NEW YORK – Two associates of President Donald Trump's personal attorney Rudy Giuliani pleaded not guilty to campaign finance charges Wednesday, as defense lawyers suggested the case was shadowed by questions of attorney-client privilege and a smear campaign "from the very highest levels of our government."

Lev Parnas, 46, a U.S. citizen born in Ukraine, and Igor Fruman, 53, a U.S. citizen born in Belarus, entered their pleas in a brief arraignment hearing in Manhattan federal court before U.S. District Court Judge Paul Oetken.

A criminal indictment unsealed on Oct. 10 alleges that Parnas and Fruman schemed to funnel hundreds of thousands of dollars in illegal campaign contributions from foreign donors to U.S. government officials and political action committees. The questioned funding included a $325,000 contribution to a political action committee backing Trump.

Before they were indicted, Parnas and Fruman worked with Giuliani as he urged Ukrainian officials to investigate 2020 Democratic presidential candidate Joe Biden and his son Hunter Biden's business involvement with Burisma, a major Ukrainian natural gas company.

At the same time, Giuliani worked for Parnas and Fruman in one of their businesses.

Parnas "worked for Giuliani and Giuliani worked for him" while Giuliani also worked for the president, defense lawyer Edward MacMahon said in court.

He suggested that information important to the defense team could become known among attorneys for the Department of Justice in Washington, D.C., as well as lawyers in the White House – and said that possibility could harm Parnas.

Giuliani would have attorney-client privilege with Trump and separately with Parnas and Fruman, and those interests need to be sorted out, along with Trump's executive privilege authority, said MacMahon. Federal prosecutors assigned to the New York case should establish what's known as a "taint team" to ensure that his client's legal interests are protected, he said.

"I know it's an issue that has to be resolved in one way or another," MacMahon said.

Assistant U.S. Attorney Rebekah Donaleski said she and other prosecutors assigned to the campaign finance case are aware of the issues. However, she told the judge: "I think now is not the forum" to address that matter.

Outside the courthouse after the hearing, Parnas co-counsel Joseph Bondy suggested that the court handling of the case could be marred by unnamed national political interests.

"We look forward to defending Mr. Parnas in the court based upon the evidence, and not a smear campaign being driven by self-serving and misleading leaks, apparently from the very highest levels of our government," said Bondy.

Bondy and MacMahon declined to elaborate. However, Parnas defended himself as he, too, addressed reporters outside the courthouse.

"I look forward to defending myself in court. I am certain that in time, the truth will be revealed and I will be vindicated. In the end, I put my faith in God," said Parnas.

Fruman did not speak with reporters.

Parnas and Fruman, who wore American flag pins on their jacket lapels as they appeared in court, remain free on $1 million bonds. They're due to return to court Dec. 2 for a hearing with codefendants David Correia, 44, and Andrey Kukushkin, 46, who pleaded not guilty last week.

The campaign contributions at the heart of the case, some disguised through so-called straw donors, were aimed at boosting the campaigns of Trump-supporting candidates and political action committees, advancing the interests of a Ukrainian government official and funding a planned cannabis retail business in the U.S., according to the indictment unsealed on Oct. 10.

Donaleski told the court Wednesday that prosecutors have executed more a dozen search warrants for numerous social media and email accounts and more than 50 bank accounts related to defendants in the case.

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Giuiliani's dealings with Parnas and Fruman have drawn the scrutiny of federal investigators. USA TODAY reported last week that federal counterintelligence investigators have been looking into the former New York City mayor's business with the two men at least early 2019. Giuliani, who is also a former federal prosecutor, has said he was unaware of any investigation.

Even before their indictment, the two men had drawn the attention of lawmakers because they had helped arrange a meeting in January between Giuliani and Ukraine then prosecutor-general. Parnas and Fruman were scheduled to appear before panels conducting presidential impeachment inquiries on the day they were arrested. The

Democrat-controlled House of Representatives issued subpoenas to both men hours after their arrests on Oct. 9 as they prepared to fly to Frankfurt, Germany with one-way tickets.

When the two were asked to appear as part of the inquiry but before their arrests, John Dowd, a former Trump lawyer, raised issues of attorney-client privilege in an Oct. 3 letter he sent to the House Permanent Select Committee on Intelligence.

He wrote that "Parnas and Fruman assisted Mr. Giuliani in connection with his representation of President Trump." He added that the two men "have also been represented by Mr. Giuliani in connection with their personal and business affairs."

Additionally, Parnas and perhaps Fruman have assisted Washington, D.C., attorneys Joseph diGenova and Victoria Toensing in their law practice, wrote Dowd. Current law clients of diGenova and Toensing include Dmytro Firtash, a Ukrainian businessman who was indicted in a 2013 Chicago federal court case on charges of using U.S. banks to arrange bribes with officials in India.

Firtash, who has been detained in Austria pending a U.S. extradition request, has pleaded not guilty. In his work for diGenova and Toensing, Parnas has been a translator on the Firtash case, according to several media accounts.

While Parnas and Fruman are charged in all four counts of the federal indictment, Correia and Kukushkin are accused only in connection with campaign contributions related to launching a cannabis business in several U.S. states. The business never materialized, the indictment said.

Correia is free on $250,000 bail. Kukushkin is subject to home detention and 24-hour GPS monitoring after posting security for a $1 million bond.

A Parnas-Fruman company, Global Energy Producers, was credited with giving $325,000 to a pro-Trump political action committee in May 2018. However, the indictment said financial records showed the money came via a circuitous route through a loan transaction linked to Fruman. The money never passed through a Global Energy Producers account, according to prosecutors.

The month the contribution was made, Parnas posted photos on Facebook of him and Fruman with President Trump in the White House and with Donald Trump Jr. in California.

Stressing that he has taken photos with many people, Trump said he did not know Parnas and Fruman. However, he also suggested that they might have been clients of Giuliani. Giuliani has referred to the men as his clients. However, he is not representing the men in the criminal case.

Giuliani, Trump's longtime friend and his personal lawyer, is a pivotal figure in the impeachment inquiry examining whether the nation's commander-in-chief improperly pressured Ukraine to investigate former Vice President Biden's family in order to boost his own reelection bid.

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Giuliani has acknowledged that Parnas and Fruman helped guide him as he urged Ukraine to investigate Biden and his son.

Giuliani has also acknowledged a similar effort to investigate Trump administration suspicions that Ukraine, not Russia, was involved in hacking the Democratic National Committee's servers during the 2016 presidential election.

However, Giuliani has insisted that he carried out his efforts with U.S. State Department knowledge and approval.