Citizens United put out a welcome mat for Lev Parnas and Igor Fruman

Lev Parnas has been busy since his indictment, most recently making the rounds to Rachel Maddow and others to talk about his dealings with Rudy Giuliani et al.

On this particular day, 10 years after the Supreme Court ruled 5-to-4 in Citizens United, let’s remember how Parnas and his alleged co-conspirator, Igor Fruman stepped onto our national stage. 

They used contributions to super PACs — the big money vehicle Citizens United made possible — as a gateway to political influence. Parnas and Igor were indicted for allegedly ignoring even the most modest legal constraints on these entities.

Parnas and Fruman’s alleged scheme stands out primarily for its sheer brazenness (and its apparent connection to the president of the United States). But the saga of Parnas and Fruman is also indicative of more significant problems with our system. Some of the blame for these problems lies with the Supreme Court’s decision, but they are also the result of a pervasive failure to enforce the rules that remain.

As their indictment spells out, Parnas and Fruman are accused of making donations to super PACs and individual candidates with the express goal of furthering their interests and, at least in some instances, those of a Ukrainian government official.

The two established various shell companies, including Global Energy Partners, in whose name they donated to America First Action, a super PAC supporting President Trump and his allies.

It was at an America First Action fundraiser that the two met with a sitting congressman and promised to raise money for him, at the same time they were seeking the congressman’s help in removing the U.S. ambassador to Ukraine, Marie Yovanovitch (whom they may also have been stalking). 

Eventually, Parnas and Fruman’s activities prompted a complaint to be filed with the Federal Election Commission (FEC) — the federal agency charged with overseeing our campaign finance system. In response to that complaint, the pair claimed that Global Energy Partners was “a real business enterprise” and the actual source of the funds they donated to America First Action. Both of these assertions appear to be debatable.

None of Parnas and Fruman’s machinations would have been possible without Citizens United, which we can thank not only for the existence of super PACs but also for their donors’ ability to hide behind opaque shell companies like Global Energy Partners. But this particular scheme was also made possible by other institutions that failed to do anything to mitigate the damage. 

One, in particular, stands out: the FEC itself.

The FEC, which is evenly divided between Democratic and Republican appointees, has become a byword for gridlock and mismanagement. Since August, the agency has not had a quorum, but even before then, it rarely pursued significant campaign finance violations and had almost completely stopped issuing new regulations. The agency’s long-term paralysis aided Parnas and Fruman’s scheme to buy political influence in two key ways.  

First, the FEC’s failures to enforce the law made it easier for Parnas and Fruman to conceal the true source of their contributions so that they could, as the indictment put it, “stay under the radar.” 

Even after Citizens United, it is illegal to use a shell company that isn’t a real business as a front to launder a political donation. But the FEC has utterly failed to enforce the law.

In 2016, for example, the Commission deadlocked on several high-profile cases, including one in which a donor used an LLC that had been formed for the sole purpose of hiding a $1 million political contribution.

Given the FEC’s failure to even investigate such blatant lawbreaking, it is unsurprising that Parnas and Fruman allegedly felt comfortable using shell companies themselves, and then lying about it to the agency. 

Second, the FEC’s failure to update its regulations, specifically around coordination between super PACs and candidates, provided an opening for Parnas and Fruman to directly influence members of Congress. 

The entire theory underlying Citizens United is that entities like super PACs that are “independent” from candidates shouldn’t be subject to most legal restrictions because donations to them do not pose a significant risk of corruption.

But the FEC has done little to require that super PACs be independent. It allows them to be formed for the sole purpose of aiding one specific candidate, like President Trump (and President Obama before him). The commission even lets the candidates who benefit to fundraise for the supposedly independent entities working to elect them (which is how Parnas and Fruman were able to lobby a sitting congressman at an America First Action event).

Given how much they could do legally, it is almost surprising that Parnas and Fruman still ended up in hot water. The sheer audacity of their actions speaks to the climate of impunity the FEC has fostered. It is impossible to know how many less brash schemes have escaped the notice of prosecutors. What is clear is that the occasional prosecution of an extraordinary case is not an effective deterrent. 

Citizens United was deeply misguided, but the other branches of government still have the power to counteract its worst effects. That requires strict, proactive rules that are fully and fairly enforced.

Parnas and Fruman’s glide past regulation and regulators underlines how much work needs to be done to protect the integrity of our political system. One of the first steps should be to reform and reinvigorate the FEC. 

Derek Tisler is a fellow with the Brennan Center for Justice’s Democracy Program. Daniel Weiner is deputy director of the Brennan Center for Justice’s Democracy Program and former senior counsel for the Federal Election Commission. Follow him on Twitter: @DanWeiner329.