Former President Donald Trump has been haunted by a number of election-interference meetings in Trump Tower, but the one that poses the biggest threat to him today still hasn’t gotten much attention.
It’s not the meeting where Trump’s campaign manager, son-in-law, and oldest adult child met with a Russian offering dirt on Hillary Clinton. And it’s not the confab two months later between that same adult child—Donald Trump Jr.—and members of Middle East royalty, who were also offering election assistance.
This meeting came before all of that—in August 2015. The attendees were Trump, his self-described “fixer” Michael Cohen, and David Pecker—the CEO of American Media Inc., parent company of the National Enquirer. The subject: silencing women who wanted to go public with damaging stories about the candidate. And it wasn’t just Stormy Daniels under discussion.
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Norm Eisen, a legal expert and senior fellow in governance studies at the Brookings Institution, told The Daily Beast that the August 2015 meeting “is the beginning of the conspiracy.”
“That conspiracy culminated in the Stormy Daniels payments, and in the false bookkeeping and campaign finance violations,” Eisen said. “All of it followed from what went on in that meeting.”
At the time, according to federal court filings and news reports, the three men crafted an arrangement where Pecker would “catch and kill” stories that could damage Trump’s candidacy—buying the rights but never publishing the accounts.
That led to federal crimes.
“At the meeting, Pecker offered to help deal with negative stories about that presidential candidate’s relationships with women by, among other things, assisting the campaign in identifying such stories so they could be purchased and their publication avoided,” AMI later confessed in its 2018 non-prosecution agreement with the Justice Department.
So while Trump is slated to be indicted on Tuesday, reportedly in connection with off-the-books hush money payments to Stormy Daniels, it’s significant that Manhattan prosecutors have also presented the grand jury with a raft of evidence regarding an earlier arrangement with another woman, stemming from the plan hammered out in that same meeting—former Playmate Karen McDougal.
There has been substantially less reporting and cable news chatter surrounding that $150,000 “catch-and-kill” arrangement. But last week, The Wall Street Journal reported that the grand jury has had a more extensive focus on McDougal than previously known, which The Daily Beast has confirmed through two sources.
A person familiar with the investigation relayed that one area of interest has been in the contracts themselves—including the prospective contract for Trump to purchase the rights to McDougal’s story from AMI, which curiously never came to pass.
That question has always hung over the McDougal arrangement. Trump famously paid off Stormy Daniels, through his reimbursements to his then “fixer” attorney Michael Cohen. But did Trump or Cohen ever reimburse AMI for the $150,000? If not, why?
Two people with knowledge of the arrangement confirmed to The Daily Beast that Cohen and Trump never paid McDougal or reimbursed AMI. But, they said, that’s because she’d repaid it herself, so to speak, by selling a ton of magazines.
Legal experts say the McDougal story shouldn’t be seen as a sidebar. Instead, they say, it could provide critical evidence against Trump that has been essentially hiding in plain sight—albeit under the shadow of Stormy Daniels.
Eisen, who has written extensively on the hush money payments, told The Daily Beast that the McDougal case could help prosecutors in “multiple dimensions” as they build the case around the Daniels payments.
“One of the most contested issues is going to be Trump’s intent to covertly benefit his campaign. That’s critically important because it takes the false books misdemeanor up to a felony, which is hiding campaign contributions,” Eisen said, referring to Cohen and AMI’s campaign finance crimes as detailed in DOJ filings.
That intent, Eisen said, traces back to that Trump Tower meeting where Trump, Cohen, and Pecker devised the catch-and-kill scheme to benefit Trump’s candidacy. And it was McDougal, not Daniels, who came first.
“The McDougal story would apply to Trump’s state of mind when they got to the next chapter, which is Stormy Daniels,” Eisen said.
He added that the McDougal story would also give Bragg more confidence about Cohen’s testimony, despite the “colorful cross-examination” that Trump attorneys will doubtlessly throw at Cohen—who has admitted lying to protect Trump.
“Cohen has never wavered on his story. And the McDougal story is a major part of that corroboration, because it establishes the veracity of what Cohen has claimed about Stormy Daniels, with a lot of additional corroborating evidence,” Eisen said. (Cohen at first denied basically everything about the payments, which we have since learned were in fact lies.)
The McDougal incident, however, would expand the constellation of witnesses, documents, and other evidence that can back Cohen up—including his tape of Trump personally discussing the payment.
Emily Bradford, a former prosecutor who handled fraud cases with both New York’s Office of the Attorney General and the Manhattan DA, said the McDougal evidence could play a key supporting role in a trial.
“It’s not uncommon in cases like this one, where intent might be difficult to prove, for the DA to provide evidence of other instances of similar behavior,” Bradford told The Daily Beast.
She pointed to what is known in New York as the Molineux rule, which provides an exception to the general rule that evidence of uncharged bad acts is not admissible.
“Prosecutors cannot present evidence of uncharged wrongdoing to prove that a defendant has a propensity to commit the type of crime actually charged. But evidence of similar behavior may be admissible for other purposes, such as to prove intent,” Bradford explained, noting that the rule is especially helpful in white collar cases.
