Michael Cohen, the longtime attorney of President Trump, is under federal investigation for possible bank fraud, wire fraud and campaign finance violations, according to three people with knowledge of the case.
FBI agents on Monday raided Cohen’s Manhattan office, home and hotel room as part of the investigation, seizing records about Cohen’s clients and personal finances. Among the records taken were those related to a 2016 payment Cohen made to adult-film star Stormy Daniels, who claims to have had a sexual encounter with Trump, according to a fourth person familiar with the investigation.
Investigators took Cohen’s computer, phone and personal financial records, including tax returns, as part of the search of his office at Rockefeller Center, that person said.
In a dramatic and broad seizure, federal prosecutors collected communications between Cohen and his clients — including those between the lawyer and Trump, according to both people.
The raids — part of an investigation referred by special counsel Robert S. Mueller III to federal prosecutors in New York — point to escalating legal jeopardy for a longtime Trump confidant who is deeply intertwined in the president’s business and personal matters.
Stephen Ryan, an attorney for Cohen, called the tactics “inappropriate and unnecessary,” saying Cohen has “cooperated completely with all government entities, including providing thousands of non-privileged documents to the Congress and sitting for depositions under oath.”
Among the records seized by investigators were “protected attorney client communications,” Ryan said.
The aggressive tactics by prosecutors drew the president’s ire. As Trump sat down for dinner Monday with military leaders at the White House, he repeatedly called the raid “a disgrace,” railing that he and his administration are the subject of unfair, baseless and misguided investigations.
“I have this witch hunt constantly going on for over 12 months now or longer,” he said. “It’s an attack on our country in a true sense; it’s an attack on what we all stand for.”
Revisiting his grievances about Mueller and Attorney General Jeff Sessions, Trump complained about what he suggested was a concerted and sometimes partisan effort to target his leadership. He noted that he has been urged to fire the special counsel, calling Mueller’s investigators “the most biased group of people.”
Dawn Dearden, spokeswoman for the U.S. attorney’s office for the Southern District of New York, declined to comment. Peter Carr, a spokesman for the special counsel’s office, declined to comment.
One person familiar with the probe said investigators have been gathering material on Cohen for weeks, including his bank records.
Two of the potential crimes being investigated — bank fraud and wire fraud — suggest prosecutors have some reason to think Cohen may have misled bankers about why he was using particular funds or may have improperly used banks in the transfer of funds.
Cohen has acknowledged facilitating a $130,000 payment in October 2016 to Daniels, who claims she had a sexual relationship with Trump in 2006.
Trump made his first comments about the payment last week, saying he did not know about the transaction.
Cohen has said he used a home-equity line of credit to finance the payment to Daniels and said that neither the Trump Organization nor the Trump campaign reimbursed him for the payment.
Banks don’t usually require much explanation from customers about how they use such credit lines. However, Cohen may have been asked to provide explanation for the large-dollar transfers he made when he moved the money to a shell company and then to a lawyer for Daniels.
The search requests for records related to the payment to Daniels cited investigators’ interest in possible violations of election law, according to one person familiar with the investigators’ work.
[Special counsel has examined episodes involving Cohen]
The seizure of Cohen’s records was first reported by the New York Times.
The Cohen raids required high-level authorization within the Justice Department. Under regulations governing the special counsel’s work, Mueller is required to consult with Deputy Attorney General Rod J. Rosenstein if his team finds information worth investigating that does not fall under his mandate to examine Russia’s interference in the 2016 election.
Rosenstein, as the acting attorney general supervising Mueller’s work, has the responsibility of deciding whether to expand Mueller’s mandate to include the new topic or to refer it to a U.S. attorney’s office.
Since Cohen is a practicing attorney whose communications with clients are considered privileged, federal prosecutors would have been required to first consider a less intrusive investigative tactic than a search warrant before executing the raids.
“A search warrant for a law office is extremely rare,” said Stephen Gillers, a professor at the New York University School of Law. “Lawyers are given the courtesy of producing documents in response to a subpoena or a request unless the government believes a lawyer will destroy or conceal the objects of the search.”
To serve a search warrant on a practicing attorney, federal prosecutors are required to obtain approval from top Justice Department officials. That means the acting U.S. attorney in Manhattan, Geoffrey S. Berman, who was appointed to his role by Sessions in January, as well as Justice Department officials in Washington, probably signed off.
