/Congress: Pro-Trump super PAC hid source of donation made by two Ukraine-linked associates of Rudy Giuliani, FEC complaint says
Congress: Pro-Trump super PAC hid source of donation made by two Ukraine-linked associates of Rudy Giuliani, FEC complaint says

Congress: Pro-Trump super PAC hid source of donation made by two Ukraine-linked associates of Rudy Giuliani, FEC complaint says

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A national watchdog organization that uncovered a campaign-finance scandal involving Ukraine-linked backers of President Donald Trump contends the super PAC that received the contribution also broke federal law.

Among other things, Lev Parnas and Igor Fruman, associates of Trump’s personal lawyer Rudy Giuliani, are charged with hiding the origin of a $325,000 donation to America First Action, a pro-Trump political action committee. They pleaded not guilty to the charges Wednesday.

America First Action has not been charged. But the group that first flagged the donation says the super PAC should be investigated for concealing the source of the money when it filed a report with the Federal Elections Commission.

“I think the evidence shows that America First Action violated the law,” said Brendan Fischer of the Campaign Legal Center, which alerted the FEC to the suspicious transaction in the summer of 2018. 

More: Rudy Giuliani associates Parnas and Fruman plead not guilty to campaign finance charges, suggest smear campaign

The proof, he said, is a banking record of the $325,000 payment, which shows the money didn’t come from the company that the political action committee named on its disclosure to the FEC. 

The banking record came to light in an unrelated lawsuit in Florida in which a man is trying to force Parnas to repay an investment for a movie that was never made.

In June, well before Parnas and Fruman were indicted, the Campaign Legal Center filed a supplemental complaint based in part on the banking record.

It’s unclear whether America First also is a target of the investigation.

The super PAC contacted prosecutors in New York last week “and offered to voluntarily cooperate,” said Kelly Sadler, a spokeswoman for the super PAC. “America First Action strictly follows the law and, as this is an open matter, we have no further comment.”

The Manhattan U.S. attorney’s office declined comment. 

Congress: Watchdog alerted the FEC in summer 2018

The criminal investigation of Parnas and Fruman stems from a complaint filed with the FEC in July 2018.

The Campaign Legal Center, a nonpartisan, nonprofit organization that advocates for fair elections, filed the complaint. It flagged a $325,000 contribution to America First Action, which bills itself as “the primary super PAC dedicated to electing federal candidates who support the agenda of the Trump-Pence administration.”

Fischer said the $325,000 contribution fit the profile of a straw donation, or one in which someone makes a contribution on someone else’s behalf. That’s illegal

America First Action reported that the money came from a company called Global Energy Producers. That company was just five weeks old, had conducted no business, and didn’t have enough income or investments to make the contribution, according to the Campaign Legal Center. 

Its investigators became more suspicious when they discovered Fruman and Parnas had boasted to Ukrainian media of their influence with Trump, Fischer said.

The FEC complaint alleges the money actually came from a private loan obtained by Fruman, passed through an attorney and contributed to America First Action by another company tied to Parnas called Aaron Investments I LLC. 

Those allegations are mirrored in the criminal indictment against Parnas, Fruman and two other men, which refers to America First Action as “Committee-1.”

They’re accused of using foreign money and a straw donor to influence U.S. politicians and “advance their personal financial interests and the political interests of at least one Ukrainian government official.”

Parnas and Fruman played an important role in helping Giuliani, the president’s personal attorney, pressure Ukrainian leaders to investigate the family of former Vice President Joe Biden, a potential Democratic candidate in the 2020 presidential race.

On the ground in Ukraine: Trump’s conspiracy theories thrive in Ukraine, where a young democracy battles corruption and distrust

They also reportedly assisted Giuliani in pushing for the ouster of U.S. Ambassador to Ukraine Marie Yovanovitch.  Trump removed her in May.

Those actions are at the center of Democrats’ impeachment inquiry into whether Trump solicited foreign help to boost his reelection effort.

Parnas, Fruman, David Correia and Andrey Kukushkin are the only people charged to date. The indictment says “others known and unknown” conspired with them. 

Congress: Banking record shifts focus to super PAC

In June, the Campaign Legal Center added another allegation to its FEC complaint: that the super PAC “knowingly accepted a contribution in the name of another, violated its reporting obligations, and filed a falsified report with the Commission.”

The complaint cited wire transfer records obtained from a Florida legal action that sought to recover about $510,000 from Parnas to repay a bad debt.  

The record of the wire transfer shows that America First Action received the money from Aaron Investments. Global Energy Producers is also listed on the transfer but is not specified as the source of the funds.

On its FEC disclosure, America First Action named Global Energy Producers as the donor, using a different address than the one on the wire transfer. 

According to prosecutors, the money never passed through a Global Energy Producers account.

If America First accepted the contribution “without knowing that the money actually came from another source, it would not have violated the law,” Fischer said. However, America First Action “did know that the transfer came from Aaron Investments I, but attributed it to GEP,” he said, referring to Global Energy Producers.

“We now know,” Fischer said in an email, “that AFA allowed Parnas to tell them how to attribute the contribution, and that AFA’s compliance firm raised red flags about attributing a contribution received from one source to an entirely different source.”

