sunny.png
Wednesday December 11th, 2019 8:27AM

Profit, not politics: What some Trump allies did in Ukraine

By The Associated Press
Related Articles
  Contact Editor

KYIV, Ukraine (AP) — As Rudy Giuliani was pushing Ukrainian officials last spring to investigate one of Donald Trump's main political rivals, a group of individuals with ties to the president and his personal lawyer were also active in the former Soviet republic.

Their aims were profit, not politics. This circle of businessmen and Republican donors touted connections to Giuliani and Trump while trying to install new management at the top of Ukraine's massive state gas company. Their plan was to then steer lucrative contracts to companies controlled by Trump allies, according to two people with knowledge of their plans.

Their plan hit a snag after Ukrainian President Petro Poroshenko lost his reelection bid to Volodymyr Zelenskiy, whose conversation with Trump about former Vice President Joe Biden is now at the center of the House impeachment inquiry of Trump.

But the effort to install a friendlier management team at the helm of the gas company, Naftogaz, would soon be taken up with Ukraine's new president by U.S. Energy Secretary Rick Perry, whose slate of candidates included a fellow Texan who is one of Perry's past political donors.

It's unclear if Perry's attempts to replace board members at Naftogaz were coordinated with the Giuliani allies pushing for a similar outcome, and no one has alleged that there is criminal activity in any of these efforts. And it's unclear what role, if any, Giuliani had in helping his clients push to get gas sales agreements with the state-owned company.

But the affair shows how those with ties to Trump and his administration were pursuing business deals in Ukraine that went far beyond advancing the president's personal political interests. It also raises questions about whether Trump allies were mixing business and politics just as Republicans were calling for a probe of Biden and his son Hunter, who served five years on the board of another Ukrainian energy company, Burisma.

On Friday, according to the news site Axios, Trump told a group of Republican lawmakers that it had been Perry who had prompted the phone call in which Trump asked Zelenskiy for a "favor" regarding Biden. Axios cited a source saying Trump said Perry had asked Trump to make the call to discuss "something about an LNG (liquefied natural gas) plant."

While it's unclear whether Trump's remark Friday referred specifically to the behind-the-scenes maneuvers this spring involving the multibillion-dollar state gas company, The Associated Press has interviewed four people with direct knowledge of the attempts to influence Naftogaz, and their accounts show Perry playing a key role in the effort. Three of the four spoke on condition of anonymity for fear of retaliation. The fourth is an American businessman with close ties to the Ukrainian energy sector.

A spokeswoman for the U.S. Energy Department said Perry, a former Texas governor and Republican presidential candidate, was not advancing anyone's personal interests. She said his conversations with Ukrainian officials about Naftogaz were part of his efforts to reform the country's energy sector and create an environment where Western companies can do business.

The Trump and Giuliani allies driving the attempt to change the senior management at Naftogazt, however, appear to have had inside knowledge of the U.S. government's plans in Ukraine. For example, they told people that Trump would replace the U.S. ambassador there months before she was actually recalled to Washington, according to three of the individuals interviewed by the AP. One of the individuals said he was so concerned by the whole affair that he reported it to a U.S. Embassy official in Ukraine months ago.

___

THE BUSINESSMEN

Ukraine, a resource-rich nation that sits on the geographic and symbolic border between Russia and the West, has long been plagued by corruption and government dysfunction, making it a magnet for foreign profiteers.

At the center of the Naftogaz plan, according to three individuals familiar with the details, were three such businessmen: two Soviet-born Florida real estate entrepreneurs, Lev Parnas and Igor Fruman, and an oil magnate from Boca Raton, Florida, named Harry Sargeant III.

Parnas and Fruman have made hundreds of thousands of dollars in political donations to Republicans, including $325,000 to a Trump-allied political action committee in 2018. This helped the relatively unknown entrepreneurs gain access to top levels of the Republican Party — including meetings with Trump at the White House and Mar-a-Lago.

The two have also faced lawsuits from disgruntled investors over unpaid debts. During the same period they were pursuing the Naftogaz deal, the two were coordinating with Giuliani to set up meetings with Ukrainian government officials and push for an investigation of the Bidens.

Sargeant, his wife and corporate entities tied to the family have donated at least $1.2 million to Republican campaigns and PACs over the last 20 years, including $100,000 in June to the Trump Victory Fund, according to federal and state campaign finance records. He has also served as finance chair of the Florida state GOP, and gave nearly $14,000 to Giuliani's failed 2008 presidential campaign.

