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AP
sources:
Trump
allies
sought
changes
at
Ukraine
utility
apnews.com
KYIV,
Ukraine
- 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.”
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. He
says
they
then met
with
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.
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