The Wall Street Journal.

National Enquirer's Yearslong Dealings With Trump Lawyer Fall Under Federal Scrutiny

The Wall Street Journal. logo The Wall Street Journal. 25/07/2018 20:22:00 Michael Rothfeld, Joe Palazzolo, Lukas Alpert, Rebecca Davis O'Brien
a close up of a newspaper © Mary Altaffer/Associated Press

Michael Cohen and the publisher of the National Enquirer forged an alliance over the years, looking out for the interests of Donald Trump and each other. Now, federal investigators are examining those ties as part of a wide-ranging probe into Mr. Cohen's personal business dealings and his self-described role as Mr. Trump's fixer.

In previously unreported interactions, some of which are memorialized in emails now under review, Mr. Cohen mediated a dispute between Omarosa Manigault-Newman, who had been a star on Mr. Trump's "Apprentice" reality TV show, and the Enquirer over a story about her brother's murder. He intervened in a separate legal case on behalf of David Pecker, chief executive of Enquirer parent American Media Inc. And when American Media paid a doorman who alleged that Mr. Trump fathered a child with an employee, a company executive ordered reporters to stop investigating after speaking with Mr. Cohen.

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The revelations show a relationship characterized by mutual benefit and favor-trading on a greater scale than was previously known. The shared history could expose American Media, Mr. Cohen and by extension, Mr. Trump, to criminal campaign-finance charges. For example, federal agents and prosecutors in New York are investigating whether Mr. Cohen, acting as Mr. Trump's representative, improperly coordinated with American Media to keep an ex-Playboy model's account of an affair with Mr. Trump under wraps in the months before the 2016 presidential election, people familiar with the matter said.

One looming issue for both prosecutors and AMI is the publisher's status as a media organization, which would afford it First Amendment protections. The Justice Department is examining whether American Media at times acted more like an extension of Mr. Trump and his campaign, a person familiar with the matter said. The legal bar is high to strip any media organization of its constitutional protections.

The Manhattan U.S. attorney's office subpoenaed American Media and the Trump Organization on the same day in early April that the FBI raided Mr. Cohen's home, office and hotel room. It is unusual for investigators to subpoena media organizations for information related to their newsgathering without advance warning.

Investigators personally approached Mr. Pecker with a subpoena and delivered a separate subpoena to American Media seeking information related to the payment to the ex-Playboy model, among other things, according to people briefed on the matter.

Federal law bars candidates from accepting campaign contributions from corporations. The law defines a contribution as anything of value given to influence a federal election. It also requires candidates to disclose political contributions and expenditures.

Mr. Cohen hasn't been charged and denies wrongdoing. Mr. Trump denies the affair, and his attorney, Rudy Giuliani, has said Mr. Trump broke no election laws.

Lanny Davis, an attorney for Mr. Cohen, declined to answer a list of questions "out of respect for the process" but added, "I ask everyone to remember the difference between innuendo and fact."

An American Media representative declined to comment. The White House didn't respond to a request for comment.

American Media's deal with the former Playboy model, Karen McDougal, surfaced days before the 2016 presidential election, when The Wall Street Journal reported that the company paid $150,000 to buy-but not publish-her story of having an affair with Mr. Trump.

American Media briefed Mr. Cohen on the deal, people familiar with their communications said; the publishing company said it was simply seeking his comment on the matter for a possible article.

In September 2016, Mr. Cohen and Mr. Trump discussed the possibility of buying the rights to the model's story from American Media.

A recording Mr. Cohen made of that conversation was seized by federal agents investigating the attorney, said people familiar with the matter. While Mr. Trump seemed open to the idea, the rights remained with American Media until this April, when the company returned them to Ms. McDougal as part of a legal settlement, the people said.

Mr. Cohen created a Delaware shell company, Resolution Consultants LLC, on Sept. 30, 2016, to buy the rights to the McDougal story from American Media, according to a person familiar with the matter.

Among the emails in the possession of federal investigators are those showing Mr. Cohen's previously unreported involvement in the dispute involving Ms. Manigault-Newman, a person familiar with the matter said.

Ms. Manigault-Newman threatened to sue American Media in 2011 over "exclusive" coverage of her brother's murder after the publisher sent a reporter to his funeral in Ohio. The reporter spoke with attendees but didn't identify herself, so mourners assumed she was part of the family, angering Ms. Manigault-Newman, people familiar with the episode said.

