The lawyer for Stormy Daniels dropped yet another eye-popping allegation Tuesday afternoon: that some of the biggest names in Corporate America gave hundreds of thousands of dollars to Michael Cohen via the same shell company he used to give Daniels $130,000 in hush money just before the 2016 election.
That gasping sound you hear is corporate board directors hyperventilating and wondering whether they have exposure to this mess. Compliance officers should call the accounts payable department to see whether your firm ever cut any checks to Cohen’s company, the now-infamous Essential Consultants.
Daniels’ lawyer, Michael Avenatti published his allegations online Tuesday in what he dubbed “Project Sunlight.” Among the shockers:
- AT&T paid Cohen $200,000 in four payments of $50,000 spread over 2017 and 2018 — the last payment arriving on Jan. 3, just days before the Wall Street Journal broke the story of Cohen’s payoff on Jan. 12.
- Novartis dropped almost $400,000, the last arriving on Jan. 5, 2018. Later that month, President Trump had a private dinner with the new Novartis CEO while they were both at the World Economic Forum in Davos.
- Korea Aerospace Industries paid $150,000 to Cohen in November 2017.
Worse, a Russian oligarch by the name of Viktor Vekselberg paid $500,000 to Essential Consultants during the first eight months of 2017. Vekselberg has had an estimated $1.5 billion of his assets frozen as a result of U.S. sanctions against Russia, and special counsel Robert Mueller has reportedly interviewed him.
According to Avenatti, various parties funneled more than $4.4 million to Cohen via Essential Consultants from October 2016 (when he created the shell to pay off Daniels) through January 2018. All transactions went through an Cohen had account with First Republic Bank in New York.
To be clear, so far these are only accusations Avenatti has made against Cohen and the businesses paying him via the Essential Consultants shell. But Avenatti provides plenty of details in his report on wire transfer amounts, dates, and banks involved. Already AT&T has confirmed that it paid Cohen “to provide insights” in the Trump Administration, per Avenatti’s allegations.
Cohen Due Diligence Questions
First, everyone breathe a sigh of relief: rumors that Avenatti and Daniels have a photo of Trump’s penis were false, so we don’t need to worry about seeing that. But overall Avenatti has a history of releasing credible allegations against Trump and proving them true, so corporate boards sensitive to accusations of influence peddling, bribery, or bank fraud should very much worry about this.
The due diligence questions around this sordid mess are substantial. What company in its right mind drops six-figure sums to a newly formed Delaware shell company without some sort of internal review? Or did those reviews happen, but senior executives overruled common sense and sent checks to Cohen anyway?
The optics, as this New York Times reported noted, are terrible:
“Russians pay Trump associate” and “Trump associate pays off porn stars” and “Corporations pay Trump associate for ‘advice'” — all in one story.
— Nick Confessore (@nickconfessore) May 9, 2018
For example, AT&T’s payments to Cohen came just as the company was arguing that the Federal Communications Commission should repeal net neutrality rules, and still is arguing with the Justice Department that its acquisition of Time Warner. So that looks sleazy. As one AT&T customer asked me Tuesday night: “Wait, does this mean some of my AT&T bill is going to Cohen and Trump to pay off porn stars?”
That statement is quite a stretch — but it isn’t necessarily wrong; we don’t know how many other porn stars Cohen may have paid, when he may have paid them, or how he obtained those funds. And it is certainly a question AT&T’s board does not want people to ask at any time, let alone in the middle of sensitive antitrust litigation with the Justice Department.
We do have credible allegations that Essential Consultants collected more than $4.4 million from various sources, and so far we can only source about $1.25 million of that amount, if Avenatti’s details are correct. Where did the rest of the money come from? I suspect that is exactly what the U.S. attorney for the Southern District of New York is asking as part of its investigation into Cohen.
Again — compliance officers may want to call the accounts payable department today to determine that for yourself and your board, before the feds show up and give you the answer themselves.
How did Avenatti get his information? We don’t know. Some people even suspect the Trump team itself leaked this news, to distract from the president’s decision yesterday to bail out of the Iran nuclear deal.
Again, that idea is preposterous — but preposterous people are who we have running the country these days.