Country Profiles

    Buy Forecast Products

    Buy Country Reviews

    Featured Country

    Americas: United States

    Special Report: "Individual 1" in the crosshairs of legal jeopardy: Cohen case and sentencing memo implicates President Trump 

    Summary:

    President Donald Trump, also known as Individual 1 in legal filimgs, has found himself in the crosshairs of legal jeopardy, based on various cases involving his former lawyer. Sentencing memos from Special Counsel Robert Mueller's office as well as that of federal prosecutors in Manhattan, implicate the president of the United States in criminal activity. As discussed in this special report, on top of a guilty plea deal in August 2018, in late November of 2018, Michael Cohen, President Donald Trump’s former lawyer, also pleaded guilty to lying to Congress regarding Trump's business dealings in Russia, which were investigated by special counsel prosecutors interested in Russian interference in the 2016 presidential election. The court filing revealed Cohen made multiple inquiries with Kremlin-associated figures about the prospect of building a Trump hotel in Moscow, and those lines of communications continued up until June 2016.

    1. Cohen pleads guilty for making hush money payments at Trump's direction --
     
    In August 2018, Michael Cohen, President Donald Trump’s former lawyer pleaded guilty to violating campaign finance laws. Cohen admitted that he paid hush money to women at Trump's direction ahead of the 2016 presidential election. Specifically, Cohen said he was directed by "the candidate," for the "principal purpose of influencing the election."  In this way, the president of the United States was implicated in criminal activity  as a co-conspirator by the man known as Trump's "fixer." 

    Earlier in 2018, Cohen admitted to setting up a limited liability company to pay off Stephanie Clifford, known by her pornographic actress stage name, Stormy Daniels, who was alleged having an affair with Donald Trump in 2006. The admission came after the  Federal Bureau of Investigation (FBI) raided the New York office of  Cohen in April 2018, and seized records relating to payments to  Daniels. 

    To be specific, Cohen was reported to have paid Daniels $130,000 in "hush money" to prevent the pornographic actress from publicly discussing her sexual encounter with Trump. Such a payment, had it occurred for the purpose of protecting Trump's 2016 campaign while not being properly disclosed, could be regarded as a campaign finance violation. It was unclear at the time if the facts of the matter fell into this category or not. For his part, the president in March 2018 claimed that he had no knowledge of the payment.  

    The FBI's investigation into Cohen involved possible bank fraud and campaign finance violations. Although the raid was not directly related to the investigation into Russian interference in the 2016 election being spearheaded by special counsel Robert Mueller, it resulted from information uncovered during his investigation.  Indeed, the raid on Cohen's office occurred as a result of a tip-off from Mueller's team, which was investigating Russian interference into the 2016 election, and the Trump campaign's links to such activity.

    In May 2018, Rudy Giuliani, who joined President Donald Trump's legal team, said in an interview on Fox News that Trump knew of the payment and repaid the $130,000 Cohen had given to Daniels.  This revelation that Trump repaid the money would fly in the face of his earlier claim that he had no knowledge of the payment.  Indeed, on April 5, 2018, when he was asked by reporters if he knew about the payment to Daniels, Trump's response was "No." Trump also denied knowing why the payment was made, saying, "You'll have to ask Michael Cohen. Michael is my attorney. You'll have to ask Michael."

    It should be noted that it was Giuliani's view that the payment to Daniels did not violate campaign finance laws because it was not drawn from Trump campaign funds.

    However, certain details of the supposed repayment disclosed by Giuliani raised eyebrows as he indicated that Cohen had been reimbursed in phases via retainer payments, which were further topped off to compensate for services and taxes. Giuliani said, "They funneled it through a law firm and the president repaid it." That particular admission gave rise to questions as to  whether the president sought to obfuscate the reimbursement to Cohen, and if in so doing, some kind of quasi-money laundering had ensued. 

    The White House, which had earlier denied any kind of liaison between Trump and Daniels,  had no immediate response to these declarations by Giuliani, which clearly contradicted its own claims. Trump himself dismissed the matter outright.  According to Trump, Giuliani -- a member of his own legal team -- did not have the details right of the legal case. Trump said that Giuliani was “a great guy but he just started a day ago” and added that his new legal advisor was still “learning the subject matter.” Trump also said that “virtually everything” reported about the payments was wrong, but declined to explicate any details. 

