The Twisted Web of Michael Cohen and Why it Matters
Michael Cohen was once President Trump’s “pit bull,” and personal lawyer. He enjoyed an office next to the real estate mogul and claimed he was so loyal to his idol that he would take a bullet for the man. Now Cohen is at the center of a criminal case involving allegations of wire fraud, bank fraud, and campaign finance law violations. The charges largely stem from a payment made by him to Stormy Daniels to cover up the porn star’s affair with the president. The New Yorker’s taxicab business is also in the spotlight.
Considering the mass of updates in the Cohen case, it can be hard to keep up with what’s going on. It can also be difficult at times to see why Cohen is so important when there are other seemingly more important events going on in the world. But the Cohen case is integral to several current events, including answering the question of collusion between the Trump campaign and Russia.
In order to understand the current standing of the case, it’s important to first know who exactly Cohen is.
Michael Cohen’s Beginnings
Michael Cohen was born in Long Island New York and grew up reading The Art Of The Deal. He made it no secret to friends, family, and anyone who would listen, that he wanted to meet Donald Trump one day. After attending American University and the Thomas A. Cooley School of Law, Cohen went to work as a personal injury attorney.
Along with his law career, Cohen began dabbling successfully in real estate and the New York City taxi cab business. At one time, his biography listed him as the co-owner of the Taxi Funding Corp. alongside Symon Garber. The business controlled more than 200 taxis in the city.
Taxi Cab Business
According to the New York Times, Cohen got started in the taxi business in the early 1990s with the help of his father-in-law. While practicing law, Cohen and Garber borrowed from banks and credit unions to buy taxi medallions in New York City. They then used those medallions as collateral to buy even more. Eventually, Cohen owned 30 medallions, each worth about $250,000. The business earned him millions.
However, in 2006, Cohen put the taxi business into Gerber’s hands and the men later had a falling out. Their disagreement led to Cohen joining forces with Russian immigrant, Evgeny Freidman, who had his own taxi business.
Since that time, Cohen and his various business partners have faced numerous charges, including a court ordered payment of $1 million for “overcharging their drivers.” They have also been accused of “forging signatures, stiffing lawyers and dodging debt collection efforts.
At one point, Cohen’s taxi business had failed to pay at least $375,000 in taxes.
In 2007, Cohen went to work for the Trump Organization.
Cohen And The Trumps
There are a few different stories for how Cohen came to work for the Trumps. According to some, Donald Trump Jr. recruited Cohen. According to others, the attorney appeared on Trump’s radar after he started buying up properties in Trump buildings. Either way, the two became fast friends. Cohen eventually earned himself an office on the 26th floor of Trump Tower, right next to the real estate mogul.
Michael Cohen became Trump’s “pit bull” and personal fixer. According to a report from the Associated Press, Cohen likened himself to Ray Donovan, a television character known for doing whatever it took to protect the tycoon he worked for.
Cohen often berated the media if they wrote bad things about Trump. The AP notes that he worked with tabloids like the National Enquirer to kill stories that would put Trump in a bad light. He also admitted to using a home-equity loan to finance the Stormy Daniels payoff.
As the AP explained, Cohen was “Trump’s outside-the-courtroom problem-solver.” It seemed that the lawyer worked more as Donald Trump’s fixer and less as an actual attorney. That distinction could be at the heart of the pair’s claims to attorney-client privilege.
The 2016 Election
While Michael Cohen never officially worked for the Trump campaign, he aided the president’s political efforts in other ways. The AP reports that Cohen used his contacts in the media to do things like “cultivate Trump’s image.” He also set up Trump’s diversity coalition and served as a liaison between Donald Trump and the National Enquirer to cover up any scandalous stories about the candidate.
The Enquirer paid for stories about Trump, including one from former Playboy Playmate Karen McDougal, who claimed to have had a nine-month affair with the real estate mogul. Cohen facilitated a payment of $150,000 to ensure McDougal’s silence and make sure the Enquirer never ran the story. But it was Michael Cohen’s role in the Stormy Daniels case that earned him a closer look from prosecutors.
