Political News

A Trail of Money Leading to Cohen

Posted May 8, 2018 11:20 p.m. EDT
Updated May 8, 2018 11:24 p.m. EDT

A shell company that Michael D. Cohen used to pay hush money to a pornographic film actress received payments totaling more than $1 million from an American company linked to a Russian oligarch and several corporations with business before the Trump administration, according to documents and interviews.

Financial records reviewed by The New York Times show that Cohen, President Donald Trump’s personal lawyer and longtime fixer, used the shell company, Essential Consultants LLC, for an array of business activities that went far beyond what was publicly known. Transactions adding up to at least $4.4 million flowed through Essential Consultants starting shortly before Trump was elected president and continuing to this January, the records show.

Among the previously unreported transactions were payments last year of about $500,000 from Columbus Nova, an investment firm in New York whose biggest client is a company controlled by Viktor Vekselberg, the Russian oligarch. A lawyer for Columbus Nova, in a statement Tuesday, described the money as a consulting fee that had nothing to do with Vekselberg.

Other transactions described in the financial records include hundreds of thousands of dollars Cohen received from Fortune 500 firms with business before the Trump administration, as well as smaller amounts he paid for luxury expenses like a Mercedes-Benz and private club dues.

References to the transactions first appeared in a document posted to Twitter on Tuesday by Michael Avenatti, the lawyer for Stephanie Clifford, the adult film star who was paid $130,000 by Essential Consultants to keep quiet about an alleged affair with Trump. The lawyer’s seven-page document, titled “Preliminary Report of Findings,” does not explain the source of his information but describes in detail dates, dollar amounts and parties involved in various dealings by Cohen and his company. Most of the transactions involved two banks: First Republic Bank and City National Bank.

The Times’ review of financial records confirmed much of what was in Avenatti’s report. In addition, a review of documents and interviews shed additional light on Cohen’s dealings with the company connected to Vekselberg, who was stopped and questioned at an airport earlier this year by investigators for Robert Mueller, the special counsel examining Russian interference in the 2016 presidential election.

Taken together, the Times’ findings and Avenatti’s report offer the most detailed picture yet on Cohen’s business dealings and financial entanglements in the runup to and aftermath of the election. Federal prosecutors in Manhattan are investigating Cohen for possible bank fraud and election-law violations, among other matters, according to people briefed on the investigation. Stephen Ryan, a lawyer representing Cohen, declined to comment.

Clifford, whose stage name is Stormy Daniels, is suing Cohen and Trump to break her nondisclosure agreement related to the $130,000. It is unclear whether that or any of the other transactions were improper, but Avenatti has asserted that Cohen’s use of Essential Consultants to make the payment potentially violated banking laws. The financial records indicate that at least some of the money that passed through Essential Consultants was from sources and in amounts that were inconsistent with the company’s stated purpose. Cohen also used the company to collect $250,000 after arranging payments in 2017 and 2018 by a major Republican donor, Elliott Broidy, to a former Playboy model he allegedly impregnated, according to news reports last month.

Among the other payments to Cohen’s company described in the financial records were four for $99,980 each between October and January by Novartis Investments SARL, a subsidiary of Novartis, the multinational pharmaceutical giant based in Switzerland. Novartis — whose chief executive was among 15 business leaders invited to dinner with Trump at the World Economic Forum in January — spent more than $10 million on lobbying in Washington last year and frequently seeks approvals from federal drug regulators. Novartis said in a statement that its agreement with Essential Consultants had expired.

In addition, Korea Aerospace Industries paid Cohen’s company $150,000 last November, according to the records. The company, an aircraft manufacturer, has partnered with Lockheed Martin, the American defense contractor, in competition for a multibillion-dollar contract to provide trainer jets for the U.S. Air Force that is expected to be awarded this year. A representative for Korea Aerospace declined to comment.

AT&T made four payments totaling $200,000 between October 2017 and January 2018, according to the documents. AT&T, whose proposed merger with Time Warner is pending before the Justice Department, issued a statement on Tuesday evening confirming that it made payments to Cohen’s firm.

“Essential Consulting was one of several firms we engaged in early 2017 to provide insights into understanding the new administration,” the statement said. “They did no legal or lobbying work for us, and the contract ended in December 2017.”

The payments by Columbus Nova occurred between January and August of last year. Andrew Intrater, the company's American chief executive and Vekselberg’s cousin, donated $250,000 to Trump’s inauguration, campaign finance records show. He and Vekselberg attended the event together and met with Cohen there, according to a person briefed on the matter. Columbus Nova retained him as a consultant soon afterward.

The consulting deal was worth $1 million and was supposed to last for a year, according to documents reviewed by The Times. But Columbus Nova decided to end the agreement midway through after it yielded a few investment ideas but no actual deals.

A person close to Intrater said the executive had no idea that Essential Consultants would be used for the separate payment to Clifford, and that he hired a number of other consultants at the time for similar prices.

“Columbus Nova is a management company solely owned and controlled by Americans,” said Richard Owens, a lawyer for Intrater and Columbus Nova, adding that Vekselberg has never owned the firm. “After the inauguration, the firm hired Michael Cohen as a business consultant regarding potential sources of capital and potential investments in real estate and other ventures.

"Reports today that Viktor Vekselberg used Columbus Nova as a conduit for payments to Michael Cohen are false. The claim that Viktor Vekselberg was involved in or provided any funding for Columbus Nova’s engagement of Michael Cohen is patently untrue,” Owens said. "Neither Viktor Vekselberg nor anyone else outside of Columbus Nova were involved in the decision to hire Cohen or provided funding for his engagement.”

A lawyer for Vekselberg did not respond to a request for comment. In addition to questioning Vekselberg, Mueller’s investigators have also interviewed Intrater, though there is no indication that either man is suspected of wrongdoing, The Times reported last week.

The person close to Intrater said that he was encouraged to attend the inauguration by an American friend, unrelated to Cohen, and that he had wanted to use the trip as an opportunity to meet with business associates in Washington.

Vekselberg has invested in Columbus Nova’s private equity funds through his sprawling Russian-based conglomerate, the Renova Group, which operates in the energy sector and elsewhere. Vekselberg was one of seven Kremlin-linked oligarchs hit with sanctions in April by the Trump administration, which also imposed the penalties on the Renova Group.

Renova has had a financial relationship with VTB, one of the largest state-owned banks in Russia, according to documents that were part of the “Panama Papers” leak of files from an offshore law firm. The documents show that Vekselberg’s companies received at least $350 million in loans or investments from VTB and a subsidiary, VTB Capital. The current state of the debt is unclear, though one document suggests it was discharged in 2010.

Cohen created Essential Consultants in Delaware less than two weeks before he completed his deal with Clifford. Cohen initially said he paid her out of his own pocket by way of a home equity line of credit.

But last week, former Mayor Rudy Giuliani of New York said that Trump had reimbursed Cohen through several $35,000 monthly transactions that amounted to more than $400,000 — covering the payment to Clifford and, he said, other “incidental expenses.”