The Michael Cohen case fascinates me.  Here is a lawyer who cut his teeth trying small-time car accident cases inside a Queens, N.Y taxi garage.  He was basically an automotive version of an ambulance chasing, personal injury attorney.

Cohen’s Taxi and Gambling “Empire”

Before joining the Trump Organization, Mr. Cohen, in addition to “practicing” law, invested heavily in the taxi business.  His longtime partner and former legal client, Simon Garber, was a Ukrainian-born taxi baron.  The two men remained business partners until 2012, when their relationship abruptly ended in litigation.

In the early 2000s, Mr. Cohen started a Florida gambling-cruise business with two other New Yorkers.  The cruise transported customers outside U.S. waters to gamble legally.  Mr. Cohen described himself as chief executive of the cruise company in a biography he penned during an unsuccessful bid for the New York City Council in 2003.  The business venture eventually ended.

Mr. Cohen maintained his private practice until 2007 when he joined the Trump Organization as an Executive Vice President.  According to New York City taxi and state corporation records, Mr. Cohen continued to own some taxi medallions through various companies, including Mad Dog Cab Corp. and Sir Michael Hacking Corp.

Entering Trump Land

You might ask: how did a two-bit personal injury lawyer with shady business dealings enter Trump land?  Mr. Cohen purchased four units in a Trump building managed by Donald Trump Jr. and later helped with a dispute involving condominium-board members at a separate complex.  He displayed loyalty to Trump and proved his worth as a “fixer.”  In an interview with the Wall Street Journal, Mr. Cohen stated, “I am the fix-it guy.”

Once welcomed into Trump’s orbit, he defended the Donald on television and persistently made legal threats to anyone who got in the way.  Mr. Cohen did not stop there though.  He also allegedly served as the “fixer” for Anthony Scaramucci and approximately 150 other people.  He reportedly handled everything from home break-ins to drunk driving cases.

In the summer of 2015, Mr. Cohen reportedly “fixed” a situation involving a media company that had approached Mr. Trump’s office.  The company wanted to discuss old pictures it obtained of Trump moving with a pen in hand toward a woman’s bare breast, attempting to autograph it.

Mr. Cohen was the perfect blue-collar New York “fixer” for the future “blue-collar” billionaire President.  He even credits himself as the one who prompted Trump’s run for President.  Mr. Cohen said he brought Trump a newspaper poll in 2011 revealing strong support, and he later created a website titled “Should Trump run?”.  He also traveled to Iowa that same year in an effort to lay the groundwork for a campaign.

Stay in New York, Cohen

A document compiled by a former British intelligence officer (Christopher Steele), which was publicized in January 2017, accused Cohen of laying the groundwork for a collusion campaign between Trump and the Kremlin.  Christopher Steele’s document alleged, among other things, that Mr. Cohen met with Russian agents in Prague during August or early September 2016 to discuss payments to hackers working with Moscow against the Hillary Clinton campaign.

Despite these efforts though, when Trump won the election, he decided to leave his “fixer” in New York City (reportedly at the behest of Ivanka and Jared Kushner).  In hopes of continuing his work for Trump, Cohen left the Trump Organization to become one of the President’s personal attorneys.  The doors to the White House, however, were mostly closed to him.  Cohen did not land any official job in President Trump’s administration, even though multiple reports suggested he was vying for Chief of Staff or White House Counsel.  It was at that point that he started generating consulting work through Essential Consultants LLC.

The Essentially Corrupt Essential Consultants LLC

Mr. Cohen’s sales pitch for his “consulting” (some would argue, “lobbying”) work was simple:

“You do not know Trump.  I do.  Hire me.” 

In the beginning, given Trump’s erratic and unpredictable behavior, it was easy sell.  K Street in Washington DC, home to some of the most powerful political lobbying firms in the world, was completely caught off guard by Trump’s 2016 election victory.  Industries and companies were scrambling to gain any insight and access to Trump.  Enter Essential Consultants LLC.

This Delaware LLC was incorporated and had a business account opened in its name in late 2016.  Since that time, at least $2 million has passed through the entity for the benefit of Mr. Cohen.  It was originally used to pay Stormy Daniels days before the 2016 presidential election as part of a non-disclosure agreement that barred her from discussing an alleged sexual encounter with Trump.

