Franklin, Andrews, Kramer & Edelstein

[scion]

Cohen Sentencing, Tabloid Deal Intensify Spotlight on Trump

After securing 3-year prison term for Michael Cohen, government reveals cooperation agreement with National Enquirer publisher

By Nicole Hong and Rebecca Davis O’Brien Updated Dec. 12, 2018 10:45 p.m. ET
https://www.wsj.com/articles/michael-cohen-trumps-former-lawyer-sentenced-to-threeyears-in-prison-11544634377

The sentencing of one former ally of President Trump and the disclosure of a key agreement with another intensified the focus on Mr. Trump’s alleged role in coordinating efforts to suppress the stories of two women to protect his 2016 campaign.

The dual developments on Wednesday came as part of a legal saga that has led Mr. Trump’s own Justice Department to directly implicate him in federal crimes, exposing him to potential legal and political peril as he enters the second half of his presidential term.

Michael Cohen, Mr. Trump’s longtime fixer and personal lawyer, was sentenced Wednesday in federal court to three years in prison. He had pleaded guilty in recent months to nine felony counts, including two campaign-finance violations related to payments he arranged during the 2016 presidential campaign to silence two women who said they had sexual encounters with Mr. Trump.

Shortly after Mr. Cohen’s sentencing, prosecutors publicly disclosed that American Media, Inc., the National Enquirer’s parent company, had also admitted to coordinating with the Trump campaign in making one of those illegal payments. The company said the purpose of its $150,000 payment to a former Playboy model in August 2016 was to quash her story of an affair with Mr. Trump to prevent it from influencing the 2016 election—not for legitimate editorial reasons, as the company previously said.

American Media has provided “substantial” assistance to investigators and agreed to future cooperation, prosecutors said. In exchange, the government said it won’t criminally prosecute the company for any campaign-finance violations.

Among the assistance provided, David Pecker, American Media’s chief executive and a longtime friend of Mr. Trump, shared information with prosecutors about Mr. Trump’s direct involvement in the payment scheme and received immunity for testifying before a grand jury in the Cohen investigation, the Journal previously reported.

Mr. Trump on Monday described the payments Mr. Cohen arranged as a “simple private transaction” and said if the payments were illegal, it was his lawyer’s “mistake.” The president has denied the sexual encounters with the women as well as ordering Mr. Cohen to arrange the payments to them.

Rudy Giuliani, a lawyer for Mr. Trump, said in an interview after the sentencing that the payments were legal.

At his sentencing Wednesday before a packed federal courtroom in downtown Manhattan, Mr. Cohen, 52 years old, apologized for lying to the American public and told the judge his “blind loyalty to Donald Trump” had led him astray from his values.

“Time and time again, I felt it was my duty to cover up his dirty deeds, rather than listen to my own inner voice,” Mr. Cohen said, as his daughter wept in the seat behind him.

Mr. Cohen said the sentencing would free him from the “personal and mental incarceration” he has been under since he started working for Mr. Trump more than a decade ago. When he took the job, he admired the real-estate tycoon’s business acumen, Mr. Cohen said, adding: “I now know there is little to be admired.”

Ahead of the 2016 election, Mr. Cohen paid $130,000 to Stephanie Clifford, the former adult-film star known professionally as Stormy Daniels, to keep quiet about her allegations of a sexual encounter with Mr. Trump. Mr. Cohen also facilitated American Media’s payment to the former Playboy model Karen McDougal. The Journal first revealed the existence of the payments.

In a pre-sentencing court filing last week, federal prosecutors in Manhattan wrote that Mr. Trump, identified in the document as “Individual-1,” directed and coordinated both illegal payments with Mr. Cohen. The filing indicated investigators have evidence corroborating Mr. Cohen’s statements, made in open court in August, that he committed the campaign-finance violations at Mr. Trump’s direction and with the purpose of influencing the 2016 election.

The Wall Street Journal first reported a month ago the details of Mr. Trump’s central role in the payments, including that he was involved in or briefed on nearly every step of the agreements.

The statements by Mr. Cohen and American Media could undercut Mr. Trump’s ability to argue the payments weren’t intended to protect his campaign. Mr. Trump has previously said they didn’t constitute campaign contributions.

In handing down his sentence, U.S. District Judge William H. Pauley III said Mr. Cohen admitted to a “veritable smorgasbord of fraudulent conduct,” including crimes that undermined democratic institutions. In addition to the campaign-finance charges, Mr. Cohen pleaded guilty in August to five counts of tax fraud and one count of making false statements to a bank. Last month he pleaded guilty to a charge brought by the office of special counsel Robert Mueller that he lied to Congress.