Enter Stormy Daniels
In January 2018, the Wall Street Journal revealed documents related to an affair between Stormy Daniels (real name: Stephanie Clifford) and Donald Trump. The president, just one year into his term, vehemently denied the allegations. Or, more clearly, the president used his personal lawyer, Michael Cohen, to deny the affair ever happened.
However, the affair did happen, and Michael Cohen paid the adult film actress $130,000 in hush money to prevent her from telling everyone what happened. The only catch? Daniels had already conducted an unpublished interview with In Touch Weekly about the affair in 2011. In light of the WSJ story, In Touch Weekly published the interview, which included explicit details about the affair.
According to the interview, Stormy Daniels and Trump met during a celebrity golf tournament in Tahoe in 2008. Daniels broke off their interactions when she became pregnant with her daughter. She didn’t think much of the affair until she was approached by Michael Cohen in October 2016 with an offer. In exchange for her silence, Cohen offered to give Daniels $130,000. She just had to sign a non-disclosure agreement (NDA).
When the news broke, Cohen and the White House denied Trump’s affair ever happened. However, they never denied the NDA or payment to the adult actress. Rather, Michael Cohen claimed he paid Daniels through his personal funds. In a statement to the New York Times, he explained, “Neither the Trump Organization nor the Trump campaign was a party to the transaction with Ms. Clifford, and neither reimbursed me for the payment, either indirectly or directly.” Cohen added that he made a similar statement to the Federal Election Commission. But that wasn’t exactly true.
In their exposé, The Wall Street Journal pointed out Essential Consultants LLC, a shell company Michael Cohen set up to pay Daniels. Cohen created the company in Delaware in 2016, just weeks before the election. He picked Delaware for its laws related to LLC companies: There is no law to publicly disclose the names of their managers. Cohen is listed as an “authorized person” for the company, but there are no other known directors or employees, according to The Atlantic. And, as it would turn out, the Stormy Daniels payment was just one thing Essential Consultants was used for.
Federal Agents Raid Cohen’s Office And Home
All was (mostly) quiet until FBI agents raided Michael Cohen’s law office and home in early April. The agents involved acted partially on a referral by special counsel Robert Mueller. The former FBI director is investigating Russian interference in the 2016 presidential election.
Stephanie Ryan, one of Cohen’s lawyers, released a statement after the raid. CNN reports that the statement read, in part, “I have been advised by federal prosecutors that the New Yor action is, in part, a referral by the Office of the Special Counsel, Robert Mueller.”
In a court filing shortly after the raid, the Justice Department explained that Michael Cohen was “under criminal investigation” and had been for months. The filing added that the criminal investigation is related to suspicion of “acts of concealment” and “fraud.” The search warrant covered information related to the Stormy Daniels payment, as well as communications between Cohen and Donald Trump.
According to The Washington Post, the Department of Justice approved the warrant under the direction of Deputy Attorney General Rod Rosenstein. It was executed by the U.S. Attorney’s Office for the Southern District of New York and involved 12 FBI agents.
Cohen’s lawyer claimed the raid was “inappropriate and unnecessary,” adding that her client, “cooperated completely with all government entities.” But the Post notes that investigators wouldn’t have carried out the search if they didn’t have sufficient evidence that something else was going on.
Two of the crimes being investigated were bank fraud and wire fraud, suggesting that prosecutors feel Cohen may have lied about why he was using particular funds. Either that or they believe he may “may have improperly used banks in the transfer of funds.”
To acquire money for the Stormy Daniels payment, Michael Cohen told investigators he took out a home-equity line of credit. While banks don’t usually need an explanation for the credit line, Cohen may have been asked why he was transferring money to Essential Consultants LLC for the Daniels payment. Investigators were apparently interested in potential violations of election law, according to the Washington Post.
Michael Cohen’s Loyalties Shift?
In the weeks after the raid, Michael Cohen remained loyal to Donald Trump, declaring on a radio show that he would rather “jump out of a building than turn on Donald Trump.”