    Days after his initial remarks about the payments to Daniels, which contradicted the president's claims, Giuliani was back in the media spotlight. In an interview with ABC News, Giuliani  said that he could not foreclose the possibility that "hush money" payments were made to other women to procure their silence regarding allegations against Trump.

    In mid-May 2018, attention returned to the matter of Trump's payment to adult entertainment star, Stormy Daniels.  At issue was President Trump acknowledgement for the first time that he repaid more than $100,000 to his personal attorney Michael Cohen.  The acknowledgment came in the form of an ethics disclosure and contradicted Trump's earlier claim that he was unaware of the Daniels payment.  The veracity of the president's claims aside, the matter also re-opened questions of possible violations of campaign finance law.

    Democratic Representative Elijah Cummings on the House Oversight Committee called for an investigation into the payments.  He said, "President Trump was required by law to report that he funneled money through Michael Cohen to reimburse a secret payment to adult film star Stormy Daniels, but he concealed these payments, and we still do not know why."

    Earlier, in the second week of May 2018, the focus on Trump's lawyer, Cohen, went in a second direction as a number of major corporations were revealed to have paid him for access to the President Trump. 

    Among those corporations was the telecommunications giant, AT&T, which paid Essential Consultants -- a Cohen linked entity -- $50,000 a month to advise them on issues including AT&T's merger with Time Warner.  At the time, the United states Justice Department sought to block AT&T's acquisition of Time Warner due to concerns about competition.

    Once the relationship with Cohen and  Essential Consultants was revealed, AT&T's chief executive, Randall Stephenson, said in a memorandum to employees that the  hiring Donald Trump's lawyer, Cohen,  was "entirely legitimate" but "a serious misjudgment," suggesting that the arrangement had "damaged" its reputation. 

    In fact, AT&T was only one of several firms that paid payments to Essential Consultants.  Raising eyebrows was the revelation that the  pharmaceutical firm, Novartis, as well as a company linked to Russian oligarch Viktor Vekselberg, made payments to Essential Consultants.

    These payments to Essential Consultants were revealed by Michael Avenatti, the lawyer for Stormy Daniels, who was paid "hush money" time of the 2016 presidential election.  Essential Consultants was the very entity used to dispatch that $130,000 payment to Daniels  in exchange for signing a non-disclosure agreement.

    In mid-May 2018, it was reported in the Washington Post that Michael Cohen asked Qatari government officials for at least $1 million in exchange for access to the president-elect at the time, Donald Trump.  Cohen made the offer in late 2016 during a visit of Qatari government officials to Trump Tower.  The Qataris were there to meet with former Trump national security adviser, Michael Flynn, but Cohen's proposal occurred separately, according to a Qatari investor, Ahmed Al-Rumaihi.  Indeed, Rumaihi confirmed that Cohen had indeed requested at least $1 million to secure access to the incoming president.

    It should be noted that Rumaihi connection was first brought to light by Michael Avenatti, the lawyer for the aforementioned adult film star, Daniels.  Via twitter, Avenatti posed the following provocative question: "Why was Ahmed Al-Rumaihi meeting with Michael Cohen and Michael Flynn in December 2016 and why did Mr. Al-Rumaihi later brag about bribing administration officials according to a sworn declaration filed in court?" 

    The revelations that Trump's lawyer sought to benefit financially by promoting and facilitating access to the incoming president revealed some degree of irony.  During his 2016 campaign, Trump often accused the Clinton Foundation  and Hillary Clinton of "pay to play" whereby donors to the foundation might gain access to the Secretary of State -- Hillary Clinton. There was actually no confirmation of such an arrangement, however, it was a popular theme during campaign rallies. But now two years later, it was apparent that Trump's own lawyer was engaged in the very type of "pay to play" he had accused the Clintons of carrying out. 

    With an eye on distancing Trump from Cohen, Trump's new legal adviser on the Russia probe, Rudy Giuliani, said the president was "unaware" Cohen offered access and consultations in exchange for payments.  

