U.S. Sanctions Ukrainian Tied to Russia Meddling, Giuliani

The Treasury Department sanctioned Andrii Derkach, a member of the Ukrainian Parliament who met with President Donald Trump’s personal lawyer last year, alleging he’s a Russian agent trying to influence the 2020 U.S. presidential election.

Between May and July of this year, Derkach released edited audio tapes and other unsupported information with the intent to discredit U.S. officials, the Treasury Department said in a statement on Thursday. Three other people associated with the Kremlin-linked Russian troll farm Internet Research Agency were also sanctioned.

Derkach met with Trump’s lawyer, Rudy Giuliani, in Kyiv last year, even as top Ukrainian officials avoided the U.S. president’s unofficial emissary. Giuliani’s actions in the country later factored into Trump’s impeachment.

Leaked recordings allegedly featuring Democrat Joe Biden, released in a heavily edited version by the Ukrainian lawmaker, involve phone conversations between Biden -- at the time Barack Obama’s vice president -- and then-Ukrainian leader Petro Poroshenko. Derkach has previously said he got the files from investigative journalists.

“Derkach and other Russian agents employ manipulation and deceit to attempt to influence elections in the United States and elsewhere around the world,” Treasury Secretary Steven Mnuchin said in the statement. “The United States will continue to use all the tools at its disposal to counter these Russian disinformation campaigns and uphold the integrity of our election system.”

Although Trump regularly scoffs “Russia-Russia-Russia,” dismissing evidence that Moscow sought to intervene in the 2016 presidential campaign to help him win, the president also often boasts that “nobody’s been tougher on Russia” than his administration. The Treasury action Thursday may bolster that argument as the question of foreign interference again hangs over the election this November.

Democratic lawmakers said the sanctions action only underscored their criticism of Trump for failing to act forcefully against Russia’s President Vladimir Putin.

“This designation is long overdue and a pressing reminder that Putin and his cronies continue to try to interfere in our elections,” Senate Democratic leader Chuck Schumer said in a statement. “The Trump administration has not done nearly enough to counter Putin’s sustained attack on our democracy, relying instead on these one-off sanctions, a whack-a-mole approach that does little to deter Putin and his oligarchs.”

Representative Adam Schiff, chairman of the House Intelligence Committee, said that Trump continues to use information from Derkach to spread “false claims and smears.”

Giuliani didn’t immediately respond to a request for comment.

Treasury said in its statement that Derkach “has been an active Russian agent for over a decade, maintaining close connections with the Russian Intelligence Services.”

Derkach wrote on Facebook that Treasury’s action against him was a “preventive response” to “shocking facts” about “DemoCorruption” that he plans to reveal next week and was “revenge against me, as a representative of the team of investigators.” He said the sanctions action will give him the opportunity to defend his interests in court.

On the tapes released by Derkach, Biden appears to tell Poroshenko that $1 billion in U.S. loan guarantees will be provided to Ukraine once that country’s top prosecutor -- widely believed to have been corrupt -- was replaced.

In response to the tapes, Donald Trump Jr., the president’s son, tweeted, “Yikes!!!! This is not a ‘perfect conversation.’” But Biden’s campaign said the tape was old news about a phone call he made for good reason. “They heavily edited this,” spokesman Andrew Bates said, “and it’s still a nothing-burger that landed with a thud.”

‘KGB School’

Former Ukrainian leader Poroshenko has said that the audio files were “fabricated” and released by a graduate of Moscow’s “top KGB school.”

As the U.S. was engulfed by allegations of Russian interference in the 2016 presidential election, Derkach pushed for an investigation into Ukrainian meddling in the vote -- an unsubstantiated claim voiced repeatedly by President Trump.

“Derkach has directly or indirectly engaged in, sponsored, concealed, or otherwise been complicit in foreign interference in an attempt to undermine the upcoming 2020 U.S. presidential election,” Treasury said in its statement.

The Internet Research Agency, highlighted by the three other people sanctioned by Treasury on Thursday, has remained active since allegedly orchestrating Russian election manipulation efforts in 2016. The organization has used fake social media accounts to undermine Biden’s candidacy ahead of the November vote. Facebook Inc. and Twitter Inc. said they were warned about the renewed Russian efforts by the Federal Bureau of Investigation.

Hours after Treasury’s action, the Justice Department announced that a criminal complaint was filed against one of those three for his role as a manager in “Project Lakhta,” which it called “a Russia-based effort to engage in political and electoral interference operations” by using stolen identities of Americans “to open fraudulent banking and cryptocurrency exchanges.”

Despite Thursday’s sanctions, Trump administration officials have recently maintained that China -- not Russia -- represents the worst foreign threat to U.S. elections.

White House National Security Adviser Robert O’Brien said in a news conference last week that China “has the most massive program” to influence the election, after he was asked about a reported Russian campaign to disseminate disinformation about vote-by-mail services.

In a Twitter post after the sanctions were announced, White House spokesman Judd Deere echoed Trump’s contention that “nobody has been tougher on Russia.”

©2020 Bloomberg L.P.

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