He referred to a BuzzFeed News story that described how the super PAC’s director of development emailed Parnas to ask how he wanted the contribution to be listed.

Sadler, the spokeswoman for America First Action, said in an email that Parnas and Fruman had completed a form attesting to the “true contributor” of the $325,000. 

She didn’t address questions submitted by USA TODAY about accusations in the FEC complaint.

“America First Action takes our legal obligations seriously and scrupulously complies with the law,” she said. “As supporters of the President, we are used to being attacked and our motives questioned by political adversaries, but we remain undeterred and focused on our mission to Keep America Great.” 

America First Action put the $325,000 in a separate bank account until all issues are resolved, she said.

Congress: Political action committees must identify true source of donations

Following campaign finance law isn’t as simple as asking someone to fill out a form.

FEC regulations require a political action committee’s treasurer to examine all contributions for evidence of illegality, including whether the donation was made in someone else’s name.

If there are “genuine questions” about the source of the funds, the FEC requires the treasurer to ask for evidence that the contribution is legal, which could include a written explanation from the contributor. The treasurer is also required to refund a donation within 30 days of discovering it is illegal. 

In the case of America First Action, the committee would be liable if it knew the source of the donation was suspect, said Karl Sandstrom, who served as a commissioner of the Federal Elections Commission in the Clinton administration.

He said he couldn’t comment on what America First Action knew or didn’t know, but the information in the wire transfer would normally lead a political action committee to inquire further about the source of the funds.

The question, he said, is whether a recipient knows something “that would give them a reasonable cause to believe that what is being reported to them was not accurate.”

For instance, a check could include information indicating it was actually from a different source. 

That the contribution was reported to have come from a weeks-old company with neither a digital presence nor evidence of business would normally lead to more investigation, Sandstrom said. Due diligence would’ve required America First to determine whether its purported donor actually had ongoing businesses.

“Anytime you have a contribution of that size,” he said, “you would think that an organization, a super PAC, would want to identify and be confident in identifying the true source of the funds.”

Congress: Parnas accused of stiffing movie investor

The Campaign Legal Center’s complaint to the FEC and the legal action seeking assets from Parnas have been operating on parallel tracks.

The collection effort has its roots in a 2015 federal lawsuit that accused Parnas and one of his companies, Parnas Holdings Inc., of failing to repay $350,000 in short-term loans from a Long Beach, New York, entity called Pues Family Trust IRS.

Michael Pues, the executor of the trust created for his parents, alleged that Parnas sought the funds to invest in a movie called “Anatomy of an Assassin.” 

In March 2016, a judge ordered Parnas and his company to pay the trust $510,434.70. 

The trust registered the judgment in federal court in southern Florida, where Parnas and his company are based, in January 2019.

In July, an attorney representing the Pues family trust filed a motion arguing the trust should be able to seek money from Aaron Investments I LLC, Global Energy Producers, America First Action, the National Republican Congressional Committee and Pete Sessions for Congress– all recipients of alleged assets from Parnas.

The motion cited information in the Campaign Legal Center’s complaint to the FEC, including the $325,000 wire transfer.

The trust also served a subpoena on America First Action, seeking records related to the $325,000 contribution from Aaron Investments.

America First Action initially objected but turned over the records in late August, after the trust pressed the issue with a motion asking a judge to force the super PAC to comply.

Congress: Super PAC staffed with Trump allies

Under federal law, super PACs must be independent. While they are free to spend as much as they want in support of a person or cause, they may not coordinate with a candidate or the candidate’s campaign.

The leadership at America First Action, which raised about $39 million in the 2018 election cycle, is dominated by figures with ties to Trump and his personal attorney.

Sean Spicer, a senior advisor and consultant for America First Action, served as Trump’s press secretary. Corey Lewandowski, Trump’s former campaign manager, previously served as senior advisor and spokeswoman.

Kimberly Guilfoyle, Donald Trump Jr.’s girlfriend and a former Fox News personality, is vice chair of the organization.

Counterintelligence probe:: Federal investigators have been looking into Giuliani’s dealings in Ukraine since early 2019

Fischer expressed concern that those connections could insulate the super PAC, especially with Trump appointee Attorney General William Barr having the final say on Justice Department prosecutions. 

In the aftermath of Special Counsel Robert Mueller’s investigation of Russian election interference, Barr wrote a letter to Congress that appeared to clear Trump, prompting the president to declare he’d been exonerated. In fact, Mueller testified that his report did not exonerate the president. 

“Certainly, Attorney General Barr has demonstrated a willingness to protect the president and his closest allies,” Fischer said.

Barr was alerted to the criminal investigation into Parnas and Fruman shortly after he took over as attorney general, and he was briefed again in the weeks before the two were arrested, according to a Justice official who was not authorized to speak publicly. 

The FEC, an independent regulator with six presidentially appointed commission seats, typically suspends investigations when there’s a parallel criminal complaint.

Other large contributions to America First Action have been the subject of campaign-finance complaints, ProPublica reported. The FEC has not acted on any of them.

That’s because the commission doesn’t have enough members to meet.

Judith Ingram, a spokeswoman, said the agency does not comment on pending cases.

Contributing: Kevin Johnson

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