How Michael Cohen Blended Trumpian Bombast With The D.C. Swamp

A flash-in-the-pan lobbying career provides insight into how the game is played.

May 16, 2018

What do Obamacare, telecommunications, antitrust law, accounting standards, and immigration have in common? Not much, except apparently that it’s worth paying millions to a New York real estate lawyer and taxicab operator to consult on those issues—especially if that man happens to be Michael Cohen, President Trump’s personal “fixer.”

After his client’s election, Cohen launched a consulting business with a singular blend of Trumpian bombast and Washington, D.C., swampiness. Trading on his close relationship with the President—he had the photos to prove it!—Cohen blustered and swaggered his way into lucrative contracts on topics where he had no expertise with companies that never would have touched him before Trump’s ascendance.

Now Cohen’s foray into consulting is at risk of evolving from merely sleazy to criminal.

After starting his new business, Essential Consulting, Cohen apparently was delighted with his new endeavor. “I’m crushing it,” he told an associate. Cohen presented himself to potential clients, gobsmacked by the 2016 election results, as a Trump whisperer.

The Swiss healthcare behemoth Novartis agreed to pay him $1.2 million. AT&T ponied up $600,000. Korea Aerospace Industries Ltd. (KAI) offered $150,000. The DC lobbying and legal giant Squire Patton Boggs paid $500,000 for a “strategic alliance” with him. And a company named Columbus Nova paid him $500,000. More on that later.

So far, so good, at least for Cohen’s bank account. But what exactly was he being paid for?

Even the companies that hired him don’t quite seem to know, especially now that their deals are public, compliments of Stormy Daniel’s hard-charging lawyer, Michael Avenatti. When firms hired Cohen, they ostensibly wanted insight on healthcare or telecommunications or whatever was needed to paper the consulting contract.

Novartis has come right out and said that they paid him essentially for no reason. After one meeting with Cohen, executives concluded he “would be unable to provide the services that Novartis had anticipated.” It decided “not to engage further” with Cohen although it did continue to pay him $100,000 a month for the better part of a year—not because he was worth it but because cancelling the contract might “cause anger” and risk Trump’s retaliation, according to one company insider.

AT&T, which just completed a trial in which the Justice Department is seeking to block its $85 billion merger with Time Warner, hired Cohen for $50,000 a month to “provide insights into understanding the new administration.” According to the Washington Post, Cohen’s work was to be evenly divided between “legislative policy development” and “regulatory policy development.” The company now calls retaining Cohen a “big mistake.”

Meanwhile KAI paid for "legal consulting concerning accounting standards on production costs." Hiring a local New York real estate lawyer to deal with aerospace accounting makes about as much sense as hiring a house painter to install fighter jet  avionics. But KAI is in competiion to win a contract that could be worth as much as $16 billion for a new U.S. Air Force jet trainer.

In his rush to cash in, Cohen may have disregarded a host of laws designed to provide a small measure of transparency and integrity to the process of trying to persuade the government. Lobbyists are required to file disclosures. Lobbyists for foreign companies are required to register as foreign agents.

Whether Cohen violated federal lobbying and foreign agent laws turns on the circumstances of each consulting deal. But consider the Novartis matter and the Foreign Agent Registration Act (FARA), the same law former Trump campaign chairman Paul Manafort is accused of violating. Novartis, a Swiss-based and Swiss-incorporated company, is almost certainly a foreign principal under the act. Cohen was brought on to engage in political activity for the company. Indeed, as far as Novartis was concerned, “it was almost as if we were hiring him as a lobbyist,” according to a Novartis excutive.

“Almost” may not be good enough to protect Cohen from FARA. Under FARA, Cohen was required to register with the government within ten days of agreeing to become a foreign agent, even before performing any actions for the company. He did not. This is black letter law.

Then there’s the $500,000 that Columbus Nova funneled to Cohen which adds a few more twists and turns.

Columbus Nova is the “family office” or “property manager” for Viktor Vekselberg, the Russian oil and metals multibillionaire, and his family. It paid Cohen for “potential sources of capital and potential investments in real estate and other ventures,” which is as bizarre as it was for KAI to pay him for accounting advice. The idea that Columbus Nova, which manages the financial affairs of one of the wealthiest men on the planet, would need capital is bizarre, and Cohen’s track record on real estate investments is checkered to say the least. The Columbus Nova payments, like those from AT&T, Novartis, and KAI went to the same bank account maintained by the same shell corporation established before the 2016 election to pay Stormy Daniels to keep silent about her alleged affair with Trump.

So why was Columbus Nova really paying Cohen? Was the $500,000 from a company linked to a Russian oligarch who supported Trump just a way to replenish the coffers of a slush fund set up by Cohen using three-quarters of a million of his own money to “fix” things for Trump during the 2016 campaign?

This political influence peddling, Russian-linked money and slush fund is certainly one suspicious witches brew.  However, it’s important to empasize that while these transactions may be unsavory, they could all also be perfectly legal.

Untangling this mess falls to federal prosecutors in the Southern District of New York, provided they’re allowed to do their job. Regardless of the outcome of their investigations, one thing is clear: for a time, Cohen was a well-lubricated alligator in the Trump swamp. Perhaps he soon will become a canary.

The views expressed are the author's own and not necessarily those of the Brennan Center for Justice.

(Image: Wikimedia Commons/IowaPolitics.com)