How Michael Cohen, Denied White House Job, Was Seen as Its Gatekeeper
Posted May 10, 2018 12:11 a.m. EDT
After paying off a pornographic film actress and doing other tasks to help his boss win the presidency, Michael D. Cohen was surprised to find that the doors to the White House were mostly closed to him.
Cohen did not land a hoped-for job in President Donald Trump’s administration — he imagined himself as chief of staff — and in January last year he left the Trump Organization, where he had long served as the in-house fixer without a clear portfolio. But he managed to turn what looked like an exile into a lucrative opportunity.
Armed with the self-appointed title of “personal attorney” to the president, Cohen, who had served as a personal-injury lawyer and owned a taxi business, became seen as the man who could help others gain access to the seat of power that had been denied to him. Major corporations including AT&T, Novartis and the law firm Squire Patton Boggs collectively paid him over $2 million for advice about navigating the suddenly foreign terrain of Trump’s Washington.
Most of the arrangements remained a secret until Tuesday, when details first appeared in an account released by Michael Avenatti, the lawyer for Stephanie Clifford, the actress who was paid $130,000 to keep quiet about her alleged affair with Trump and is now suing to be released from the agreement. The New York Times confirmed many of Avenatti’s disclosures through a review of financial records.
On Wednesday, additional details emerged. Novartis, the Swiss drugmaker, said it had paid Cohen $1.2 million after he approached the company early last year promising insights into Trump’s views on health care. AT&T, which has been pursuing a major corporate merger, said it had paid him $600,000 for advice on regulatory matters.
Both companies also disclosed that they had been contacted last November by investigators for the special counsel, Robert Mueller, who is examining Russian interference in the 2016 election. Mueller’s team also questioned a Russian oligarch linked to another company, Columbus Nova, a New York-based investment firm, that had paid Cohen about $500,000 for consulting services last year, according to the financial records.
The payments were among transactions totaling $4.4 million that between October 2016 and January this year flowed through Essential Consultants LLC, the same shell company Cohen used to pay Clifford, better known as Stormy Daniels. Cohen faces an investigation into his finances by the FBI, which raided his home and offices last month.
It is not clear what Cohen delivered for clients. One cut short his contract, while another paid him even after concluding he could not provide the services he had promised.
Cohen’s dealings were the focus of intense questioning at a White House briefing on Wednesday, when Sarah Huckabee Sanders, the press secretary, was asked whether the lawyer’s business transactions embarrassed Trump and were contrary to his pledge to “drain the swamp” of influence peddlers. She fired back: “I think that would be up to those individuals who make the decision to hire someone, just the same way that the companies that you work for make the decision to determine whether or not they think that you’re qualified to serve in a position.” Quaking on K Street
Some of the contracts with Cohen were executed at a time when large companies and lobbying firms were scrambling to adjust to life under Trump. There is always some disruption at the beginning of a new administration as lobbyists with ties to an incoming president seek to profit and firms more associated with the opposition party recalibrate. But Trump’s election shook K Street, home to many of the capital’s lobbying firms, like an earthquake.
He had pledged during his campaign to stamp out special-interest influence, and came into office with few ties to established Washington lobbying and consulting firms.
“This guy came to office with virtually no K Street constituency, which is virtually unheard-of in the modern era, and so everybody was in a rush to hire people with connections to him,” said Ivan Adler, a partner at the McCormick Group in Washington who recruits lobbyists.
Squire Patton Boggs, one of the largest law firms in the world, has maintained a top lobbying practice in Washington partly by bringing in lobbyists with deep connections to the leadership in both parties. But the practice, which is run by former Sens. John Breaux, D-La., and Trent Lott, R-Miss., was not seen as particularly well connected to the Trump administration.
Before entering into a “strategic alliance” with Cohen in March last year, the firm broached the prospect of partnerships with others connected to Trump. Beginning in December 2016, Squire Patton Boggs talked with a lobbying firm started by former Trump campaign officials Barry Bennett and Corey Lewandowski, and with David Bossie, who had served as Trump’s deputy campaign manager, among others, according to people familiar with the discussions. Unlike Cohen, the three men had extensive experience in politics and government.
Bennett, Bossie and Lewandowski, who did not end up working with the firm, declined to comment.