Mr. Cohen stepped in to defuse the situation and orchestrated a resolution in which Ms. Manigault-Newman dropped her legal threat in return for a job from American Media, these people said.

American Media announced in December 2011 that Ms. Manigault-Newman, then known as Ms. Manigault-Stallworth, had become West Coast editor of the company's now-defunct Reality Weekly, a magazine about reality shows. After that publication shut down, she worked for American Media's OK! Magazine.

Jerry George, National Enquirer's West Coast bureau chief at the time, recalled his superiors instructing him to find an office for Ms. Manigault-Newman. Mr. George, who left the company in 2013, said he was never told what duties Ms. Manigault-Newman would perform.

Mr. George found a space for Ms. Manigault-Newman on the other side of the office from his reporting staff, near the advertising department, he recalled, adding: "I don't think attendance was mandatory for her." Her mother sometimes came to American Media's offices, where she was known as "Mamarosa," Mr. George said.

Ms. Manigault-Newman joined Mr. Trump's White House staff to do public outreach until she was forced out in December.

Ms. Manigault-Newman has been interviewed by federal investigators, according to people familiar with the matter. There has been no suggestion that the resolution of her dispute with American Media was improper, but it highlights the overlapping interests of the media company and the Trump Organization that prosecutors want to understand better, according to people familiar with the matter.

Federal investigators have obtained emails showing that Mr. Cohen intervened in another legal dispute on Mr. Pecker's behalf in 2016, shortly after American Media completed the $150,000 deal to buy the rights to Ms. McDougal's story--and as he was contemplating buying those rights from American Media.

Mr. Pecker had recently joined the board of payment-processing company iPayment Inc. After the board ousted the iPayment Chief Executive Carl Grimstad in August 2016, he sued the firm, its investors and its directors.

The iPayment board that forced Mr. Grimstad out was controlled by the same investors who had taken American Media private several years earlier.

Marc Kasowitz, a longtime attorney for Mr. Trump, represented Mr. Grimstad.

Mr. Cohen's emails show him trying to mediate the dispute, according to people familiar with the records. He reached out to Mr. Kasowitz, and they arranged for a settlement meeting overseen by Mr. Cohen. Mr. Pecker went, along with lawyers for other defendants.

"Mr. Cohen asked Mr. Grimstad's lawyers at our firm to meet to discuss a resolution of the litigations, which Mr. Grimstad authorized his lawyers to do," Sheron Korpus, Mr. Kasowitz's partner who led the case, said in an emailed statement. "No resolution was reached."

The parties settled in 2017 with a payout to Mr. Grimstad valued at nearly $20 million, according to court documents.

A spokeswoman for Paysafe Group, which acquired iPayment this year, declined to comment on Mr. Cohen's efforts to resolve the litigation.

Mr. Trump's relationship with Mr. Pecker dates to at least the 1990s, when Mr. Pecker was president and chief executive of Hachette Filipacchi Magazines. The publisher put out Trump Style, a custom quarterly magazine distributed to guests at Trump properties. Mr. Pecker hosted a party for Hachette at Mr. Trump's Mar-a-Lago resort in Palm Beach.

When Mr. Pecker took over American Media in the late 1990s, he imposed a moratorium on negative stories about Mr. Trump, according to former employees of the company.

Mr. Cohen, who joined the Trump Organization in 2007 as special counsel to Mr. Trump, developed an independent friendship with Mr. Pecker, according to people who know both men.

A person who knows Mr. Pecker professionally and personally said he viewed himself as an outsider in polite society and gravitated to others similarly placed, like Messrs. Trump and Cohen. Mr. Cohen has praised Mr. Pecker as "a great guy," according to an acquaintance of both men.

Tips about Mr. Trump poured into the Enquirer during the height of the popularity of "The Apprentice" and its spinoff, former employees said. Enquirer editors rejected any that painted Mr. Trump in a bad light, knowing Mr. Pecker wouldn't allow them, they added.

At the time, National Enquirer editors faxed or emailed stories and printed them out, scrawling edits in pen on hard copies before sending them to other editors or reporters. Sometimes Trump stories would have changes labeled "per Pecker" that seemed aimed at flattering Mr. Trump, such as identifying him as a "multibillionaire" instead of merely a billionaire, Mr. George recalled.

Throughout Mr. Trump's 2016 presidential campaign, American Media used its pages to bolster the candidate and bash his opponents. Mr. Cohen, as Mr. Trump's fixer, privately communicated with the company on a range of issues, according to people familiar with the matter.

