WSJ: Cohen defrauded Trump on cooked reimbursement claims

Next month, former Trump fixer Michael Cohen will testify before the House Oversight Committee to reveal all the dirt he knows about his former boss. Today, the Wall Street Journal helped deliver a message — turnabout is fair play. A former contractor for Donald Trump’s public-relations efforts claims that Cohen stiffed him for all but $13,000 of a $50,000 bill, while federal prosecutors show that Trump reimbursed Cohen for the entire $50K.

Gee, I wonder where the WSJ got this information? Hmmmm….

In early 2015, a man who runs a small technology company showed up at Trump Tower to collect $50,000 for having helped Michael Cohen, then Donald Trump’s personal lawyer, try to rig online polls in his boss’s favor before the presidential campaign.

In his Trump Organization office, Mr. Cohen surprised the man, John Gauger, by giving him a blue Walmart bag containing between $12,000 and $13,000 in cash and, randomly, a boxing glove that Mr. Cohen said had been worn by a Brazilian mixed-martial arts fighter, Mr. Gauger said. …

Mr. Gauger owns RedFinch Solutions LLC and is chief information officer at Liberty University in Virginia, where Jerry Falwell Jr., an evangelical leader and fervent Trump supporter, is president.

Mr. Gauger said he never got the rest of what he claimed he was owed. But Mr. Cohen in early 2017 still asked for—and received—a $50,000 reimbursement from Mr. Trump and his company for the work by RedFinch, according to a government document and a person familiar with the matter. The reimbursement—made on the sole basis of a handwritten note from Mr. Cohen and paid largely out of Mr. Trump’s personal account—demonstrates the level of trust the lawyer once had within the Trump Organization, whose officials arranged the repayment.

The takeaway to this is that Cohen lifted $36K+ and stuck it in his own pocket. Whether that’s what actually happened would have to be determined in court, but it might explain why Robert Mueller’s team lost interest in Cohen early in their probe. Not only does it undermine Cohen’s credibility as a witness, it might make it easier to believe that anything done underhandedly was by Cohen himself without Trump’s knowledge. After all, one could argue, Trump got fleeced on this deal by Cohen without blinking an eye.

There’s another problem with this transaction for Cohen too, beyond potential tax violations. Cohen billed this as tech services to the Trump Organization, not the campaign, without disclosing the nature of the work. As UCI professor and campaign-finance expert Richard Hasen tells the WSJ, that should have been disclosed by Cohen as an independent expenditure. That’s clearly a lesser issue than potential embezzlement, but it shows that Cohen was skirting campaign-finance regulations well before Stormy Daniels got paid off.

Not only did Cohen allegedly pocket money in the RedFinch relationship, Gauger claims Cohen wanted Gauger to promote Cohen at Trump’s literal expense. Cohen wanted to lift his own profile as — wait for it — a sex symbol. No, really:

During the presidential race, Mr. Cohen also asked Mr. Gauger to create a Twitter account called @WomenForCohen. The account, created in May 2016 and run by a female friend of Mr. Gauger, described Mr. Cohen as a “sex symbol,” praised his looks and character, and promoted his appearances and statements boosting Mr. Trump’s candidacy.

Er … yeeaahhh.

Cohen’s not exactly denying the story this morning, either:

The “sole benefit”? If the details in the WSJ report are accurate, then no, it wouldn’t have been the “sole benefit.” Those make it look a lot like Cohen was benefiting plenty from his relationship with Trump, both above- and below-board. And maybe even below-belt. Yeesh.

Even so, the timing of this broadside against Cohen can’t be ignored. Trump and his team know how much Cohen can hurt them, politically if not legally. They’re opening up the books to destroy Cohen’s credibility and make him next to worthless as a witness at his congressional hearing next month. Those motives are clear enough that news media outlets will have to take care to scrupulously verify claims coming to them from Cohen’s political enemies. The WSJ seems to have done that well enough to keep Cohen from issuing a flat denial today. We’ll have to see what else Cohen won’t be able to deny as the hearings come closer.

Addendum: Just as an aside, do campaigns really spend $50K to rig online polls? If so … we’ll have to start featuring more of them. Here’s one for today, and anyone feeling the need to rig it can inquire on the tips line as to where to send my check. Your answers on #2 and #3 might determine my negotiating position, of course, especially #2.

Update: Another possible half-defense from Cohen is that he could claim the difference was how Trump was reimbursing him for payoffs under the table. That may not hold up, though, because the payoffs to mistresses before the presidential campaign wouldn’t have mattered. Plus, you don’t stiff the contractor on those — you make arrangements for inflated invoicing up front.

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