Rudy Giuliani Sidekick Lev Parnas Traces Part of Money Trail to Ukraine

(Bloomberg) -- From fine whiskey to European flights to cigar bars, the tab for the Ukraine mission was starting to add up.

Even one of President Donald Trump’s wealthiest contributors sounded peeved. “Just becoming expensive flying u guys everywhere LEV,” wrote Harry Sargeant III, a Florida energy tycoon, in a pointed text to Lev Parnas, Rudy Giuliani’s advance man on the Ukraine operation.

A trove of documents recently released by Parnas, including that text from April, provides some new details about the money web that helped support Giuliani’s work in Ukraine as President Trump’s personal lawyer.

The group’s apparent wish list included discrediting a Trump rival, tying Ukraine to 2016 election meddling and pushing for the ouster of a U.S. ambassador -- the propriety of which is now at the heart of impeachment proceedings in Washington.

Money flowed to Giuliani and his cohorts from home loans, friends, relative strangers and wealthy businessmen, some with interests in the gas and energy sector. It even came from a lawyer for an embattled Ukrainian energy tycoon fighting extradition to the U.S. on a conspiracy charge.

Rudy Giuliani Sidekick Lev Parnas Traces Part of Money Trail to Ukraine

Giuliani was working for the president without pay, and under financial strain from his public divorce proceeding. While most pro bono clients cover their lawyers’ out-of-pocket expenses, the famously tight-fisted Trump doesn’t appear to have been shelling out for the travel racked up by Giuliani, Parnas and his Florida business partner, Igor Fruman.

The travel arrangements could brush up against campaign finance laws. While Giuliani, Parnas and Fruman can volunteer as much of their time as they want for a campaign, any subsidy for such work by third parties would generally need to be reported as a contribution, and money from foreign individuals would be illegal. Trump kicked off his re-election campaign last June at a rally in Florida.

Chris Kise, a lawyer for Sargeant, characterized the money shelled out for flights as loans to a colorful and funny acquaintance who claimed to be broke. “Mr. Sargeant was not part of any plan to remove the U.S. ambassador and has no business interests in Ukraine,” Kise said.

Giuliani didn’t respond to a request for comment, nor did attorneys for Parnas and Fruman.

Ukraine Mission Cost

The Ukraine mission looks to have run up hundreds of thousands of dollars in travel and hotel costs, including private jets and the Ritz-Carlton in Vienna, where a night costs upwards of 380 euros ($420). Another glimpse comes from New York prosecutors. Parnas spent more than $70,000 on private jet travel in September alone, according to a filing last month seeking to revoke his bail.

Over the course of eight months last year, Parnas jetted to Kyiv on multiple occasions and made trips to Warsaw, Vienna, Madrid, Paris and Israel, according to his messages, many of them touching on his Ukraine work. Giuliani and Fruman accompanied him frequently.

Giuliani, Parnas and Fruman also accumulated tens of thousands of dollars in travel expenses. Sargeant picked up the tab on at least a handful of trips by Parnas and Fruman, according to people familiar with the situation. Parnas ran up tens of thousands of dollars in debt to a private jet broker close to Sargeant, who covered the cost so his friend wasn’t stiffed, according to a person familiar with the situation and text messages to Parnas.

Rudy Giuliani Sidekick Lev Parnas Traces Part of Money Trail to Ukraine

Sargeant and Giuliani have known each other for years. Since 2018, Sargeant and Parnas regularly crossed paths. The three took in a Dallas Cowboys game and shuttled between New York, Washington and Florida together. Sargeant, a shipping magnate, controls potentially lucrative oil concessions in Venezuela that are currently hamstrung by U.S. sanctions. When the men’s travel coincided, Parnas and Fruman sometimes flew on Sargeant’s own plane, but that was to fill empty seats at no additional cost, according to someone familiar with the matter.

Sargeant’s lawyer said he “never chartered or paid for any private aircraft for Lev (or Igor Fruman, or Giuliani) in or to Europe.”

Trump’s Circle

Parnas began working his way into Trump’s orbit with campaign donations in 2016, but it was two years later when he and Fruman upped the ante by giving $325,000 to America First Action, a pro-Trump political action committee. That vaulted them into Trump’s inner circle, including dinner with Donald Trump Jr.

The big donation prompted prosecutors in New York to charge Parnas and Fruman with conspiracy to violate campaign finance laws and with filing false records to disguise the source of their contributions. The two have pleaded not guilty.

The men reported to the Federal Election Commission that the money came from their company, but prosecutors say it came from a private loan. Fruman borrowed $3 million against a Miami condo in a private mortgage just two days before he made the $325,000 contribution. The lenders were a retired American couple who immigrated from the Soviet Union decades ago and their son-in-law, according to real estate records filed in Florida.