Known for his combative style and fierce loyalty to Trump, Cohen served for a decade as a top lawyer at the Trump Organization, tangling with reporters and Trump’s business competitors on behalf of the celebrity real estate mogul.
He never formally joined Trump’s campaign but was in close contact with his longtime boss from his Trump Tower office throughout the 2016 race and presidential transition.
Cohen left the Trump Organization in January 2017, around the time of Trump’s inauguration, and since then has served as a personal attorney to the president.
Squire Patton Boggs, the law firm where Cohen had an office for the past year, said in a statement Monday that its “arrangement with Mr. Cohen reached its conclusion, mutually and in accordance with the terms of the agreement.”
“We have been in contact with federal authorities regarding their execution of a warrant relating to Mr. Cohen,” the firm said. “These activities do not relate to the firm and we are in full cooperation.”
To pursue criminal charges against Cohen for breaking federal election law, prosecutors would have to prove that he made the payment to Daniels to influence the election, rather than for personal reasons — to protect Trump’s reputation, for example, or his marriage.
Cohen has acknowledged that he facilitated the payment to Daniels, but he has not said why.
On Oct. 17, Cohen established Essential Consultants LLC as a vehicle for the $130,000 payment, records show. Ten days later, on Oct. 27, the bank Cohen used in New York transferred the money to Daniels via a California bank account belonging to her lawyer, Keith Davidson.
Eleven months later, in September 2017, that California bank — City National Bank in Beverly Hills — asked Davidson about the source of the payment, according to an email reviewed by The Washington Post. Bank officials declined to comment on whether the inquiry was triggered by a request or subpoena from law enforcement.
At some point, Cohen’s New York bank, First Republic, flagged the transaction to the Treasury Department as a suspicious payment, according to the Wall Street Journal.
Cohen used his Trump Organization email in negotiating the agreement with Davidson and in communicating with his bank about the funds.
In February, after a watchdog group filed a complaint about the payment with the Federal Election Commission, Cohen released a statement saying he “used my own personal funds to facilitate” the payment. He rejected the idea that the payment should have counted as a campaign contribution.
“The payment to Ms. Clifford was lawful, and was not a campaign contribution or a campaign expenditure by anyone,” he said, referring to Daniels’s real name, Stephanie Clifford.
While the timing of the payment — 12 days before the presidential election — might suggest an attempt to influence the outcome, timing is not enough to prove intent, said Rick Hasen, a professor specializing in election law at the University of California at Irvine.
“It would be very difficult to bring one of these cases without some good documentary evidence,” he said. “I think a lot of people are underestimating the hurdles that it takes to bring a criminal prosecution.”
[Trump says he didn’t know his attorney paid $130,000 to Stormy Daniels]
Cohen’s work for Trump has been a topic of particular interest in recent months to Mueller’s investigators. Although there has been no sign that he is a subject or target of Mueller’s probe into Russian interference in the 2016 election, people familiar with the investigation have said that Cohen has come up repeatedly in interviews and document requests.
Cohen played a central role in two Russia-related episodes Mueller has been investigating, including negotiations to build a Trump tower in Moscow that the Trump Organization undertook after Trump announced his candidacy for president. Cohen also was fleetingly involved with an effort to call attention to a Russia-friendly proposal for peace in Ukraine shortly before Trump took office.
Mark Berman, Emma Brown, Josh Dawsey, Anne Gearan, Rosalind S. Helderman, Beth Reinhard, Philip Rucker, Matt Zapotosky and Spencer S. Hsu contributed to this report.
President Trump made a host of dubious claims during two recent public appearances, jumping from taxes to trade, from Iraqi oil to Canadian immigration laws, from promoting voter-fraud conspiracy theories to suggesting a California mayor should be charged with obstruction of justice.
We counted 24 false or misleading statements in Trump’s infrastructure speech in Ohio on March 29 and his roundtable on taxes in West Virginia on Thursday. This is not an exhaustive list, however, and some of Trump’s claims include multiple inaccuracies.
The president seems to enjoy going off-script — Trump literally threw out his prepared remarks with a flourish in West Virginia — and perhaps as a result, we have a lot to unpack.
As usual with our roundups of multiple claims, we will not be giving Trump a Pinocchio rating.