In early March, Fruman, Parnas and Sargeant were touting a plan to replace Naftogaz CEO Andriy Kobolyev with another senior executive at the company, Andrew Favorov, according to two individuals who spoke to the AP as well as a memorandum about the meeting that was later submitted to the U.S. Embassy in Kiev.

Going back to the Obama administration, the U.S. Energy Department and the State Department have long supported efforts to import American natural gas into Ukraine to reduce the country's dependence on Russia.

The three approached Favorov with the idea while the Ukrainian executive was attending an energy industry conference in Texas. Parnas and Fruman told him they had flown in from Florida on a private jet to recruit him to be their partner in a new venture to export up to 100 tanker shipments a year of U.S. liquefied gas into Ukraine, where Naftogaz is the largest distributor, according to two people briefed on the details.

Sargeant told Favorov that he regularly meets with Trump at Mar-a-Lago and that the gas-sales plan had the president's full support, according to the two people who said Favorov recounted the discussion to them.

These conversations were recounted to AP by Dale W. Perry, an American who is a former business partner of Favorov. He told AP in an interview that Favorov described the meeting to him soon after it happened and that Favorov perceived it to be a shakedown. Perry, who is no relation to the energy secretary, is the managing partner of Energy Resources of Ukraine, which currently has business agreements to import natural gas and electricity to Ukraine.

A second person who spoke on condition of anonymity also confirmed to the AP that Favorov had recounted details of the Houston meeting to him.

According to Dale Perry and the other person, Favorov said Parnas told him Trump planned to remove U.S. Ambassador Marie Yovanovitch and replace her with someone more open to aiding their business interests.

Dale Perry told the AP he was so concerned about the efforts to change the management at Naftogaz and to get rid of Yovanovitch that he reported what he had heard to Suriya Jayanti, a State Department foreign service officer stationed at the U.S. Embassy in Kyiv who focuses on the energy industry.

He also wrote a detailed memo about Favorov's account, dated April 12, which was shared with another current State Department official. Perry recently provided a copy of the April memo to AP.

Jayanti declined to provide comment. Favorov also declined to comment.

On March 24, Giuliani and Parnas gathered at the Trump International Hotel in Washington with Healy E. Baumgardner, a former Trump campaign adviser who once served as deputy communications director for Giuliani's presidential campaign and as a communications official during the George W. Bush administration.

She is now listed as the CEO of 45 Energy Group, a Houston-based energy company whose website describes it as a "government relations, public affairs and business development practice group." The company's name is an apparent nod to Trump, the 45th president.

This was a couple of weeks after the Houston meeting with Favorov, the Naftogaz executive. Giuliani, Parnas and Baumgardner were there to make a business pitch involving gas deals in the former Soviet bloc to a potential investor.

This time, according to Giuliani, the deals that were discussed involved Uzbekistan, not Ukraine.

"I have not pursued a deal in the Ukraine. I don't know about a deal in the Ukraine. I would not do a deal in the Ukraine now, obviously," said Giuliani, reached while attending a playoff baseball game between the New York Yankees and Minnesota Twins. "There is absolutely no proof that I did it, because I didn't do it."

During this meeting, Parnas again repeated that Yovanovitch, the U.S. ambassador in Kyiv, would soon be replaced, according to a person with direct knowledge of the gathering. She was removed two months later.

Giuliani, who serves as Trump's personal lawyer and has no official role in government, acknowledged Friday that he was among those pushing the president to replace the ambassador, a career diplomat with a history of fighting corruption.

"The ambassador to Ukraine was replaced," he said. "I did play a role in that."

But Giuliani refused to discuss the details of his business dealings, or whether he helped his associates in their push to forge gas sales contracts with the Ukrainian company. He did describe Sergeant as a friend and referred to Parnas and Fruman as his clients in a tweet in May.

As part of their impeachment inquiry, House Democrats have subpoenaed Giuliani for documents and communications related to dozens of people, including Favorov, Parnas, Fruman and Baumgardner's 45 Energy Group.

Baumgardner issued a written statement, saying: "While I won't comment on business discussions, I will say this: this political assault on private business by the Democrats in Congress is complete harassment and an invasion of privacy that should scare the hell out of every American business owner."

