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How Giuliani’s Indicted Pals Tried to Score a Ukrainian Gas Deal at Trump's DC Hotel

Lev Parnas and Igor Fruman met with the CEO of a state-owned gas giant in a bid to broker U.S. gas exports to Ukraine.

by Greg Walters
Dec 11 2019, 6:35pm

WASHINGTON — Lev Parnas and Igor Fruman, indicted associates of Rudy Giuliani, met with the CEO of Ukraine’s state-owned natural gas company at Trump International Hotel in Washington in May, a person familiar with the situation told VICE News.

Parnas and Fruman had a pitch: They wanted to arrange exports of significant amounts of U.S. gas to Ukraine. The Trump hotel gathering was one of at least three meetings the businessmen held with top representatives of Ukrainian gas giant Naftogaz this year, the person said. In one, they reportedly proposed replacing both the sitting CEO of Naftogaz and the U.S. ambassador to Ukraine.

The Trump hotel meeting, which has not previously been reported, is the latest sign of a sustained attempt by Parnas and Fruman to set up a lucrative energy deal for themselves with Ukraine’s most important energy company.

Two of those meetings came on the heels of Trump’s surprise removal of ambassador to Ukraine Marie Yovanovitch, whose ouster prosecutors say Parnas worked behind the scenes to orchestrate.

Taken together, these events appear to show how Parnas and Fruman attempted to profit from their connections to Giuliani while allegedly helping him search for damaging information about former Vice President Joe Biden in Ukraine. Giuliani's efforts to get Ukraine to investigate the Bidens are now at the center of President Trump’s all-but-certain impeachment in the House.

The meeting at Trump International Hotel with Naftogaz CEO Kobolyev may also help shed light on why federal investigators recently interviewed the energy chief.

Kobolyev's counsel, Lanny Breuer, confirmed that his client has “voluntarily talked with the government attorneys,” but would not comment on what was discussed, citing the ongoing nature of the investigation.

Both Parnas and Fruman currently face charges in the Southern District of New York over allegedly making illegal donations to GOP campaigns in an attempt to win political influence and “advance their personal financial interests.” Both have pleaded not guilty. But prosecutors have said the case is likely to soon expand to include additional charges or defendants.

Read: Rudy's indicted associate will soon be allowed to share records with Congress

That could spell trouble for Giuliani. The New York prosecutors who charged Fruman and Parnas are widely reported to be investigating Trump’s personal attorney — including the question of whether Giuliani stood to personally profit from Parnas and Fruman’s energy dealings in Ukraine, The Wall Street Journal reported in November, citing people familiar with the matter.

Giuliani has vehemently denied any involvement in the energy company established by Parnas and Fruman, Global Energy Producers, and said he has no business interests in Ukraine. He did not respond to requests to comment for this article.

Trump International Hotel

Naftogaz CEO Kobolyev’s attendance at the May meeting at Trump International Hotel shows how quickly Parnas and Fruman were able to use their connections to Trump’s inner circle to command an audience with Ukraine’s top businessmen, even though they had little prior experience in the energy industry.

But it doesn’t necessarily suggest they were close to reaching a deal. Instead, Kobolyev’s presence was intended to show Parnas and Fruman they wouldn’t be able to shunt him out of the way at Naftogaz in their quest to broker energy exports from the U.S. to Ukraine, the person familiar with the talks told VICE News.

That’s because the pair had already discussed their gas export idea with another Naftogaz executive on the sidelines of an energy conference in Houston in March, according to an interview that executive, Andrew Favorov, gave to CNN in November. And Parnas and Fruman had a proposal for him, Favorov said: That he take over as Naftogaz CEO.

They claimed their connections to the U.S. government and Giuliani would help them negotiate future gas deals between Naftogaz and U.S. suppliers, Favorov said.

Favorov dismissed the idea that he might replace his boss and take over the Ukrainian gas giant as “completely crazy,” he told CNN. He then quickly reported the episode to Kobolyev, he told The Wall Street Journal.

But Favorov said he continued to speak with Parnas and Fruman, in large part due to their apparent deep connections in Trump’s Washington — especially after they accurately predicted, at the meeting in Houston, that Trump would soon recall Yovanovitch, he told CNN.

Asked why he agreed to meet with Parnas and Fruman, Favorov said he didn’t want to adversely affect his company.

“From this point on, we would listen, we'll smile politely and move along,” Favorov said.

Favorov met the pair again at a Washington steakhouse, The Capital Grille, in May, and then at Trump’s hotel. But to keep them from repeating their earlier suggestion that he replace his boss, Favorov brought Kobolyev with him to that second gathering, the person familiar with the meetings told VICE News.

A lawyer for Parnas, Ed MacMahon, rejected Favorov’s account to the Journal as “completely false.” Parnas’ legal team and an attorney for Fruman didn’t return requests for comment for this story.

Yovanovitch was recalled from her post abruptly in late April following a whisper campaign against her in the far-right media, which she has said might have been stirred up by associates of Giuliani seeking to stymie her anti-corruption agenda so they could enrich themselves.

“Individuals who have been named in the press as contacts of Mr. Giuliani may well have believed that their personal financial ambitions were stymied by our anti-corruption policy in Ukraine,” Yovanovitch testified.

By contrast, Yovanovitch praised Kobolyev’s tenure at Naftogaz for progress against corruption.

“It's really cleaned up its act,” Yovanovitch said of Naftogaz under Kobolyev. “We consider it to be one of the success stories in Ukraine. But that doesn't mean it's done. I mean, there's still issues going forward.”

Cover: This combination of Oct. 9, 2019, photos provided by the Alexandria Sheriff's Office shows booking photos of Lev Parnas, left, and Igor Fruman. The two business associates of Rudy Giuliani were arraigned on Wednesday, Oct. 23, on charges they conspired to make illegal contributions to political committees supporting President Donald Trump and other Republicans. (Alexandria Sheriff's Office via AP, File)
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