for comment.

Andrew Bates, a Biden campaign spokesman, said Mr. Biden has professional respect for Ms. Yovanovitch but that the two aren’t close. “She became our ambassador during the final 6 months of the administration,” he said. “This is standard Rudy Giuliani: noun, verb, lie about Joe Biden. ”

When asked about Ms. Yovanovitch’s removal Thursday, Mr. Trump told reporters: “I don’t know if I recalled her or somebody recalled her but I heard very, very bad things about her for a long period of time. Not good.”

Ms. Yovanovitch couldn’t be reached for comment. She is set to testify before House lawmakers on Oct. 11 as part of the impeachment inquiry. People close to her disputed that she did anything wrong and defended her work.

“She was doing everything by the book,” said a senior Ukraine government official who interacted with her. “Everything was blessed by State Department.”

Ms. Yovanovitch remains an employee of the State Department and is a senior State Department fellow at Georgetown University.

A career diplomat, she first served as the second-ranking diplomat in Kyiv in 2001 under President George W. Bush and returned as ambassador under President Obama in 2016.

Prior to Ms. Yovanovitch’s recall from Kyiv, her relations with some senior Ukrainian officials were fraught. Ms. Yovanovitch openly criticized the office of Mr. Lutsenko, then the prosecutor general, for its poor anticorruption record. “Lutsenko hated her because she pushed for reforms, especially in the judiciary sector,” said a former Western diplomat in Ukraine.

Presidents have the authority to nominate and remove ambassadors. But some senior officials at the White House and State Department say they had been unaware of the president’s displeasure with Ms. Yovanovitch and surprised by her removal.

Mr. Giuliani’s role in pressing for the ambassador’s ouster is unusual given that he holds no formal government role. The president’s critics contend that, in his capacity representing the president’s personal interests as his attorney, he has exercised undue influence over administration policy and personnel.

Mr. Giuliani isn’t the only figure outside the administration to have expressed concerns about the ambassador. As early as the spring of 2018, Pete Sessions, at the time a GOP congressman from Texas, sent a letter to Mr. Pompeo asking for her removal, saying he had been told Ms. Yovanovitch was displaying a bias against the president in private conversations.

Mr. Sessions told the Journal he didn’t follow up on the matter and didn’t hear until months later about Mr. Trump’s interest in replacing her. He declined to say where his information about the ambassador came from but said his letter was in line with a broader concern among members of Congress that the administration wasn’t moving swiftly enough to put new ambassadors in place.

In a March 2019 interview with a columnist at The Hill, Mr. Lutsenko complained that the U.S. Embassy in Kyiv was obstructing corruption investigations, including by providing a “do not prosecute” list and restricting Ukrainian access to the U.S. Mr. Lutsenko’s claim is mentioned in the whistleblower complaint.

The U.S. State Department at the time called the untouchables list claim an “outright fabrication.” Mr. Lutsenko later retracted the allegation about the list and said had no evidence of Biden wrongdoing. He was dismissed in August.

In early 2019, Mr. Lutsenko met twice with Mr. Giuliani, who around the same time stepped up his quest to collect information he could use to persuade Ukraine to open an investigation into the Bidens. The men met in New York in January and in Warsaw in February.

Mr. Lutsenko couldn’t be reached for comment. Mr. Giuliani said he brought concerns about the ambassador to the president in the weeks following his meetings with Mr. Lutsenko. “It would have been a dereliction of my duty if I didn’t,” he said. He accused Ms. Yovanovitch of blocking his efforts to push Ukraine to investigate the Bidens: “I think she covered it up.”

The president’s supporters kept up criticism of Ms. Yovanovitch. In a March 22 interview on Fox News, Joe diGenova, a lawyer close to the president, accused Ms. Yovanovitch, without providing evidence, of having “bad-mouthed” Mr. Trump to Ukrainian officials and having told them “not to listen or worry about Trump policy because he’s going to be impeached.”

Mr. diGenova declined to comment. In the Fox interview, Mr. diGenova added: “The president has ordered her dismissal from her post.” The same month, Donald Trump Jr. , the president’s son, referred to the ambassador in a Twitter message as a “joker.”

After Volodymyr Zelensky won the Ukrainian presidency on April 21, State Department officials told their Ukrainian counterparts that they favored continuity at the embassy in Kyiv, rather than inserting a new ambassador, according to people familiar with the matter.

Instead, Ms. Yovanovitch was recalled about two weeks after the election. The State Department hasn’t named a successor.

In the July 25 call, Mr. Trump described Ms. Yovanovitch to Mr. Zelensky as “bad news.” Mr. Zelensky responded: ”It was great that you were the first one who told me that she was a bad ambassador because I agree with you 100%.”

Pompeo Acknowledges He Was on Trump-Zelensky Phone Call
U.S. Secretary of State Mike Pompeo confirmed for the first time Wednesday that he listened in on the phone call between President Trump and Ukrainian President Volodymyr Zelensky that prompted a House impeachment inquiry.

In early May, a packet of materials was received by Mr. Pompeo’s office at the State Department, according to an account given Wednesday to House and Senate committee members by the State Department inspector general and later described by Democratic lawmakers. The inspector general told Congress he had information relevant to the impeachment investigation. The inspector general didn’t respond to requests for comment.

It contained several folders marked “Trump Hotel” containing notes and newspaper clippings Democratic lawmakers said were designed to smear Ms. Yovanovitch, packaged in an envelope marked “White House,” according to documents viewed by the Journal.

“It is a package of propaganda and disinformation and conspiracy theories,” said Rep. Jamie Raskin (D., Md.).

The nine-page document Mr. Giuliani said he gave to Mr. Pompeo dated March 28 was part of that packet, according to a person who saw the packet.