Bradford added that, given what’s understood from previous reporting and court filings, she wouldn’t expect to see actual charges stemming from the McDougal agreement, since Trump apparently never made a payment or reimbursement and therefore would most likely not have falsified any business records.
But the agreement itself, along with the other ample evidence of Trump’s involvement, could help demonstrate that “he understood what he was doing and was an active participant in the concealment,” she said.
Bragg is said to have been looking to tie Trump’s false business records in the Daniels reimbursements—a misdemeanor—to another crime, in order to level up to a felony. Previously, Bradford told The Daily Beast it’s possible that Bragg would tie that charge not to an unproved and uncharged federal election crime committed by Trump, but to the crimes committed by Cohen—to which he has already pleaded, and which include facilitating the AMI payment. Federal prosecutors and a judge found his plea credible, accepted it, and sentenced him to prison.
But unlike with Daniels, in the McDougal case, the confession did not come only from Cohen. AMI also admitted to the crime in its non-prosecution agreement with the DOJ. The company also ate a $187,500 Federal Election Commission fine for “knowingly and willfully” violating federal election law.
So while there may not be a false business records tie-in to the McDougal payment, those judgments could strengthen Bragg’s Molineux hand.
“Practically speaking, I think they’d be looking for as much objective, non-Cohen testimony as possible,” Bradford said.
While there are a few crucial differences between the Daniels and McDougal arrangements, there are also similarities. Both payments were initially coordinated through Pecker. Both involved Cohen acting as middleman. Both were allegedly intended to influence the 2016 election. And federal prosecutors—not just Cohen—allege that the payments came at Trump’s direction.
In the summer of 2016, after talks involving Trump and Cohen, Pecker paid McDougal $150,000 for the rights to her story about an affair she claimed to have had with Trump in the 2000s. (Trump has denied the affair.) In exchange, AMI promised McDougal she would appear on two magazine covers and have a recurring column, according to federal prosecutors.
Then, in late September, Cohen committed to reimbursing Pecker for the rights to McDougal’s story, per federal prosecutors. Days later, however, Pecker told Cohen to tear up the agreement.
It’s still not clear why AMI was never reimbursed. Two people with knowledge of the events told The Daily Beast that Pecker had concerns about being able to justify the payments.
Pecker reportedly broke off the deal under advice of legal counsel in early October 2016. The sources claim Pecker was conscious about rankling AMI’s hedge fund benefactor and majority owner—Chatham Asset Management, and its CEO, Anthony Melchiorre.
Pecker, according to the two people, was concerned about the size of the payment. The $150,000 was too large to disguise in the AMI’s books or otherwise justify, and Pecker didn’t want it to become public knowledge that AMI had paid off a former Playmate for Donald Trump.
But Pecker, it turns out, was making his own professional moves around that same time—thanks to Melchiorre.
On Oct. 5, 2016, Chatham Asset Management named Pecker to the board of another entity it owned—Canadian publisher Postmedia. (Postmedia itself flagged Pecker’s appointment in a shareholder statement as presenting a “potential conflict of interest.”)
Two days later, the Access Hollywood tape was released. The day after that, Cohen was told that Daniels was revisiting her own options about going public. This time, Pecker bowed out, saying it was too much cash.
Whatever hopes Pecker had about keeping McDougal hush money under wraps soon vanished. On Nov. 4—days before the 2016 election, and weeks after Pecker told Cohen to rip up the proposed contract—The Wall Street Journal revealed the $150,000 payment.
Still, Trump never made AMI whole. According to the two sources, Pecker claimed that was because McDougal had actually sold a boatload of magazines—more than enough to offset the $150,000 check from AMI, and enough to alleviate any concerns about balancing the books.
McDougal’s agreement, however, didn’t land her an AMI-branded magazine cover until several months later, when Trump was already in office. But that cover—the spring 2017 issue of Muscle & Fitness Hers—became the magazine’s best-selling issue of the year.
Three months after that issue came out, Pecker dined with Trump at the White House. And, Bloomberg later reported, Pecker brought a friend: Anthony Melchiorre.
That meeting, The New York Times reported, also happened to boost AMI’s standing in the eyes of Saudi Arabian investors Pecker had been courting as his own company foundered.
Whatever the financial bridge that was built didn’t last.
The next year, AMI confessed to the feds that the company had paid McDougal to help Trump’s election chances. That’s an in-kind corporate contribution and a federal crime, but AMI dodged penalties by entering into a non-prosecution agreement, pledging cooperation with federal authorities.
Cohen, by contrast, pleaded guilty to causing that same corporate donation. And unlike Pecker or the AMI brass, Cohen served prison time for it.
The month after AMI signed its non-prosecution agreement, it scored a $460 million refinancing. Two months later, the company announced it had found a buyer for the National Enquirer—with Chatham expressing its “disgust” over the hush money scandal.
The sale, however, stalled out. Still, it finally came to fruition this year, in February—weeks after Pecker first testified to the grand jury.
Then, on Monday—one day before Trump was scheduled to surrender himself at the New York County courthouse—the Securities and Exchange Commission fined Chatham and Melchiorre $19.3 million for meddling with AMI bond sales.
The interference, which occurred between 2016 and 2018, “had the effect of increasing the prices of those generally illiquid securities in a way that was disconnected from economic reality,” the SEC alleged.
