Trump, right, and Pence, left, with Lev Parnas, third from left and Igor Fruman. Photo / Supplied
Trump, right, and Pence, left, with Lev Parnas, third from left and Igor Fruman. Photo / Supplied
Donald Trump is playing down his connection to two businessmen accused of illegally funnelling foreign money into American politics.
The two men, Lev Parnas and Igor Fruman, are associates of Trump's personal lawyer Rudy Giuliani. They were arrested on Wednesday night (US time) at Dulles International Airport in Virginia as they tried to leave the country with one-way tickets.
According to US Attorney Geoffrey Berman, they were carrying one-way tickets.
Trump, right, and Pence, left, with Lev Parnas, third from left and Igor Fruman. Photo / Supplied
A few hours before their arrest, Parnas and Fruman had lunch with Giuliani at the Trump International Hotel in Washington.
The charges relate to a US$325,000 donation to a group supporting Trump's reelection.
Parnas and Fruman were arrested on a four-count indictment that includes charges of conspiracy, making false statements to the Federal Election Commission and falsification of records. The men had key roles in Giuliani's efforts to launch a Ukrainian corruption investigation against Democratic presidential contender Joe Biden and his son Hunter.
The indictments mark the first criminal charges related to the Ukraine controversy. While they do not suggest wrongdoing by the president, they raise additional questions about how those close to Trump and Giuliani sought to use their influence.
Trump has dismissed the impeachment inquiry as baseless and politically motivated. As he was leaving the White House for a political rally in Minneapolis, Trump said he didn't know Parnas or Fruman and hadn't spoken with Giuliani about them, despite appearing in White House photos alongside the pair , his lawyer Giuliani and Vice President Mike Pence.
In May, Parnas posted a picture of himself with Trump at the White House, praising the President for an "incredible dinner and even better conversation".
In June he posted the same picture again, wishing Mr Trump a happy birthday and describing him as a "friend".
Both men were pictured with the President's son, Donald Trump Jr, at a "power breakfast" in California in May of 2018.
And another photo shows them beaming alongside Trump, Giuliani and Vice President Mike Pence.
Giuliani said he couldn't comment and that he didn't represent the men in campaign finance matters.
This courtroom sketch depicts from left, attorney Kevin Downing, Lev Parnas, Igor Fruman, attorney Thomas Zehnle and U.S. Judge Michael Nachmanoff. Photo / AP
Records show that Parnas and Fruman used wire transfers from a corporate entity to make the US$325,000 donation to the America First Action committee in May 2018. But wire transfer records that became public through a lawsuit show that the corporate entity reported as making the transaction was not the source of the money.
The big donation to the Trump-allied PAC was part of a flurry of political spending tied to Parnas and Fruman, with at least US$478,000 in donations flowing to GOP campaigns and PACs in little more than two months.
Q: "What conversations have you had with Lev Parnas and Igor Fruman?"
President Trump: "I don't know those gentlemen. It's possible I have a picture with them because I have a picture with everybody." pic.twitter.com/nnxOW2Wzp3
The money enabled the relatively unknown entrepreneurs to quickly gain access to the highest levels of the Republican Party, including meetings with Trump at the White House and Mar-a-Lago in Florida.
Prosecutors allege that Parnas urged a congressman to seek the ouster of the US ambassador to Ukraine, at the behest of Ukrainian government officials. That happened about the same time that Parnas and Fruman committed to raising more than US$20,000 for the politician.
The congressman wasn't identified in court papers, but the donations match campaign finance reports for former Rep. Pete Sessions, a Texas Republican who lost his re-election bid in November. In May 2018, Parnas posted a photo of himself and his business partner David Correia with Sessions in his Capitol Hill office, with the caption "Hard at work!!"
Parnas and Fruman appeared in court Thursday and were ordered to remain jailed as a bail package was worked out. They are due in court in New York next week. Kevin Downing, the lawyer who represented former Trump campaign chairman Paul Manafort on charges that he hid millions of dollars that he earned in Ukraine advising politicians there, was representing the men for their initial appearance and declined to comment.
