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Trial of Rudy Giuliani Associate Exposes Methods and Networks of Secret Donors

Lev Parnas’s case shows how foreign donors secretly funnel money through straw donors, shell companies and “dark money.”

Lev Parnas walks past criminal court on October 18, 2021, in New York City.

Lev Parnas, a Soviet-born former business associate of Rudy Giuliani, was recently convicted for campaign finance crimes. His case, and others, exposed the ways secret donors — including foreign nationals — can hide their identities from the American public while currying influence with U.S. politicians through straw donors, shell companies and “dark money.”

On Oct. 22, a jury found Parnas guilty on six counts related to illegally funneling foreign money into U.S. elections. His co-defendant, Ukraine-born California cannabis investor Andrey Kukushkin, was found guilty on two counts related to the conspiracy to steer money from a foreign national into U.S. elections.

Parnas faces up to 45 years in prison for the six counts but his sentencing was deferred pending a second trial related to his alleged scheme to defraud investors of more than $2 million invested in his shell company, Fraud Guarantee. Giuliani admitted working on the shell company in exchange for $500,000 in 2019. Parnas also faces a Securities and Exchange Commission lawsuit.

Igor Fruman, Parnas’ Soviet-born business partner, was charged along with Parnas, Kukushkin and their U.S. partner, David Correia, in the illegal foreign straw donor scheme.

Fruman pleaded guilty to in September to one count of soliciting money from a foreign national and is awaiting sentencing. In February, Correia was sentenced to a year and a day in prison after he pleaded guilty to conspiracy and making false statements.

The scheme steered more than $690,000 to Republican campaigns and political groups during the 2018 election cycle, reaching candidates at the federal and state level.

Parnas was convicted with charges related to steering a $325,000 donation from Russian national Andrei Muraviev to pro-Trump super PAC America First Action in 2018, using the name of another shell company, Global Energy Producers.

While it is less clear what influence Parnas and others gained from through their contributions, the access granted is well documented.

Text messages admitted as evidence during the trial show America First Action’s financial director encouraged Parnas to give large contributuions to the pro-Trump super PAC so Parnas could get access to events.

The super PAC hosted several events catering to big donors attended by former President Donald Trump himself, including one where Parnas’ photo was taken with Trump.

At the federal level, 35th Inc., a single-candidate super PAC that supported former Congressional candidate Patrick Morrisey (R-W.Va.) got $15,000 from Global Energy Producers in 2018.

Parnas and his associates also made a $50,000 donation in the name of Global Energy Producers to Florida Gov. Ron DeSantis (R) in his 2018 gubernatorial race, state campaign finance disclosures show. The donation came just before DeSantis won the Republican primary and a day before Trump gave DeSantis a “full endorsement.” DeSantis turned the money over to the federal government after Fruman and Parnas were arrested. DeSantis admitted at the time that he knew Parnas but Fruman, “not so much.”

Prosecutors said Parnas lied to the Federal Election Commission about the source of the 2018 donation since the company was in fact not profitable or functioning as a real business.

The jury found that the donation was actually sourced through a mortgage refinance loan obtained by Fruman.

A common thread among the candidates Parnas and Fruman steered donations to during the 2018 cycle is that they were running in states that could have been advantageous to their fledgling marijuana business.

Wesley Duncan — a 2018 Republican candidate for attorney general in Nevada — testified that his campaign refunded a $10,000 donation from Parnas as soon as they found out it was illegal. Duncan also claimed he once turned down an invitation from Parnas to fly to an event in a private jet.

Other major contributions include $100,000 to Protect the House and $100,000 to House Majority Trust, joint fundraising committees benefiting the Republican National Committee and the National Republican Congressional Committee.

While Parnas’ case ended with a conviction, other prosecutions in similar cases are just beginning.

On Oct. 19, a grand jury indicted Rep. Jeff Fortenberry (R-Neb.) with knowingly making false statements to FBI agents about whether he was aware that his campaign received illegal contributions from Lebanese-Nigerian billionaire Gilbert Chagoury at a 2016 fundraiser.

In April, the Justice Department unsealed documents revealing that Chagoury agreed to pay the U.S. government $1.8 million to resolve allegations in a straw donor scheme routing illegal foreign contributions to U.S. campaigns.

Fortenberry is the only politician to be indicted in the case. He is charged with concealing information and making false statements to federal investigators.

The other candidates whose campaigns received illegal foreign funds from straw donors steering money from Chagoury have not been charged.

The charges follow multiple other campaign finance scandals.

The DOJ announced charges in September against Republican operatives Jesse Benton and Doug Wead for allegedly funneling money from a Russian national to the Trump campaign’s joint fundraising committee in a straw donor scheme.

On Oct. 12, the FEC unsealed a signed conciliation agreement in which the pro-Trump Great America PAC agreed to pay a $25,000 fine after Benton allegedly solicited $2 million in 2016 from Telegraph journalists posing as representatives of a Chinese national.

In a recording released by The Telegraph, Benton can be heard describing how a foreign national could pass a $2 million contribution to the PAC through shell companies and 501(c)(4) nonprofit dark money groups.

The FEC charged Benton with knowingly soliciting illegal funds from a foreign national but Benton declined to cooperate with the FEC’s investigation and chose not to enter into conciliation because of due process issues. The FEC ultimately deadlocked on whether to pursue the matter further.

In December 2020, Benton was pardoned by Trump on charges tied to hiding bribes in an unrelated 2012 campaign finance scandal. At the time, Benton allegedly paid a vendor who then paid a subvendor, violating the FEC’s ultimate vendor disclosure rules.

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