Although Mr. Cohen deserves credit for taking steps to cooperate with investigators, Judge Pauley said, “that does not wipe the slate clean.” He ordered Mr. Cohen to pay more than $1.3 million in restitution and $100,000 in fines, as well as forfeit $500,000.

Mr. Cohen will report to prison on March 6, and his lawyers have requested he be placed at the federal prison in Otisville, N.Y.

The prison sentence caps a dramatic about-face for Mr. Cohen, who once famously said he would take a bullet for the president. He has since aimed one straight at his former boss, providing prosecutors with information that Mr. Trump and his inner circle may have taken part in federal crimes surrounding the 2016 election.

Whether a payment was intended to influence the election has been a key question in prior campaign-finance prosecutions. When the Justice Department accused John Edwards, a former senator from North Carolina, of using illegal campaign contributions to conceal an affair during his 2008 presidential run, he argued the money was meant to hide his mistress from his wife, not to influence the election. A jury acquitted him of one charge and deadlocked on the rest.

Mr. Cohen’s lawyers had asked the judge to grant him no prison time, suggesting Mr. Cohen believed the information he shared with prosecutors about the president and others should have earned him a get-out-of-jail-free card. Mr. Cohen turned on his former boss when he could have held out instead for a pardon, his lawyers wrote.

Federal prosecutors in Manhattan, however, said Mr. Cohen was no hero and asked the court to impose a “substantial” prison sentence. Prosecutors cited Mr. Cohen’s refusal to pursue a formal cooperation agreement with the Southern District of New York, which would have required him to reveal his entire criminal history to the government, including information about crimes committed by other people.

Mr. Cohen did provide significant and credible information to Mr. Mueller’s office, prosecutors said, but he declined to answer questions about other areas of investigative interest to Manhattan federal prosecutors beyond campaign-finance crimes.

In a statement to the court on Wednesday, Guy Petrillo, one of Mr. Cohen’s lawyers, harshly criticized the Manhattan U.S. attorney’s office’s handling of Mr. Cohen’s case, pointing to the “strident tone” of the office’s sentencing memorandum, including what he described as an “immature and meaningless observation” about Mr. Cohen’s temper.

“Mr. Cohen had the misfortune to have been counsel to the president,” Mr. Petrillo said. Responding in court, a prosecutor said the office “treated Mr. Cohen just the way we treat every other defendant.”

Lanny Davis, an adviser to Mr. Cohen, said after sentencing that Mr. Cohen would eventually “state publicly all he knows about Mr. Trump,” including to any congressional committee.

Mr. Cohen has already met seven times with Mr. Mueller’s office and shared information about efforts by Mr. Trump’s inner circle to forge closer ties with Moscow in the months before the 2016 election, including previously unknown contacts between Russians and the Trump campaign from as early as fall 2015, according to court documents.

Sitting presidents cannot be indicted under Justice Department guidelines, but Democrats will take over control of the House in January, enabling them to subpoena records. They have said they plan to investigate Mr. Trump’s involvement in the hush-money payments, which incoming House Judiciary Chairman Jerrold Nadler (D., N.Y.) has described as “impeachable offenses.”

Rep. Adam Schiff (D., Calif.), who is expected to take control of the House Intelligence Committee, said on Sunday: “Is a crime directed and coordinated by the president which helped him obtain office sufficient to warrant his removal from that office? That’s a legitimate question to ask.”

Republicans in Congress have largely dismissed the president’s involvement in the payments. Sen. Orrin Hatch (R., Utah), after being told New York prosecutors had alleged the president ordered Mr. Cohen to arrange the hush-money payments, said: “OK, but I don’t care. All I can say is he’s doing a good job as president.”

Mr. Cohen, who served as a Trump Organization lawyer and later as Mr. Trump’s personal attorney, will continue assisting the Russia investigation, prosecutors said.

Mr. Cohen’s pleaded guilty last month to a charge of lying to Congress about the extent of efforts to build a Trump Tower in Moscow during the 2016 campaign, saying he deliberately tried to minimize Mr. Trump’s involvement in the process in an attempt to curtail the Russia investigation.

Once the special counsel investigation concludes, Mr. Mueller is expected to submit a report to the Justice Department that is also anticipated to reach Congress. That report could incorporate any findings related to the president by New York prosecutors.


—Rebecca Ballhaus contributed to this article.

Write to Nicole Hong at [e-mail] and Rebecca Davis O’Brien at [e-mail]

https://www.wsj.com/articles/michael-cohen-trumps-former-lawyer-sentenced-to-threeyears-in-prison-11544634377