Ohio
“We started building our wall. … We have $1.6 billion, and we’ve already started. You saw the pictures yesterday. I said, ‘What a thing of beauty.’ ”
The omnibus spending bill Trump signed in March includes $1.6 billion for fencing along the U.S.-Mexico border, not for Trump’s wall. (A fence is not a wall.) Parts of this all-fence project date to 2009, long before Trump took office.
Trump also tweeted pictures of the “wall,” but they’re actually photos of the 2009 project.
“We’re building up our military to the highest level it has ever been, and it was not in good shape. But it’s now going to be, very soon, the highest level it has ever been. And by the way, that means jobs, too. … Millions of jobs.”
Trump’s spending bill provides a record $700 billion to the U.S. military. But that’s in raw dollars. A better way to measure over time is percentage of the economy, and Trump’s is only one-third the size of the defense budget at the height of the Vietnam War. Moreover, experts say the added funds, $61 billion above what was appropriated in 2017, will not create “millions of jobs” but rather thousands or tens of thousands. Note that the spending bill provides a 2.4 percent pay raise for troops. That comes with a big price tag — and it does not directly create new jobs.
“Energy exports are at a record high, and foreign imports are at their lowest level in much more than a decade.”
Energy exports are in fact at a record high. But import levels are not as low as Trump claims. The United States imported 25.34 quadrillion BTUs of energy in 2017, according to the Energy Information Administration. Imports were lower in 2015 (23.79 QBTUs), 2014 (23.24 QBTUs) and 2013 (24.62 QBTUs).
“Just this week, we secured a wonderful deal with South Korea. We were in a deal that was a horror show. It was going to produce 200,000 jobs, and it did — for them. That was a Hillary Clinton special, I hate to say.”
Trump is referring to a free-trade agreement with South Korea that was negotiated by the President George W. Bush’s administration and then tweaked by President Barack Obama’s. (Hillary Clinton played no role.) It’s worth noting that calculating job gains or losses from such agreements is more art than science, as we found in 2015, so Trump’s 200,000 estimate should be taken with a grain of salt.
“We’ve got the greatest economy, maybe, ever — maybe in history. We have the greatest economy we’ve ever had.”
The stock market has seen a healthy recovery from the low points of the 2008-2009 economic downturn, and Wall Street pay has bounced back, too. But the recovery has been uneven. Median household income is barely above its 2008 level, adjusting for inflation. Wealth distribution has become more uneven since the financial crisis, with the rich now accounting for a larger share of total wealth than the middle and lower classes as compared with pre-crisis levels. This Wall Street Journal graphic gives a good overview of current economic conditions.
The U.S. gross domestic product grew 2.3 percent in 2017, Trump’s first year in office, according to Bureau of Economic Analysis data. It grew at a faster rate in three of the years Obama was in office (2010, 2014 and 2015); it also grew at a faster rate for much of the George W. Bush and Bill Clinton administrations.
“A very important, and respected, in some circles, Democrat, said we want to get rid — we should get rid of our Second Amendment. In other words, get rid of it.”
Trump is referring to Justice John Paul Stevens, a retired member of the Supreme Court who wrote an opinion piece in the New York Times calling for the repeal of the Second Amendment. Stevens for years was the leader of the Supreme Court’s liberal wing; his ideology was clearly in sync with the Democratic Party.
But Stevens never identified publicly as a Democrat. He was a registered Republican when Richard Nixon nominated him to the U.S. Court of Appeals for the 7th Circuit, and when Gerald Ford nominated him to the Supreme Court. (In this sense, Stevens is not unlike Trump, who identifies as a Republican even though he made political contributions to Democrats for years.)
“We got rid of the bump stocks. The bump stocks, now, are under very strict control, which I think everybody agrees is fine.”
Trump’s administration has proposed to ban bump-stock accessories for firearms, but the rulemaking process takes time and the ban is still not finalized.
“I approved that Keystone XL pipeline, and I approved the Dakota Access pipeline; both of them. … I thought we would have, like, some commotion. Right? Some commotion. Like, some protest — nobody. I approved it. The pickets, they picked up their stuff and they left. That was the end of it.”
In fact, there were protests after Trump approved the Dakota Access pipeline. The governor of North Dakota had to order that the protesters be removed, as Daniel Dale of the Toronto Star noted.
“We’re only into about 15 months, but I think I have approved much more than I’ve promised.”
As of January, the president had broken or failed to deliver on many of his campaign promises, according to our Trump Promise Tracker.
