U.S. President Donald Trump. (Photographer: Mark Wilson/Pool via Bloomberg)

Trump's Alleged Affairs Become Legal Threat After Raid on Lawyer

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(Bloomberg) -- An FBI raid on Donald Trump’s longtime lawyer has transformed the president’s purported affairs with an ex-Playboy model and an adult film star from political obstacles he could swat away into potentially serious legal problems that could imperil his presidency.

The change came when FBI agents raided the office, home and hotel room of Michael Cohen, Trump’s personal attorney, on Monday. The FBI seized records relating to Karen McDougal, the former Playmate who said she had a 10-month affair with Trump, and Stephanie Clifford, the porn star known as Stormy Daniels, who said she had sex with Trump once, according to a person familiar with the matter.

The raid was approved by Deputy Attorney General Rod Rosenstein and conducted under the authority of the U.S. attorney in Manhattan, although the information originated from the work of Special Counsel Robert Mueller, according to a second person familiar with matter.

A subpoena was also served to the Trump Organization for information related to a payment to Daniels for her silence, the first person said.

Trump lashed out at Mueller’s probe and the Justice Department in an eight-minute diatribe to reporters Monday evening. He met with his lawyers at the White House Tuesday to discuss the FBI raid, which has confirmed their worst fears -- that the Mueller investigation is mushrooming well beyond campaign collusion with Russia.

Authority to Fire

The president has “been advised” that he has the authority to fire Mueller, White House press secretary Sarah Huckabee Sanders told reporters Tuesday. Rosenstein has said that only he can fire Mueller, and only for cause.

Trump Steps Up Mueller Attack as Russia Probe Hits Closer

Longtime Trump lawyer Marc Kasowitz sent at least one member of his team to Washington, D.C., to discuss the matter with the president’s lead attorney on the Russia probe, Jay Sekulow, said a person familiar with the matter. While the search was overseen by the U.S. attorney’s office in the Southern District of New York, the lawyers regard it as a direct extension of Mueller’s investigation.

The U.S. attorney in Manhattan, Geoffrey Berman, who was appointed by Trump, recused himself from the Cohen case, according to a U.S. official.

Both McDougal and Clifford signed non-disclosure agreements just before Trump’s election in 2016, with Daniels taking $130,000 from Cohen and McDougal accepting $150,000 from American Media Inc., owner of the National Enquirer. Both came forward in interviews last month to offer intimate details about their relationships with Trump.

The New York Times first reported that the subpoena covered records related to both McDougal and Clifford, and the Wall Street Journal was first to report the Trump Organization subpoena. Investigators were seeking documents related to possible bank and wire fraud, as well as potential campaign finance violations, according to the Washington Post.

Agents also subpoenaed records of New York City taxi medallions that Cohen owns, according to CNN.

Hitting Home

The raid on Cohen really hits home for the president, since few people outside his family are closer to Trump than Cohen. The frustration betrayed concern by the president about an inquiry that has now reached deep into his inner circle.

Mueller, meanwhile, appears to be making strategic moves that could help preserve his investigation even if Trump removes him, according to current and former U.S. officials.

Because the raid on Cohen was conducted under the auspices of the U.S. attorney in Manhattan, evidence seized can be shared with Mueller as needed or preserved if the special counsel is removed, the officials said.

Separately, Mueller and his 17 prosecutors are preparing for two separate trials of Trump’s former campaign chairman, Paul Manafort, who is accused in a pair of indictments of money laundering, conspiracy, bank and tax fraud, and failing to register as a lobbyist for politicians in Ukraine.

In a legal filing defending the indictment before a federal judge in Washington, Mueller said he has authority to investigate a wide array of crimes as long as he follows Justice Department rules and coordinates his activities with Rosenstein.

“Although a criminal investigation may start with a specific set of facts, the point of investigation is to explore those facts, develop new ones, and continually reassess the direction of the inquiry,” Mueller’s team wrote in an April 2 legal filing in federal court in Washington.

©2018 Bloomberg L.P.

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