Correia and Andrey Kukushkin, a Ukrainian-born US citizen, were also charged in the case. A federal judge in San Francisco ordered Kukushkin held on Thursday pending a bail hearing to determine whether he is considered a flight risk.
Parnas and Fruman were arrested as they attempted to get on a flight to Frankfurt, Germany, according to a person familiar with the investigation. US authorities are looking at whether that was a first stop en route to Ukraine, said the person, who wasn't authorised to discuss the probe and spoke on condition of anonymity.
Attorney General William Barr had been briefed on the investigation soon after he was confirmed in February, was updated in recent weeks and was made aware Wednesday night that the men were being arrested, a person familiar with the matter told The Associated Press. The person spoke on condition of anonymity to discuss an ongoing investigation.
Maybe Rudy Giuliani shouldn't have made this video of himself and his Ukraine co-conspirators Orb Parnas and Igor Fruman WHILE they were planning their getaway, at the Trump Hotel.#ImpeachmentTaskForcepic.twitter.com/tijLTQrK52
The indictment says Parnas and Fruman "sought to advance their personal financial interests and the political interests of at least one Ukrainian government official with whom they were working" and took steps to conceal it from third parties, including creditors. They created a limited liability corporation, Global Energy Producers, and "intentionally caused certain large contributions to be reported in the name of GEP instead of in their own names."
Prosecutors charge that the two men falsely claimed the contributions came from GEP, which was described as a liquefied natural gas business. At that point, the company had no income or significant assets, the indictment said.
Prosecutors allege that Parnas and Fruman conspired to make illegal contributions to try to skirt the limit on federal campaign contributions. The men are also accused of making contributions to candidates for state and federal office, joint fundraising committees and independent expenditure committees in the names of other people.
The commitment to raise more than US$20,000 for the congressman was made in May and June 2018. The lawmaker had also received about $3 million in independent expenditures from a super political action committee that Parnas and Fruman had been funding.
As a result of the donations, Parnas and Fruman had meetings with the congressman and Parnas lobbied him to advocate for removing the ambassador to Ukraine, Berman said.
Trump referred to Ambassador Marie Yovanovitch, who was indeed recalled to the US, as "bad news" in his July phone call with Ukrainian President Volodymyr Zelenskiy.
Sessions said in a statement tweeted by a spokesman that he "could not have had any knowledge of the scheme described in the indictment." Sessions wasn't asked to take any action during the meetings with Parnas and Fruman and wrote a letter to the secretary of state about Yovanovitch after colleagues in Congress said she was "disparaging" the president, he said.
The indictment also charges that Kukushkin conspired with the three other defendants to make political contributions, funded by a foreign national, to politicians seeking state and federal office "to gain influence with candidates as to policies that would benefit a future business venture."
An unnamed foreigner wired US$500,000 from a bank account overseas through New York to the defendants for contributions to two candidates for state office in Nevada, the indictment alleges. Foreigners are not permitted to contribute to US elections.
The indictment accuses the four men of also participating in a scheme to acquire retail marijuana licenses through donations to local and federal politicians in New York, Nevada and other states.
America First Action said the US$325,000 contribution will remain in a separate account while the court cases play out. A spokeswoman, Kelly Sadler, said the committee will "scrupulously comply with the law."
The AP reported last week that Parnas and Fruman helped arrange a January meeting in New York between Ukraine's former top prosecutor, Yuri Lutsenko, and Giuliani, as well as other meetings with top government officials.
Giuliani's efforts to launch a Ukrainian corruption investigation were echoed by Trump in the July 25 call with Zelenskiy. That conversation is now at the heart of the impeachment inquiry.
House Democrats subpoenaed Parnas and Fruman on Thursday for documents they have refused to produce to three House committees. The panels have also subpoenaed Giuliani.
A whistleblower complaint by an unnamed intelligence official makes reference to "associates" of Giuliani in Ukraine who were attempting to make contact with Zelenskiy's team, though it's not clear that refers to Parnas and Fruman.
