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The Political Scene | The New Yorker
How Michael Avenatti is Redefining His Legal Case Against Trump
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How Michael Avenatti is Redefining His Legal Case Against Trump
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- [00:00]
A
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B
This is the Political Scene, a weekly conversation with New Yorker writers and editors about Politics. It's Thursday, May 10th. I'm Dorothy Wickenden, executive editor of the New Yorker. This week, Michael Avenatti, the lawyer for Stephanie Clifford, also known as Stormy Daniels, once again stole the political spotlight from President Trump. On Tuesday, Avenatti posted a document online showing that Michael Cohen, Trump's personal lawyer and fixer, set up a shell company a month before the 2016 election that has since taken in almost $4.4 million. Last year, that company received half a million dollars from a firm associated with a Russian oligarch and hundreds of thousands more from corporations seeking access to the Trump administration. Cohen used his shell company, among other things, to pay hush money to Stormy Daniels to remain silent about her alleged affair with Trump. On Wednesday, in an interview on Rachel Maddow, Avenatti explained his accusations against Cohen.
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C
He was hired for one reason and one reason only, and that was he was selling access to the highest office in the land.
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D
At best, that's what he was doing. At best.
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C
And ultimately Robert Mueller or myself or someone else will get to the bottom of exactly what he was selling. And perhaps more importantly, Rachel, where did all of this money go?
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B
Adam Davidson joins me to discuss Michael Avenatti's rapidly developing legal strategy and why the revelations about Cohen's shady business dealings could be a very big deal for the president. Adam, welcome.
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D
Hi, Dorothy. Great to be here.
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B
You have argued for many months that Trump runs the presidency, really, just as he ran the family business. And you've written many pieces that really show that. The last time you and I spoke on this program, I think it was only three months ago, we were talking about collusion. That was the big issue at the time between the Trump campaign and Russia. Now the news is about potentially criminal behavior during the Trump presidency. Back then, we didn't know about Michael Cohen or Stormy Daniels. We didn't know about hush money, shell companies, slush funds to pay off women with grievances against the president. So what, in the simplest possible terms, did we learn this week?
- [03:41]
D
So there are the things we now know for sure, and then there's a whole bunch of things that are suggested by this new round of information. So what we know for sure, based on this document that Michael Avenatti released, and that was very quickly confirmed by the New York Times, the Washington Post, and public statements by several of the companies involved, is that pretty much immediately after Donald Trump became president, he declared that Michael Cohen would be his personal attorney, that Michael Cohen would quit the Trump Organization and open an office, a law office, that had one client, the president of the United States. At that precise moment, Michael Cohen began shopping his services all over the country and apparently all over the world, saying, if you pay me a huge amount of money, hundreds of thousands, even millions of dollars, I will provide, quote, unquote, special insight into the president of the United States. And we know now that he had several clients that we know about AT&T Novartis, the Swiss drug company, and quite provocatively, a New York based investment firm whose entire purpose is to invest money on behalf of a man named Victor Vekselberg, who is a Russian oligarch, which, you know, basically by definition means he is a man close to Putin, close to the Kremlin.
- [05:20]
B
So we'll get back to him in a second. I'm sorry to interrupt, but I just have to mention that all of this was a source of great pride to Cohen. Last summer, one of his associates said that he was bragging about how often he spoke to the president, saying that he was crushing it.
- [05:34]
D
People close to the president so saw this as an incredible opportunity to enrich themselves. If you think about any president going into office, there is a huge industry on K Street, lobbyists who are selling their services to help guide companies through how the new administration will work. But here we had a president who was just completely outside of the existing lobbying structure. There was no lobbying firm in Washington who could credibly say, we know Donald Trump. We know what he's thinking. And so the only people who have that insight are a small handful of Trump's cronies. And we know that these are people who, you know, are very transactional. They're always looking for an angle, always looking for a way to make a buck. So it is, on the one hand, not at all surprising that someone like Michael Cohen was. Would do that. On the other hand, this is unbelievably shocking, as so much in the Trump universe is.
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B
But wait, wait, wait, wait. Just to play devil's advocate for a moment, you just said that this is what lobbyists do. And, okay, so Trump didn't have his contacts inside Washington, so he relied on his cronies. What is so shocking, then, about what we now know?