“I tell the story about Keystone. … That was dead for a couple of years, and no chance. I get elected, I approve it almost, like, in the first day, right at the very beginning. And I just say to myself, ‘Can you imagine the boss of whatever the hell company it is — who never actually called me to say thank you?’ But that’s okay.”
TransCanada chief executive Russ Girling actually thanked Trump twice in a meeting.
“We spent $7 trillion in the Middle East. We’d build a school; they’d blow it up. We’d build it again; they’d blow it up. We’d build it again; hasn’t been blown up yet, but it will be.”
Trump is lumping together the wars in Iraq (in the Middle East) and Afghanistan (in South Asia), which together cost about $1.6 trillion from 2001 to 2014. He is also adding in estimates of future spending, such as interest on the debt and veterans’ care for the next three decades.
“I got tired of watching. I used to say, ‘Keep the oil.’ We never kept the [Iraqi] oil. If we kept the oil, we would have been okay. If we kept the oil, we wouldn’t have ISIS. … That’s how they funded themselves.”
This one’s a real doozy.
First, invading and then seizing the resources of a sovereign nation would violate the Geneva Conventions. Second, taking Iraq’s oil would be logistically impossible with the troop levels committed by the United States, and would ultimately cost more than the oil is worth, experts say.
Third, the Islamic State might still exist, and still might be able to fund itself, without Iraqi oil proceeds. Much of the oil revenue that finances it comes from Syria, which the United States did not invade.
According to FactCheck.org, oil was not the most significant revenue source for the Islamic State, also known as ISIS, in 2015:
“ISIS had total revenue of $1.18 billion in 2015, according to a 2016 report by the inspectors general for the State Department, Defense Department and USAID. The terrorist group’s primary source of financing that year was extortion, stolen goods and taxes, at a combined total of $600 million. Oil accounted for $480 million. That report didn’t say how much oil revenue came from Iraq and how much came from Syria. However, a former Bush administration counterterrorism official told the House Financial Services Committee in May 2015 that about 90 percent of oil produced by ISIS came from Syrian oil fields.”
“You know, when I got in, we had over 100 federal judges that weren’t appointed. … But now we have about 145 federal district judges. We have 17 court of appeals judges. And as I said, we have the one Supreme Court justice. But think of 145 district judges.”
Prepare for a math headache.
These statements in combination suggest that Trump has appointed 145 judges to the U.S. District Court, 17 to the U.S. Court of Appeals and one Supreme Court justice. But his numbers are wildly inflated.
Since Trump took office, the Senate has confirmed 14 appellate judges, 14 district judges, and one Supreme Court justice.
Another 45 district court nominees and 10 appellate court nominees are awaiting Senate confirmation.
In total, Trump has appointed 29 judges to the district, appellate and supreme courts, not 162 as he suggested. Even when including the pending nominees, the total number rises only to 84, or about half of the 162 he claimed. Trump has set a record with judicial appointments, but it’s more modest than he portrays.
West Virginia
“You know, they used to call it tax reform, and for 40 years they couldn’t pass anything and they didn’t know why. I said, ‘How’s it hard to pass tax cuts?’ Turned out it was not that hard. It was not easy.”
Never mind that Ronald Reagan’s tax cuts passed more than 31 years ago; George W. Bush and Obama also passed big tax-cut bills.
“We had a trade deficit of almost $500 billion last year with China.”
This is a zombie claim. It keeps getting debunked, but Trump keeps saying it. (Accurately relaying trade figures is not the president’s strong suit.)
The trade deficit with China was $310 billion in 2016. This factors in both goods and services.
The goods deficit in 2017 was $375 billion, but the net trade figure will most likely be lower once trade in services is factored into the equation.
“This is our country. If you have a baby on our land, congratulations, that baby is a United States citizen. We’re the only one.”
Thirty countries offer birthright citizenship, including all in North America and almost all in South America, according to the Center for Immigration Studies. The number rises to 33 when including Lesotho, Tanzania and Tuvalu.
“If you come into Canada, it’s got to be based on merit. With us, it’s a lottery system — pick them out — a lottery system. You can imagine what those countries put into the system. They’re not putting their good ones.”
Like the United States, Canada offers family sponsorship for would-be immigrants, so its immigration system is not entirely based on merit.
Trump often mischaracterizes the U.S. diversity visa lottery. Other countries do not choose people to “put into the system.” Instead, nearly 15 million self-selected people from countries with low immigration to the United States apply annually for the slim chance to win an invitation to apply for a green card.