He developed a close working relationship with American Media's chief content officer, Dylan Howard, who joined Mr. Cohen to drink at Mr. Trump's victory party at the New York Hilton in Manhattan on the night of Nov. 8, 2016, people familiar with the matter said.

During Mr. Trump's campaign, the National Enquirer sent some of its unpublished stories about Mr. Trump or his rivals directly to Mr. Cohen for review, said people familiar with the practice. The tabloid also cobbled together columns under Mr. Trump's name-"I am the only one who can make America great again!" one began-and cleared them with Mr. Cohen, according to one of the people.

American Media executives also talked to Mr. Cohen in late 2015, as Mr. Trump prepared to enter primary season with a major lead on his opponents in opinion polls, about a tip the National Enquirer received from a former doorman who had been fired from a Trump-branded apartment building, people familiar with the matter said.

American Media paid the doorman, Dino Sajudin, $30,000 for exclusive rights to his story alleging that Mr. Trump fathered a child with one of his employees, bucking its usual practice of paying sources upon publication, the people said.

Mr. Sajudin passed a lie-detector test but offered no proof of the relationship, the people said. Enquirer staff staked out the woman's home attempting to get a picture and learned that she, her husband and daughter all had worked at Mr. Trump's company.

Mr. Cohen called Mr. Howard after word got back to him that a National Enquirer reporter had reached out to Mr. Trump's assistant to ask about the alleged love child, said one person familiar with the conversation.

The reporter hadn't told her superiors about her plans to approach the Trump Organization, the person said.

"He is furious," Mr. Howard told Enquirer editors, referring to Mr. Cohen, the person said. He then ordered staff to stand down on any additional reporting on Mr. Sajudin's story.

A year later, other media organizations began to chase rumors about the doorman's story. A Journal reporter visited the home of the employee identified by Mr. Sajudin in late 2016. A couple of hours later, Mr. Cohen called the reporter unsolicited and said the allegations were "baseless."

American Media executives told the Journal in December 2016 that the company paid Mr. Sajudin because he had threatened to take his tip elsewhere and they didn't want to lose a potentially big scoop. The Enquirer didn't publish a story because Mr. Sajudin "was unable to provide one shred of information to support his fanciful claims," Messrs. Pecker and Howard said in a written statement at the time.

"I don't think they had any intention of doing a story," Mr. Sajudin said in an interview with the Journal at the time. "I think it was just about paying some money to make it go away."

Mr. Sajudin declined to comment for this article.

Because the Journal found no evidence to support Mr. Sajudin's claims and because the woman told the Journal she didn't have an affair with Mr. Trump, the newspaper didn't publish an article about the payment to Mr. Sajudin.

The stakes were much higher the following summer, as the election drew near, when Ms. McDougal, the former Playboy playmate, began considering telling her story alleging she had an affair with Mr. Trump in 2006.

At the same time, the former adult-film star Stephanie Clifford, also known as Stormy Daniels, tried to sell to American Media her story of an alleged sexual encounter in 2006 with Mr. Trump, according to people familiar with the matter.

American Media rebuffed her. Reports of that alleged sexual encounter had surfaced years earlier in the celebrity press and Ms. Clifford had denied them.

Without American Media's help, Mr. Cohen made a $130,000 deal to buy Ms. Clifford's silence himself through a shell corporation, less than a month before the election.

Mr. Cohen's friends said he was doing his job as Mr. Trump's attorney when he tried to soften or kill media stories about Mr. Trump. Mr. Cohen said in an interview this month with ABC News that he tried to made good-faith judgments in his work for Mr. Trump, adding, "I am not perfect."

Now, Mr. Pecker's collaboration with Mr. Cohen may be nearing an end.

A few weeks after FBI agents searched Mr. Cohen's properties, the Enquirer targeted the attorney in a two-page article under the headline, "Payoffs & Threats Exposed: Trump Fixer's Secrets & Lies!"

The tabloid reported in the same issue that Mr. Trump had passed a polygraph "Proving No Russia Collusion!"

Write to Michael Rothfeld at michael.rothfeld@wsj.com, Joe Palazzolo at joe.palazzolo@wsj.com and Rebecca Davis O'Brien at Rebecca.OBrien@wsj.com

25. heinäkuuta 2018 23:22:00 Categories: The Wall Street Journal.

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