Judge Slows U.S. Review of Trump Lawyer’s Records: Cohen Update

(Bloomberg) -- After an afternoon of pitched arguments over who should have the right to vet documents seized from President Donald Trump’s personal attorney, a federal judge in New York delayed a decision on whether to appoint an impartial “special master” to conduct the review.

U.S. District Judge Kimba Wood said that federal authorities who seized documents from the lawyer, Michael Cohen, would provide copies to Cohen’s team. A lawyer for Cohen said they could provide a list of proposed special masters by Tuesday. The government will also provide names.

The judge voiced confidence in federal prosecutors and stressed that she didn’t want to slow down the matter. “I have faith in the Southern District U.S. attorney’s office that their integrity is unimpeachable,” Wood said. She said her interest is in “getting this moving”speedily and efficiently.

Prosecutors will consult with the filter team and the FBI to get a better estimate of the volume of records. They will supply Wood by early Wednesday with an estimate of how long it will take to get the records to Cohen’s attorneys. Lawyers for both sides will then confer about proposed electronic search terms for the documents.

A Matter of Speed (4:27 p.m.)

The judge signaled an openness to using a so-called taint team as suggested by the government, to consult with lawyers for Cohen and Trump and try to reach agreement on whether particular documents are protected.

There are two threads of argument in the courtroom. Lawyers for Trump and Cohen are arguing for a process that insures that attorney-client privilege is preserved. The government is saying that it has an option that would preserve due process, but without bogging down.

McKay, the assistant U.S. attorney, argues that the special master that the Cohen team favors would be an “extremely inefficient” process. “Where Mr. Cohen is now obviously under criminal investigation, he’s going to have even more incentive to drag things out by claiming privilege,” McKay said.

Meanwhile, he said, Hendon’s idea turns on finding time for the president to review documents and sign off on them. “It’s going to be very difficult for her to get the president of the United States’ time to consult a privilege log if there are 100 items on it,” McKay said.

A filter team, McKay said, honors the privilege as well as law-enforcement interests. If, for example, a government team reviewed 500 communications between Cohen and Trump and none of them had relationship to investigation, they wouldn’t forward them to investigators, the prosecutor said. The team would review documents twice before any go to prosecutors.
“It narrows the field,” he said.

Wood made at least one plea to keep things moving when Hendon pointed out she has no idea what to tell Trump about what’s in Cohen’s files.

The judge interrupted Hendon. “You’re getting into areas that we don’t need to address now,” Wood said. (Bob Van Voris)

Hannity on Air: ‘Michael Never Represented Me’ (4:01 p.m.)

Sean Hannity, who was poised to do a radio show when his name emerged in the court, said on air that he had asked Cohen for his perspective on some legal questions involving attorney-client privilege, but never talked to Cohen about any case involving a third party.

“I never paid legal fees to Michael,” Hannity said. “Michael never represented me in any matter.” He later added: I “may have” handed Cohen “ten bucks” and asked for attorney-client privilege. (Steven Dennis)

What’s a Privilege Log? (3:45 p.m.)

A privilege log is a document that gives information about evidence withheld on the basis of the attorney-client privilege, typically including the type of communication -- whether a letter, email or notes of a phone call -- along with the date and parties to the communication.

Trump’s lawyer, Hendon, acknowledged that privilege logs are “a real pain for everybody” but said they’re necessary to safeguard the privilege.

She argued that the attorney-client privilege has been recognized for more than 400 years and is one of the oldest legal privileges under common law. “It is a beacon to the world and to history,” she said. “Without it no client could speak freely with counsel, and no attorney could properly serve the client.”

Most people would react similarly if told that criminal prosecutors raided their lawyer’s office, seized materials related to their case and were told the prosecutors were going to review them to determine if they were privileged, she said.

“It is the client of the lawyer who owns the privilege. The purpose now should be on ensuring that the privilege is not invaded,” Hendon said. (Bob Van Voris and David Voreacos)

Judge Asks How Long a Record Review Would Take (3:39 pm)

The judge asked how long it would take for everything that was seized to be organized for review -- and how long Hendon’s client, the president, would have to devote to the task. McKay said that while some of the devices the FBI seized will need to be decrypted, most of the evidence could be posted “in a week or two.”

The government claims that for any communications between Cohen and Trump or another client, a so-called taint team will consult with lawyers for Cohen and Trump and try to reach agreement on whether particular documents are protected. Disputes will be brought to the court to determine the issue before the team investigating the case would have access to the documents.