The couple, Gregory and Lilian Abrovsky, also bought a condo in the same Miami building. They have a son who is an executive at a Russian internet company, but he was unaware of the transaction, according to a spokesman for the family.

The loan, extended to a Fruman company called Seafront LLC for one year at 9%, was arranged by a mortgage broker who says his lenders and borrowers often don’t meet each other.

“In the spring of 2018, we made a secured interest-bearing loan,” said the son-in-law, Daniel Chernin. “We never met with or spoke with the borrowers.” The loan was repaid in full in August 2019.

Parnas’s family got its own personal loan last year. The lawyer representing Dmitry Firtash, the gas tycoon fighting U.S. extradition from Vienna, says he extended $1 million to buy a Boca Raton, Florida, property. In addition, Parnas received $200,000 from a law firm representing Firtash, according to U.S. prosecutors.

The man at the center of the mission had his own money woes. Giuliani’s income had plunged as he left a law firm job that paid him as much as $6 million a year, took the president as his primary client and headed for divorce court. He picked up cash along the way to replenish his finances.

A Long Island businessman paid $500,000 to Giuliani as part of his investment into Fraud Guarantee, a company co-founded by Parnas. Marc Mukasey, a former legal partner of Giuliani, loaned his friend $100,000 last year when divorce proceedings tied up his bank accounts. One America News Network paid about $100,000 for travel and other costs for a three-part television report that Giuliani worked on in Ukraine, Charles Herring, the network’s president, told Bloomberg in an interview last month. The documentary series was intended to further Trump’s cause against Democratic political rival Joe Biden.

Top-Shelf Style

Wherever they went, Giuliani and his team kept a top-shelf lifestyle. That would be consistent with the spending habits chronicled in Giuliani’s divorce. His monthly expenses were about $230,000, according to his ex-wife’s lawyer.

Big bills at cigar bars surfaced. Other luxuries were enticements for the Ukraine crew. Giuliani became godfather to Parnas’s son, and Parnas at one point described receiving a loan of about $100,000 for his son’s bris without saying who extended it, according to a person familiar with the matter.

Parnas sent photos of bottles to Yuriy Lutsenko, then Ukraine’s prosecutor general, while in Kyiv last June. “Igor wants to know which one’s best,” Parnas texted in Russian.

“Hibiki,” Lutsenko responded, citing a Japanese whiskey that can easily run hundreds of dollars a bottle. “Really great. In the top three worldwide.”

“Come join us,” Parnas urged the prosecutor.

Rudy Giuliani Sidekick Lev Parnas Traces Part of Money Trail to Ukraine

Later that summer -- after the July phone call when Trump pressed Ukraine President Volodymyr Zelenskiy for a Biden-linked investigation -- Giuliani flew to Madrid. He was there for a client who had nothing to do with the Ukraine matter, according to his lawyer, Robert Costello. While in Spain, Giuliani also met Zelenskiy’s top adviser.

For that trip, Parnas smoothed the way. “I also arranged VIP service at Madrid,” he wrote to Giuliani ahead of time. “When you arrive in Madrid their (sic) will be someone waiting for you with a sign that says ‘NUBA’ at the door of the plane. They will take you through costumes (sic).”

Last April, Parnas showed some sensitivity to Sargeant’s complaint and suggested that he would be reimbursed.

“We are paying you back for this we are never expecting you to pay for it my brother that’s why we wanted to do the loan so we don’t have to bother you,” he texted at one point.

By August, Sargeant was pestering Parnas to repay him as well as a jet charter company operated by a family friend. Despite repeated requests, Parnas never did, according to Sargeant’s lawyer.

Potential Job

One source of potential revenue for Giuliani failed to materialize. He pursued contracts last spring for what appeared to be work for Ukraine’s Prosecutor General and Justice Ministry, according to the Parnas messages. Bloomberg previously reported that Giuliani talked about representing Ukraine to help recover billions in looted assets.

According to the Parnas texts, Giuliani was seeking retainers, and pro-Trump lawyers Victoria Toensing and Joe diGenova were working with him to finalize them. Giuliani was negotiating with Lutsenko in February 2019, at the same time they were discussing a possible Ukrainian investigation of Biden and his son, Hunter, who sat on the board of a Ukrainian company.

Giuliani never signed a retainer contract and there’s no indication he was paid. The legal duo of Toensing and diGenova went on to represent Firtash, for which they billed $1 million and for whom Parnas provided translation services.

Ultimately, Ukraine did open an investigation, though not into Biden. Authorities are now examining something else mentioned in the text trove, the possibility of improper surveillance of the former U.S. ambassador to Ukraine, who was abruptly recalled to Washington last spring.

©2020 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.