Mr. Cohen similarly used Essential Consultants LLC to pay Shera Bechard, a former Playboy model, who Republican donor Elliot Broidy allegedly impregnated in an extramarital affair (although some suspect it was actually for Trump, not Broidy).  He wired $1.6 million to Ms. Bechard and charged Mr. Broidy a $250,000 fee for the deal.

The company is the central piece in the investigation on whether Mr. Cohen is guilty of federal bank fraud, money laundering, campaign financing violations, and other crimes.

Some of the payments to Essential Consultants LLC included those from Novartis AG (Swiss pharmaceutical giant) and AT&T.  These payments were made in return for Mr. Cohen’s consultive advice.

Novartis was concerned about Trump’s calls to end Obamacare and his complaints about high drug prices (Trump’s recently announced plan to cut drug prices more modestly left the industry relieved).  After a single meeting, Novartis realized Mr. Cohen could not actually help them and they ended their relationship, but were still contractually obligated to pay him $1.2 million.

AT&T engaged Mr. Cohen in early 2017.  The company made payments to Essential Consultants totaling approximately $600,000 in exchange for “insights” into the administration at a time when the telecommunications giant needed government approval for an $85 billion takeover of Time Warner Inc.  AT&T ended its relationship with Mr. Cohen in December 2017 and recently stated that he “did no legal or lobbying work for us.”  Notably, AT&T recently fired the executive who agreed to the contract with Mr. Cohen.  As for the takeover of Time Warner Inc., the deal’s outcome is now in the hands of a federal judge, who is expected to rule on June 12, 2018.  For reasons why these types of colossal media marriages are terrible for consumers and the economy, read more here.

Mr. Cohen also received money through Essential Consultants LLC from Korea Aerospace Industries LLC, a South Korean company seeking to sell its planes in the United States.  This company sent Mr. Cohen $150,000 for advice on local accounting standards.  It is likely they were also hoping to curry favor with Mr. Cohen (and ultimately, Trump) given the company’s business relationships with U.S. firms like Boeing and Lockheed Martin.

In addition to payments from Novartis, AT&T, and Korea Aerospace Industries Ltd., Essential Consultants LLC received $500,000 in 2017 from an investment management firm (Columbus Nova) whose biggest investor is a company founded by Russian oligarch, Viktor F. Vekselberg.  Columbus Nova made payments to LLC from the month of the inauguration through August 2017.  As recently as May 8, the company advertised itself as the U.S. investment arm for Renova, a holding company owned by Vekselberg.  The reference no longer exists and Vekselberg denies any contractual relationship with Cohen or Essential Consultants LLC.

Of note, Mr. Vekselberg’s cousin, Mr. Intrater, donated $35,000 to a joint fund between the Trump campaign and the Republican National Committee in June 2017, according to Federal Election Commission records.  Vekselberg’s cousin also donated $250,000 to Mr. Trump’s inaugural fund.

Indictment and Aftermath

All of these transactions beg the question: were Mr. Cohen’s actions criminal or simply slimy?  He reportedly tried and failed to forge similar relationships with other individuals and firms, such as the Ford Motor Company.  When people realized that his promises for access to the administration were truly hollow and tangential at best, they stopped succumbing to his deceptive sales pitch.

Now the man who displayed unconditional loyalty for his boss may go down in flames for it.  In addition to the indictment from the U.S. Attorney’s office in the Southern District of New York,  the watchdog group Public Citizen recently filed complaints with Congress and the Justice Department, saying that Mr. Cohen broke federal ethics and lobbying laws by failing to register as a lobbyist while collecting big sums from companies with business before the Trump administration.  Trump’s top lieutenant tried to profit from the very swamp Trump promised to drain.

As the old saying goes, the company you keep is a reflection of your character.  Even if the activity Mr. Cohen conducted through Essential Consultants LLC is not found to be criminal, playing fast and loose with banking, money laundering, and campaign financing laws is unethical at best.  Did Trump have direct knowledge of the payments to Stormy Daniels and others?  Time will tell, but typically when there is smoke, there is fire, and this particular conflagration may bring down more than the President’s favorite “fixer.”

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