    Cohen's legal problems were this mounting by the month, ultimately resulting with him engaging famed lawyer, Lanny Davis, for representation.  Of ironic significance was the fact that Davis had served as former President Bill Clinton's attorney decades prior.  

    By August 2018, as intimated above, Cohen had pleaded guilty to violating campaign finance laws. On Aug. 21, 2018, in a New York courtroom, Cohen admitted to eight counts of tax and bank fraud, including tax evasion, making false statements to a financial institution, willfully facilitating an unlawful corporate contribution, and making a campaign contribution at the request of a candidate or campaign. 

    Prosecutors charged that Cohen had failed for five years to report income from a taxi business, brokerage commissions, and consultancy fees.  As well, they charged that Cohen offered "sham" invoices to the campaign in order to procure 
     reimbursement for his "excessive campaign contribution." 

    The admission of guilt by Cohen was part of a plea deal with prosecutors that was intended to reduce his prison sentence from 65 years to just over five years. 

    Of particular consequence was the fact that Cohen admitted he paid hush money to women at Trump's direction ahead of the 2016 presidential election. Cohen said he was directed by "the candidate," for the "principal purpose of influencing the election."   

    Cohen's lawyer, Lanny Davis, said: "Today he stood up and testified under oath that Donald Trump directed him to commit a crime by making payments to two women for the principal purpose of influencing an election."  In this way, the president of the United States was implicated in criminal activity  as a co-conspirator by the man known as Trump's "fixer."

    Cohen was released on bail of $500,000 and he was scheduled to be sentenced on Dec. 12, 2018.

    While the legal narrative for Cohen was reaching some degree of a conclusion, for President Trump, it was quite likely ramping up.  At issue for Trump was Cohen's reference to Trump as "a candidate for federal office" who had directed him to break federal election laws.

    Cohen's plea deal did not include an agreement to cooperate with federal prosecutors in New York or federal prosecutors working on the Russian interference probe led by the special counsel, Robert Mueller.  Nevertheless, Cohen's lawyer, Lanny Davis, appeared to indicate that his client was open to cooperation of some sort. 

    Davis made clear that if the payments to Daniels -- a violation of campaign finance laws -- placed Cohen in legal jeopardy, then they certainly would have the same effect on the president.  Davis posed the following rhetorical question: "If those payments were a crime for Michael Cohen, then why wouldn't they be a crime for Donald Trump?" 

    Legal experts would respond by noting that a sitting president would have to be impeached; however, there was no legal testing ground for the question of whether or not a sitting president could be indicted.  

    Regardless, the Trump inner circle appeared undeterred.  Trump's lawyer, Rudy Giuliani, asserted that there was "no allegation of any wrongdoing against the president. " 

    Trump himself seemed unconcerned by the Cohen case developments.  In an interview with Fox News, Trump emphasized that the hush money payments to pornographic actress. Daniels, were not made with campaign funds. From Trump's point of view, it seemed that he believed this claim would exonerate him from legal liability. But in truth, a candidate cannot seek to legally evade campaign finance regulations by paying for campaign expenses with non-campaign funds. 

    At the heart of the matter was the fact that while private citizens can certainly use financial incentives to cover up unfavorable private affairs, a candidate in a political campaign would be legally required to disclose how his or her campaign funds were spent.  Had the Trump campaign reported the Daniels payment to the Federal Election Commission, it would have disclosed Trump's relationship with the pornographic actress, with obvious political consequences ahead of the presidential election.  Thus, it would seem that Trump and Cohen sought to circumvent  disclosure regulations. In plain terms it was illegal for Trump to obfuscate a campaign expense.

    Beyond that, there was another dimension. The fact of the matter was that Trump's explanation of hush money payments in August 2018 were a contradiction of his claims in April 2018 that he had no knowledge of the payment at all.  

    The seriousness of the legal case was emphasized later in the same week when it was reported that federal prosecutors granted the Trump Organization CFO  as well as the National Enquirer's chief executive immunity in the Cohen case.  

