Moment of Trump

The former president pleads not guilty to 34 criminal charges – a first in American history. We talk to the journalists behind the original Stormy Daniels story about how we ended up in this place.

Moment of Trump 

The story behind the story that led to the unprecedented arrest of the 45th president of the United States.

Donald J. Trump was never very good at paying his vendors on time – or at all.

But he seemed to have loyal foot soldiers just the same. Trump’s personal lawyer and self-proclaimed “fix-it guy,” Michael Cohen, took out a loan against his own house and used the funds to pay $130,000 to Stephanie Clifford, an adult film star who went by the name Stormy Daniels, to keep her silent about her claims of an affair with Trump in the run-up to the 2016 presidential election. Trump has denied the affair, but not the payment.

After Trump won, he did something very un-Trump-like: He paid Cohen back. Had he not, the events of this week may have never come to pass.

As is often the case, it is not the original sin – paying for the silence of Daniels to bury her story, which she was threatening to take public ahead of the election – but the way in which it is covered up that causes the greatest turbulence.

On Tuesday, Trump plead not guilty to all 34 counts of falsifying business records and conspiracy in the first degree in a wide-ranging scheme meant to prevent a sex scandal. But the details of exactly how Cohen’s reimbursements were accounted for and what Trump knew about Cohen’s arrangements – and when – will be central to whether the case against him will be successful. Each count against Trump is a felony, carrying up to four years in prison.

After the proceedings, Trump did not speak to journalists before flying back home to Florida, but did dash off some posts and a video to his online channel Truth Social to denounce the charges, saying “This is massive ELECTION INTERFERENCE on a scale that we have never seen in this Country!”

The charges against him involved only the hush money paid to Daniels and the alleged falsification of business records 34 times from February to December 2017. But prosecutors described other payments for silence, including one made to a doorman alleging Trump had a child out of wedlock and, separately, to Playboy’s 1998 Playmate of the Year, Karen McDougal, who claimed an affair with Trump and wanted to sell her story during his presidential campaign. The National Enquirer, allied closely with Trump, paid her $150,000 for the story in 2016, then buried it.

“If this case survives a motion to dismiss and goes forward, there are a lot of gaps in the information I would like to see filled,” says Joe Palazzolo, one of the two Wall Street Journal reporters who broke the story of the original hush money payments to Daniels. “I worked on this story for five years of my life and I did not expect this turn of events, but here we are.”

One of the biggest gaps will be proving that Trump personally stage-managed the payment to Daniels and the alleged falsification of business records around Cohen’s reimbursements, which were billed as legal expenses by the Trump Organization under a “retainer agreement” with Cohen that prosecutors say was a “sham,” because neither expenses nor a retainer agreement ever existed. 

In testimony while Trump was still president, Cohen told Congress “Mr. Trump directed me to use my own personal funds from a home equity line of credit to avoid any money being traced back to him that could negatively impact his campaign.”

“We got the ball rolling on this a long time ago, but now a lot of other people have worked on it,” Palazzolo told Power Corridor, adding that he will be looking to see if the proceedings will shed any more light.

On the strength of a tip, Palazzolo and his co-author, Michael Rothfeld, began tracking the hush money payments made during Trump’s first presidential run, eventually uncovering how Cohen set up a Delaware shell company, Essential Consultants LLC, to arrange the payment to silence Daniels in October 2016, just days before the election.

“We just pored through tens of thousands of shell companies – there are around 15,000 shell companies a day set up in Delaware – before we found the one used for the Stormy Daniels payment,” says Rothfeld. “The state of Delaware emailed us the underlying documents and it ended up that Michael Cohen had put his name on it.”

From there, Rothfeld and Palazzolo asked Cohen to comment, and he did not deny his involvement. They backed up the story through a number of independent sources, as well as confirmed the size of the Daniels payment. They also went to Trump’s camp for comment where they received, in Rothfeld’s words, “a lot of non-denial denials.” Trump’s representatives insisted Trump never slept with Daniels, but would not say she wasn’t paid.

When Palazzolo and Rothfeld ran with the story, they knew it was solid, but it was still nerve-wracking. “We were very nervous, we were saying the president’s lawyer paid money to a porn star, but we were convinced it was correct,” Rothfeld says. The story won the 2019 Pulitzer Prize in National Reporting, spurring calls for criminal inquiries and Trump’s impeachment.