People who worked with Squire Patton Boggs cautioned the firm against partnering with Cohen, predicting that his confrontational style and deal-making could bring unwanted attention, according to those familiar with the conversations. They said the firm ignored the advice in hopes that Cohen would be a draw for prospective clients.
Cohen brought in five “client opportunities,” between March 2017 and March this year, when his arrangement was terminated by the firm, according to an internal email.
The firm did not respond to requests for comment. But the email by its global managing partner, Frederick R. Nance, provided talking points intended to create distance between the firm and Cohen. It stated that neither “our Firm nor any of our clients is involved in the federal investigation of Cohen.” And it described the firm’s “strategic alliance” with Cohen as “in keeping with our posture as a global multi-practice law firm with a premier Public Policy practice.” The identities of the clients brought in by Cohen were not specified. But one of them was a Florida company called U.S. Immigration Fund LLC that helps facilitate foreign investments, according to court filings first reported by The Wall Street Journal on Wednesday. U.S. Immigration Fund has worked with the company of Jared Kushner’s family to drum up investments.
Cohen remained largely independent from the law firm during his yearlong association with it, according to both the internal email and court documents filed by prosecutors who are investigating Cohen. Among other things, Squire Patton Boggs did not have a key to Cohen’s office, and it was kept locked at all times. Cohen also used his own computer server, which was separate from that of the firm.
Seeking Trump Insights
A large multinational firm that saw a potential ally in Cohen was AT&T, which had a pressing reason to be seeking one: In late October 2016, just weeks before Election Day, it had announced its intention to merge with Time Warner, whose television division includes the president’s leading cable news bête noire, CNN.
Trump quickly criticized the proposed deal, telling supporters at a campaign event, “AT&T is buying Time Warner and thus CNN, a deal we will not approve in my administration because it’s too much concentration of power in the hands of too few.”
AT&T, which has long-standing ties to the traditional Republican establishment in Washington, was not prepared for Trump to win, and there was little planning in place for his potential victory, according to three people familiar with discussions at the company. Its lead lobbyist through much of the campaign, James W. Cicconi, a Republican and onetime official in the administrations of Ronald Reagan and George H.W. Bush, broke with his own party to publicly endorse Hillary Clinton in June 2016 (he retired a few months later).
None of it boded well for a firm seeking approval for an $85.4 billion merger with a media company that the incoming president had publicly attacked and that had various other matters pending in Washington. Soon, AT&T donated $2 million to the inauguration festivities and an additional $80,000 for telecom equipment used during the event.
It was around this time that Cohen and AT&T officials first met, according to one person familiar with the details of the arrangement. Cohen was in Trump Tower in Manhattan on the day in January 2017 that AT&T’s chief executive, Randall Stephenson, went there to visit the president-elect, but the person, speaking on the condition of anonymity because the meetings were private, said that AT&T and Cohen did not meet then.
Under the company’s yearlong contract, Cohen provided advice on how AT&T should approach the merger and various regulatory issues, according to a company note to employees. AT&T said Cohen was one of several consultants it retained at the start of Trump’s term to help it better understand the president’s thinking.
“Companies often hire consultants for these purposes, especially at the beginning of a new presidential administration, and we have done so in previous administrations, as well,” the company said on Wednesday in the communication to employees.
As for Novartis, it was concerned about Trump’s pledges to end the Affordable Care Act and his complaints about high drug prices. Cohen reached out to company executives in early 2017, presenting himself as knowledgeable about the president’s thinking on those matters, according to two people briefed on the talks. They would speak only under the condition of anonymity because they were not authorized to discuss the contract publicly.
Novartis said it soon determined that Cohen could not provide the services he offered. The drug giant considered terminating his contract but learned it could do so only for cause, so it continued paying him until the deal expired.
Joseph Jimenez, the chief executive at Novartis at the time the deal was signed, left the company this January. His replacement, Vasant Narasimhan, took over the next month, and the company has said he had no role in the arrangement. Narasimhan dined with Trump along with other European business leaders at this year’s World Economic Forum. Novartis said Narasimhan’s presence at the dinner had nothing to do with the payments to Cohen.
Jimenez did not respond to requests for comment.
In court papers filed Wednesday, Cohen’s lawyers tried to get Avenatti prohibited from appearing in a Manhattan federal courthouse, saying that he had improperly obtained Cohen’s bank records and also peddled some false information. Meanwhile, the Treasury Department’s inspector general said it was examining whether confidential financial records related to Cohen were leaked.