McKay said that without a taint team, it could take a very long time for the defense to review the documents. He noted that in the Lynn Stewart case, there were just a few boxes and it took more than a year to complete the review.

Trump lawyer Hendon said she couldn’t estimate how long it would take to review the material until they know what has been seized. (Bob Van Voris and David Voreacos)

Invoking POTUS’s Name (3:18 p.m.)

Cohen’s legal team will invoke Trump’s name frequently in filings not because he was a Cohen client but because they want to slow down the case, McKay, the U.S. assistant attorney, said. “It is in Mr. Cohen’s interest to do so,” McKay said.

Wood seemed to voice skepticism about Cohen’s argument that they can move quickly to determine which documents are protected by the attorney-client privilege. “It’s not that you’re bad people. You’ve mis-cited the law,” she told a Cohen lawyer. (Bob Van Voris)

Hannity’s Journalism in New Light (3:08 p.m.)

No word yet why Hannity had engaged Cohen. Clearly there’ll be keen interest in the legal side of this matter. Until then the scrutiny may fall on what may have been hidden motivations behind his journalism.

Take this tweet from Hannity’s verified account on April 11: “Up next on #Hannity @michellemalkin & @SebGorka join me to discuss how the media’s anti-Trump agenda has hit a new low since the Michael Cohen raid.”

Hannity Responds to Disclosure He Is Third Client (3:03 p.m.)

“We have been friends a long time. I have sought legal advice from Michael,” Hannity told Rebecca Ballhaus of the Wall Street Journal.

Client No. 3 Is Sean Hannity (2:52 p.m.)

A gasp was heard in the courtroom when a Cohen lawyer disclosed the name of the third client: Sean Hannity.

Hannity is a Fox News host and has been one of the president’s most vocal on-air defenders. and a critic of Mueller’s probe. Trump often calls Hannity after his Fox News program, according to media reports.

“I understand he doesn’t want his name out there, but that isn’t the law,” Judge Wood said. (David Voreacos)

Judge Says Client No. 3 Must Be Named Publicly (2:46 p.m.)

Wood heard from various sides on whether Cohen must publicly reveal the identity of Cohen’s third client, and ordered him to do so.

A Cohen lawyer, Stephen Ryan, had said that the third client, whom Cohen initially would not name, told Cohen over the weekend not to allow his name to get out. The person is publicly prominent and Ryan offered instead to put the name in a sealed envelope for the judge, saying the client has said he’ll appeal if Judge Wood orders his name disclosed.

“At this point, no one would want to be associate with the case in that way,” Ryan said. “I can give you the name right now in a sealed envelope and provide it to the court.”

Robert Balin, a lawyer representing the press’s interests in the case, objected to allowing Client 3 to remain anonymous, saying there’s “intense public interest in the issues that are before this court.” (Bob Van Voris and David Voreacos)

U.S. Calls Cohen Argument Frivolous (2:42 p.m.)

McKay, the assistant U.S. attorney, said the government properly obtained search warrants, saying Cohen had made a “frivolous” argument that the raid violated his Fourth Amendment guarantees against unreasonable searches.

McKay said it’s improper to attempt to drum up media attention to the case and then cite that attention as a basis for their application for discretion.

“The only thing that makes this case unusual in any respect is that one of Mr. Cohen’s clients is the president,” McKay said, saying that neither party has made a persuasive argument as to why the materials are privileged. (David Voreacos and Chris Dolmetsch)

‘Taint Team’ (2:39 p.m.)

Cohen’s lawyers asked Wood to let them review the seized material first or, as a fallback, appoint a neutral special master to review evidence seized from Cohen. Trump’s lawyers didn’t support a special master.

The lawyers raised the case of Lynne Stewart, the former lawyer for imprisoned Egyptian cleric Sheikh Omar Abdel Rahman. She was convicted in 2005 of providing material support for terrorism. A jury found that she helped pass messages from her client to his followers in a foreign terrorist organization. In Stewart’s case the judge agreed with a defense request to appoint a special master.

Prosecutors argue that in many searches of lawyers’ offices a separate “taint team” of agents and prosecutors is selected to review the evidence and make an initial determination of whether they’re privileged. Once all disputes over privilege claims are resolved, the remaining documents are passed on to a “clean team” of prosecutors that hasn’t been exposed to the protected documents.

