Prosecutors Investigating Michael Cohen for Possible Illegal Lobbying

Date : 06/14/2018 @ 6:14PM
Source : Dow Jones News
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Prosecutors Investigating Michael Cohen for Possible Illegal Lobbying

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By Nicole Hong, Jonathan D. Rockoff and Drew FitzGerald 

Federal prosecutors in Manhattan are investigating whether Michael Cohen, the longtime personal lawyer for Donald Trump, illegally engaged in secret lobbying, people familiar with the investigation said, as part of the government's broader probe into Mr. Cohen's business dealings.

In the course of that investigation, the prosecutors have contacted companies that hired Mr. Cohen as a consultant after Mr. Trump won the 2016 presidential election, including AT&T Inc. and Novartis AG, according to other people familiar with the matter. The companies paid a total of about $1.8 million to Mr. Cohen in 2017 and early 2018 for his insights into the Trump administration.

Investigators in the U.S. attorney's office for the Southern District of New York are examining whether Mr. Cohen violated any federal disclosure laws in connection with his consulting deals, including whether he lobbied for domestic or foreign clients without properly registering, the people familiar with the investigation said.

Federal prosecutors in New York have been investigating Mr. Cohen for bank fraud, campaign-finance violations and other possible crimes, The Wall Street Journal has previously reported. Mr. Cohen hasn't been charged with any crime, but the array of possible charges against Mr. Cohen could put additional pressure on him to cooperate with prosecutors, according to defense lawyers.

Mr. Cohen has previously denied any wrongdoing. Neither he nor his lawyer, Stephen Ryan, responded to a request for comment.

Mr. Cohen has never registered as a domestic or foreign lobbyist, according to federal databases. Under federal law, individuals are required to file a federal disclosure form if they contact public officials to try to influence specific policies or legislation on behalf of their clients. Individuals lobbying on behalf of foreign governments must register with the Justice Department. Violating this law carries penalties of up to five years in prison.

Companies commonly hire consultants to explain new presidential administrations, and such consultants can work for clients without registering as lobbyists as long as they avoid pitching elected officials to adopt specific policies.

Special counsel Robert Mueller contacted Novartis, which is based in Basel, Switzerland, and Dallas-based AT&T late last year in the course of his investigation into whether Mr. Trump's associates colluded with Russia to interfere in the 2016 elections, both companies have said. The companies have said they cooperated with his requests and considered the matters closed. Mr. Trump has repeatedly said there was no collusion between his campaign and Russia.

In April, Federal Bureau of Investigation agents raided Mr. Cohen's office, home and hotel room in New York, seizing millions of documents and more than a dozen electronic devices belonging to Mr. Cohen, according to court documents.

Evidence from the seized materials and the public disclosure last month of the companies' contracts with Mr. Cohen likely led federal prosecutors to seek more information from AT&T and Novartis. The companies were contacted by Manhattan federal prosecutors in recent weeks, people familiar with the matter said.

Mr. Cohen entered into the consulting agreements with the two companies using the Delaware-registered company Essential Consultants LLC, the same entity through which he arranged a secret payment of $130,000 to former adult film star Stephanie Clifford -- professionally known as Stormy Daniels -- in exchange for her silence about an alleged sexual encounter with Mr. Trump. Mr. Trump has denied any such encounter took place.

After the 2016 election, Mr. Cohen was among a handful of longtime Trump aides shopping their access to the White House as companies sought inroads to the new administration.

Mr. Cohen pitched himself aggressively, telling prospective clients they should fire their strategic advisers and hire him because "I have the best relationship with the president on the outside," according to a person familiar with his approach, The Wall Street Journal previously reported.

Novartis, one of the world's largest drug companies by sales, paid Mr. Cohen $100,000 a month for the 12 months ending in February, for a total of $1.2 million. The company believed Mr. Cohen could help it understand "how the Trump administration might approach U.S. health-care policy matters," a spokeswoman said last month.

Novartis executives realized early on that Mr. Cohen couldn't help with health policy but continued to pay him because his 12-month contract could be terminated only for cause, the spokeswoman has said.

Federal prosecutors in Manhattan haven't interviewed any Novartis employees, and the requests were focused on Mr. Cohen rather than any conduct at Novartis, a person familiar with the matter said. The company is cooperating with the U.S. attorney's office, the person said.

Novartis's general counsel, Felix Ehrat, stepped down over the payments, saying in May that although "the contract was legally in order, it was an error."

AT&T paid Mr. Cohen's company $600,000 from 2017 to early this year for "insights into understanding the new administration." The company has said Mr. Cohen's company "did no legal or lobbying work for us."

AT&T hired Mr. Cohen as it was seeking government approval for an $85 billion takeover of Time Warner Inc. The Justice Department later sued to block the deal. A federal judge ruled against the government on Tuesday, paving the way for the acquisition to close. Aside from mentioning the acquisition, Mr. Cohen's contract with the company also called for consulting on other legislative and regulatory matters.

Last week the Justice Department said department officials had no known contact with Mr. Cohen regarding the deal.

Randall Stephenson, AT&T's chief executive, told employees last month that hiring Mr. Cohen was a "big mistake." Bob Quinn, who oversaw Mr. Cohen's contract as the company's policy chief, was forced to leave over the payments to Mr. Cohen, the Journal has previously reported.

Mr. Cohen also expressed interest in pitching foreign governments, the Journal previously reported, and sought money from Qatar officials on at least two occasions.

In December 2016, he solicited $1 million from Ahmed al-Rumaihi, who at the time was head of the Qatar Investment Authority's investment division, Mr. al-Rumaihi told the Journal. Mr. Cohen was also hired recently by a major donor to Mr. Trump's inauguration to pitch a nuclear-power investment to the Qatar Investment Authority, according to people familiar with the matter. Qatar has said the state has never been a client of Mr. Cohen.

Other Trump associates have been investigated for foreign lobbying violations. Former national security adviser Mike Flynn, as part of his guilty plea for lying to the FBI, has admitted to false statements and omissions made in his forms disclosing his lobbying for Turkey. Former Trump campaign chairman Paul Manafort and former campaign aide Rick Gates were both charged by Mr. Mueller's office with failing to register as foreign lobbyists for their work with Ukrainian politicians.

Mr. Manafort has pleaded not guilty to that charge and other charges, ahead of a September trial in Washington. Mr. Gates pleaded guilty in February to two other charges.

Write to Nicole Hong at nicole.hong@wsj.com, Jonathan D. Rockoff at Jonathan.Rockoff@wsj.com and Drew FitzGerald at andrew.fitzgerald@wsj.com

 

(END) Dow Jones Newswires

June 14, 2018 17:59 ET (21:59 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.

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