Welcome to Rabbit Hole, a breaking-news analysis that helps you get smart on the one story everyone’s obsessing over—for Beast Inside members only.
The Trump Organization paid Michael Cohen a $60,000 “bonus” after he handled Donald Trump’s alleged mistress problem with a hush money payout to porn star Stormy Daniels. Now he’s paying for that bonus and much more as he stares down a possible three-year prison sentence for campaign finance violations, cheating the IRS out of his luxury handbag profits, and lying about Trump’s would-be Russian real estate empire, among other charges. Federal prosecutors in Manhattan and Special counsel Robert Mueller have both filed sentencing memos on Cohen and boy do they not look good for him.
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Brag man: One of the many ways Cohen screwed himself was by leaving behind a trail of evidence about his illegal campaign contribution to the Trump campaign in the form of a hush money payment to alleged Trump mistress Stormy Daniels. Cohen, according to prosecutors, “privately bragged to friends and reporters, including in recorded conversations, that he had made the payment to spare [Trump] from damaging press and embarrassment” after transferring $130,000 to Daniels’s attorney.
Crime pays (sort of): As he admitted in his guilty plea, Cohen got reimbursed from the Trump Organization for the Daniels hush money payment. But Trump’s company didn’t just make him whole again for the $130,000 he shelled out from his home equity credit line. They reimbursed the $130,000, plus $50,000 for unspecified “tech services” he provided during the campaign, along with an additional $60,000 “bonus,” as had been previously reported by the Wall Street Journal. That may have seemed nice like a good chunk of change at the time, but it’s a good bet that he’s spent more than that on legal fees for the favor he did.
‘Essentially hollow’ Consultants LLC: Cohen tried to cash in on Trump’s election victory by offering companies with business before the new Trump administration “unique insights” about Trump and his associates. A handful of companies signed up as clients but Cohen was essentially bluffing about his access, according to prosecutors. “His promises of insight and access proved essentially hollow.” U.S. Attorney Robert Khuzami described corporations “stuck” paying him up front to the tune of $4 million total and receiving little or nothing in return.
Michael Cohen, couture connaisseur: In addition to his Trump Organization payouts, Cohen had a handful of interesting side hustles, where he did his best to keep his profits away from the tax man. He’d made his initial fortune in the notoriously shady taxi medallion business and tried to hide around $4 million in income that came from it, mostly through undisclosed loans to another person in the taxi business. But Cohen also has a taste for fine accessories. According to Manhattan prosecutors he hid $30,000 in profit he made from selling off “a rare and highly valuable French handbag.”
Trumped: When Cohen first pleaded guilty to campaign finance violations in federal court, he claimed that he’d orchestrated hush money payouts to alleged Trump mistresses Stormy Daniels and Karen McDougal “in coordination with and at the direction of” then-candidate Trump. Trump has been happy to smack talk both Cohen and Mueller and call them liars. But in the memo filed today, Cohen’s allegation is echoed by a U.S. Attorney appointed by Trump himself. Khuzami wrote that “with respect to both payments [to Trump’s alleged mistresses], he acted in coordination with and at the direction of” Trump (thinly veiled as “Individual-1”).
Hidden Pecker: American Media Inc chairman and Trump pal David Pecker apparently thought he was protecting himself when he used an “an encrypted telephone application” to call Cohen and arrange the hush-money payout to alleged Trump mistress Stormy Daniels. That encryption may have prevented someone from wiretapping the call but it didn’t hide evidence that the call had taken place. Whether through metadata or information from another witness, Khuzami knew the call took place and cited it in his memo.
Will snitch for pleas: Khuzami is less than happy with the help offered by Cohen both to his office and the special counsel. His sentencing memo argues that, rather than a ”selfless and unprompted” act of contrition, Cohen only knocked on Mueller’s door once he needed something to help fend off the looming charges against him in New York.
The help Cohen did give to Khuzami’s team wasn’t much either, according to the Southern District filing. Cohen met with prosecutors there just twice and would only talk about what other people may have done wrong in the campaign finance charges he’d already plead to. When prosecutors asked him about possible crimes he may have committed, Cohen “declined to be debriefed on other uncharged criminal conduct, if any, in his past.”
More sources: In addition to the Southern District of New York memo, there are hints in the memo released on Friday by special counsel Robert Mueller that his office already has a piece of the Trump Tower Moscow story from some as-yet unrevealed source. Twice in the memo, Mueller says Cohen’s statements were “corroborated by other information obtained in the course of the SCO’s investigation” and “credible and consistent with other evidence” they have.
But who? We don’t know but there are some clues as to who would at least have knowledge of the other aspects of the Moscow project. Felix Sater, a real estate developer friend of Trump’s who also worked on the Moscow project, spoke extensively with Buzzfeed about aspects of the Russian real estate gambit for an article and appears as “Individual 2” in the special counsel’s criminal information filed on Cohen. In the Buzzfeed article, Sater mentioned that he’s already been interviewed by members of Mueller’s team.
Cashing in: Cohen wasn’t just working the Trump Tower Moscow project for brownie points with his boss. He spent much of his career as a devoted Trump sycophant who’d “take a bullet” for him but the Mueller memo makes clear that Cohen was looking to cash in on the project as well. Prosecutors wrote that the “financial aspects of the deal that would have made it highly lucrative for the Company and himself.” It’s still early and there’s no reaction yet from Trump’s legal team.
But the fact that Cohen admitted to a personal financial motive for pushing the project forward tees up a talking point for them to try and distance Trump from the haggling with Russians. “Cohen was pushing this for his own personal gain, not at the direction of the president.”
