Diagnosing the FBI Raids On the President’s Lawyer.
On April 9, 2018 the FBI executed a series of search warrants against the offices of Michael Cohen, the personal lawyer for the President of the United States. Cohen is involved in Mueller’s Russia investigation, mostly because of a disturbing email he received from Felix Sater. Sater is a Russian immigrant previously convicted for a stock fraud scheme on behalf of the Russian Mafia. He sent Cohen an email which included the following:
However, Cohen is probably better known as the President’s “fixer.” The attorney who arranged the remarkable, and almost certainly not legally binding, deliberately fraudulent, “Hush Agreement” with porn star Stormy Daniels. In one of the more bizarre, and legally implausible aspects of the story, both Cohen and Trump claim the Hush Agreement, with its attending $130,000 payment to Daniels, was done solely by Cohen and without even Trump’s knowledge.
This Criminal Investigation Is Likely Not Connected To Mueller’s Russia Probe.
These search warrants were not directly obtained by Mueller’s team but rather by the United States Attorneys Office for the Southern District of NY on referral of information from Mueller. That suggests the search warrants were related to potential criminal conduct associated with the Stormy Daniels issue, and not the Russia investigation.
So the question arises, what potential criminal conduct might be at issue here, and could they implicate the President of the United States? The answer is there are a number of potential criminal issues, and yes, they could implicate President Trump.
As a starting point, search warrants are not issued for civil questions, or simple breach of contract issues. Getting a judge to issue a search warrant requires proving to the judge there is probable cause evidence related to a crime will be found at the scene. The application for the search warrant would require a statement of at least one specific criminal statute.
While the legal standards are not technically different, government attorneys seeking a search warrant and judges know attorneys’ offices are packed with attorney/client privileged information. For that reason they tend to be more exacting in their review when seeking and granting warrants to search the offices of attorneys. The issuance of these warrants apparently met this more exacting review.
Search warrants of lawyers offices are rare. That this happened is compelling evidence of strong probable cause in this case. Further, this was not just any attorney, but rather the attorney for the President of the United States. This sort of warrant just doesn’t happen without awesome evidence. Frankly, I don’t think this raid would have been done without damn near indictable evidence already existing. It’s even possible that Cohen has already been indicted and that it is under seal.
Given the President’s reaction (see below) another point needs to be emphasized. Remember when Trump fired all the United States Attorneys so he could appoint his own? The United States Attorney for the Southern District of New York, Geoffrey Berman, who sought and secured this warrant, is a Republican appointed by Trump. Berman donated the maximum individual amount, $5,400, to Trump’s campaign and was a volunteer in Trump’s New Jersey campaign operation.
The United States Attorney who sought and secured this warrant was appointed by Trump and donated $5,400 to Trump’s campaign and volunteered for Trump’s campaign.
Potential Criminal Charges In The Stormy Daniels Case.
- Campaign Finance Law Violations.
This started when Common Cause filed a Complaint with the FEC alleging the payment to Daniels was an illegal campaign contribution. The Federal Election Campaign Act (FECA) broadly defines a campaign contribution at 52 U.S.C. 30101(8) as “any gift, subscription, loan, advance, or deposit of money or anything of value made by any person for the purpose of influencing any election for Federal office.” Cohen admits he made the payment to influence the election, stating he sought to avoid the harm the porn star’s allegations might cause the campaign. Cohen told CNN “Just because something isn’t true doesn’t mean that it can’t cause you harm or damage. I will always protect Mr. Trump.”
If viewed as a campaign contribution Mr. Cohen would have an issue because the contribution would exceed the individual contribution limit of $2,700. If Cohen was repaid by the campaign, directly or in kind, then that violated laws related to use of campaign funds. Donors to campaigns are entitled to be confident their money will not be used as payola to porn stars.
There is a clear legal dilemma here. If Cohen was repaid by the Trump Campaign it was an illegal use of campaign funds. If Cohen was not repaid it was an illegal campaign contribution.
- Money Laundering.