    According to the Wall Street Journal, Allen Weisselberg, who worked for the Trump Organization for decades, was given immunity, in connection with hush money payments to women.  According to vanity Fair, David Pecker, the chief executive of American Media Inc., which publishes the National Enquirer, was also  given immunity, in connection with hush money payments to women.  

    The general consensus was that both Weisselberg and Pecker were likely involved in obfuscating the payments to Karen McDougal, who was alleged to have an affair with Trump.  As discussed above, concealing such payments would be in violation of campaign finance law, thus leaving both men at risk of criminal exposure. Their cooperation with federal prosecutors would intensify the pressure to be brought not only on Cohen, but also the president.

    Meanwhile, Lanny Davis,  claimed that his client, Michael Cohen, witnessed a discussion between President Trump and his son, Donald Trump Jr., regarding the infamous Trump Tower meeting between Trump campaign officials and Russian agents, including Kremlin-linked lawyer Natalia Veselnitskaya.

    The Trump campaign originally claimed the meeting was intended to discuss adoptions but later admitted it was to garner damaging information on Trump's presidential rival, Hillary Clinton. 

    The meeting was arranged  by British producer Rob Goldstone and offered information that “would incriminate Hillary and her dealings with Russia and would be very useful to your father.”  The response from Trump Jr. made clear that the subject matter was not adoptions and would be welcomed by the Trump campaign as he said: "If it's what you say I love it." 

    Seeking such information from a foreign power could well be regarded as conspiracy to defraud the United States -- something very likely being probed by Special Counsel Mueller's team. 

    On CNN, Davis warned that his client was eager to "tell truth to power" and that Cohen's accounts would be of particular interest to special counsel,  Mueller.   Davis repeated that his client was willing to talk to the Mueller team during an interview on MSNBC.  Davis additionally suggested that the Trump Tower meeting was “the obvious possibility of a conspiracy to collude and corrupt the American democracy system.”  

    In a separate CNN interview, Davis indicated that President Trump knew about hacked Democratic National Committee (DNC) emails before their release by Wikileaks during the 2016 presidential election.  

    Davis said, "I believe that he [Cohen] observed and saw Mr. Trump being aware of the use of emails to damage  Hillary Clinton's campaign. That could only have been derived through illegal hacking from a Russian agency called WikiLeaks." Davis continued, “What I’m suggesting is that Mr. Cohen was an observer and was a witness to Mr. Trump’s awareness of those emails before they were dropped and it would pertain to the hacking of the email accounts.”

    At issue in this case was the publication of the hacked emails from the DNC and Clinton campaign chairman John Podesta by Wikileaks.  Of grave importance was the conclusion reached by United states intelligence that Russia carried out a concerted effort to  interfere in the 2016 presidential election in the United states, and to influence the election of Donald Trump.

    While  this report has centered on the campaign finance violations / hush money case against Cohen, it was converging with Special Counsel Mueller's probe into Russian  election interference.  To this end, Cohen's lawyer Davis said on  MSNBC that his client was "more than happy to tell the special counsel all that he knows.”

    2. Trump involved in "nearly every step" of hush-money payments to women

    In early November 2018, the Wall Street Journal reported that President Donald Trump was involved in "nearly every step" of hush-money agreements to women.  The payments were to women -- Stormy Daniels and Karen McDougal -- who claimed to have had affairs with Trump before he became president. The Wall Street Journal said that Trump, as a presidential candidate, "directed deals in phone calls and meetings" centered on silencing the women.  The Wall Street Journal also reported that Trump may have violated federal campaign finance laws in forging such agreements with the women. 

    In the case of the $150,000 payment to Playboy model, Karen McDougal, American Media Chief Executive David Pecker paid the money to McDougal for her story, which it never published.  According to the Wall Street Journal. the payment was made after "Mr. Trump asked Mr. Pecker to quash" McDougal's story.

    For his part, Trump initially denied knowing about the $130,000 payment made to Stormy Daniels, an adult film actress who said she had sexual intercourse with Trump in 2006.  Trump also  denied that sexual encounter with Daniels even took place.  

