Northwest Arkansas Democrat-Gazette
Trump-linked Cohen admits guilt
Violated banking, tax, campaign finance laws, he tells judge
President Donald Trump’s former lawyer Michael Cohen pleaded guilty Tuesday in a Manhattan courthouse to eight violations of banking, tax and campaign finance laws in a federal investigation that scrutinized his business dealings and his efforts to silence women who reportedly have negative stories about Trump.
Cohen pleaded guilty to five counts of tax evasion, one count of making a false statement to a bank and two campaign finance violations: making an unlawful corporate campaign contribution and making an excessive campaign contribution.
“Yes, sir,” Cohen answered when the judge asked if he pleaded guilty.
He said he arranged payments to two women “at the direction of a candidate for federal office.”
Cohen said the payments were “for the principal purpose of influencing the election” for president in 2016.
In entering the plea, Cohen did not name the two women or even Trump, saying instead that he worked with an “unnamed candidate.”
But the amounts and the dates all lined up with the $130,000 paid to adult-film actress Stormy Daniels, whose real name is Stephanie Clifford, and the $150,000 that went to Playboy Playmate Karen McDougal to buy their silence in the weeks and months leading up to the 2016 White House election. Both women claimed to have had affairs with Trump, which he denies.
According to prosecutors, the payment to McDougal
was made through the parent company of the National Enquirer. Cohen made the payment to Daniels through his own company and then was reimbursed by Trump, he said.
Cohen — long the self-professed “fixer” for Trump — agreed to the deal after prosecutors claimed that he risked having to serve more than a dozen years in prison, according to a person familiar with the matter.
Trump’s lawyer, Rudy Giuliani, issued a statement after Cohen’s plea. “There is no allegation of any wrongdoing against the president in the government’s charges against Mr. Cohen,” Giuliani said. “It is clear that, as the prosecutor noted, Mr. Cohen’s actions reflect a pattern of lies and dishonesty over a significant period of time.”
Reminded that he had previously vowed to “take a bullet” or “do anything” to protect the president, Cohen told ABC in July that Trump was not his top priority. “To be crystal clear, my wife, my daughter and my son, and this country have my first loyalty,” he said.
Last month, Cohen attorney Lanny Davis released an audio recording of a September 2016 conversation between Trump and Cohen in which they discussed a deal that McDougal made to sell the rights to her story of an alleged affair with Trump. The move was seen as a dramatic turn against Trump by the Cohen camp.
Trump’s current attorney and advisers have said he has nothing to fear from Cohen.
“If he gets indicted for something that has nothing to do with the president, well, I feel sorry for Michael, although I don’t know how sorry I feel for him, because he was tape recording the world and deceiving them, including his client,” Giuliani told Fox News on Monday.
“But it has nothing to do with us,” he added.
Cohen’s plea agreement comes just one day after the New York federal court overseeing the seizure of Cohen’s records finished its review
of which documents were protected by attorney-client privilege.
The case against Cohen stems in part from a referral by special counsel Robert Mueller, who is investigating Russian interference in the 2016 election and examined Cohen’s role in at least two episodes involving Russian interests, according to people familiar with that probe.
The plea agreement does not call for Cohen to cooperate with federal prosecutors in Manhattan. Still, it does not preclude him from providing information to Mueller.
Late Tuesday, Cohen’s lawyer told MSNBC’s Rachel Maddow that Cohen has knowledge on certain subjects that should be of interest to Mueller and is “more than happy to tell the special counsel all that he knows.”
FINANCIAL DEALS, LOANS
The Cohen investigation first became publicly known in April, when FBI agents searched his New York office, home and hotel room. The searches — in which agents collected all of Cohen’s phones and electronic devices — set off panic in the White House that federal investigators were looking into Trump’s business dealings and communications with Cohen.
Since then, the probe has led to revelations about how Cohen sought to squelch negative stories about Trump and then leverage his access to the president.
