MANHATTAN (CN) – The arraignment of Rudy Giuliani’s associates Lev Parnas and Igor Fruman had been shaping up to be a routine plea of not guilty — until a defense attorney remarked Wednesday that the case could invoke evidence falling under the realms of executive privilege.

“These are issues that we need to be very sensitive to,” Parnas’ attorney Edward McMahon said this morning.

U.S. District Judge Paul Oetken pressed McMahon about how such a privilege would come into play, asking whether Giuliani worked for Parnas or Parnas worked for Giuliani.

Both worked for each other, McMahon replied, adding that the fact that Parnas and the president share a lawyer could spark tangled privilege issues.

Emphasizing that he could not personally assert privilege, McMahon said: “Only the president or the White House can invoke that.”

The comment underlined the White House’s proximity to a case accusing Parnas and Fruman of illicitly funneling Russian money into U.S. elections.

Federal prosecutors depict the conspiracy as a tangled one.

Assistant U.S. Attorney Rebekah Donaleski revealed that her office has issued subpoenas to 50 bank accounts in the voluminous discovery, a disclosure that falls the day after a report in BuzzFeed that authorities found red flags for money laundering involving millions in suspicious transactions.

Roughly two weeks ago, Parnas and Fruman were arrested outside Washington at Dulles International Airport, holding one-way tickets to Vienna. Both men have surrendered their passports and posted bail, agreeing to electronic monitoring and heavy travel restrictions.

The duo promptly left New York’s Thurgood Marshall Courthouse after Wednesday’s brief hearing.

Joseph Bondy, an attorney for Parnas, lashed out at what he described as a campaign by the powerful to discredit his client.

“We look forward to defending Mr. Parnas in court, based on the evidence, not a smear campaign, driven by self-serving, scheming leaks, apparently from the highest level of our government,” Bondy told reporters.

Though Bondy would not specify the leaks to which he had been referring, BuzzFeed published an investigation the previous night that cited “senior law enforcement officers” as sources and gave a deep view of the men’s alleged finances.

The report described the men’s “extravagant spending at Trump hotels” in service of Giuliani’s back-channel campaign in Ukraine to dig up dirt on former Vice President Joe Biden, the president’s likely election rival.

Parnas delivered a more cryptic statement, claiming that the “truth will be revealed” and he would be “vindicated.”

Fruman and Parnas — born in Ukraine and Belarus, respectively — have been charged with using straw donors to launder foreign money into U.S. elections through limited liability companies.

Their accused co-conspirators Andrey Kukushkin, a Ukrainian-born resident of California, and David Correia, of South Florida, pleaded not guilty last week.