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Michael Cohen says hush money paid ‘at the direction of a candidate’

NEW YORK — Michael Cohen, President Trump’s former lawyer, made the extraordinary admission in court Tuesday that Trump had directed him to arrange payments to two women during the 2016 campaign to keep them from speaking publicly about affairs they said they had with Trump.

Cohen acknowledged the illegal payments while pleading guilty to breaking campaign finance laws and other charges. He told a judge in US District Court in Manhattan that the payments to the women were “at the direction of the candidate” and “for the principal purpose of influencing the election” for president in 2016.

Cohen also pleaded guilty to multiple counts of tax evasion and bank fraud, bringing to a close a monthslong investigation by federal prosecutors who examined his personal business dealings and his role in helping to arrange financial deals with women connected to Trump.

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The plea came shortly before another blow to the president: His former campaign manager, Paul Manafort, was convicted in his financial fraud trial in Virginia. Special Counsel Robert Mueller III had built a case that Manafort hid millions of dollars in foreign accounts to evade taxes and lied to banks to obtain $20 million in loans.

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In federal court in Manhattan, Cohen made the admission about Trump’s role in the payments to the women as he pleaded guilty to two campaign finance crimes.

One of those charges stemmed from a $130,000 payment he made to an adult film actress, Stephanie Clifford, better known as Stormy Daniels, in the run-up to the 2016 presidential election. The other concerned a complicated arrangement in which a tabloid bought the rights to the story about a former Playboy model, Karen McDougal, then killed it.

Silent on Cohen, Trump says Manafort conviction ‘a disgrace’

The guilty plea and Cohen’s statements in court represent a pivotal moment in the investigation into the president’s campaign: a once-loyal aide admitting that he made payments at the behest of Trump to shield him from politically damaging disclosures.

In this court room drawing, Michael Cohen stood to plead guilty, flanked by Assistant US Attorney Andrea Griswold, left, and Cohen's attorney Guy Petrillo, far right, at federal court in New York Tuesday.
Elizabeth Williams via AP
Cohen stood to plead guilty, flanked by Assistant US Attorney Andrea Griswold (left) and Cohen's attorney Guy Petrillo (right) in court.

Trump’s lawyers have, for months, said privately that they considered Cohen’s case to be potentially more problematic for the president than the investigation by Mueller.

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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.”

Cohen had been the president’s longtime fixer, handling his most sensitive matters. He once said he would take a bullet for Trump.

The plea agreement does not call for Cohen to cooperate with federal prosecutors in Manhattan. Still, it does not preclude him from providing information later to them or the special counsel, who is examining the Trump campaign’s possible involvement in Russia’s interference in the 2016 campaign.

Cohen faces a recommended prison sentence of 46 to 63 months, according to court filings. If he were to substantially assist the special counsel’s investigation, Mueller could recommend a reduction in his sentence.

The charges against Cohen were not a surprise, but he had signaled recently he might be willing to cooperate with investigators who for months have been conducting an extensive investigation of his personal business dealings.

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His guilty plea comes a month after he gave an interview to George Stephanopoulos on ABC News and said he would put “his family and country first” if prosecutors offered him leniency in exchange for incriminating information on Trump.

In July, in what appeared to another public break with Trump, one of Cohen’s lawyers, Lanny Davis, released a secret audio recording that Cohen had made of the president in which it seems that Trump admits knowledge of a payment made to McDougal, the model.

As part of their investigation, prosecutors had been looking into whether Cohen violated any campaign finance laws by making the $130,000 payment to Clifford in the run-up to the 2016 presidential election.

Cohen’s plea culminates a long-running inquiry that became publicly known in April when FBI agents armed with search warrants raided his office, apartment, and hotel room, hauling away reams of documents, including pieces of paper salvaged from a shredder, and millions of electronic files.

Lawyers for Cohen and Trump spent the next four months working with a court-appointed special master to review the documents and data files to determine whether any of the materials were subject to attorney-client privilege.

The special master, Barbara Jones, who completed her review last week, issued a series of reports in recent months, finding that only a small fraction of the materials were privileged and the rest could be provided to prosecutors.

On Monday, the judge overseeing the review, Kimba Wood of US District Court in Manhattan, issued an order adopting Jones’s findings. It was unclear Tuesday what role the materials that Jones reviewed may have had in the charges against Cohen.

One collateral effect of Cohen’s plea agreement is that it may allow Michael Avenatti, Clifford’s lawyer, to proceed with a deposition of Trump in a lawsuit that Clifford 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 on Twitter 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.”

Cohen pleaded guilty to eight separate charges, detailed in a document called a criminal information: five counts of tax evasion for his personal income tax returns from 2012 to 2016, one count of bank fraud, and the campaign finance violations.

The bank fraud charge stems from a series of loans Cohen obtained or sought to obtain between 2010 and 2015.

Cohen pleaded guilty to making false statements to a bank about his net worth and failing to disclose several loans, some of which were collateralized by taxi medallions.

One element of the charge relates to a series of loans for more than $20 million made by two financial institutions, Sterling National Bank, and the Melrose Credit Union, in 2014.

Publicly filed financing statements showed that the 2014 loans were secured by 32 taxi medallions owned by Cohen and his family. The medallions were then valued at more than $1 million each and generated a total of more than $1 million a year in income.

Sixteen separate companies controlled by Cohen and his family received the loans. Each company owned two taxi medallions. Cohen and his wife also personally guaranteed the loans, according to the filings.

There is no indication that either financial institution suffered a loss as a result of the loans or that Cohen missed payments, which are ordinarily important aspects in a bank fraud case. While bank fraud without a loss is rarely charged on its own, it is sometimes charged in conjunction with other crimes, as it was in Cohen’s case.