    Trump's claims have been somewhat upended by the guilty plea of his former attorney, Michael Cohen, to charges of campaign finance violations.  Also upending Trump's account was the fact that Cohen admitted that he made payments to two women, at the direction of Trump when he was a candidate for political office.  The payments were issued for political reasons, given the stake in the 2016 presidential election.  

    As noted by Cohen's lawyer, Lanny Davis,  "Donald Trump directed [Cohen] to commit a crime by making payments to two women for the principal purpose of influencing an election."  According to the Wall Street Journal, the payments were made in a circuitous manner "without leaving the candidate's fingerprints on the deal." 

    Note: Under campaign finance law, contributions to a federal candidate cannot exceed $2,700 and donations must be disclosed. 

    3. Former Trump lawyer Cohen pleads guilty to lying to Congress

    On Nov. 29, 2018. Michael Cohen -- President Donald Trump's former personal lawyer -- pleaded guilty to lying to Congress about a proposed Trump Organization real estate project in Moscow.  The plea appeared to signify an intensification of the investigation into Russia's role in the 2016 election by Special Counsel Robert Mueller. 

    In federal court, Cohen, a Trump stalwart who characterized himself as the president's "fixer," pleaded guilty to one count of making false statements to two congressional panels about a real estate venture in Russia being pursued by Trump at the time he was running for president in 2016.

    In 2017, Cohen submitted written statements to Congress asserting that efforts by Trump to build a Trump Tower skyscraper in Moscow had come to a conclusion by the start of 2016.  Now, in 2018, Cohen was acknowledging that the pursuit of the Moscow deal continued for several months - until June 2016, a period when Trump had secured the Republican presidential nomination. While the Trump skyscraper project never came to fruition, via the guilty plea, Cohen admitted that he had provided false statements to both the Senate and House intelligence committees.  

    Cohen also admitted that while he told Congress that he had limited contact with Trump concerning the Moscow skyscraper project, his engagement was, in fact, "more extensive." Cohen additionally admitted that although he told Congress that he took no steps toward traveling to Russia, in fact, such a trip was discussed. 

    As Cohen's lawyers sought to secure a more lenient sentence for their client, Cohen said that he tried to downplay Trump's attempt to secure the Trump Tower deal during the 2016 presidential campaign. Cohen admitted that he was in “close and regular contact” with Trump’s political and legal teams when he prepared a statement for Congress regarding the Moscow skyscraper project.  He also admitted that although he suggested that the effort was "effectively terminated before the Iowa caucuses of February 1, 2016,” this was not the case.  Indeed, there were plans in the works for a trip to Russia in the summer of 2016 and Trump was kept “apprised” of Cohen's contacts with Russia during the campaign.

    In his guilty plea, Cohen explained his actions referencing Trump as "individual 1" as follows:  "I made these misstatements to be consistent with individual 1's political messaging and out of loyalty to individual 1."  Individual 1 has been identified as Donald Trump. 

    Of significance was the fact that Cohen had in August 2018 already pleaded guilty to a number of criminal charges brought by federal prosecutors in the state of New York.  These ranged from tax evasion and bank fraud to campaign finance violations.

    With the news of Cohen's latest guilty plea being reported in the news, Trump angrily reacted in remarks to journalists, saying of his former lawyer, "He's a weak person and not a very smart person. He's got himself a big prison sentence. And he's trying to get a much lesser prison sentence by making up this story."

    Trump also attempted to defend his cadre's contacts with Russia, saying of Cohen's admission, "Now here's the thing. Even if he was right, it doesn't matter because I was allowed to do whatever I wanted during the campaign. I was running my business, a lot of different things during the campaign."  He added, "Everybody knows about this deal. I wasn't trying to hide anything."  

    But in fact, on July 27, 2016, Trump said to a Miami CBS news station that he had nothing to do with Russia and had never met Putin, saying, “But I have nothing to do with Russia, nothing to do, I never met Putin, I have nothing to do with Russia whatsoever.”  That claim contradicted not only Cohen's admission but also Trump's own statement that a deal with Russia was known. 

