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Two Key Players In The Ukraine Controversy Spent Lavishly As They Dug For Dirt on Biden

Bank records reveal a whirlwind of spending at high-end restaurants, an infamous strip club, and five-star hotels by the two little-known operatives who waged a back-channel campaign with Rudy Giuliani.

Posted on October 9, 2019, at 12:10 p.m. ET

Courtesy Parnas

A screenshot shows Lev Parnas and Igor Fruman meeting with President Donald Trump and other Republicans in Washington, DC.

For Lev Parnas, the Ukrainian American businessman who joined Rudy Giuliani in a back-channel campaign to unearth damaging information about Joe Biden, the money kept flowing.

There was a $1,410 charge to a Palm Beach limousine service and nearly $20,000 in expenses at Trump hotels in Washington, DC, and New York. There were bills running to hundreds of dollars at exclusive restaurants such as Novikov in London and BLT Prime in Washington. During one of his many trips to the Ukrainian capital of Kyiv, there was a $657 charge at Tootsie, the popular strip club in the heart of the city.

At the same time that he was facing court judgments for hundreds of thousands in personal debts, the 47-year-old political operative was traveling like a freewheeling CEO as he met with Ukrainian prosecutors and other officials.

BuzzFeed News obtained unprecedented access to scores of bank records from private business accounts controlled by Parnas and his partner, Igor Fruman, as they carried out a campaign now at the center of the first presidential impeachment inquiry in a generation.

Three congressional committees have already sent the men letters demanding records about their efforts to help President Donald Trump. Coming just a week after those inquiries, these financial documents — a potential road map of the duo’s travel and the sources of any funding they received — are likely to attract the interest of investigators.

In July, a joint investigation by BuzzFeed News and the Organized Crime and Corruption Reporting Project — which was cited in the whistleblower complaint that sparked the impeachment inquiry — revealed that Parnas and Fruman pushed Ukrainian prosecutors to investigate Trump’s top political rival and his son, Hunter Biden, under Giuliani’s direction.

The two men also urged prosecutors to probe accusations that Ukrainian agents tried to rig the 2016 election in Hillary Clinton’s favor by divulging evidence about Trump campaign chair Paul Manafort, in what became a pillar of the Mueller investigation.

Meanwhile, Parnas dined with President Donald Trump in Washington and met with Donald Trump Jr. and Tommy Hicks Jr., now co-chair of the Republican National Committee, in Beverly Hills, all the while spending hundreds of thousands of dollars on Republican causes.

The House committees conducting the presidential impeachment inquiry have sent a subpoena to Giuliani, who has been working as a lawyer for the president, demanding that he turn over any records of his efforts with Ukraine authorities since Trump took office.

So far, Parnas and Fruman have failed to cooperate with congressional investigators, according to one person working on the impeachment inquiry. “If they continue to fail to comply, they will be served with subpoenas in short order,” the official said.

Experts in congressional investigations said the financial records obtained by BuzzFeed News provide potentially critical evidence — and could help House members determine not just what actions were undertaken on the president’s behalf, but also whether the men complied with campaign finance or foreign lobbying laws.

John Dowd, a lawyer for Parnas and Fruman, declined to comment on his clients’ transactions. But in an earlier series of interviews with BuzzFeed News, Parnas said he was not paid any money for setting up meetings between Giuliani and Ukrainian prosecutors, and that he did so “because it was my duty.”

“I just want to make sure the right information comes out,” he said.

Parnas said he met “many times” with the president over the past year but refused to talk about what they discussed. “I am not going to talk about my conversations with the president,” he said.

The records provide new details about the origins of some of the money that Parnas and Fruman used to finance their back-channel campaign, which included trips to Kyiv, Paris, Warsaw, and New York to meet with Ukrainian officials.

The records do not identify all the sources of their funding, but much of it — $1.26 million — came from a mortgage that Fruman took out last year against an oceanfront condo he owned in one of the most exclusive enclaves of south Florida.

It’s unclear what financial arrangement the two partners had, but records show that Parnas tapped into the mortgage money almost immediately, setting off a flurry of transfers in May 2018 that helped pay for their travel over the next several months and fund dozens of campaign contributions.

Parnas characterized the burst of donations to GOP candidates as an attempt to help Global Energy Producers, the company that he and Fruman founded weeks earlier to sell natural gas to Ukraine. But those contributions — including $325,000 to a Trump-aligned super PAC — also provided them access to the top echelons of the Republican establishment. That money is now under scrutiny in the impeachment inquiry and is the target of a legal challenge by a campaign watchdog group that alleges the two men concealed the true source of the funds.

