Welcome to Rabbit Hole, a breaking-news analysis that helps you get smart on the one story everyone’s obsessing over—for Beast Inside members only.
The Mueller investigation might be winding down, but that doesn’t mean Trump’s legal problems are over. Quite the opposite. CNN reported on Tuesday that federal prosecutors in New York want to talk to Trump Organization executives and there’s a new subpoena asking for heaps of information about fundraising during the Trump inauguration. So where are these lines of inquiry headed and whose names will Trump be cursing to the high heavens if those New York prosecutors—presumably from the Southern District, covering Trump Tower and the rest of Manhattan—get there?
CNN said it couldn’t confirm what prosecutors were interested in talking to Trump Organization executives about but one of the lingering issues from former Trump fixer Michael Cohen’s guilty plea on campaign finance charges is whether his role in helping pay hush money to Trump’s alleged mistresses could pose any jeopardy for Trump’s company.
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Liability: How is it a Trump Organization legal problem if Cohen violated campaign finance violations by buying the silence of Trump’s mistresses? If a Trump executive wittingly participated in the scheme to make an illegal campaign donation through a mistress payout, that person could face legal jeopardy of their own. And that’s what Cohen has reportedly alleged, according to a December 2018 New York Times story. Cohen reportedly told prosecutors that the Trump Organization’s chief financial officer Allen Weisselberg participated in discussions about the payoffs.
We also see the potential for criminal liability outlined in the original criminal information SDNY filed on Cohen. In that document, prosecutors say Cohen presented executives of the Trump Organization with a copy of a bank statement from the Essential Consultants” shell company showing the $130,000 he’d paid to buy former porn star Stormy Daniels’ silence and agreed to reimburse him for what were in effect illegal campaign contributions. Furthermore, two Trump Organization executives anonymized as Executive-1 and Executive-2 handled approval of reimbursement payments to Cohen by chalking them up as “legal expenses” pursuant to a nonexistent retainer agreement. The Trump Organization also threw in a $60,000 bonus to Cohen after he made the payout.
Executives 1 and 2: Aside from the Times and CNN stories, there’s another hint that federal prosecutors in New York might still be interested in whether the Trump Organization was involved in the mistress payouts. Recall that as part of the prosecution, SDNY offered the tabloid company AMI a non-prosecution agreement in exchange for its cooperation. As Rabbit Hole noted at the time, deputy US Attorney Robert Khuzami’s statement after Cohen’s sentencing referenced AMI’s “agreement to provide cooperation in the future.” Given that Cohen had already been sentenced and AMI had a non-prosecution agreement, the statement begged the question of where else “cooperation in the future” could lead.
Inaugural headache: Adding to Trump’s legal woes is what The New York Times reported was a staggeringly broad subpoena issued by federal prosecutors looking for just about any kind of documents related to donations made during the inaugural. In particular, the Times reported that prosecutors are investigating the possibility that foreign nationals made illegal contributions during inaugural events and whether campaign officials lied about them. Prosecutors are also seeking documents related to Imaad Zuberi, a wealthy Obama campaign donor first profiled by The Daily Beast. As The Daily Beast reported at the time, Zuberi donated $900,000 to the Trump inaugural committee and spoke with Cohen, who hyped a planned infrastructure spending plan. Zuberi told the Times that he had no knowledge of the subpoena.
Influence industry: Tom Barrack, the head of Trump’s inaugural committee, may be looking at his own influence peddling questions. ProPublica reported Tuesday evening that Barrack’s investment company, Colony, had sent around a memo a month after the inauguration which advised that it should “strategically cultivate domestic and international relations while avoiding any appearance of lobbying” as the new Trump administration came into office. ProPublica reported that the memo was written by Rick Gates, a cooperating witness in the Mueller investigation and Barrack’s former deputy on the inaugural committee.
In the works: Signs of an inaugural fundraising investigation have been apparent for a while. Wall Street Journal and New York Times stories date the investigation to December at the latest and The Daily Beast reported that one focus included an event attended by Michael Flynn, Rep. Devin Nunes (R-CA), and a host of foreign dignitaries.
Parting shots: As the Times story notes, it was Cohen who put federal prosecutors onto the scent of the inaugural campaign finance investigation. If the feds want to talk Cohen’s mistress payouts with Trump Organization executives, that will make two new investigative threads that Cohen has given to the feds. Trump was already furious at his former fixer and had emptied his bile duct onto Twitter about his hatred for the man. But beginning in December, Trump’s broadsides began to include what Cohen has characterized as implicit threats to his family and innuendos about his father-in-law. If you thought Trump’s fury at Cohen is bad now, it could get even nastier if these two investigations go further.
The cloud lingers: Once again, we’ve seen regular prosecutors from the US Attorney’s office in New York put Trump in seemingly greater legal jeopardy than special counsel’s office he’s devoted so much time and effort into discrediting.
But what makes this especially nauseating for Trumpworld is that it shows that the legal cloud could continue hanging over Trump’s head potentially longer than they expected. The tea leaves surrounding the Mueller investigation have pointed towards an ending sooner rather than later. NBC News reported that Deputy Attorney General Rod Rosenstein planned to step down once the Mueller investigation had finished, a time period sources estimated to be around March. But with possible investigations into the inaugural fundraising and a separate interview of Trump Organization executives, it could be that Trump’s legal problems linger even after Mueller goes home.