    Making Trump's claims more suspect was the news broken by Buzzfeed that  Trump’s company planned to give a penthouse at  the proposed Trump Tower Moscow to Russian President Vladimir Putin.  According to four Buzzfeed sources, including the originator of the plan, the penthouse was valued at $50 million and was part of Trump's luxury real estate development negotiations in Russia.  Buzzfeed's reporting on this matter dated back to May 2018 when the media outlet covered associations between Cohen and a business associate, Felix Sater, with political and business moguls in Moscow.

    As stated by Sater to Buzzfeed, “In Russia, the oligarchs would bend over backwards to live in the same building as Vladimir Putin. My idea was to give a $50 million penthouse to Putin and charge $250 million more for the rest of the units. All the oligarchs would line up to live in the same building as Putin.” This plan was confirmed to Buzzfeed by a second source.

    It should be noted that after announcing that he would meet with Russian President Vladimir Putin at the Group of 20 industrialized nations summit in Argentina, Trump canceled the meeting. The Trump administration said that the cancelation was due to the imbroglio in the Sea of Azov close to the Crimea region whereby Russia seized three Ukrainian ships, generating a geopolitical crisis.  However, there were some suggestions that the Cohen plea deal may have also contributed to the decision, with the White House anxious to distance itself from Putin and Russia.  

    4. Federal Prosecutors say Trump oversaw illegal payment in 2016 presidential election

    Federal prosecutors on December 7th, 2018 in Manhattan filed a sentencing memo for Michael Cohen, President Donald Trump's former personal attorney, that stated Donald Trump directed illegal hush-money payments to two women during the 2016 presidential election season. The filing specifically stated that “Cohen himself has now admitted, with respect to both payments, he acted in coordination with and at the direction of Individual-1.” It should be noted that "Individual-1" denotes President Donald Trump. 

    Cohen had already pleaded guilty in August of 2018 to the campaign finance crimes investigated by Manhattan federal prosecutors. Months later in December 2018, federal prosecutors from the Southern District of New York argued for a "substantial" prison sentence, which was likely to be for four years. Cohen tried to avoid a prison term, but the prosecutors cited his "personal greed" and his track record of having “repeatedly used his power and influence for deceptive ends" to ensure he was not granted such leniency. 

    The guilty plea implicated President Trump in two illegal payments to two women: Stormy Daniels, a pornographic film actress, and Karen McDougal, a model and actress who used to appear in Playboy. The women were offered money to the value of $130,000 and $150,000 respectively in exchange for silence regarding affairs they had with Donald Trump.

    Alongside the Manhattan federal prosecutors memo, a filing from prosecutors for Special Counsel Robert Mueller stated Cohen met a Russian individual in November of 2015 who offered “synergy on a government level” between the Russian government and the Trump presidential campaign. The unnamed individual also lobbied for a meeting between Trump and Russian President Vladimir Putin, though Cohen claimed he never followed up with this opportunity. The special counsel's prosecutors noted that Cohen “had gone to significant lengths to assist the Special Counsel’s investigation" and recommended a sentence of six months. 

    Note:  The main fallout of the sentencing memo from prosecutors from the Southern District of New York was that the president of the United States -- Individual 1 -- was now being implicated in two criminal felonies.   As noted by Democratic Representative Ted Lieu, a member of the House Judiciary Committee, "We have a sitting president of the United States who committed two felonies while running for president.” He added, “When you look at what the prosecutors did in the Southern District of New York, they allege that Donald Trump directed two campaign finance violations. These are felonies and you can infer intent by looking at a defendant’s statements." 
     

    Written by:

    Denise Youngblood Coleman,  PhD. 

    President and Editor in Chief

    CountryWatch Inc.

    and 

    Alexander Ross

    Contributing Writer

    CountryWatch Inc.


    --  Dec. 11, 2018

     

     

     

     

    Copyright CountryWatch, Inc. All Rights Reserved.
    No portion of CountryWatch content can ever be reproduced or republished without expressed written consent from CountryWatch Editor in Chief.

    X
    X
    Your subscription status: (products you have access to)
    Country Reviews CountryWatch Maps
    Country Wire Culture Watch
    Country Data CountryWatch Videos
    Political Intelligence Briefing Elections Central
    Intelligence Wire Forecast
    Global Guide Political Intelligence Zone
    Country Briefing