The Weekend Wrap: May 19, 2024

Where's Weisselberg?

Welcome to the Weekend Wrap! Here are the week’s white collar highlights:

Trump Prosecutions

New York State Case - Hush Money/False Business Records

Week four of trial testimony is in the books. It looks like the case will go to the jury this week.

Gag Order: On Tuesday a New York state appellate court upheld Judge Merchan’s gag order. Trump had argued that the order, which forbids him from making public statements attacking witnesses, jurors, or court personnel, infringes his First Amendment rights. The court of appeals rejected that claim, finding that Merchan properly balanced Trump’s rights against the court’s need to ensure “the fair administration of justice in criminal cases” and the rights of those related to a criminal proceeding to be “free from threats, intimidation, harassment, and harm.”

Trump comes outside the courtroom during every break, attacks the trial as a disgraceful witch hunt, and reads messages of support from commentators and Republican politicians. But since Merchan held him in contempt a second time and said the next violation would probably mean jail, Trump complains about the gag order but has largely abided by it. The $1,000 fines may not have been an adequate deterrent, but it appears the prospect of spending time in jail was enough to make him hold his fire.

Trial Testimony: Michael Cohen, the state’s star witness, was the only witness last week (there was no court on Wednesday or Friday). From the accounts I read it sounds like he held up fairly well, although he is predictably getting beaten up quite a bit on cross examination. 

Michael Cohen arrives at the trial (Credit: AP/Yuki Iwamura)

On direct, he told the by now familiar story of how he made the hush money payment to Stormy Daniels and the scheme to cover it up by disguising the reimbursements to him as legal expenses. He also identified each of the 34 allegedly false documents that form the basis of the criminal charges: the invoices from him and the Trump Organization accounting vouchers and checks that describe the reimbursements as payments for legal services pursuant to a retainer agreement. 

Cohen testified that all of these documents were false. The monthly payments of $35,000 were not for legal services rendered but were to reimburse him for the hush money payment and other expenses and to help him cover his taxes. And there was no retainer agreement.

Cohen also testified about a meeting he and Trump Organization CFO Allen Weisselberg had with Trump just before he left for Washington. Cohen testified that Weisselberg described the reimbursement plan and Trump approved it. This meeting is critically important to proving Trump’s knowledge and intent, and Cohen is the only witness.

Cross examination began Tuesday afternoon and continued all day on Thursday. It was meandering at times, but Trump attorney Todd Blanche did score a few points. He sought to undermine Cohen’s credibility by highlighting the many, many times he has lied in the past, including under oath. He tried to portray Cohen as angry at Trump and biased against him. He played some examples of Cohen’s angry, profane rants about Trump on his podcast and social media, to contrast with the relatively calm demeanor he displayed on the stand.

None of this was a surprise. The state brought out a number of Cohen’s past lies and possible biases on direct examination, to try to “draw the sting,” as trial lawyers say. But this case will largely rise or fall on whether the jury believes Cohen, so the defense has to go after him hard. 

Blanche will finish cross-examining Cohen on Monday, and Cohen will be the last prosecution witness. It sounds like the defense will have one or two brief witnesses at most. They haven’t officially announced whether Trump will testify, but I’ll be shocked if he does. The judge advised the parties to be ready to give closing arguments on Tuesday. We could potentially have a verdict before Memorial Day.

A lot will come down to whether the jury finds Cohen credible about these particular events, despite his many past lies. It’s always hard to tell how a jury is reacting, and it’s impossible when you’re not in the courtroom. Overall it sounds like Cohen is doing about as well as could be expected on the stand. The prosecutors will also have a chance to try to rehabilitate him on redirect after the cross is done.

The Best Defense: I have several concerns about the government’s case at this point. I think they have clearly established that Cohen paid the hush money to Daniels and was reimbursed by Trump. I think they’ve clearly established that the reason they paid her off was concern about how her story would affect the campaign. 

They’ve also established — I guess — that the documents contain some false entries when they say the payments were for “legal services” pursuant to a “retainer.” I’m not really bowled over by this argument; the “falsity” seems like kind of a technicality. If you are reimbursing your attorney for a contract payment he made on your behalf (as well as paying for some other things, including his bonus), is it criminally false to enter that in your books as a legal expense? And does it matter whether or not payments were pursuant to a retainer agreement — in legal terms, is that a material falsehood? Or in layman’s terms: who cares if there was a retainer agreement or not?

These are pretty fuzzy lies, as opposed to the falsehoods in most fraud cases. Expect part of the defense argument in closing to be that these records were not actually false. But put that aside for now.

I think the evidence is even less clear that Trump himself knew about all the false entries and that he caused those false documents to be made with the fraudulent intent to cover up another crime. That’s what the statute requires. 

The DA claims Trump, Cohen and Weisselberg structured the repayment this way to conceal a potentially illegal campaign contribution, and that this constituted a criminal conspiracy to interfere with the election under New York law. That’s what supposedly makes the business records offense a felony. But there was very little, if any, evidence suggesting that covering up a campaign finance crime was Trump’s intent. I don’t recall any testimony from Cohen regarding conversations with Trump about how this might be a campaign finance violation and that’s why they needed to conceal it.