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D
So, look, there is this existing world of lobbyists, and we do have campaign finance laws that I think almost anyone who looks at them recognizes are insufficient to the task. All these silly rules that you can eat finger food, but you can't eat a sandwich. You can't directly receive a check, but if you send someone into a room five minutes after you left, that person can take 50 checks. There's a lot of nonsense, but that nonsense serves a purpose. There is a distance between the person in power and. And the people paying to influence that person in power. And while from a broad perspective, we as a nation should still address the serious issue of legalized corruption, what Michael Cohen did sure looks a lot more like illegal corruption. He is not a registered lobbyist. He was not public about this. So we actually can go on opensecrets.org or other websites and find out exactly what companies have paid to lobby the President or Congress or others. This was a secret llc. This was money that we only know because someone leaked it to Michael Avenatti. And we still have no idea what the President's direct involvement was.
- [08:12]
B
So is there any evidence so far that there was a clear quid pro quo between, say, AT&T and the President?
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D
There is no evidence of that so far. You know, I think both Robert Mueller and the U.S. attorney for the Southern District of New York, as well as me and every other investigative reporter in America will be desperately trying to figure out, where did Michael Cohen's money go? Did it end up in Trump's hands? Or was it explicitly a pool of funds that Cohen could both use for himself and also to pay off and deal with problems such as Stormy Daniels and Rudy Giuliani suggested there probably were other women in the last year that Michael Cohen had to pay off. Here's my view on it. It strikes me as highly unlikely that Michael Cohen, a man who has devoted the last 10 years of his life to Donald Trump, that he, at the very moment that Donald Trump becomes the most powerful and more importantly, perhaps to someone like Michael Cohen, is his brand is as big as ever. That someone like Michael Cohen at that moment would sell his access to the president without the president's explicit or implicit assent. Because, you know, this is a basic rule of, I'm going to say it, of organized crime and operations like the Trump Organization. You kick money upstairs, you keep the boss safe by not telling him all the dirty details, but you do not use the boss's name to pocket some money without kicking any upstairs.
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B
And what about the Russia connection with Trump? All roads, sooner or later, it seems, lead back to Russia. So much so that voters have become really sick of the entire subject. They just don't want to hear it anymore. Why should they care?
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D
You know, we've been hearing about Russia for a very long time, but now we have something far more potentially important and relevant and far more troubling. We have the first clear instance of money coming from a well connected Russian oligarch going to one of the people closest to Donald Trump. We are now no longer talking about second or third tier consultants to the campaign, people that Trump may or may not have met once or twice. We are talking about one of the core insiders of the Trump Organization for more than a decade. And that is a big leap forward in getting Kremlin influence right into the inner circle of Donald Trump. And we still don't know for sure. And it could be possible that the official story is true, that this wasn't really money for from the oligarch. It's also possible that Donald Trump had nothing to do with it, knew nothing about it, and Michael Cohen was just using his name to enrich himself. That being said, it's still very troubling. Why in the world are people that close to the President of the United States getting half a million dollars or more from people very close to the Kremlin?
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I'm Katie Drummond. I'm Wired's global Editorial Director.
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I'm Michael Colory, Wired's Director of Consumer Tech and Culture.
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And I'm Lauren Good. I'm a senior correspond at Wired. And our show, Uncanny Valley is all about the people, power and influence of Silicon Valley.
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At Wired, we're constantly reporting on how technology is changing every aspect of our lives. So each week on the show, we get together to talk about one of the biggest stories in tech.
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D
Right? So whether we're talking about privacy, AI, social media, or a major tech figure, we will always explain the Silicon Valley forces behind these stories and how they affect you.
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Make sure you're following Uncanny Valley in your podcast app of choice so you don't miss an episode.
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B
The other big news this week, which was almost overshadowed by Avenatti hogging the airwaves, was Trump's withdrawal from the Iran deal. And he argued there, not without cause, that the Iranian regime is the leading state sponsor of terror, and went on to say that the deal that was struck under the Obama administration with our Western allies gave the regime many billions of dollars, some of it in actual cash. A great embarrassment to me as citizen and to all citizens of the United States. And he called Iran a sinister vision of the future. Now, as we've just been discussing in part, Trump has never been a model of consistency, but point out for us, please, on this, the way he himself rewarded the Iran regime when he was building a hotel in Azerbaijan.