Michael Cohen said today that "I’d rather jump out of a building than turn on Donald Trump,” according to @DonnyDeutsch, who ate lunch with him at Barneys in Manhattan.
— Michael M. Grynbaum (@grynbaum) April 11, 2018
For his part, Trump remained loyal to his fixer, accusing the Justice Department of carrying out a “witch hunt” against Cohen. He claimed the FBI “broke into” Cohen’s office.
In May, the president finally acknowledged the Stormy Daniels payments in a series of tweets, writing:
Mr. Cohen, an attorney, received a monthly retainer, not from the campaign and having nothing to do with the campaign, from which he entered into, through reimbursement, a private contract between two parties, known as a non-disclosure agreement, or NDA. These agreements are…..
— Donald J. Trump (@realDonaldTrump) May 3, 2018
…very common among celebrities and people of wealth. In this case it is in full force and effect and will be used in Arbitration for damages against Ms. Clifford (Daniels). The agreement was used to stop the false and extortionist accusations made by her about an affair,……
— Donald J. Trump (@realDonaldTrump) May 3, 2018
…despite already having signed a detailed letter admitting that there was no affair. Prior to its violation by Ms. Clifford and her attorney, this was a private agreement. Money from the campaign, or campaign contributions, played no roll in this transaction.
— Donald J. Trump (@realDonaldTrump) May 3, 2018
As Cohen’s case heated up, he began to change his mind about Trump. In July, Michael Cohen spent 45 minutes with ABC News’ George Stephanopoulos talking about the investigation and what he will do in the coming weeks and months.
At one point in the interview, the lawyer indicated he would cooperate with Mueller and federal prosecutors, even at the president’s expense. He explained, “My wife, my daughter, and my son have my first loyalty and always will. I put family and country first.” Cohen added that his decision to cooperate would be based on the legal advice of his new attorney.
He stated, “Once I understand what charges might be filed against me, if any at all, I will defer to my new counsel, Guy Petrillo, for guidance.”
Cohen was also critical of Trump’s policies and the way the president responded to the FBI raid. Cohen told Stephanopoulos, “I don’t agree with those who demonize or vilify the FBI. I respect the FBI as an institution, as well as their agents.” He added of the Russia investigation, “I don’t like the term witch hunt.”
The Stephanopoulos interview hinted to some that Cohen could turn on Trump. But Trump didn’t see it coming until late July.
Recent Case Revelations
On July 24, CNN obtained a tape recording of a conversation between Donald Trump and Michael Cohen. The conversation took place in 2016 and includes a discussion about the payment made to Karen McDougal. Two days later, CNN also reported that Trump knew in advance of a meeting being held at Trump Tower where a group of Russians prepared to offer dirt on Hillary Clinton. According to the lawyer, the president approved the meeting, which took place in June 2016.
At once, Trump’s narrative about Michael Cohen changed. Trump tweeted out in response to the leaked tape:
What kind of a lawyer would tape a client? So sad! Is this a first, never heard of it before? Why was the tape so abruptly terminated (cut) while I was presumably saying positive things? I hear there are other clients and many reporters that are taped – can this be so? Too bad!
— Donald J. Trump (@realDonaldTrump) July 25, 2018
Of the 2016 meeting at Trump Tower, the president vehemently denied any knowledge, writing:
…..I did NOT know of the meeting with my son, Don jr. Sounds to me like someone is trying to make up stories in order to get himself out of an unrelated jam (Taxi cabs maybe?). He even retained Bill and Crooked Hillary’s lawyer. Gee, I wonder if they helped him make the choice!
— Donald J. Trump (@realDonaldTrump) July 27, 2018
Rudy Guiliani, who once praised Cohen for his trustworthiness, called his fellow lawyer a “pathological liar.” Interestingly enough, Guiliani said in an interview with CNN’s Dana Bash, “I do not expect that Michael Cohen is going to lie.” Trump’s new lawyer added, “I think he’s going to tell the truth as best he can.”