Just days after it came out, Common Cause, a Washington-based watchdog group, filed complaints with the U.S. Department of Justice and the Federal Election Commission alleging the $130,000 payment to Daniels amounted to an unreported, illegal in-kind contribution to the Trump campaign for the purpose of influencing the outcome of the 2016 presidential election, made in coordination with Cohen.

At the time Common Cause did not know it was Cohen himself who had made the in-kind payment, but later amended the complaints to account for Cohen’s claims, which the group noted exceeded the legal limit for campaign gifts by $127,000. 

No charges would be filed against Trump while he was still a sitting president, as is the custom rather than settled law, though Cohen did go to prison after pleading guilty to tax evasion and violating campaign-finance laws.

“The federal prosecutors in Manhattan wrote the charges against Cohen in a way where they could charge Trump, but then nothing happened,” Rothfeld recalls. “I was surprised, frankly, when they picked it back up.”

Rothfeld, who is now an investigative reporter at The New York Times, co-wrote a book with Palazzolo on what they uncovered together, “The Fixers: The Bottom-Feeders, Crooked Lawyers, Gossip Mongers and Porn Stars Who Created the 45th President.” 

“We knew the story could result in Trump being charged,” Rothfeld says. “When Michael Cohen’s offices were raided by the FBI it was our first inkling that there could be more of a significant impact – then it snowballed.”

Dimon Dilemma

Chatter weighing JPMorgan CEO’s future as possible U.S. Treasury Secretary does not sit well alongside fresh allegations of Epstein case.

Yes, we put out a story last week chronicling how JPMorgan Chase’s chief executive Jamie Dimon achieved borderline action hero status as he raced the clock alongside U.S. Treasury Secretary Janet Yellen to shore up the foundering U.S. banking system.

This was meant (mostly) in jest, and I feel the need to point out that I should not need to point this out. Hyperbole, people.

Nonetheless, talk that Dimon may be asked by President Biden as early as this year to possibly succeed Yellen is getting a tiny bit louder, and is seen by some as a fitting retirement lap to his nearly two-decade-long reign as Wall Street’s top banker. 

After Dimon gamely pitched in to help co-lead last month’s rescue operation, resulting in 11 banks joining forces to stabilize the financial system (a herculean effort that The New York Times breathlessly called the “Jamie and Janet show”), it does not strain the imagination to think he might be an appealing candidate for the job.

Yet Dimon’s hero halo is looking a little tarnished by fresh allegations that high-ranking executives at JPMorgan knew about – and made light of – the behavior of late child predator, convicted sex criminal, and financier Jeffrey Epstein, a client of the bank.

An amended complaint filed in New York by lawyers for the U.S. Virgin Islands this week alleges that Epstein’s predatory behavior toward minors was “widely known” and that JPMorgan “senior executives joked about Epstein’s interest in young girls.” 

The email containing the remarks, which was redacted, was sent in 2008 to Mary Erdoes, who still runs the bank’s asset and wealth management division where Epstein was a client. JPMorgan has not commented on the filing, but has vigorously defended Erdoes as acting “with the highest levels of integrity and professionalism." 

The year the email was sent to Erdoes, 2008, was the same year Epstein plead guilty to soliciting underage sex and sentenced to 18 months in prison.

Erdoes has been subjected to questioning under oath in pre-trial proceedings and Dimon is expected to be deposed in May. JPMorgan is facing lawsuits  regarding its relationship with Epstein from both the U.S. Virgin Islands and an alleged Epstein victim going by the name of Jane Doe. Pre-trial proceedings are under way and a trial is planned for October.

The U.S. Virgin Islands also highlighted an internal correspondence at JPMorgan referring to a “Dimon review” of the bank’s relationship with Epstein, but the bank has claimed it does not have any record of it.

The headlines from the Epstein proceedings, coupled with talk of Dimon ascending to Treasury Secretary may not go on for much longer, though, as Dimon has made it clear more than once (including to Trump, when his name was floated years ago) that he does not want the job, full stop.