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D
So starting in 2011 and going all the way through to December 2016, the Trump Organization was in business with the Mamatov family of Azerbaijan. The Mamata family is known in Azerbaijan, a very corrupt country, as being among the most corrupt people in that country. But more troubling than that, at exactly the moment that Donald Trump and the Trump Organization were building a Trump Tower, Baku, the Mamadou were running a major scam with something called a company called Azar Pasilo. Azar Pasillo bears all of the hallmarks of being a front for Iran's Revolutionary Guard. So basically, because of sanctions, Iran's Revolutionary Guard created hundreds of shell companies, front companies, so that they could fund terror organizations around the world, get money to Syria. They could buy goods for weapons of mass destruction, nuclear weapons, nuclear missiles. And Azar Pasilo is run by two former Iranian Revolutionary Guard generals, people who had worked directly on the weapons of mass destruction program. And most of its work was in partnership with Iran's, with the Revolutionary Guard's business arm. They sure bore all the clear hallmarks of being a front for Iran's Revolutionary Guard. Now, the Trump Organization claims they did not know this at the time and only learned about it in the summer of 2015. Yet they remained in business with this family for the entire next year and a half, meaning the entire presidential campaign. I was able to see the contract they had with the Mamadou, and they had a right to review their books, to audit their books. So in other words, for a year and a half, the Trump Organization was in a position uniquely of all companies in the world. They were legally entitled to uncover a money laundering plot of Iran's Revolutionary Guard. They did not do that. They didn't cancel the contract. They simply continued this relationship. Every time I talk about Trump's business practices, you know, someone will respond, yeah, well, all business people do stuff like that. That is not true. Business people do not do things like this.
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B
So getting back to Vekselberg, who's the oligarch of interest at the moment? Who is he and what do we know about him? How close is he to Putin?
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D
He's quite close to Putin. So anyone who is a billionaire in Russia has some level of comfort with Putin. Putin would not allow you to be that rich if you didn't. Vekselberg has been called one of the good guys of Russian oligarchs. He is very worried about his international reputation. He's been very involved with some Jewish charities and other charities that have brought him into the circle of, you know, for example, New York society. He has a strong business presence in New York City.
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B
Also, as our colleague John Cassidy pointed out this week, he has connections to the Clinton Foundation. I think that his company has donated between 50,000 and $100,000 to them.
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D
Absolutely. And I do think, you know, and this is something Trump supporters will attack us for every time if we don't mention it, and maybe fairly so. That oligarchic money from the Soviet Union has certainly found homes with many Democrats, many leading Democrats. Joe Biden's son has made a small fortune in the Ukraine, and many people have called on for investigations there. General Wesley Clark has done a lot of business in Kazakhstan. And that being said, there is a difference. Trump's business seems far more tied to these Russian oligarchs. It's not just cashing in on connections. It's central to what his business model became after 2006. Now, I don't want to give Victor Vekselberg such a, such a clean bill of health. He is also closely tied to some other names that have become familiar to us with the Trump investigation. He was tied to and co owned businesses with and borrowed money from VEB bank, which is seen as not really a bank, but more a financing arm of Putin's inner circle. He's also connected to the Alpha Group, which owns the Alpha bank, which some have seen as confusingly and intensely connected to the Trump Organization. So, interestingly enough, he's also the leading owner of Faberge Eggs in the world.
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B
That I did not know.
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D
That's an important detail. So looking at this, at the surface, Victor Vexelberg sort of hurtling himself into Trump world, sort of being deeply in Clinton world, and then out hurdling himself into Trump world, actually makes me think that Vekselberg is a bit late to the party. He was not central to whatever the relationship was between the Trump Organization and Russia were beforehand. But that being said, Victor Vekselberg had an awful lot of close ties who were longtime Republican donors and longtime Trump inner circle folks. Len Blavatnik, Mikhail Friedman. And in a way, you know, if, if that circle wanted to get money to Trump, Vekselberg, you know, would be a guy you would think of as making a lot of sense.
- [18:32]
B
The Washington Post reported this week, getting back to the question of Russian banks and how much they were helping Donald Trump. So the Post reported that from 2006 on, Trump, after successive bankruptcies, just stopped borrowing money. And those reporters found that interesting in 2008, as I think you've reported and others have reported, you know, Donald Trump was saying, we see a lot of money pouring in from Russia and that the company basically had all the funding it needed. He said, we don't need American banks. So what's new here?
