Moneybox

Is It Normal for the President’s Lawyer to Run a Political Consulting Firm?

US President Donald Trump's personal lawyer Michael Cohen(C) leaves the US Courthouse in New York on April 26, 2018. - US President Donald Trump acknowledged on Thursday that his personal lawyer, Michael Cohen, represented him in a 'deal' involving porn star Stormy Daniels. Trump had previously denied knowledge of a $130,000 payment Cohen made to Daniels that she claims was to prevent her from talking about their alleged 2006 affair.Trump, in a wide-ranging telephone interview with 'Fox and Friends,' admitted for the first time that Cohen represented him in a 'deal' with Daniels, who has filed a lawsuit seeking to have the 'hush agreement' negotiated by Cohen thrown out. (Photo by HECTOR RETAMAL / AFP)        (Photo credit should read HECTOR RETAMAL/AFP/Getty Images)
Michael Cohen’s political consulting business: Was it normal?
HECTOR RETAMAL/Getty Images

The president’s longtime personal lawyer Michael Cohen has been operating a secret Washington consultancy, accepting payments from major corporations and other entities.

Is this normal? In some ways, experts say, it is.

“We have an entire industry of individuals with close relationships to government officials that sell and capitalize on that relationship,” says Paul Seamus Ryan, a vice president at Common Cause, a government watchdog.

Not normal: the fact that Cohen did not make his activity public by “hanging a shingle” as a lobbyist. “Doing it all in secret, never having done it before, while simultaneously working for a public official, and the public official being the president—these are new glosses on an old profession,” he observed. Not normal: trading off being not just a well-connected person but the sitting president’s lawyer. “Another thing that’s not normal is for a president’s lawyer to set up an LLC and make a hush money payment to a porn star.” Common Cause has filed complaints with the Department of Justice and the Federal Election Commission arguing that the Stormy Daniels payment, which was made in October 2016 from Cohen’s newly formed Essential Consultants LLC, was a campaign finance violation.

On Tuesday night, the New York Times and NBC confirmed a report from Stormy Daniels’ lawyer Michael Avenatti asserting that under Cohen’s stewardship, Essential Consultants LLC graduated from hush money payments to political consulting, taking in six-figure sums from the Russian-backed investment firm Columbus Nova, Korea Aerospace Industries, AT&T, and Novartis.

“What’s the difference between these payments and lobbying, campaign finances, any of that?” asked John Wonderlich, the executive director of the Sunlight Foundation. “These payments do away with the entire artifice of a broker or a campaign, it’s just pure pay-to-play. Campaign finance regulation has been eroded a lot over the last 20 years, and it’s like Cohen skipped ahead another 20.” In a way, it fits with a broader Trumpian pattern: doing the quiet thing loud (plus the hush money, foreign payments, and the lawyer issue). “It is not by any stretch of the imagination normal.”

Dallas-based AT&T, the nation’s largest telecom company, has a pending merger with Time Warner that is opposed by the Justice Department. The company spent more than $16 million on lobbying in Washington last year, according to OpenSecrets.org. The company says it hired Cohen for advice on issues “including regulatory reform at the FCC, corporate tax reform and antitrust enforcement.”

Cohen made an astounding $1.2 million from the Swiss pharmaceutical giant Novartis—a $100,000-per-month retainer that was paid out for a full year even though Cohen met with Novartis only once. Novartis spent nearly $9 million in lobbying in 2017, according to OpenSecrets, though Cohen was not a registered lobbyist, so his retainer would not be included in that sum.

Novartis told the Washington Post it hired Cohen for advice on the Affordable Care Act.
Though the company found, after the one meeting, that Cohen “would be unable to provide the services that Novartis had anticipated,” it continued to make payments throughout his 12-month contract. An anonymous employee told the health publication STAT that Cohen had approached the company, promising access during a chaotic transition period.

That posture—paying for access under the guise of expertise—is typical, says Lee Drutman, a fellow at the New America foundation and the author of The Business of Lobbying.

“A lot of companies were scrambling to figure out how to talk to the Trump administration,” he told Slate. “Some of them might have panicked and tried to sign up somebody who they thought could get them access. It’s not unusual that money would go to a consulting firm set up by someone close to someone in power. What’s unusual is that there’s someone still working for the person in power.”

“So is it normal?” Drutman asked out loud. “It is not normal.”

In a long and delightful 2017 story in the New York Times Magazine, Nicholas Confessore recounts the tumult that accompanied the Trump transition on K Street—a time in which Trump insiders like former Trump campaign manager Corey Lewandowski were able to reinvent themselves as registered lobbyists with lists of blue-chip clients. Desperate power players threw money at the newly minted insiders; a billionaire offered one lobbyist $1 million for a photo with the president in the Oval Office. One man, Confessore reports, offered Lewandowski $250,000 for the president to tweet about him. Lewandowski’s ace in the hole? A promise to get the president on the phone.

The gold rush lured in plenty of people with tenuous connections to Trump, and it lured in Michael Cohen, who received in April 2017 a $500,000 “strategic alliance fee” from the law firm Squire Patton Boggs, a potential sweetener for other clients. He is the latest in a long line of people to capitalize on connections to people in power, including Democratic uber-lobbyist Tony Podesta, whose brother served in the Clinton and Obama White Houses.

“Not normal,” says Nick Allard, dean of the Brooklyn Law School and former head of lobbying at Patton Boggs (several years before the Cohen deal, which Allard said he had nothing to do with). “Just the brazen, shameless, sloppy attempt to peddle the ability to buy results is not only shocking but is done at a level that in recent modern history we have not seen.
We’re in dangerous territory because when there’s a suggestion that enormous sums of money change hands for no professional work being done, questions arise as to what that money is for.”

It’s not clear if Cohen violated disclosure requirements for lobbyists—you have to do lobbying work, such as meeting with elected officials, to meet the threshold—or if he was in fact offering access to Trump rather than just insight. “When there’s a new guy in town, nobody knows who he is or how he’ll act, there’s a great deal of interest in getting reliable information,” says Jan Baran, a D.C. lawyer who advises clients on lobbying, among other subjects. “At least since January 20th,” he added, “nothing has been normal.”