Those who win the lottery must then meet educational or work experience requirements and pass a background check. A State Department office in Kentucky manages the lottery.
“Remember my opening remarks at Trump Tower, when I opened. Everybody said, ‘Oh, he was so tough,’ and I used the word ‘rape.’ And yesterday, it came out where, this journey coming up, women are raped at levels that nobody has ever seen before. They don’t want to mention that.”
Trump is referring to rape allegations within the caravan of Central Americans heading to the United States. There are two problems with this statement.
First, Trump is harking back to 2015, when he announced his presidential candidacy in Trump Tower. He claimed at the time, “When Mexico sends its people, they’re not sending their best. … They’re rapists.” But the caravaners are Central Americans, so these rape allegations do not prove his point about Mexicans.
Second, the rape allegations themselves are a matter of dispute. “A BuzzFeed News reporter who has been traveling with the caravan for 12 days says there’s no evidence that’s true,” the news site reported.
White House spokeswoman Sarah Huckabee Sanders told reporters that Trump was referring to a report, in 2014, that as many as 80 percent of women who have tried the journey outside such caravans have been raped. “He’s saying that the drug smugglers, the traffickers, the coyotes — this is something that, again, has been in recent years — I know it’s been up to as high as 80 percent,” she said.
“We’re going to have the wall. We’ve already started building it. We have a billion-six. We’ve started building it and fixing miles and miles of wall that’s already up — and fence.”
Trump made this claim in both Ohio and West Virginia. Regardless of where Trump says this, a fence is not a wall.
“How about the mayor of Oakland, where she tells a thousand people to ‘get going; law enforcement is coming to get you.’ And this was all planned. And many of them scattered, and it was pretty much a failure. I mean, to me that’s obstruction of justice, and something should happen there. And it hasn’t, and I don’t know why it hasn’t.”
Trump blames the mayor of Oakland, Calif., for spoiling a four-day immigration sweep in Northern California. The mayor, Libby Schaaf, had warned residents about the raid by U.S. Immigration and Customs Enforcement the night before it began in February.
The suggestion that Schaaf allowed 1,000 people to evade ICE is misleading because the agency never captures all its targets in such raids, according to a former ICE spokesman in California who resigned in protest after this raid.
ICE ended up arresting 232 unauthorized immigrants during this raid that Trump calls “pretty much a failure.”
“We had somebody on the West Side Highway, which I know very well, in Manhattan, he ran over — I think he killed about eight people. … And came in through chain migration. Or he might have also come in through a lottery. But he brought a lot of people with him. They say 22 people. Twenty-two people.”
Trump is repeating a Four Pinocchio claim about Sayfullo Saipov, an immigrant from Uzbekistan charged with killing eight and injuring 12 in a deadly rampage in New York in 2017. Saipov entered the United States with a diversity visa. We found no evidence that he brought any relatives to the United States, let alone 22.
“In many places, like California, the same person votes many times. You probably heard about that. They always like to say, ‘Oh, that’s a conspiracy theory.’ Not a conspiracy theory, folks. Millions and millions of people.”
A wide range of studies has found only infinitesimal evidence of voter fraud in the United States. One study says the rate is so low as to be almost nonexistent: between 0.0003 percent and 0.0025 percent. (The odds of getting struck by lightning are higher.)
Tellingly, Trump dissolved his own voter fraud task force, which produced no evidence of fraud.
“And we’re working on coal — clean coal. I always say ‘clean, beautiful coal.’ ”
There’s no such thing as “clean coal.” Power plants can mitigate some of the effects of burning coal by capturing and burying carbon-dioxide emissions, but that doesn’t cleanse the coal itself.
“We’re negotiating a deal with Mexico, NAFTA, and I hope it works out. But it was a horrible deal for our country. It was incompetently drawn. It was a shame that it ever happened. It emptied out millions of jobs. Thousands of factories and plants. They left. And a lot of them are moving back. Chrysler just announced they’re moving back into Michigan and many other car companies are expanding and building brand-new plants.”
Trump once again exaggerates the effects of NAFTA. The Congressional Research Service says the trade deal had a “modest” effect on the U.S. economy.
Trump also says Fiat Chrysler is moving a plant back to Michigan. But Chrysler actually is moving one production line from a Mexican plant to Michigan. Both plants were already operating, and the Mexican plant won’t be closed.
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