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D
So what we see is this radical shift from spending, what Donald Trump liked to call opm, other people's money, to spending his own money. And Eric Trump telling the Washington Post, well, you know, we did it because we'd gotten in trouble with debt in the past. We wanted to be able to be nimble and quick and not deal with a bank. So. And also we had so much, so much money that it was easy to spend. And there's the Washington Post puts together something like $400 million over a decade. They say that's a low estimate. I've talked to a lot of people this week who know the Trump Organization very well. And with them, we've tried to build the cash flow. It's a very secretive organization. We don't know, but we know that his main cash flow came from the Apprentice and, and the four commercial buildings he owned. And it's very hard to get us to $400 million in cash. It's hard for us to see how he has that much money in free cash, meaning just money available. The other thing we see is some of these deals do actually make sense. He's buying these down on their luck golf courses, putting some money in and hoping to sell them at a profit. It doesn't seem crazy, but when we go specifically to his Scottish investments, he has two golf courses in Scotland and one in Ireland. He's spending well over $200 million there, so well over half of this money. He's doing almost the bulk of that spending just in 2014 alone. And this makes zero sense. Scottish golfing is in crisis. There's virtually no way he's going to make that money back.
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B
So why is, why is he doing that?
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D
Well, that is the question. So I talked to a longtime business associate of his who said, look, he's. He's an impulsive guy. He's emotional, he loves golf, and his mom was from Scotland, and he had this sentimental idea. I just don't buy it. I do think he's an impulsive guy. I do think he makes irrational decisions, but he does them consistently in the same way he uses other people's money. Now, if he had used legal other people's money or normal other people's money, then we would know it would be a bank loan, it would be financing, he'd have investors. But there is the possibility that much like this Michael Cohen Secret llc where money is being funneled, that Donald Trump had secret LLCs and that he was getting other people's money to buy this. As it happens, golf courses are notorious. Real estate in general is notorious for money laundering. But golf courses in particular, because their, Their value is very variable. Money launderers love variable value, where you can sort of claim it's worth this much one day and then it's worth a lot more or a lot less the next day. And. And money launderers love a business where there's so many different types of money flows within them. Now, obviously, we don't know that this is money laundering. There's a lot of work to do to establish that. But money laundering is a much clearer explanation of the facts than this man, who is not known as a particularly sentimental man, suddenly wanted to help out his, you know, his mom's people or feel a connection to his mom's people.
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B
Let's just say, for the sake of thinking this through, this was discovered to be a fact that this was a money laundering operation. Could Trump be indicted?
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D
So this gets to a really untested question. Can a sitting president be indicted at all? Most of this money would have been spent before he was president, so that increases the odds that he could be indicted for a crime unrelated to the presidency. If it was ultimately money that was controlled or influenced by a government, you do immediately get to the Emoluments clause, which is a grounds, an immediate grounds for impeachment. At the end of the day, any punishment Trump will receive while in office will be the result of a political process, not a legal process.
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B
Thanks so much, Adam. We'll have you back again.
- [23:23]
D
Thank you, Dorothy. I always love coming on.
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B
Adam Davidson is a staff writer and a regular contributor to new yorker.com, this has been the political scene from the New Yorker. You can subscribe to this and other New Yorker podcasts by searching for the New Yorker in your podcast app and find more political analysis and commentary on new yorker.com Feel free to rate and review the political scene on Apple Podcasts. This podcast is produced by Alex Barron and Hannah Wilentz. I'm Dorothy Wickenden.
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E
What the hell is going on right now and why is it happening like this? At Wired, we're obsessed with getting to bottom of those questions on a daily basis. And maybe you are too. I'm Katie Drummond, the global Editorial Director of Wired, and I'm hosting our new podcast series, the Big Interview. Each week I'll sit down with some of the most interesting, provocative and influential people who are shaping our right now. Big Interview conversations are fun. I want a shark that that eats the Internet, that turns it all off, unfiltered and unafraid. So in a lot of ways, I try to be an antidote to the unimaginable faucet of reactionary content that you see online. To the best of my ability, every week we're going to offer you the ultimate luxury of our times, meaning and context. True or false? You, Brian Johnson, the man sitting across from me, one day, at some point as of yet undefined in the future, you will die. False. Tell me more. Listen to the Big Interview right now in the same place you find WIRED's Uncanny Valley podcast. Subscribe or follow wherever you get your podcasts.
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B
From. PRX.