Rudy Giuliani Holds up Phone: Acting at Request of State Department

  • Rudy Guiliani claims he was acting at the request of the State Department.
  • We will see if he is exaggerating.
    If he is acting as a private citizen, he is not entitled to attorney-client privilege.
  • The investigators will be interested in examining his records and we will see if he is exaggerating/bluffing.

The Ukraine Transcript Fizzle

The phone call evidence isn’t enough to annul a presidential election.

The White House on Wednesday released the transcript of President Trump’s July call with Ukrainian President Volodymyr Zelensky, and the news is that Mr. Trump was telling the truth about it. The conversation was largely routine diplomacy, and even the reference to Joe Biden was less than promoted by the press. Good luck persuading Americans that this is an impeachable offense.

The five-page transcript shows that Mr. Trump called to congratulate Mr. Zelensky on his party’s victory in Parliament. After niceties, Mr. Trump waxes on as he often does that the U.S. “spend[s] a lot of effort and a lot of time” on Ukraine, while complaining that European countries don’t do their share. At no point does Mr. Trump threaten a withdrawal of U.S. aid to Ukraine.

The Hype of Trump’s Ukraine Ca

Mr. Trump does ask for a “favor”—that Ukraine look at 2016 election meddling. “I would like you to find out what happened with this whole situation with Ukraine, they say Crowdstrike,” he says, referring to the company that investigated the 2016 hack of the Democratic National Committee.

He also disparages former Special Counsel Robert Mueller—no surprise there—and notes that “they say a lot of it started with Ukraine.” Mr. Trump is clearly still sore about the attempt by the Hillary Clinton campaign to dig up foreign dirt on him, but there is nothing wrong with asking a foreign head of state to investigate meddling in U.S. elections.

Only after that does Mr. Zelensky mention Mr. Trump’s personal lawyer, Rudy Giuliani, who has been publicly urging the Ukrainians to investigate Joe Biden and his son Hunter’s activities in Ukraine. Mr. Zelensky says he is “hoping very much” that the former New York mayor comes to Ukraine. He promises that all “investigations will be done openly and candidly.”

Mr. Trump responds, “Good because I heard you had a prosecutor who was very good and he was shut down and that’s really unfair.” After some praise for Mr. Giuliani, Mr. Trump adds that “there’s a lot of talk about Biden’s son, that Biden stopped the prosecution” of corruption in Ukraine. Mr. Trump also says that he intends to get Mr. Giuliani and Attorney General William Barr to call, and he asks that Mr. Zelensky work with them.

That’s it. No quid pro quo. The references to the Bidens are in the context of fighting corruption, not as a prerequisite of U.S. aid. Mr. Trump was unwise to mention Mr. Biden, but the tenor of the conversation is congenial. It’s amusing to hear the same critics who call Mr. Trump an oafish thug on a daily basis now say this was all a subtle masterpiece of extortion. When is Mr. Trump ever subtle?

Democrats are making much of Mr. Trump’s references to Attorney General Barr, which were also imprudent in the Biden context. But the Justice Department says nothing came of it, that Mr. Trump never asked Mr. Barr to make that call, and Mr. Barr has never communicated with Ukraine, or with Mr. Giuliani about Ukraine.

Mr. Trump certainly was reckless to use the former New York mayor as an anti-corruption envoy, or for anything else. Rudy is an unguided missile on TV and can’t be much better in private. The Justice and State Departments have plenty of people who can work with Ukraine on corruption.

Keep in mind that all of this came to public attention because of a leak about a whistleblower complaint from the intelligence bureaucracy. The accusation is that Mr. Trump somehow attempted to cover this up, but it looks on the evidence released Wednesday that the Administration acted by the book.

The complaint went to the intelligence community inspector general, who found it credible and deserving of submission to Congress under the whistleblower statute. But the director of national intelligence general counsel rightly sought legal guidance from the Justice Department Office of Legal Counsel, which is the authority on executive branch legal obligations.

The White House on Wednesday released OLC’s legal opinion that the inspector general was wrong because Mr. Trump is not a member of the intelligence community and that a “routine diplomatic call” does not count as “intelligence activity.”

Meanwhile, Justice says its Criminal Division evaluated the IG’s August referral that the phone conversation could be a violation of federal campaign finance law. A Justice Department statement said the Criminal Division determined there was no “violation” and that “all relevant components of the Department agreed with this legal conclusion.” In other words, no laws were broken. The IG will testify to Congress, so we can compare his case to the Justice Department’s.

***

If Democrats want to pursue impeachment on this thin gruel, then Americans should also consider the process by which this became a national political crisis. First a whistleblower who is still unidentified brings a complaint based on what he heard about a President’s phone call. By the way, the OLC memo says in passing that the IG’s review acknowledges “some indicia of an arguable political bias on the part of the Complainant in favor of a rival political candidate.”

Then the IG makes a flawed legal judgment that Congress must see the complaint. When his argument is rebutted, word leaks to the press, Congress cries coverup, and suddenly we are putting the country through another impeachment upheaval.

Is anyone else troubled that this is all it takes to impeach a President? If a bureaucrat who dislikes a President can trigger a complaint based on hearsay that forces the disclosure of presidential diplomacy, the conduct of foreign policy will be severely hampered. Democratic Presidents won’t be spared once Republicans figure out how this works.

Mr. Trump’s refusal to abide by the normal guardrails of presidential decorum is often offensive. It can also be risky—for himself and U.S. interests. We have often criticized him for it. But impeaching a President is voting to annul an election, and that should require far more evidence than we have from this Ukraine phone call.

Democrats may not be able to stop themselves now that Speaker Nancy Pelosi has joined the impeachment parade. But the voters should ask if impeachment on these terms will do far more harm to American democracy than Mr. Trump’s bad judgment.