MANHATTAN (CN) — A federal judge vowed Tuesday to investigate whether two allies of President Donald Trump have a conflict of interest after meeting with Turkey's chief on behalf of a gold trader charged with laundering money for Iran.
U.S. District Judge Richard Berman issued the warning at a hearing for Reza Zarrab, a Turkish national charged in New York with violating the International Emergency Economic Powers Act and conspiracy to commit bank fraud.
Just days earlier, prosecutors made the blockbuster disclosure that Zarrab has retained to two Trump allies — former New York City Mayor Rudy Giuliani and ex-U.S. Attorney General Michael Mukasey — to meet with Turkish President Recep Tayyip Erdogan on his behalf.
Though neither Giuliani and Mukasey have appeared in court beside Zarrab, the March 31 letter says that the pair informed then-U.S. Attorney Preet Bharara and Attorney General Jeff Sessions on Feb. 24 that they would be meeting with Erdogan.
Since that time, Sessions fired Bharara in a purge of 46 U.S. attorneys appointed by President Barack Obama. The move surprised many observers because Bharara had met with Trump in November and said the president-elect wanted him to stay on. Bharara has since repeatedly alluded to Turkey's embattled democracy and political interference with his office on his Twitter account.
Zarrab’s lead attorney Benjamin Brafman told the court today Giuliani and Mukasey had acted transparently.
“Nobody was trying to hide their involvement, and I think it was very appropriate lawyering for them to do that,” Brafman said.
“It’s not like we picked two people nobody respects and whose integrity could be called into question,” Brafman added.
The prosecution’s letter notes that Giuliani and Mukasey more recently revealed plans to meet with U.S. government officials about Zarrab’s case.
Brafman insisted that Zarrab is entitled to “explore whether there may be a diplomatic solution to this case.”
“This was not an attempt to backdoor the Southern District,” Brafman said. “I made that clear to them.”
Assistant U.S. Attorney Michael Lockard argued that the court needs more information about Giuliani and Mukasey’s ties before making a decision.
Giuliani’s law firm Greenberg Traurig is a registered agent of the Turkish government, and Mukasey’s firm Debovoise Plimpton has represented several of the international banks that prosecutors count as Zarrab’s victims.
In the political sphere, Giuliani served as one of Trump's top advisers in last year's presidential campaign, and Mukasey's son Marc Mukasey has been rumored to be next in line for Bharara's post as U.S. attorney for New York’s Southern District.
Giuliani and Mukasey’s involvement fits with Zarrab’s pattern of fleshing out his defense team with politically connected Republicans. The case docket shows that Zarrab has been represented by at least 17 attorneys, including Paul Clement, the former U.S. solicitor general under George W. Bush.
Zarrab, who has multiple billion-dollar businesses, has consulted with so many lawyers that Brafman said that he lost track of them.
“He’s interviewed half of the lawyers in America,” Brafman quipped in court.
Judge Berman promised to issue an opinion within the “next day or so.”
"It is also the court's responsibility to ensure the integrity of these proceedings," Berman said.
The entanglement hearing comes at a time of great change in U.S.-Turkish relations.
While Obama’s Secretary of State John Kerry had been outspoken in criticizing Erdogan’s human rights record, Trump has filled his administration officials more sympathetic to Erdogan’s regime.
The president has real estate interests in Istanbul, and U.S. Secretary of State Rex Tillerson drew controversy last week for not scheduling a meeting with Turkish dissidents during a trip to Ankara last week.
The Wall Street Journal recently reported that Mike Flynn, a retired U.S. Army general who lasted only weeks as Trump’s first national security adviser, met with Turkish officials to discuss removing Erdogan’s foe from the United States outside the formal extradition process.
Former U.S. Attorney Bharara tweeted that story out, along with a critique by journalist David Frum of the Trump administration’s new posture toward Turkey.
“They do know that Erdogan is bulldozing the last remains of Turkish democracy?” Frum asked, referring to Trump’s diplomats.
Zarrab’s lawyer tried to dismiss the significance of Bharara’s Twitter activity. “Maybe he’s bored,” Brafman quipped. “I don’t know.”
Bharara’s indictment of Zarrab made him an overnight celebrity among Turkish dissidents, who applauded him for busting a member of what they believed to be Erdogan’s corrupt inner circle.
Now a scholar in residence at New York University School of Law, Bharara did not immediately respond to a request for comment.
Another hearing has been scheduled for April 24, and trial is slated for Aug. 21.
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