Cohen Caught In Complex Thicket Of State, Federal Investigations

Michael Cohen is currently caught in a thicket of state and federal investigations.

There’s the Manhattan U.S. Attorney probe, in which he pleaded guilty on eight counts of personal financial wrongdoing and campaign finance violations. There’s the New York Department of Taxation and Finance inquiry into the Trump Foundation, which grew out of the New York Attorney General’s lawsuit against the charity. And there is the still-looming possibility that he will be called to provide information in special counsel Robert Mueller’s investigation into Russia’s 2016 election interference.

Though Cohen’s Tuesday plea deal included no provision requiring him to cooperate with authorities, that does not mean cooperation could not happen at a later date.

Former federal prosecutors told TPM that these various state and federal entities are likely to put aside any turf battles and work closely together to handle these complex, occasionally overlapping investigations.

“It’s really going to require coordination for these cases to work,” Mimi Rocah, a former federal prosecutor who spent 16 years in the Manhattan U.S. Attorney’s Office and is now a fellow at Pace Law School, told TPM.

The multiple inquiries “speak to the crossover—similar to the organized crime world—where you just have different subjects that one person knows about in different jurisdictions,” Rocah added. “It speaks to people wanting to work together to get it right because there are very high stakes.”

The Manhattan U.S. Attorney’s Office, state Attorney General’s office, and the state tax department declined TPM’s request for comment, citing the ongoing nature of their investigations.

Federal and state prosecutors are notoriously territorial about their own witnesses and potential witnesses. This is in part because they want credit for their investigations, especially in high-profile cases and competitive districts like Manhattan. There’s also the question of control. If an investigator from one district or agency messes up a line of questioning or makes a mistake in one probe, it could taint other investigations involving the same witness.

“That’s not going to happen here,” former federal prosecutor Jeff Cramer told TPM, citing the professionalism and integrity of the players involved.

Rocah, too, said that “99 percent of the time, if it was really going to make a difference in the outcome of the case, and it was important for the different aspects of the system to work together, they did.”

One example of the smooth coordination between multiple agencies: the prosecution of Cohen’s former partner in the taxi business, Gene Freidman.

Freidman in May admitted to nearly $5 million in tax fraud. The New York Department of Taxation and Finance referred the case to the Attorney General’s office for prosecution. Freidman was facing up to 25 years in prison in that case. But he struck a deal state Attorney General Underwood’s office that included promising to cooperate with federal authorities investigating Cohen in order to avoid jail time.

One former federal prosecutor who asked to speak on background as he’s currently representing an individual in the Mueller probe told TPM he was struck by the “cross-pollination” of state and federal agencies in the Freidman case.

A similar dynamic appears to be at play with Cohen’s involvement in the Trump Foundation probes. The New York attorney general in June filed a civil suit against the charity and its board, which is composed of Trump and his three eldest children. Attorney general spokeswoman Amy Spitalnick had said that the office will “seek a criminal referral from the appropriate state agency as necessary.”

The state tax department is also looking into possible tax violations by the charity. On Wednesday, the agency subpoenaed Cohen in that inquiry, noting that Cohen’s attorney, Lanny Davis, claimed on CNN that his client had information that would “be of interest” to New York investigators looking into the foundation.

A source familiar with the investigation told TPM that the state tax department and attorney general’s office are in touch about both the Cohen and foundation matter. Anything found by the tax investigators would be referred to the attorney general’s office for criminal prosecution.

Cohen could also be asked to testify in a review being conducted by the Manhattan district attorney’s office that the New York Times reported Thursday was in its earliest stages. Prosecutors are weighing whether to pursue criminal charges against the Trump Organization and two of its executives for using sham legal invoices to reimburse Cohen for hush money payments to women, as Cohen has alleged in his plea deal.

Former prosecutors told TPM that they’re surprised that Cohen did not have cooperation terms stipulated in his plea deal the way Freidman did, given his years of service to the Trump Organization and involvement with the 2016 campaign.

One possible explanation reported by the Wall Street Journal is that federal prosecutors had an early September deadline to charge Cohen. Under Justice Department guidelines, they could have been seen as influencing the midterm elections had they waited any longer.

They rushed to settle on the agreement released Tuesday as plea deal talks came together over the weekend, the Journal reported.

There are also lingering questions over the value of the information Cohen can provide, given the voluminous evidence prosecutors have already compiled, and whether he is a credible witness.

The terms of any cooperation with either state investigators or the Mueller probe would need to be spelled out at Cohen’s sentencing hearing, which is currently scheduled for Dec. 12.

In the meantime, Cohen is signaling that he’s eager to help anywhere he can.

A Cuomo administration official told TPM that Cohen contacted the tax department shortly after receiving the agency’s subpoena, asking when they could find a time to talk.