Michael Cohen, former personal lawyer to U.S. President Donald Trump, listens to closing statements during a House Oversight Committee hearing in Washington, D.C., U.S. (Photographer: Al Drago/Bloomberg)

Cohen Opens Trump to Potential Legal Risks With New Allegations

(Bloomberg) -- Michael Cohen unfurled a series of damaging accusations against his former boss Donald Trump in a day of testimony before Congress, including assertions that may pose additional legal peril for the president.

Trump’s former lawyer and fixer offered potentially damaging specifics on at least three possible misdeeds, starting with his assertion that Trump inflated the Trump Organization’s finances when seeking loans and insurance discounts and deflated them for tax purposes.

Cohen also told the House Oversight and Reform Committee on Wednesday that he witnessed a conversation during the 2016 campaign between Trump and his friend Roger Stone, who disclosed in advance that WikiLeaks would soon release stolen emails damaging to his Democratic rival Hillary Clinton, and that as president Trump personally repaid Cohen for payments that he’d directed Cohen to pay a porn star as hush money.

Cohen Opens Trump to Potential Legal Risks With New Allegations

Cohen tore into Trump, saying “he is a racist. He is a con man. He is a cheat.” At the same time, he rebuffed some of the more explosive allegations about Trump’s behavior over the years, saying he had no knowledge of embarrassing videotapes or payoffs for a “love child” -- and that he didn’t believe either story.

Cohen said he had only “my suspicions” that Trump colluded with Russians who sought to to help him win the election, the central question in the investigation that Special Counsel Robert Mueller is close to completing.

Cohen Opens Trump to Potential Legal Risks With New Allegations

“I certainly don’t see any increased liability from the testimony with respect to so-called Russian collusion,” said Solomon Wisenberg, who served as deputy independent counsel during the Clinton-era Whitewater investigation.

That doesn’t mean the president is home free, said Wisenberg, who now heads the white-collar criminal defense practice at the Washington law firm Nelson Mullins Riley & Scarborough LLP.

“They do seem to be trying to build a case that the president may have provided inaccurate financial information to lending institutions,” he said.

Some of the most damaging disclosures may relate to Trump’s financial information, Wisenberg said. Cohen testified that Trump provided different financial information to different entities depending on his objectives. Inflating one’s holdings to obtain a bank loan or deflating them when dealing with the Internal Revenue Service could be federal crimes.

“You’d have to look at the details,” Wisenberg said, although he noted that under current Justice Department policy, “you still can’t indict a sitting president.”

Some experts believe a sitting president could be charged with crimes committed before taking office -- and it’s certain all of the issues raised by Cohen will be pursued by Democrats whose newly gained control of the House gives them tools from subpoena power to impeachment.

Republicans on the House committee tore into Cohen and the decision by the Democratic majority to devote a day to his testimony. Cohen is due to report to prison on May 6 after pleading guilty to nine felonies -- including lying to Congress previously in closed-door testimony.

Cohen Opens Trump to Potential Legal Risks With New Allegations

“You have a history of lying over and over and over again,” Representative Jim Jordan of Ohio, the Oversight panel’s top Republican, told Cohen. He suggested Cohen had grown bitter because Trump didn’t give him a White House job after the election, an assertion Cohen denied. Other Republicans suggested he was angling for a book deal. Cohen acknowledged he’d welcome an offer.

Cohen also said he’s in regular contact with the federal prosecutors in the Southern District of New York about ongoing investigations, and he said the president is under investigation for issues that haven’t yet become public.

Ronald Fischetti, a veteran criminal defense lawyer in New York, said Cohen could get a reduced prison term if prosecutors deem he has provided substantial help in their ongoing investigations.

“The fact that Cohen is still actively cooperating with federal prosecutors -- even after he’s been sentenced -- about other investigations is significant,” Fischetti said. “Michael Cohen has been with Trump for more than a decade and knows of all these deals he’s done and all of his financial dealings. He’s in a prime position to know what happened and have access to documents of a criminal nature.”

Cohen testified that Trump -- who has refused to make public his tax returns -- kept a close eye on financial information in his business career.

“Whatever the numbers would come back to be we would immediately report it back" to Trump, Cohen said.

He testified the Trump Organization inflated valuations on company assets in part to burnish his public image as a billionaire and also for insurance on his properties.

“We would provide them with these copies so that they would understand that the premium, which is based sometimes upon the individual’s capabilities to pay, would be reduced," Cohen said.

Maria Vullo, former New York Department of Financial Services superintendent, said in an email that making false statements to an insurance company can be a basis to void the policy for fraud.

"In addition, there are various state and federal laws that proscribe and penalize the making of false statements for purposes of personal gain," she said.

Republican Jordan said Democrats called Wednesday’s hearing to set up a potential impeachment effort in the House. Democrats have kept a lid on impeachment talk, at least until Mueller soon makes his final report, but they appeared to be laying the groundwork for expanded investigations.

Among those they may demand to hear from next is Trump Organization official Allen Weisselberg, who Cohen said was present when Trump directed that hush money be paid to an adult film actress in the days before the election. Weisselberg earlier struck a limited cooperation agreement with prosecutors in Cohen’s case.

Cohen gave the committee a copy of a check that he said Trump signed after he became president as reimbursement for hush money paid to silence Stephanie Clifford, the porn star also known as Stormy Daniels, who alleged she had an affair with Trump.

Cohen provided a second check and told the committee that he believed the signatures on that one came from Donald Trump Jr. and Weisselberg. Cohen has pleaded guilty to charges of illegal campaign contributions related to the payments.

Separately, Cohen’s claim he was present for a phone call Stone held with the president on WikiLeaks’ plans could implicate Trump as part of a conspiracy to interfere with the 2016 election by hacking his opponents, a criminal plot for which he would have been an intended beneficiary.

"If you know about it and were encouraging it to occur, you would be a co-conspirator under the law," said former federal prosecutor Matthew Jacobs, who worked under Mueller when the special counsel was the U.S. attorney in San Francisco. Making that case, however, would also require proving Stone was part of that conspiracy.

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