Michael Cohen Says He Arranged Payments to Women at Trump’s Direction
The former personal lawyer to President Trump pleaded guilty to campaign finance violations, as well as multiple counts of tax evasion and bank fraud.
By William K. Rashbaum, Maggie Haberman, Ben Protess and Jim Rutenberg
Michael D. Cohen, President Trump’s former lawyer, made the extraordinary admission in court on Tuesday that Mr. Trump had directed him to arrange payments to two women during the 2016 campaign to keep them from speaking publicly about affairs they said they had with Mr. Trump.
Mr. Cohen acknowledged the illegal payments while pleading guilty to breaking campaign finance laws and other charges, a litany of crimes that revealed both his shadowy involvement in Mr. Trump’s circle and his own corrupt business dealings.
He told a judge in United States District Court in Manhattan that the payments to the women were made “in coordination with and at the direction of a candidate for federal office.”
“I participated in this conduct, which on my part took place in Manhattan, for the principal purpose of influencing the election” for president in 2016, Mr. Cohen said.
The plea represented a pivotal moment in the investigation into the president, and the scene in the Manhattan courtroom was striking. Mr. Cohen, a longtime lawyer for Mr. Trump — and loyal confidant — described in plain-spoken language how Mr. Trump worked with him to cover up a potential sex scandal that Mr. Trump feared would endanger his rising candidacy.
Mr. Cohen also pleaded guilty to multiple counts of tax evasion and a single count of bank fraud, capping a monthslong investigation by Manhattan federal prosecutors who examined his personal business dealings and his role in helping to arrange the financial deals with women connected to Mr. Trump.
The plea came shortly before another blow to the president: His former campaign manager, Paul Manafort, was convicted in his financial fraud trial in Virginia. The special counsel, Robert S. Mueller III, had built a case that Mr. Manafort hid millions of dollars in foreign accounts to evade taxes and lied to banks to obtain $20 million in loans.
Mr. Trump’s lawyers have, for months, said privately that they considered Mr. Cohen’s case to be potentially more problematic for the president than the investigation by the special counsel.
But Mr. Trump’s lawyer, Rudolph W. Giuliani, said in a statement after Mr. Cohen’s plea, “There is no allegation of any wrongdoing against the president in the government’s charges against Mr. Cohen.”
In federal court in Manhattan, Mr. Cohen made the admission about Mr. Trump’s role in the payments to the women — an adult film actress and a former Playboy playmate — as he pleaded guilty to two campaign finance crimes.
One of those charges stemmed from a $130,000 payment he made to the actress, Stephanie Clifford, better known as Stormy Daniels, in the run-up to the 2016 presidential election. Prosecutors said that Trump Organization executives were involved in reimbursing Mr. Cohen for that payment, accepting his phony invoices that listed it as a legal expense. The other charge concerned a complicated arrangement in which a tabloid bought the rights to the story about the former Playboy model, Karen McDougal, then killed it.
Mr. Cohen’s plea was announced by Robert Khuzami, the deputy United States attorney, along with senior officials from the F.B.I. and the Internal Revenue Service. Addressing reporters outside the courthouse, Mr. Khuzami said that Mr. Cohen had “decided that he was above the law, and for that, he is going to pay a very, very serious price.”
The plea agreement does not call for Mr. Cohen to cooperate with federal prosecutors in Manhattan. Still, it does not preclude him from providing information to them later or to the special counsel, who is examining the Trump campaign’s possible involvement in Russia’s interference in the 2016 campaign. If Mr. Cohen were to substantially assist the special counsel’s investigation, Mr. Mueller could recommend a reduction in his sentence.
Mr. Cohen had been the president’s longtime fixer, handling his most sensitive business and personal matters. He once said he would take a bullet for Mr. Trump.
As Mr. Cohen addressed the judge, admitting to the crimes he had committed, the packed courtroom remained silent. Even when Mr. Cohen made obvious references to Mr. Trump, referring to him as “the candidate” and “a candidate for federal office,” spectators seemed to listen raptly, with no gasps or audible reactions.
Mr. Cohen pleaded guilty to five counts of tax evasion for concealing more than $4 million in personal income from 2012 to 2016 and to one count of bank fraud, for failing to disclose $14 million in debts in an application for a $500,000 home equity line of credit. He also pleaded guilty to making an excessive campaign contribution and causing an unlawful corporate contribution during the 2016 election cycle.
He will be sentenced on Dec. 12 before Judge William H. Pauley III. Though Mr. Cohen faces a maximum of 65 years in prison, the plea agreement provides for a far more lenient sentence: The government calculated the sentencing guidelines at from 51 to 63 months and the defense put them at 46 to 57 months. A final guidelines determination will be made by the Probation Department, but the ultimate sentence will be determined by Judge Pauley.
Mr. Cohen’s attorney, Lanny J. Davis, said Mr. Cohen had put his family and country ahead of his loyalty to Mr. Trump. “He stood up and testified under oath that Donald Trump directed him to commit a crime by making payments to two women for the principal purpose of influencing an election,” Mr. Davis said. “If those payments were a crime for Michael Cohen, then why wouldn’t they be a crime for Donald Trump?”