Baumgardner later denied that she had any business dealings in Ukraine but refused to say whether the replacement of Ambassador Yovanovitch was discussed.

Sargeant did not respond to a voice message left at a number listed for him at an address in Boca Raton.

John Dowd, a former Trump attorney who now represents Parnas and Fruman, said it was actually the Naftogaz executives who approached his clients about making a deal. Dowd says the group then approached Rick Perry to get the Energy Department on board.

"The people from the company solicited my clients because Igor is in the gas business, and they asked them, and they flew to Washington and they solicited," Dowd said. "They sat down and talked about it. And then it was presented to Secretary Perry to see if they could get it together.

"It wasn't a shakedown; it was an attempt to do legitimate business that didn't work out."

___

THE ENERGY SECRETARY

In May, Rick Perry traveled to Kyiv to serve as the senior U.S. government representative at the inauguration of the county's new president.

In a private meeting with Zelenskiy, Perry pressed the Ukrainian president to fire members of the Naftogaz advisory board. Attendees left the meeting with the impression that Perry wanted to replace the American representative, Amos Hochstein, a former diplomat and energy representative who served in the Obama administration, with someone "reputable in Republican circles," according to someone who was in the room.

Perry's push for Ukraine's state-owned natural gas company Naftogaz to change its supervisory board was first reported by Politico.

A second meeting during the trip, at a Kyiv hotel, included Ukrainian officials and energy sector people. There, Perry made clear that the Trump administration wanted to see the entire Naftogaz supervisory board replaced, according to a person who attended both meetings. Perry again referenced the list of advisers that he had given Zelenskiy, and it was widely interpreted that he wanted Michael Bleyzer, a Ukrainian-American businessman from Texas, to join the newly formed board, the person said. Also on the list was Robert Bensh, another Texan who frequently works in Ukraine, the Energy Department confirmed.

Gordon D. Sondland, the U.S. ambassador to the European Union, and Kurt D. Volker, then the State Department's special envoy to Ukraine, were also in the room, according to photographs reviewed by AP. The person, who spoke on condition of anonymity due to fear of retaliation, said he was floored by the American requests because the person had always viewed the U.S. government "as having a higher ethical standard."

The Naftogaz supervisory board is supposed to be selected by the Ukrainian president's Cabinet in consultation with international institutions, including the International Monetary Fund, the United States and the European Union. It must be approved by the Ukrainian Cabinet. Ukrainian officials perceived Perry's push to swap out the board as circumventing that established process, according to the person in the room.

U.S. Energy Department spokeswoman Shaylyn Hynes said Perry had consistently called for the modernization of Ukraine's business and energy sector in an effort to create an environment that will incentivize Western companies to do business there. She said Perry delivered that same message in the May meeting with Zelenskiy.

"What he did not do is advocate for the business interests of any one individual or company," Hynes said Saturday. "That is fiction being pushed by those who are disingenuously seeking to advance a nefarious narrative that does not exist."

Hynes said the Ukrainian government had requested U.S. recommendations to advise the country on energy matters, and Perry provided those recommendations. She confirmed Bleyzer was on the list.

Bleyzer, whose company is based in Houston, did not respond on Saturday to a voicemail seeking comment. Bensh also did not respond to a phone message.

As a former Texas governor, Perry has always had close ties to the oil and gas industry. He appointed Bleyzer to a two-year term on a state technologies fund board in 2009. The following year, records show Bleyzer donated $20,000 to Perry's reelection campaign.

Zelenskiy's office declined to comment on Saturday.

In an interview Friday with the Christian Broadcasting Network, Perry said that "as God as my witness" he never discussed Biden or his son in meetings with Ukrainian or U.S. officials, including Trump or Giuliani.

"This has been a very intense, a very focused push to get Ukraine to clean up the corruption," Perry said in the interview. "I can't go in good faith and tell a U.S. company, go and invest here, go and be involved if the corruption is ongoing."

He did confirm he had had a conversation with Giuliani by phone, but a spokeswoman for the energy secretary declined to say when that call was or whether the two had discussed Naftogaz.

___

Biesecker and Lardner reported from Washington.

___

Follow Associated Press investigative reporters Desmond Butler at http://twitter.com/desmondbutler , Michael Biesecker at http://twitter.com/mbieseck and Richard Lardner at http://twitter.com/rplardner

___

Contact AP's global investigative team at Investigative@ap.org.

