Business

National Enquirer Executives Said to Be Subpoenaed in Cohen Investigation

Posted June 20, 2018 9:03 p.m. EDT

The investigation into President Donald Trump’s former lawyer and “fixer” Michael Cohen has ensnared the publisher of the National Enquirer, further thrusting the media company into a federal inquiry involving a onetime top lieutenant to a sitting president.

Prosecutors with the Southern District of New York subpoenaed executives at the publisher, American Media, this spring, according to people who have been briefed about the move but agreed to share the details about it on the condition of anonymity.

The prosecutors had already asked for communications between Cohen and American Media’s chairman, David Pecker, and its chief content officer, Dylan Howard. That request was part of a search warrant they secured for Cohen’s home, office, hotel room and electronic devices in April.

The people familiar with the investigation said prosecutors sought similar communications from Howard and Pecker.

During the presidential campaign, American Media had arranged to effectively silence Karen McDougal, a former Playboy model who claimed to have had an affair with Trump years earlier, with a $150,000 payout.

The payment caught the attention of investigators conducting a broad investigation into Cohen’s efforts on behalf of Trump during the campaign, as well as his own business dealings. It is also the subject of a complaint at the Federal Election Commission.

The New York Times reported in February that Cohen had been in contact with McDougal’s lawyer at the time, Keith Davidson, as Davidson was negotiating with American Media on her behalf; Cohen was not directly a party to the deal.

In a statement Wednesday, the tabloid publisher said, “American Media Inc. has, and will continue to, comply with any and all requests that do not jeopardize or violate its protected sources or materials pursuant to our First Amendment rights.”

Even with this administration’s heated invective against the news media, federal subpoenas of media companies remain exceedingly rare. Justice Department officials tend to approve them only after a deliberative process at the agency’s highest levels.

Several First Amendment lawyers said in interviews that the situation involving American Media and Cohen was equally unusual.

Pecker has acknowledged being friends with Cohen and Trump. American Media’s deal with McDougal — including buying the exclusive rights to her story about Trump, which it did not publish — was what is known in the tabloid world as a “catch and kill.”

American Media has denied any wrongdoing. And Pecker has portrayed the deal with McDougal as a business arrangement, noting that it also included rights to use her on its magazine covers and to publish fitness columns under her name.

But Pecker told The New Yorker last year that as far as he was concerned, once McDougal struck the deal she was part of the company, and “once she’s part of the company, then on the outside she can’t be bashing Trump and American Media.”

At the Federal Election Commission, American Media is facing claims that the payment to McDougal constituted an illegal political contribution to Trump, meant to stanch negative publicity against him during the campaign.

Political donations to candidates are capped at $5,400 per individual during election cycles, and candidates may not receive money directly from corporate treasuries. American Media has denied that the payment constituted a contribution.

“Any time that a news organization is being subpoenaed, as a First Amendment lawyer, that raises a red flag,” said Mark Bailen, an attorney at BakerHostetler in Washington. “The question is, is this related to the editorial enterprise, or is it related to the business enterprise, or even a personal consideration for one of the employees or publishers or owners or executives of the company? That would take it out of the realm of having a direct newsroom impact.”

The main concern, he said, is “protecting reporters from having to turn over state’s evidence at the whim of the government.”

News of the subpoena was first reported by The Wall Street Journal.