“Granting such relief would mark a serious departure from the accepted, normal practices of this district and erect an unprecedented and unwarranted obstacle to the government’s ability to investigate attorneys for their own conduct, in this case or any other,” the U.S. argued in a letter to the judge early Monday. (Bob Van Voris)

‘Three Legal Clients’ (2:34 p.m.)

The Justice Department says Cohen has more attorneys of his own than he has clients, challenging Cohen’s prior claim that the materials swept up in the FBI raids included thousands of documents protected by the attorney-client privilege.

“His letter admits this morning that he has only three legal clients, and this is fatal to their motion,” said Assistant U.S. Attorney Thomas McKay.

Most of the evidence seized is on hard drives and other electronic devices and pertains to work he’s done in recent years, McKay said. Anything related to work Cohen did for legal clients would be a small portion of anything seized given how little work he’s done lately as a lawyer, he said.

Cohen’s arguments in a letter to the court earlier Monday -- saying he believed that privileged information had been taken relating to clients he’d represented years ago -- are therefore moot, McKay argued.

“Mr. Cohen might have a legal degree, but this investigation and the search is largely focused on his private business dealings and his private financial dealings,” McKay said (David Voreacos and Chris Dolmetsch)

Hearing Gets Under Way (2:12 p.m.)

The hearing over Cohen’s records got under way shortly after 2 p.m. Watching from the gallery was not only Daniels, whose real name is Stephanie Clifford, but also former Governor Elliot Spitzer of New York, who made a surprise appearance for reasons that weren’t immediately clear.

Also in attendance is Robert Balin, a lawyer with Davis Wright Tremaine who said he’s representing a consortium of media outlets including ABC TV. He said he filed a request with Wood asking her to make an audio recording of the hearing available for the news media and the public. Balin told Bloomberg News that the practice is used by the Supreme Court and Second Circuit. (Patricia Hurtado)

Meet the Judge (2:12 p.m.)

Wood was nominated to the federal court by President Ronald Reagan in 1987 and confirmed the following year. In 1990, she sentenced Michael Milken to 10 years in prison, which was later reduced to two years.

President Bill Clinton nominated her as his pick for attorney general in 1993 after his previous nominee, Zoe Baird, withdrew over off-the-books payments to her nanny, an undocumented worker. Wood, who’d hired an undocumented babysitter before it was illegal to do so and paid the required taxes, was also withdrawn.

In 2010, Wood presided over a case against Anna Chapman and nine other Russian agents who were arrested and then deported in a prisoner exchange. (Bob Van Voris)

What’s at Stake

President Donald Trump is fighting an extraordinary legal battle in Manhattan on Monday, seeking to stop his own Justice Department from reviewing records seized from his longtime private lawyer, Michael Cohen.

Among those expected to attend a hearing at the federal district court in Manhattan is Stormy Daniels, the adult-film star who claims she had sex with Trump in 2006 and took a $130,000 hush payment shortly before the 2016 election. Cohen, who has said he made the payment from his own account, has been ordered to attend.

Cohen’s home, office, hotel room and safety-deposit box were raided by the FBI on April 9 as part of a long-running criminal investigation of his activities. Prosecutors in New York haven’t identified what specifically they’re probing, although they said in a court filing that “the crimes being investigated involve acts of concealment by Cohen.” Special Counsel Robert Mueller is separately examining possible ties between the Trump campaign and Russian interference in the 2016 election.

It’s unusual enough for federal agents to seize an attorney’s records, and unprecedented to take those of a president’s personal lawyer. Federal prosecutors want a team of government lawyers to review the material to determine what’s covered by the attorney-client privilege and what can be passed to investigators.

Cohen is asking for the review to be conducted by a court-appointed attorney. Trump will be represented by his own lawyer, Joanna Hendon, who has requested that the president be given a chance to review the seized materials, which includes more than a dozen electronic devices.

The matter will ultimately be decided by U.S. District Judge Kimba Wood.

--With assistance from David Voreacos Christian Berthelsen Patricia Hurtado Bob Van Voris Chris Dolmetsch and Steven T. Dennis

To contact Bloomberg News staff for this story: Jeffrey D Grocott in New York at jgrocott2@bloomberg.net.

To contact the editors responsible for this story: Jeffrey D Grocott at jgrocott2@bloomberg.net, David Glovin at dglovin@bloomberg.net, David S. Joachim

©2018 Bloomberg L.P.

With assistance from Jeffrey D Grocott