Crime

‘Executive privilege’ could complicate case against Giuliani associates, attorney says

Two South Florida businessmen who worked to help President Donald Trump’s personal attorney pursue dirt in Ukraine on a political foe pleaded not guilty Wednesday to charges that they conspired to purchase influence by steering hundreds of thousands of dollars in illegal foreign cash into U.S. campaigns.

Appearing in a Manhattan courtroom, Lev Parnas and Igor Fruman said they will fight allegations of fraud and conspiracy brought in a grand jury indictment two weeks ago by prosecutors in the Southern District of New York. And one of Parnas’ attorneys raised the possibility of a direct link between the campaign finance case and Trump, warning that information sought by prosecutors could be deemed confidential by the White House.

“There have already been issues with executive privilege,” said attorney Edward MacMahon, referring to a legal claim that allows the president to withhold some information. “These are issues that we need to be sensitive about now.”

“You’re not suggesting that your client worked for the president?” asked U.S. District Court Judge J. Paul Oetken.

MacMahon said he was not, but was referring to the duo’s work for attorney Rudy Giuliani, and Giuliani’s representation of Trump.

The comments in court Wednesday linked the prosecution of the two South Florida men with Giuliani and with Trump, even as the White House grapples with an impeachment investigation.

Trump has said he doesn’t know Parnas or Fruman. The White House did not respond to a request for comment.

Prosecutors have accused Fruman, Parnas and two business associates of skirting federal campaign donation caps by giving money to candidates in other people’s names, and of using a shell company called Global Energy Producers to steer foreign money to federal and state campaigns. According to the grand jury indictment, the men hoped to purchase political influence through the donations while also pursuing marijuana licenses in multiple states and while lobbying at least one member of Congress on behalf of a Ukrainian government official to remove the U.S. ambassador to the country.

Fruman, 53, of Boca Raton, and Parnas, 47, of Sunny Isles Beach, were arrested by the FBI Oct. 9 at Dulles International Airport while waiting to board a one-way flight out of the country, according to prosecutors. Each is facing two counts of conspiracy, one count of making false statements to the Federal Election Commission and one count of falsification of records.

Their business associates, Andrey Kukushkin, of San Francisco, and David Correia, of Palm Beach Gardens, pleaded not guilty last week to one count each of conspiracy.

“There are many false things that have been said about me and my family,” Parnas told reporters outside the Thurgood Marshall Federal Courthouse following the hearing. “In the end, I put my faith in God.”

Neither Trump nor Giuliani were mentioned in the grand jury indictment.

But before their arrests, Parnas, a naturalized citizen originally from Ukraine, and Fruman, a naturalized citizen from Belarus, were helping Giuliani push the Ukrainian government to investigate former Vice President Joe Biden and his son, Hunter, and to pursue an unfounded theory that Russian elections interference in 2016 was actually a conspiracy that began in Ukraine.

Fruman and Parnas were subpoenaed this month by three U.S. House committees as part of an impeachment inquiry into Trump after the men refused to voluntarily turn over documents and testify. John Dowd, an attorney hired to represent the two men after they were called to give depositions, asserted in an Oct. 3 letter to the committees that the information being sought was protected by attorney-client privilege and “other privileges.”

Pressed Wednesday about how executive privilege might apply to two businessmen working with the president’s personal attorney — and not on official U.S. government business — MacMahon referred a reporter to Dowd’s letter.

Also Wednesday, former White House communications director Anthony Scaramucci, appearing at a commercial real estate speakers series in Fort Lauderdale, told reporters he thinks the mention of executive privilege by Parnas’ attorney was “not great for Trump.”

Scaramucci, who has been hypercritical of the president after a falling out this summer, alluded to a campaign finance complaint filed last year against Global Energy Producers, the Fruman-Parnas company, by the Campaign Legal Center alleging that Fruman had dinner with Trump at the president’s personal residence in Florida in May of 2018.

“That means they’re closer to him than he’s willing to admit,” said Scaramucci. “And I would think that’s true, by the way. The president isn’t having dinner with you in the residence if he doesn’t know who you are.”

Investigators for the Southern District of New York who are pursuing the cases against Fruman and Parnas have been seeking reams of financial and personal information on the men and their associates.

Last week, during an arraignment hearing in New York for Correia and Kukushkin, prosecutors said they’d culled details on the men’s activities from more than 50 bank accounts after serving search warrants. Parnas also agreed to file a financial affidavit in order to be freed on bond Monday from federal jail in Virginia, and his wife, Svetlana Parnas, agreed to turn over bank records.

BuzzFeed News reported Tuesday that a grand jury subpoena issued in Florida last week sought information related to money transfers worth millions of dollars to and from accounts belonging to Parnas and Fruman.

Assistant U.S. Attorney Rebekah Allen Donaleski said in court Wednesday that investigators have issued more than a dozen search warrants for electronic devices, emails, and bank and social media accounts.

“The discovery is voluminous,” she said.

Pictures posted by Fruman and Parnas on their social media accounts show the South Florida socialites attended occasional events with Trump, going back to before he became a presidential candidate. Their interactions with Trump appear to have increased once he launched his campaign, after which they began attending GOP fundraisers and showing up in pictures with the president, his eldest son and Giuliani.

Parnas also raised money for Florida Gov. Ron DeSantis, who pushed his political committee to disgorge a $50,000 donation contributed last year by Global Energy Producers. The donation was not mentioned in the indictment.

DeSantis said last week that he knew Parnas as “one of the top supporters of the president in Florida.

Their home state is not mentioned in the indictment, but the men were pursuing a medical marijuana license in Florida as well, according to sources.

Miami Herald reporter David Smiley reported from Miami. Kelsey Neubauer reported from New York.

David Smiley is a Florida native (yes, they exist) and veteran of South Florida journalism. He’s covered schools, cops and crime, and various city halls, earning awards for stories about municipal pensions and Miami Beach’s police department. He became the Miami Herald’s political reporter in 2018 and covered the midterm elections and recount.
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