Privilege Battle Over Parnas Files Kicked to DC

MANHATTAN (CN) – A federal judge punted to Washington on Thursday a privilege dispute over several iPhones turned over to the House Intelligence Committee by one of the indicted associates of personal Trump attorney Rudy Giuliani.

Along with his former business partner Igor Fruman, Lev Parnas faces a federal criminal indictment in the Southern District of New York on charges that they used the shell company Global Energy Producers to funnel $325,000 in foreign cash into America First Action, a Trump super-PAC.

This undated image released by the House Judiciary Committee shows a photo of Lev Parnas with President Donald Trump in Florida. Parnas, a close associate of Trump’s personal lawyer Rudy Giuliani, is claiming Trump was directly involved in the effort to pressure Ukraine to investigate Democratic rival Joe Biden. (House Judiciary Committee)

Parnas appeared in court this afternoon a week after his attorney Joseph Bondy confirmed that his client’s iCloud included a recording that apparently catches President Donald Trump instructing Parnas and Fruman to “get rid of” Ukrainian Ambassador Marie Yovanovitch.

After a leaked version had already circulated through the media, electronic extractions of Parnas’ iPhones and iCloud were turned over to the House Intelligence Committee.

Attorneys for Fruman in turn wrote to U.S. District Judge J. Paul Oetken expressing concern that significant portion of material produced by Parnas contained communications they contend is shielded by attorney-client privilege.

“Mr. Parnas did not, and does not have any authority to waive Mr. Furman’s privilege, or otherwise disclose privileged communications belong to Mr. Furman,” Fruman’s attorney Todd Blanche wrote in a Jan. 22 letter.

“My obvious concern is that Mr. Bondy’s hasty efforts to find a forum (beyond MSNBC and CNN) for someone — anyone– to listen to his client’s version of events caused him to irresponsibly produce privileged materials to the HPSCI,” added Blanche, a partner at Cadwalader, Wickersham & Taft.

In court Thursday, Judge Oetken appeared to suggest sympathy for the scenario in which jointly held privilege was being waived by a single defendant, but stopped short of ordering that the materials be clawed back.

“This is all sort of a gray area,” the Obama-appointed judge said.

“The remedy, I think, is in Washington,” Oetken continued..

Congress maintains it is not obligated to recognize common-law privileges established by courts, such as the attorney-client privilege, work-product doctrine or other nonconstitutional privileges.

The judge asked Parnas’ attorney to “make an effort” to communicate with the House committee to take necessary measures not to publicly disclose any materials that might be subject to privilege.

Parnas and Fruman were arrested on Oct. 9, 2019, when authorities intercepted them in Washington’s Dulles Airport, where the men held one-way tickets to Vienna, Austria.

Exactly one week earlier, President Donald Trump, through his attorney Jay Sekulow, signed off on Parnas and Fruman’s criminal defense counsel.

Opposing congressional subpoenas for documents at the time, Parnas and Fruman were represented by John Dowd, who is also a former lawyer for Trump.

Dowd no longer represents either men, but Fruman kept his legal team close to the White House with attorney Todd Blanche, who previously represented Paul Manafort, the convicted former chair of Trump’s 2016 election campaign.

Parnas pursued a dramatically different legal strategy, dropping Dowd in favor of Bondy and embarking on what only can be described as a campaign of full disclosure: a Nielsen-smashing interview with MSNBC’s Rachel Maddow, a follow-up with CNN’s Anderson Cooper and the wholesale transmission to the House Intelligence Committee of forensic scans of multiple electronic devices that Parnas held.

The hearing Thursday in the Southern District of New York was initially called to address Parnas’ request to modify a protective order to obtain material from Parnas’ iCloud account, but Bondy ultimately withdrew the request at the hearing, explaining that they were able to access the online file storage with the aid of one of the firm’s younger employees.

Judge Oetken will hold another hearing Monday to set a trial date and motions schedule for the criminal trial.

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