But a post-tape, post-2016 allegations Guiliana had a different take on Cohen. While dismissing Cohen’s claims, the former mayor said, “[Cohen] is a liar. A proven liar.”
July 8: If Cohen believes it’s in his best to cooperate, God bless him, he should cooperate. I do not expect him to lie. I think he’s going to tell the truth, as best he can, given his recollection
— The Situation Room (@CNNSitRoom) July 27, 2018
A source told CNN that Trump is extremely upset about Cohen’s revelations. According to the source, Trump’s legal team, including Rudy Guiliani, is trying to discredit Cohen. But it’s hard to believe that Trump would trust a man so thoroughly that he knew to be a “pathological liar.” No explanation has been given yet for why the president would rely so much on someone who was apparently so untrustworthy.
Time will tell who is telling the truth, but with recordings and intimate knowledge of Trump’s inner workings, Michael Cohen might be the one to bet on.
There remain several unanswered questions in the Michael Cohen case that investigators are working to uncover. Last week, the court’s overseer, Special Master Barbara S. Jones, finished her review of documents obtained during the April FBI raid. Here are just a few that federal prosecutors are trying to answer:
What did the FBI get in the raid on Michael Cohen?
The biggest question of late is what is in the documents and tapes seized in the raid. The fact that Cohen made tape recordings of some meetings with Trump has caused concern in the President’s camp and given hope to his critics. The fact that the FBI had to jump through high-level hoops for a warrant on Cohen suggests they have compelling evidence in their case. It also suggests the information they obtained will help significantly with their case — and maybe with Mueller’s investigation as well. In total, more than 100 recordings were seized, of which nearly 100 allegedly contain conversations with Trump.
What happened in Prague?
While Stormy Daniels is interesting and the leaked tape is significant to the case, prosecutors are also looking into a trip Cohen took to Prague in the summer of 2016. While Michael Cohen denied making a trip there (even taking to Twitter to say he was never there), investigators determined that he is lying.
— Michael Cohen (@MichaelCohen212) January 11, 2017
The revelation is important because it backs up a claim made by former British spy Christopher Steele. He claimed in a private intelligence report that Cohen met with a Russian official in Prague to discuss Russia’s support for Trump in the 2016 election.
What’s up with the payments AT&T and Novartis made to Cohen’s shell company?
Between late 2017 and early 2018, AT&T paid Michael Cohen’s shell company, Essential Consultants LLC, $200,000. In that same time frame, Novartis also made four separate payments to the tune of $400,000. A third company, owned by a Russian oligarch, also paid money to the LLC.
In a prepared statement to CNBC, AT&T explained that Essential Consultants “was one of several firms we engaged in early 2017 to provide insights into understanding the new administration.” AT&T added, “They did no legal or lobbying work for us, and the contract ended in December 2017.
At the time, AT&T was considering an acquisition of Time Warner. That merger was completed in June. The Wall Street Journal reports that AT&T’s chief lobbyist, Bob Quinn, oversaw the Cohen contract. A source told the WSJ that Quinn was forced out.
Shortly after Novartis paid Essential Consultants, rumors surfaced that Trump took a dinner with the incoming CEO of the pharmaceutical company when he was in Switzerland in January 2018. A spokesperson for the company told CNBC that “any agreements with Essential Consultants were entered before our current CEO taking office in February of this year and have expired.”
It’s not clear if Trump knew about the deals Michael Cohen made with AT&T or Novartis. It’s possible the Cohen documents will offer investigators some much needed insight.
Here’s Why The Michael Cohen Case Matters
The case involving Michael Cohen is convoluted and confusing. There are many elements involved, from payoffs and contracts to lies and taxicabs. It’s possible that the Stormy Daniels payment wasn’t made in violation of campaign finance laws. It’s possible that Michael Cohen’s taxicab business was 100 percent legitimate. But it’s also possible that Michael Cohen is the key to breaking open the case for Donald Trump and collusion with Russia.
Updates come in almost every day in the case, because investigators are poring over new information. Once the investigation is complete, we will have a clearer picture of what exactly happened between Donald Trump and Michael Cohen.