___

This story has been corrected to show Bleyzer's first name is Michael, not Robert.

  • Associated Categories: Associated Press (AP), AP National News, AP Online National News, Top General short headlines, AP Online Headlines - Washington, AP Elections, General Presidential Election News, AP World News, AP Business, AP Business - Corporate News, AP Elections - Campaigns, AP Business - Industries, AP Business - Utilities
© Copyright 2019 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
Profit, not politics: What some Trump allies did in Ukraine
US Energy Secretary Rick Perry pushed to place someone reputable in Republican circles on the supervisory board of Ukraine's state-owned gas company, person present during meeting at which topic was discussed tells AP
8:28AM ( 6 minutes ago )
3 get Nobel Medicine prize for learning how cells use oxygen
Three scientists won the Nobel Prize in physiology or medicine for discovering how cells respond to differing oxygen levels, paving the way for promising strategies to fight anemia, cancer and other diseases
8:22AM ( 11 minutes ago )
The Latest: 135 climate protesters arrested in London
London Police say some 135 climate activists have been arrested as the Extinction Rebellion group attempts to draw attention to global warming
8:22AM ( 12 minutes ago )
Associated Press (AP)
US troops start pullout from along Turkey's border in Syria
US-backed Kurdish-led forces in Syria say American troops have begun withdrawing from areas along Turkey's border.
7:36AM ( 58 minutes ago )
Pope seeks 'courageous' debate over Amazon priest shortage
Pope Francis has told South American bishops to speak "courageously" at a meeting on the Amazon, where the shortage of priests is so acute the Vatican is considering ordaining married men and giving women official church ministries
7:33AM ( 1 hour ago )
The Latest: Oxygen plays major part in many diseases
A member of the Nobel Committee at Sweden's Karolinska Institutet says this year's award was given for "a fundamental basic science discovery about how the body adapts to different levels of oxygen."
7:20AM ( 1 hour ago )
AP National News
The Latest: 3 scientists given Nobel Prize for cell research
The 2019 Nobel Prize for Physiology or Medicine has been awarded to scientists William G. Kaelin, Jr, Peter J. Ratcliffe and Gregg L. Semenza
5:41AM ( 2 hours ago )
GM-UAW talks take turn for worse; settlement not near
The top negotiator in contract talks between General Motors and the United Auto Workers says bargaining has hit a big snag
5:40AM ( 2 hours ago )
Johnson battles to surmount EU opposition to Brexit plan
British Prime Minister Boris Johnson is making phone calls to other European Union leaders as he tries to overcome opposition to his Brexit deal
5:31AM ( 3 hours ago )
AP Online National News
Sanders releases campaign finance plan while recuperating
Bernie Sanders unveils major campaign finance plan, continuing his presidential bid even as he's at home recuperating from a heart attack
6:00AM ( 2 hours ago )
A record 35 candidates vie for Sri Lanka's presidency
A record 35 candidates have filed nominations for next month's Sri Lankan presidential election, but the incumbent has opted not to seek a second term with the entry of popular former defense chief Gotabaya Rajapaksa, who is considered the favorite
4:20AM ( 4 hours ago )
Warren aims to build appeal in Republican strongholds
Warren's trips to more conservative areas of America test whether her progressive message can resonate in all regions
12:37AM ( 7 hours ago )
AP Elections
Romney ramps up rhetoric on Trump, but what's his next move?
Mitt Romney's ratcheted-up rhetoric on President Donald Trump is again raising hopes among Trump detractors that the senator could play a key role in the unfolding impeachment saga
10:22PM ( 1 day ago )
Warren dismisses top staffer for inappropriate behavior
Elizabeth Warren's presidential campaign has dismissed its national organizing director following "multiple complaints" of inappropriate behavior
10:11PM ( 1 day ago )
Pompeo blasts Ukraine critics for 'silly gotcha game'
Secretary of State Mike Pompeo is defending the Trump administration's approach to Ukraine and says it's typical of the transactional way countries deal with one another.
8:19PM ( 1 day ago )
General Presidential Election News
The Latest: Climate protesters block traffic in Madrid
Climate activists have blocked roads and staged a sit-in in Madrid as they joined a global wave of actions by the Extinction Rebellion movement to draw attention on failed environmental policies
7:50AM ( 44 minutes ago )