Looming over the negotiations between prosecutors and Mr. Cohen has been the possibility of a presidential pardon. Mr. Trump reached out to Mr. Cohen by phone a few days after the F.B.I. raids, and they had dinner together a month earlier in March, at Mr. Trump’s private club in Florida, Mar-a-Lago. Mr. Cohen’s lawyer had loosely raised the issue of a pardon with an attorney for Mr. Trump several months ago, according to two people with knowledge of the conversations.
By striking a deal with Mr. Cohen that includes prison time, federal authorities were aware of the risk that the president might pardon him, said another person briefed on the matter. But it is also possible that Mr. Cohen could eventually cooperate.
Prosecutors charged that Mr. Cohen’s $130,000 payment to Ms. Clifford was effectively a donation to Mr. Trump’s campaign, because by securing her silence it improved his electoral fortunes, and thus violated 2016 campaign finance law prohibitions against donations of more than $2,700 in a general election.
Mr. Cohen also pleaded guilty to “causing” an illegal corporate donation to Mr. Trump through his involvement in a $150,000 payment American Media Inc. made to Ms. McDougal in late summer 2016 to buy the rights to her story, effectively securing her silence for the remainder of the campaign. Corporations are prohibited from coordinating political spending with candidates or their representatives. Mr. Cohen signed papers a month later to purchase the rights to her agreement from A.M.I., but the publisher backed out of the deal at the last minute.
The prosecutors filled in several blanks in a story that has been unfolding for months about the lengths to which Mr. Cohen went during the campaign to help his boss stave off embarrassing news about alleged affairs ahead of Election Day. And the charges confirmed that what might have seemed on the surface to have been only tawdry allegations involving an adult entertainment star and a former Playboy model may actually carry legal and political implications for a sitting president.
Prosecutors left little doubt that A.M.I. Inc., owner of The National Enquirer, became a de facto campaign proxy for Mr. Cohen in his efforts on behalf of Mr. Trump.
According to court papers, the publisher agreed in August 2015, months before the first primaries, to look out for damaging stories about Mr. Trump and his alleged affairs with women during talks with Mr. Cohen and “one or more” members of Mr. Trump’s campaign.
The tabloid company agreed to identify those stories “so they could be purchased and their publication avoided,” the prosecutors said on Tuesday — an inverted role for a tabloid scandal sheet such as The Enquirer, which went on to savage Mr. Trump’s opponents while promoting and protecting him.
That deal led to the arrangement with Ms. McDougal, which was struck in August 2016. But prosecutors also reported for the first time that A.M.I. was intimately involved in the arrangement with Ms. Clifford. The tabloid connected Mr. Cohen with the lawyer who had negotiated the McDougal contract, Keith Davidson. Mr. Davidson also had Ms. Clifford as a client and later hashed out the agreement for Ms. Clifford’s silence.
Prosecutors said in court papers that when Mr. Cohen initially failed to finalize the deal, an editor at A.M.I. — a likely reference to Dylan Howard, the company’s chief content officer — alerted Mr. Cohen that there was a risk that Ms. Clifford would sell her story to another media company, one that would publish it.
Mr. Cohen’s admission that he broke the law by paying off Ms. Clifford was a remarkable turnaround from the legal and publicity battle that he and his lawyers had waged against her. Ms. Clifford and her lawyer, Michael Avenatti, have hounded Mr. Cohen since May, taunting him on social media and predicting his indictment. Mr. Cohen’s lawyers frequently fired back, accusing Mr. Avenatti of “fanning a media storm” and of “smearing” Mr. Cohen in a relentless series of televised appearances.
“I predicted this a long time ago before the warrants were even executed,” Mr. Avenatti said on Tuesday. “We feel extremely vindicated.”
Mr. Cohen’s plea culminates a long-running inquiry that became publicly known in April when F.B.I. agents armed with search warrants raided his office, apartment and hotel room, hauling away reams of documents, including pieces of paper salvaged from a shredder, and millions of electronic files contained on a series of cellphones, iPads and computers.
Lawyers for Mr. Cohen and Mr. Trump spent the next four months working with a court-appointed special master to review the documents and data files to determine whether any of the materials were subject to attorney-client privilege and should not be made available to the government.
The special master, Barbara S. Jones, who completed her review last week, issued a series of reports in recent months, finding that only a fraction of the materials were privileged and the rest could be provided to prosecutors for their investigation.
On Monday, the judge overseeing the review, Kimba M. Wood of Federal District Court in Manhattan, issued an order adopting Ms. Jones’s findings and ending the review process.
It was unclear on Tuesday what role the materials that Ms. Jones reviewed, which were made available to prosecutors on a rolling basis, may have had in the charges against Mr. Cohen.
One collateral effect of Mr. Cohen’s plea agreement is that it may allow Mr. Avenatti, Ms. Clifford’s lawyer, to proceed with a deposition of Mr. Trump in a lawsuit that Ms. Clifford filed accusing the president of breaking a nondisclosure agreement concerning their affair.
The lawsuit had been stayed by a judge pending the resolution of Mr. Cohen’s criminal case. Mr. Avenatti wrote on Twitter on Tuesday that he would now seek to force Mr. Trump to testify “under oath about what he knew, when he knew it and what he did about it.”
