A Turkish gold trader testified in federal court on Wednesday that he hired two lawyers — widely believed to be Rudy Giuliani and former Attorney General Michael Mukasey — to negotiate a prisoner exchange between the U.S. and Turkish governments.
Reza Zarrab did not identify Giuliani and Mukasey by name during his testimony, but the 34-year-old gold trader hired the pair to his all-star legal team earlier this year. The two would-be dealmakers met with Turkish president Recep Tayyip Erdogan in February to discuss what has been described as a diplomatic resolution to the case.
According to The Daily Beast, Zarrab testified that he hired the lawyers to negotiate a prisoner swap that fell within “legal limits.”
Zarrab was once the target of the U.S. government’s investigation into a sanctions-busting scheme involving Turkish banks and the Iranian government. But Zarrab recently turned state’s evidence, pleading guilty last month to seven federal charges and agreeing to testify against his former co-defendant, Mehmet Hakan Atilla, a top executive at the Turkish bank Halkbank.
According to reporters inside the Manhattan court room where Zarrab testified, the gold trader said he decided to cooperate with the government after the prisoner swap negotiations fell through.
Erdogan had pressed the Obama and Trump administrations for Zarrab’s release. While he has claimed that the Turkish judicial system should handle the case, his intervention in the matter has widely been seen as an attempt to prevent Zarrab from revealing embarrassing information about Erdogan’s family and the Turkish government.
The New York Times reported in April that Giuliani and Mukasey met with Erdogan in late-February in order to agree to what was described as a diplomatic deal. Mukasey said in court filings that he and Giuliani sought “a state-to-state resolution of this case.”
“Senior officials in both the U.S. government and the Turkish government remain receptive to pursuing the possibility of an agreement,” he said in the court filings.
There was no hint in the court documents that Giuliani and Mukasey sought a prisoner swap, though it was speculated by many Turkey watchers that an exchange was on the table.
It is unclear who the Turkish government was supposed to release in exchange for Zarrab. He also did not elaborate on why the deal fell through.
The Turkish government has used a falsely imprisoned American pastor named Andrew Brunson as a bargaining chip against the U.S. Erdogan has publicly called on the U.S. to release one of his political foes, exiled cleric Fethullah Gulen, in exchange for Brunson.
A month after Giuliani and Mukasey’s meeting with Erdogan, Trump fired Preet Bharara, the U.S. attorney who was initially handling the Zarrab case. The move caught Bharara by surprise. Though an Obama appointee, Trump had told him just after the election that he would keep his position during the new administration.
The circumstances and timing of Bharara’s firing have generated speculation that he was ousted over his involvement in the Zarrab case.
Giuliani could not be reached for comment for this article. A spokeswoman for Mukasey at his law firm Debevoise & Plimpton declined comment, saying “we don’t have anything additive to provide this time around.”