From the Federal Money Laundering statute at 18 U.S.C. 1956:
(2) Whoever transports, transmits, or transfers, or attempts to transport, transmit, or transfer a monetary instrument or funds from a place in the United States to or through a place outside the United States or to a place in the United States from or through a place outside the United States —
(A) with the intent to promote the carrying on of specified unlawful activity; or
(B)knowing that the monetary instrument or funds involved in the transportation, transmission, or transfer represent the proceeds of some form of unlawful activity and knowing that such transportation, transmission, or transfer is designed in whole or in part —
(i) to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of specified unlawful activity; or
(ii) to avoid a transaction reporting requirement under State or Federal law.
If this was a campaign contribution, or illegal use of campaign funds, and the Hush Agreement was orchestrated to disguise such nefarious purposes, then a charge of money laundering may apply.
- Obstruction of Justice/Witness Intimidation and/or Tampering.
Per New York Law adultery is a crime. The Hush Agreement can be viewed as an effort to obstruct justice and intimidate a witness. The payment could be viewed as bribing a witness to said crime.
In addition, at the time the Hush Agreement was entered into, other women (responding to the notorious Access Hollywood tape), had filed lawsuits against Trump alleging sexual assault and harassment. The testimony of Stormy Daniels might be helpful to their cases and the Hush Agreement could be viewed as an effort to suppress that testimony.
- Bank Fraud.
Large transfers of money, like the one to Stormy Daniels, require that the transferring party explain to banks the purpose behind the transfers. If Cohen misrepresented the reason this could be bank fraud.
- Tax Law.
How was this was reported on everyone’s taxes. Did Cohen report it as an expense? What kind? Declaring a tax deduction for an illegal enterprise is illegal.
How This Can Implicate The President.
One word, conspiracy. If Trump conspired with Cohen to dodge campaign finance law, and/or money launder, and/or obstruct justice or witness tamper, and/or commit tax fraud, then the President is implicated. This is totally separate from the Russia investigation. There are now two independent investigations that may criminally implicate the President.
Yes, we don’t currently know any of that. However, the claim that Trump did not know of the Hush Agreement is implausible for many reasons.
In terms of the attorney/client privilege, it does not exist if the attorney and his client are engaged together in a crime. It’s called the attorney/client crime exception. Criminal enterprises are not privileged.
Other Issues: Does This Finally Prompt Trump To Fire Mueller?
Trump has already declared the search warrants part of Mueller’s “witch hunt.” Trump called the search warrants a “disgraceful situation” and “attack on our country.” He again attacked his own Attorney General, Jeff Sessions, for recusing himself from an investigation that Sessions himself was a potential target of.
Trump’s attacks on Mueller are off target. As discussed above, Mueller divorced himself, and his investigation, from these search warrants. The United States Attorney who sought and secured the warrant is a Republican who was appointed by Trump and who donated to Trump’s campaign. This is a completely separate investigation, outside of the Special Counsel, and in normal Department of Justice channels. A judge, independent from the judges involved in warrants for Mueller’s investigation, signed off on the extraordinary warrants for Cohens’ attorney offices.
While Trump’s attacks on Mueller are factually infirm, he has nonetheless taken that approach. Will this produce a Trump version of Nixon’s “Saturday Night Massacre”? Trump’s tweets the following morning do nothing to reduce such concerns.
Another possibility is that Trump could preempt any prosecution of Cohen by pardoning him.
Other Issues: Impact On The Stormy Daniels Lawsuit.
- Plus For Daniels, Hush Agreement Was For An Illegal Purpose.
Contracts that violate public policy are void. You now have a judge signing probable cause warrants suggesting exactly that. Michael Avenatti, Daniels’ attorney, is already celebrating that point.
- Plus For Daniels, The Government Is Conducting Your Discovery.
The only thing better than your own discovery, comparatively lame civil subpoenas called “Requests for Production,” is government FBI agents (with guns and everything) going in and just seizing stuff. As an attorney in a civil case you can’t do that. Getting it from the government may be an issue for Avenatti, but to the extent the government is going to use it, it has to be released.
- Minus For Daniels, No Deposition Of Cohen.
Earlier the same day of the search warrants Avenatti renewed his motion to depose Cohen and Trump. Michael Cohen is now clearly a target of a criminal investigation. If deposed he will invoke the 5th Amendment and not answer any questions. If the President claims the same privilege, things could get interesting in Washington D.C.