Cohen Probe Reaches Into Trump’s Business, and the Red Line He Drew
(Bloomberg) -- With Donald Trump’s former lawyer turning on him and reports that prosecutors want to speak with his financial chief, federal investigators appear to be delving increasingly into the president’s business interests -- an area he has sought to keep off-limits.
The Trump Organization is being put under the microscope as Trump’s former personal lawyer and fixer Michael Cohen signals a willingness to cooperate with U.S. prosecutors in New York. The FBI seized his emails and audio files, including at least a dozen with audio of Trump or of Cohen talking about Trump. Allen Weisselberg, the company’s chief financial officer, was called to testify before a grand jury in the Cohen investigation, the Wall Street Journal reported.
Until recently, some of Trump’s most serious legal risks centered around questions about whether the president or those around him colluded in Russian meddling in the 2016 campaign and whether Trump as president sought to obstruct the probe by Special Counsel Robert Mueller. It’s unclear to what degree Mueller has been digging into Trump’s business affairs.
A year ago, Trump -- who often boasts of his business success but has refused to make public his tax returns -- told the New York Times that Mueller would be crossing a red line if he probed the real estate tycoon’s business dealing. “I think that’s a violation,” he said. “Look, this is about Russia.”
But the Cohen investigation is being run by the U.S. attorney in the Southern District of New York, not by Mueller’s team in Washington. While Trump potentially could move to fire or rein in Mueller by replacing the man who appointed him, Deputy Attorney General Rod Rosenstein, the president may have more trouble politically trying to influence a probe run by a U.S. attorney’s office.
Weisselberg and Amanda Miller, a Trump Organization spokeswoman, didn’t respond to requests for comment.
Cohen’s turn from avid Trump defender to tell-all accuser has clearly rattled the president, even as Trump’s allies and lawyers have been trying to downplay Cohen’s significance. They’ve painted him as a disgruntled employee who was a nuisance at the Trump Organization and had little role in day-to-day business operations. “This guy is a proven liar,” Rudy Giuliani, a lawyer for the president, said Thursday night on CNN.
The immediate cause of Giuliani’s denunciation was a CNN report, citing “sources with knowledge” it didn’t identify, that Cohen was planning to say Trump knew in advance of Donald Trump Jr.’s meeting at Trump Tower during the 2016 campaign with a Russian lawyer they had been told had damaging information on Democrat Hillary Clinton.
“I did NOT know of the meeting with my son, Don jr.," the president tweeted Friday morning. "Sounds to me like someone is trying to make up stories in order to get himself out of an unrelated jam (Taxi cabs maybe?). He even retained Bill and Crooked Hillary’s lawyer. Gee, I wonder if they helped him make the choice!”
Cohen’s personal finances have come under acute pressure. In April, he put up his family’s Park Avenue apartment as additional collateral for millions of dollars in troubled loans to his foundering taxi business, according to public filings. The loans were secured by New York City taxi medallions, which have plummeted as much as 80 percent in value since Cohen borrowed against them with the rise of ride-sharing competition such as Uber Technologies Inc.
Trump was furious, according to a person close to him, when he learned that the FBI had raided Cohen’s law office, home and hotel room in April. Days later, the president openly weighed firing Rosenstein, blaming Mueller even though the raid was the work of New York prosecutors. It was a turning point in Trump’s thinking, and soon after he brought on Giuliani to take a more combative tone with Mueller.
The risk to the president that investigations will increasingly edge into his business was a subtext of a recording leaked this week of a 2016 conversation between Cohen and Trump. It appeared to show the president was aware of a payment made to prevent publication of articles about Playboy model Karen McDougal’s alleged affair with the president.
Trump has denied ever having a relationship with McDougal, and Giuliani has said the tape shows Trump was hearing about the payment for the first time when Cohen brought it up.
But a passing reference on the recording raised new questions about whether the Trump Organization was involved. Cohen told Trump that he had discussed with Weisselberg -- the Trump Organization CFO -- financing to buy the rights to McDougal’s story from the publisher of the National Enquirer. The purchase didn’t take place.
Alan Futerfas, an attorney for the Trump Organization disputed the idea that Cohen would consult with Weisselberg, telling the Washington Post that the chief financial officer is just “a bookkeeper who simply carries out directions from others about monetary payments and transfers.”
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