In 2020, when asked again about his interest in the post under Biden, Dimon dismissed the notion about as expressly as one can. 

“I love what I do, and I have never coveted the job. Ever. And some people do, and I applaud that. I love my country, so I will help anyone who has that job,” Dimon said. “I want to do this job, that’s what I want to do. If I ever get a call to help, I always take those calls and try to offer my help to whoever’s secretary of Treasury, and any president, by the way.”

While succession planning for Yellen may have to wait for another day, the Epstein case could affect who succeeds Dimon if the proceedings go poorly for the bank. In particular, Erdoes, who had to deal with Epstein directly and eventually jettisoned him as a client, has long been considered one of the top candidates to step into Dimon’s shoes.

Introducing…the Kleptocracy Bus Tour !

London ingeniously turns “Lifestyles of the Rich and Famous” on its head with a showcase of oligarchs’ and kleptocrats’ ostentatious properties.

For the uninitiated, an oligarch is a wealthy business leader with immense political influence, and – intersecting neatly with this theme – a kleptocrat is a person who uses political power to steal a country’s resources.

When capital is looted from a kleptocracy like Russia, the network of ruling elites who enrich themselves usually need a safe place to park the funds, such as tax shelters, artwork, yachts, jewelry, cryptocurrency – or jaw-droppingly expensive real estate.

When you get right down to it, there are not that many items in the world that can reliably hold their value at tens or hundreds of millions of dollars.

And even fewer places on earth where one can see some of the world’s greatest concentrations of wealth heaping before their eyes. After all, tax shelters, artwork, yachts, jewels, and crypto accounts are fairly easy to hide.

But a massive marble mansion, or an entire block of buildings in one of London’s poshest neighborhoods is truly hard to miss – especially if public property records confirm the owners appear to be linked to allies of an authoritarian leader, like maybe Russian President Vladimir Putin.

This month, the Centre for the Study of Corruption at Sussex University in Brighton, UK, will be resurrecting the popular “Kleptocracy Bus Tour” of London, showcasing the opulent homes of superrich kleptocrats and oligarchs who have bought up properties in high-end neighborhoods such as Chelsea, Fulham and Belgravia. (For the record, I am affiliated with the Centre for the Study of Corruption, where I am working on research for a Master’s degree.)

The tour is not meant to ogle the riches of oligarchs and kleptocrats. Its purpose is to heighten students’ awareness of how far-flung kleptocracies can come home to roost, hugely affecting the property values of a city, expanding its wealth gap and directly impacting the lives of its citizens, including making it harder for them to buy or rent a home, or build a life.

“It’s meant to be educational and to bring a real-life context to students who are studying corruption,” says Becky Dobson Phillips, a lecturer in corruption analysis at the University of Sussex’s School of Law, Politics and Sociology. “This is a way to demonstrate how political corruption can affect us, even close to home.”

She notes it is not an uncommon experience to walk through a very wealthy neighborhood and feel like one does not belong. “We’ve all felt it, that feeling of walking down a street that’s very exclusive and not feeling like you should be there, wondering even if you are allowed to walk there,” Dobson says. She says Sussex undergraduate and graduate students plan to attend the bus tour later this month, with some students giving presentations to the group.

Anti-corruption experts note that some of the world’s wealthiest cities are filled with upscale “empty mansions” and neighborhoods that are dead quiet, because the houses are simply placeholders for owners to park their cash. They don’t live there and only the housekeeping staff ever come and go.

Arthur Doohan, co-founder of ClampK, a UK anti-corruption initiative that began running the bus tours several years ago, tells Power Corridor they have attracted “politicians, policy activists, and the media.”

These days, the tours are often run on a case-by-case basis, but they continue to attract international attention. “We recently ran a tour to coincide with the Ukraine invasion anniversary,” he says.

The United Kingdom is not the only place drawing kleptocrats. Other Western jurisdictions include South Africa and the UK dependencies of the British Virgin Islands, the Cayman Islands, and the Channel Islands of Jersey and Guernsey.

The U.S. also has been known to welcome piles of oligarchical cash. Paging bus tours for New York, Greenwich, Conn., Palm Beach, Miami, Los Angeles, and St. Thomas in the U.S. Virgin Islands. For a start.