Michael Cohen’s Payments From Ukraine May Be a “Smoking Gun” on FARA Violations

Michael Cohen is in big trouble.

Many questions remain surrounding the payments President Trump’s personal lawyer solicited through his shell company, Essential Consultants LLC, from AT&T, Novartis, Korea Aerospace Industries, and Qatari government officials. For instance, is Essential Consultants Cohen’s only LLC, and are there more payments we don’t yet know about? Are the payments he received from these companies and officials related to his potential campaign finance violations? Perhaps most troublingly, what is Trump’s relationship to Cohen’s LLC or LLCs? Did Trump know about the payments, and is it possible he may be the beneficial owner of these companies and therefore could have received payments directly?

But one thing that is not in question is that Michael Cohen is in big trouble. On May 10, Public Citizen filed an ethics complaint to the Foreign Agents Registration Act (FARA) Unit of the Department of Justice requesting an investigation into whether or not Cohen, who is not registered as a lobbyist, violated (FARA) or the Lobbying Disclosure Act (LDA) of 1995 by touting his “access” to the President in exchange for these payments.

And now, in the latest development in this whirlwind of news stories and legal questions, the BBC is reporting that Cohen received a secret payment of at least $400,000 by high-ranking Ukrainian officials last June. Reportedly, Ukraine’s registered lobbyists found traditional routes to lobbying this non-traditional White House unsatisfactory toward achieving their goal of robust negotiations between President Trump and Ukrainian president Petro Poroshenko. To alleviate this, BBC’s sources allege, Ukrainian officials then made this payment to Cohen in exchange for opening a secret backchannel to Trump. Disturbingly, one BBC source alleges that as a “gift” to Trump, Poroshenko even promised to help keep information from Special Counsel Robert Mueller’s investigation into the Trump campaign’s possible collusion with Russia.

If the BBC’s reporting is accurate, this raises further suspicion that Cohen may have violated U.S. lobbying laws. He was not registered as a representative of Ukraine, so by allegedly operating in a paid capacity to advance Ukrainian interests in the White House, he may have blatantly broken the law as laid out in FARA. In response to this new reporting, Public Citizen updated its ethics complaint.

According to Craig Holman, government affairs lobbyist for Public Citizen, “Our original complaint was based on Cohen’s solicitations to his corporate clients of being able to provide access to administration officials. We did not have concrete evidence that such access was in fact provided. This new report involving payments made and access received by the Ukrainian government appears to be the smoking gun.”

In her May 24th op-ed in Salon, Public Citizen’s vice president of legislative affairs, Lisa Gilbert, explains that these shady payments illustrate the need for the U.S. Securities and Exchange Commission (SEC) to create rules that would require public companies to disclose their political activity. Without this transparency, Gilbert argues, companies like AT&T and Novartis do their shareholders a disservice by risking their reputation and in turn the continued support of their investors. This desire to avoid angering shareholders and enduring embarrassing PR disasters is one more reason why America’s public companies should not be able to conduct their political spending in secret.

But even with more robust public disclosure laws, not all of Mr. Cohen’s suspicious and possibly illegal activity would have been made public. The BBC’s reporting suggests that Cohen also acted on behalf of the interests of a foreign government without being registered as a lobbyist of that country. With each news story, Trump’s campaign promise to “drain the swamp” is proven to be a farce. As long as Trump’s associates like Mr. Cohen continue to engage in shifty behavior that bumps up against and possibly violates U.S. lobbying laws, Trump might as well declare himself the president of the swamp.

Caroline Ristaino was a key contributor to this piece.

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