Within less than a week of getting the mortgage money, Parnas would also make four transfers, totaling $845,000, to various companies controlled by both partners. Of that, nearly half a million dollars went to an export business founded by Fruman.

Meanwhile, Parnas embarked on a whirlwind of travel and spending.

In just three weeks in July, he racked up charges in Warsaw, Los Angeles, Washington, and New York, spending thousands at each stop. There was a $3,182 charge at a glitzy nightclub in West Hollywood and more than $1,000 at two Japanese restaurants — all on the same day.

At the plush Peninsula hotel in Beverly Hills, the expenses totaled nearly $13,000, and about a week later, there were more than $6,300 at the Trump International Hotel in Washington.

As Parnas appeared to travel the globe, so did Fruman, whose spending was not at the same pitch, but who was also a frequent visitor to Kyiv, records and interviews show. In July, he made a $4,250 payment to the Hilton International Hotel in Kyiv. After that, it was on to the Loews Hotel in New York City.

There were also dozens of cash withdrawals on Parnas’s card — nearly $42,000 last year alone — at banks and ATMs in cities like Kyiv, New York, and Miami. The records do not reveal which payments were related to Parnas and Fruman’s energy business and which were related to the pair’s efforts to turn up information to help Trump, but they spent at least $203,000 between July 2018 and April of this year.

Aram Roston / Reuters

Giuliani has coffee with Parnas at the Trump International Hotel in Washington on Sept. 20.

By late 2018, Parnas was fully engaged in helping Guiliani make contact with Ukrainian officials. He helped arrange a Skype session between Giuliani and Viktor Shokin, the embattled prosecutor who was fired at the urging of Biden in 2016, drawing the president’s attorney deeper into the campaign.

In November, there was a $524 charge at Shelly’s Back Room, a cigar lounge just a stone’s throw from the White House, and $1,200 at a Las Vegas nightclub called Drai’s that regularly features acts like DJ Pauly D and Trey Songz.

By December, Parnas and Fruman appear to have returned to their base in Kyiv, the Hilton International Hotel, where they would spend more than $2,500 that month. It was during that trip that hundreds of dollars in charges were incurred at Tootsie, the local strip club.

By then, the push for an investigation of the Bidens had reached a critical stage. Parnas and Fruman were close to connecting Giuliani with Yuriy Lutsenko, then the top prosecutor in Ukraine — a key moment in the sequence of events that congressional investigators are now examining.

In January, Giuliani met with Lutsenko over two days, placing the president’s lawyer at the center of the shadow campaign to discredit the Democratic frontrunner. In addition to the Bidens, Lutsenko talked about an alleged effort by employees in the US embassy to help Clinton by leaking information about payments to Manafort. “He brought documentation, verification,” Parnas recalled. “It opened his eyes,” he said, referring to Giuliani. “It went from hearsay to reality.”

While the partners continued to set up meetings for Guiliani in the ensuing months, Parnas was being chased by creditors in the United States in a series of civil cases that would begin to expose the secret political maneuvering.

One lawsuit accused Parnas and Fruman of boasting about their connections to Giuliani and other Republicans in order to snare a $100,000 loan that was not repaid for months. In a second case, the lawyer for a family trust sought records about Parnas after Giuliani told the New York Times that Parnas had helped set up meetings for the former New York mayor.

Parnas has incurred at least nine court judgments in the past 15 years — including two court orders to remove him from homes where he failed to pay the rent. And despite his lavish spending and newfound prominence in Washington, he continued to lag behind on financial obligations as recently as this year, the banking records show. In January, one of his business accounts dipped more than $8,000 into overdraft and stayed that way for several months.

It wasn’t until September, when House Democrats began to demand information from key players, that his efforts in Ukraine became a national controversy. Now those meetings with Shokin, Lutsenko, and other Ukrainian officials are among the key events that lawmakers are trying to learn more about — requesting that Parnas and Furman turn over information that may help lawmakers in the inquiry. ●

Additional reporting by Aubrey Belford of the Organized Crime and Corruption Reporting Project, and BuzzFeed News reporters Kadia Goba, Jason Leopold, Tanya Kozyreva, David Mack, Jeremy Singer-Vine, and Caroline O’Donovan

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