After the search, Giuliani acknowledged that the president had made several payments reimbursing Cohen for the $130,000 settlement with Daniels. Trump had previously denied knowledge of the payoff.
Meanwhile, leaked documents showed that Cohen was paid millions last year by companies such as AT&T and Novartis to provide advice about the new administration.
Cohen had been under scrutiny by federal prosecutors starting in the fall of 2017, when Mueller’s team came across some unusual financial transactions and loans Cohen had obtained.
The special counsel referred the matter to the U.S. attorney’s office for the Southern District of New York, which has been looking for evidence of possible bank fraud, wire fraud or violations of campaign finance laws in Cohen’s business dealings, according to people familiar with the matter.
The investigation has examined loans related to Cohen’s taxi medallion business and whether any laws were broken as part of an effort to stifle negative stories about Trump when he was running for president, according to people familiar with the matter.
A central focus of the probe has been on matters that have nothing to do with Cohen’s most famous client but rather Cohen’s attempts to borrow substantial sums of money against his taxi medallions and evidence suggesting that he lied to get the money.
On more than a dozen loan documents, according to two people familiar with investigators’ work, Cohen dramatically inflated the value of his medallion business year after year, even as the industry suffered from the rise of ride-hailing businesses.
Deputy U.S. Attorney Robert Khuzami said Cohen failed to report more than $4 million in income between 2012 and 2016, including $1.3 million from his taxi medallion holdings.
Cohen also lied to a financial institution by failing to
disclose more than $14 million in debt and obtaining a $500,000 home equity line of credit he wasn’t entitled to, Khuzami said. Cohen used that credit line to fund the Daniels payment, prosecutors said.
After making the hush money payments, Cohen submitted phony invoices to Trump’s company, ostensibly for services rendered in 2017, the prosecutor said.
“Those invoices were a sham,” Khuzami said. “He provided no legal services for the year 2017. It was simply a means to obtain reimbursement for the unlawful contributions.”
Under federal law, expenditures to protect a candidate’s political fortunes can be construed as campaign contributions, subject to federal laws that bar donations from corporations and set limits on how much can be given.
“If those payments were a crime for Michael Cohen, then why wouldn’t they be a crime for Donald Trump?” Davis, Cohen’s lawyer, tweeted.
Cohen worked for Trump for more than a decade, starting in 2007. The search of Cohen’s office angered the president, who claimed that prosecutors were violating attorney-client privilege.
Cohen also argued that prosecutors had violated attorney-client privilege by seizing what his lawyers said could be thousands or more items related to his work as a lawyer.
It is unusual for investigators to seize the papers of an attorney, but in court filings federal prosecutors maintained that Cohen was doing very little legal work and that they were investigating his
business dealings to search for evidence of potential crimes.
U.S. District Judge Kimba Wood appointed a former federal judge to act as a special master and review the seized items to assess what material must be withheld from investigators because it is covered by attorney-client privilege.
In the end, only a tiny fraction of the seized material was found to be covered by the privilege, according to court filings.
Although Cohen has for years been portrayed as a lawyer who handled some of the most important and sensitive issues for Trump, the president has insisted to associates in recent months that Cohen was not that closely involved with him.
However, Giuliani said in May that Cohen was routinely asked to handle issues that could cause personal embarrassment for Trump, such as the claim of an affair by Daniels.
“The agreement with Michael Cohen, as far as I know, is a long-standing agreement that Michael Cohen takes care of situations like this, then gets paid for them sometimes,” Giuliani said in May.
One collateral effect of Cohen’s plea agreement is that it may allow Michael Avenatti, Daniels’ lawyer, to proceed with a deposition of Trump in a lawsuit that Daniels filed accusing the president of breaking a nondisclosure agreement concerning their affair.
The lawsuit had been stayed by a judge pending the resolution of Cohen’s criminal case. Avenatti wrote Tuesday on Twitter that he would now seek to force Trump to testify “under oath about what he knew, when he knew it and what he did about it.”