When autocratic leaders attack “corruption,” they are usually using it as a pretext to clear out the competition and establish their own racket. President Trump’s campaign to pressure Ukraine to investigate his domestic enemies follows this pattern. While Trump attorney Rudy Giuliani was leaning on the government in Kiev, he was simultaneously running a side hustle trying to extort the Ukrainians into throwing some energy business at his clients.
Some of the facts surrounding Rudy’s energy scam trickled out over the weekend, but the most damning revelations were contained in an explosive Associated Press story Sunday evening. If it were not a sidecar to a historic scandal, the energy scam would itself constitute a large enough scandal to bring most presidencies to their knees.
This is the basic outline of the story: While he was representing Trump as a lawyer, Giuliani was being paid by two men who were seeking business with Ukraine’s government. Giuliani was wearing two hats: simultaneously representing the president of the United States and his paid clients. The conflict of interest between the two roles is overt. Giuliani’s clients could use his name to leverage Ukraine to give them business.
The discrete details of the episode look even shadier. Two Soviet émigrés, Lev Parnas and Igor Fruman, have been trying to sell liquified natural gas to Ukraine. A profile of Parnas and Fruman by the Organized Crime and Corruption Reporting Project depicts both men as lacking any real background in energy. Fruman, according to the profile, has a number of links to the Russian Mafia. Parnas and Fruman donated hundreds of thousands of dollars to the Republican Party, hired Giuliani, and spent months trying to get a piece of the gas market in Ukraine. Giuliani does not disclose his clients and refused to answer whether Parnas and Fruman are paying him, but on Twitter he has identified both men as his clients.
Parnas and Fruman, along with a third partner, approached an executive at the state-owned Ukrainian energy firm with an offer to sell him up to 100 tanker shipments a year of liquefied natural gas, while touting their connections with Trump. The Ukrainian “perceived it to be a shakedown,” the AP reports.
John Dowd — the former Trump lawyer who also represents Parnas and Fruman — tells the AP the whole approach was completely aboveboard. “It wasn’t a shakedown; it was an attempt to do legitimate business that didn’t work out.”
But given the circumstances, the two legitimate businessmen could not possibly have proposed an innocent transaction. Ukraine was under military threat from Russia. Its government was desperately seeking both diplomatic support from Washington (in the form of a meeting between the two presidents, which would send a signal to Russia to back off) as well as military aid. They wouldn’t have needed to threaten to break somebody’s legs, and almost certainly didn’t make any threats, because the threat was already coming from Russia. Any deal the Ukrainians made with people representing the American government was inherently extortive.
And Parnas and Fruman were absolutely representing Trump at the time. As BuzzFeed reported in July, Parnas and Fruman held at least four meetings with Ukrainian prosecutors to urge investigations of Trump’s enemies, and met with both President Trump and Donald Trump Jr.
So Parnas and Fruman were meeting with Ukrainian officials, representing Trump and his political demands. The Ukrainians knew they had an existential need to placate Trump. And at the same time they were doing this, Parnas and Fruman were also pushing Ukraine to throw some natural-gas import business their way.
Giuliani tells the AP that he did not personally solicit a business deal in 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. There is absolutely no proof that I did it, because I didn’t do it,” he insists, continuing his well-known habit of framing his denials in the most suspicious-sounding terms.
It’s probably true that Rudy didn’t negotiate the gas deal in Ukraine himself. And as he recently told the Post, his work for Trump is free. (“My other clients are paying me for the work I do for them. Nobody is paying me for a single thing I’m doing for Donald J. Trump.”) But the people who are paying Rudy did negotiate a gas deal.
Giuliani is representing Trump for free, but his status as Trump’s lawyer gave him enormous economic value to Parnas and Fruman. And Parnas and Fruman were also not paid to represent Trump’s political agenda in Ukraine. But this generous pro bono use of their time as freelance diplomats was also highly advantageous. It gave them the chance to pitch business deals mixed together with diplomacy. The Ukrainians surely got the message that making Trump happy meant making Giuliani happy, and making Giuliani happy meant making Parnas and Fruman happy.
Their efforts to intertwine their business agenda with the Trump political agenda were so successful that Energy Secretary Rick Perry brought up their interests in his negotiations with Ukraine. Trump told Republicans that his July 25 call with President Zelensky was Perry’s idea. “The only reason I made the call was because Rick asked me to,” he said on a conference call. “Something about an LNG [liquefied natural gas] plant.” Perry met with Parnas and Fruman and reportedly asked Ukrainians to place a couple of Americans on the board of the state gas company. “I may or may not know anything about it,” Giuliani tells Politico, in yet another not-very-innocent-sounding quote. But Perry was pretty clearly not running the strategy.
The attempted gas deal is a sideshow to the larger scandal, which is about Trump using his office to push a foreign government to smear his domestic rivals. But it’s an important subplot in its own right. Trump needed freelance operators to extort Ukraine because the normal foreign-policy apparatus is not set up to shake down foreign countries for dirt on the president’s enemies. He couldn’t pay Giuliani, Parnas, and Fruman to do this for him. But the arrangement allowed them to seek reimbursement by free riding off Trump’s threats. They could add their gas deal onto the payment terms Trump was demanding from Ukraine.
The fact that Trump has been casting this campaign as an effort to root out “corruption” while Rudy’s boys were asking for a taste of the action just makes the whole joke funnier.