Global shares mixed with all eyes on China trade talks
World shares mixed as US, China prepare for trade talks
7:38AM ( 56 minutes ago )
A look at top cases for the Supreme Court's new term
A look at top cases for the Supreme Court's new term
7:09AM ( 1 hour ago )
AP Business
Police: 3 dead, 1 missing after car plunges into canal
Authorities: Car carrying 5 people plunges into Delaware canal and driver helped a teenage girl to safety before dying in a bid to rescue three other passengers, two of whom were boys found dead; 3rd boy still missing
8:57PM ( 11 hours ago )
US researchers on front line of battle against Chinese theft
Emails and other documents obtained through public records requests by The Associated Press show the FBI's far-reaching efforts to caution colleges that some Chinese scientists aspire to steal U.S. research for Beijing's gain
8:24AM ( 1 day ago )
Purdue opioid deal blasted as records show $13B to Sacklers
State and local governments are blasting the terms of OxyContin maker Purdue Pharma's settlement offer, saying it would not force members of the Sackler family to pay back money they "pocketed from their illegal conduct."
8:24PM ( 2 days ago )
AP Business - Corporate News
Sanders, Warren upend how Democrats raise money
Bernie Sanders and Elizabeth Warren raked in more cash over the past three months than any of their Democratic rivals
12:06AM ( 2 days ago )
Campaign: Sanders had heart attack, released from hospital
Democratic presidential candidate Bernie Sanders has left a Las Vegas hospital after being treated for a heart attack
10:00PM ( 2 days ago )
Judge finds no bias from Jussie Smollett special prosecutor
A Chicago judge says he's keeping a special prosecutor looking into why the state's attorney's office abruptly dismissed charges against actor Jussie Smollett, despite conflict-of-interest questions
8:12PM ( 2 days ago )
AP Elections - Campaigns
Protests choke communities in Haiti as aid, supplies dwindle
Deadly protests are choking communities across Haiti as supplies dwindle and non-government agencies suspend aid
8:42PM ( 11 hours ago )
Iran says Chinese state oil firm withdraws from $5B deal
Iran's oil minister says China's state oil company has pulled out of a $5 billion deal to develop its massive offshore natural gas field, an agreement from which France's Total SA earlier withdrew
2:26PM ( 18 hours ago )
The Latest: Perry office says he urged Trump's Ukraine call
A spokeswoman for Energy Secretary Rick Perry says Perry encouraged President Donald Trump to speak to the Ukrainian leader in a call at the center of a House impeachment probe
10:44AM ( 21 hours ago )
AP Business - Industries
Stocks climb as job report gives some solace after wild week
Stocks marched broadly higher on Wall Street Friday after a report showing solid U.S. job gains and a decline in the unemployment rate allayed some investors' concerns about slowing economic growth
3:21PM ( 2 days ago )
Black market brand draws scrutiny as vaping illness spreads
Federal investigators looking into a rash of mysterious and sometimes fatal lung illnesses apparently linked to vaping are turning their attention to an illegal marijuana vape.
1:34PM ( 2 days ago )
BP CEO Dudley, who managed wake of Gulf oil spill, to retire
Oil company BP names Bernard Looney as CEO in 2020 to take over from Bob Dudley, who oversaw the firm's recovery from the Gulf oil spill
11:42AM ( 2 days ago )
AP Business - Utilities
3 get Nobel Medicine prize for learning how cells use oxygen
Three scientists won the Nobel Prize in physiology or medicine for discovering how cells respond to differing oxygen levels, paving the way for promising strategies to fight anemia, cancer and other diseases
8:22AM ( 12 minutes ago )
The Latest: 135 climate protesters arrested in London
London Police say some 135 climate activists have been arrested as the Extinction Rebellion group attempts to draw attention to global warming
8:22AM ( 12 minutes ago )
Jay Gruden fired by Redskins after 0-5 start to 6th season
Jay Gruden has been fired as head coach of the Washington Redskins after an 0-5 start to his sixth season
8:21AM ( 13 minutes ago )
New whistleblower may give House Democrats fresh information
House Democrats leading impeachment inquiry of Trump's dealings with Ukraine may have fresh information to work with after new whistleblower steps forward
8:19AM ( 15 minutes ago )
1 of 2 men wanted in deadly Kansas bar shooting arrested
Police have identified two suspects in a Kansas bar shooting that left four people dead and five others wounded
8:18AM ( 16 minutes ago )