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, 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, according to a person familiar with Trump's remarks.
The person, who spoke to the AP on condition of anonymity to describe a closed conversation among GOP officials, recounted that Trump said it was Perry who asked him to make the July call to discuss "something about an LNG (liquefied natural gas) plant." Trump's remarks were first reported Saturday by the news site Axios.
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 in which Western companies can do business.
Perry was asked about the AP's reporting on Monday while in Lithuania, where he was meeting with officials from Ukraine and other eastern European countries to discuss energy security and cooperation. He said any suggestion that he tried to force a management change at Naftogaz was a "totally dreamed up story."
"We get asked for our recommendations about people who are experts in areas, various areas," Perry said. "Folks who have expertise in particular areas. Obviously having been the governor of the state of Texas, I know a lot of people in the energy industry."
Perry also confirmed he had urged Trump to call Zelenskiy, but said the subject was the potential growth of Ukraine's energy sector.
"Absolutely, I asked the president multiple times, 'Mr. President, we think it is in the United States' and in Ukraine's best interest that you and the president of Ukraine have conversations, that you discuss the options that are there,'" Perry said, recounting his conversations with Trump.
The Trump and Giuliani allies driving the attempt to change the senior management at Naftogaz, 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.
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 Kyiv, formerly known as 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.
A Florida lawyer representing Sargeant, Christopher Kise, issued a statement Monday confirming that his client was at the Houston dinner with Parnas, Fruman and Favorov, but insisted he was there only to offer "broad industry guidance and his expert view on the challenges presented by operating in foreign markets."
"Attending a single, informal dinner in Houston does not place Mr. Sargeant at the center of any Naftogaz or Ukrainian business plan," Kise said. "Mr. Sargeant never discussed any role or participation in any Ukraine venture, nor any specifics regarding the potential business ventures of the other dinner participants."
The statement did not address whether Yovanovitch's fate was discussed at the dinner. Kise also said Sargeant has not met at Mar-a-Lago with Trump since he became president.
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.
The House Intelligence Committee also issued sweeping document requests to Parnas and Fruman, due Monday, and scheduled depositions for later in the week.
John Dowd, a former Trump attorney who now represents Parnas and Fruman, said he and his clients have not yet decided whether to comply. Democrats on Monday threatened to issue subpoenas if they don't show.
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.
Dowd 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.
Perry has close ties to the Texas 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. 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.
In Lithuania on Monday, Perry said he could not recall whether Bleyzer's name was on the list provided to Zelenskiy. But Perry confirmed he had known Bleyzer for years and called him "a really brilliant, capable businessman."
"I would recommend him for a host of different things in Kyiv because he knows the country," Perry said of Bleyzer. "He's from there. So, why not? I mean I would be stunned if someone said that would you eliminate Michael Bleyzer from a recommendation of people you ought to talk to about how to do business in the country, whether they're knowledgeable. It'd be remarkable if I didn't say, 'Talk to Michael.'"
Biesecker and Lardner reported from Washington. Associated Press reporter Alan Fram contributed.
Key findings from this story are summarized at the AP News website.
Follow AP 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.