Expect the defense to argue in closing that even if the jury believes Stormy Daniels, Trump was just trying to cover up an embarrassing but non-criminal incident – just as Bill Clinton lied to cover up a non-criminal relationship with an intern. If Trump knew about the false entries at all (and why would he care about such bookkeeping matters?) it was not to conceal a crime. The repayment schedule was just a convenient way to reimburse Cohen for this and other expenses, not some elaborate scheme to conceal criminal conduct.

Finally, there’s the concern I’ve raised about this case since the beginning: how does the state prove intent to defraud anyone based on these documents? These were internal records of a private company. They weren’t submitted to anyone, and no one had a right to see them. Although the DA likes to talk about this as an election interference case, the documents could not have been intended to influence the election or defraud the voters, because they were not even created until after the election. The DA’s case is almost over, and I still don’t think it’s entirely clear what their theory is on proof of intent to defraud.

Of course, the defense will have its own credibility problems to deal with during closing:

Bottom line: to prove these charges the DA has to prove both that Trump knew about the false records and that he caused them to be made with the fraudulent intent to cover up another crime. That’s where I think the case is most vulnerable.

That’s the sort of issue where you might get one or two jurors to say they have a reasonable doubt. And if you think it sounds like a legal technicality, remember: there are two lawyers on the jury.

#Where’sWeisselberg: I’ve been thinking a lot this past week about a witness we haven’t heard from: former Trump Organization CFO Allen Weisselberg. The jury has heard a lot about him. He and Cohen are the ones who came up with the reimbursement plan. The Trump Organization Controller, Jeffrey McConney, identified Weisselberg’s handwriting on the “smoking gun” document where the amounts for the reimbursement are added up. Cohen testified that Weisselberg explained the reimbursement plan to Trump and he approved it.

Even more than Cohen, Weisselberg was at the center of the alleged conspiracy to interfere with the election and cover it up through the reimbursement plan and false records of the Trump Organization. But the state won’t be calling him as a witness. I think the jury is going to wonder why. 

Trial lawyers sometimes refer to this as an “empty chair” argument - why did this person who is central to the case not take the stand and testify? In a criminal case where the state has the burden of proof, that empty chair usually will weigh against the prosecution.

Weisselberg is currently serving time at Rikers Island after pleading guilty to perjuring himself on Trump’s behalf during the New York civil fraud case. (That wouldn’t keep him from testifying - prisoners are brought in to testify all the time.) It’s true he might lie again to protect Trump - but apparently we don’t know. We learned during a conference between the judge and the attorneys that the prosecutors apparently have not spoken to Weisselberg about this case and did not have him testify in the grand jury.

In other words: prosecutors were investigating an alleged conspiracy involving A, B, and C. A testified and says they all did it, but has some credibility issues. B denies it. I can’t imagine indicting B for the conspiracy without even attempting to find out what C would say about it. But that’s apparently what the DA did here. That really floored me.

It’s true that under an unusual feature of New York law, a witness called to the grand jury automatically receives immunity. So putting Weisselberg in the grand jury would have meant immunizing him for these crimes. But prosecutors clearly did not intend to indict him for this scheme anyway. Because he would be immunized, he couldn’t assert the 5th and would have to testify or face contempt. So why not get his testimony locked in under oath?

If prosecutors had called Weisselberg to the grand jury there are two main possibilities: he corroborates Cohen and implicates Trump, or he disagrees with Cohen and exonerates Trump. Suppose he backs Cohen up - then you have a second key witness to the central events of your case. Your evidence just got twice as strong. Sure he’s a convicted perjurer, but so is Cohen, your star witness. It would still give you two witnesses to Trump’s state of mind instead of just one. He might even have additional incriminating information that Cohen did not have.

Or assume he lies again to protect Trump, which may be more likely. You would have to turn that over to the defense as exculpatory information. But at least you know what he would say and have him locked in under oath. You can investigate what he says to see if it holds water, and develop evidence to rebut it if you think he lied. If you indict Trump anyway and Weisselberg ends up testifying for the defense, you have his prior sworn testimony with which to impeach him. And if you can prove he lied, you can indict him again for perjury.

Some might argue: he’s obviously going to lie to protect Trump. Why bother putting him in the grand jury? But that’s not a reason not to make him testify. If you think he’s going to lie, you put him in the grand jury and make him do it. If he’s going to lie, it's much better to find that out in the grand jury, before you indict and where you control the examination, than to wait until trial where the defense may call him and blow your case out of the water and you're hearing it all for the first time. 

But there’s another possibility: he exonerates Trump, and you decide maybe he isn’t lying. Or at least he raises enough doubt about the case that you decide not to indict. Prosecutors can’t just say, "His testimony might be bad for my case - I don't want to know," and not speak to such a key witness. They have a higher obligation to investigate and seek the truth, not just to try to win.

I can’t imagine indicting a criminal case without even trying to get the grand jury testimony of such a critical witness who was readily available. That’s doubly true with a seven year old, marginal case where the defendant is a former president of the United States.

It’s clear the defense isn’t going to call Weisselberg at trial either, so they probably believe his testimony would not be helpful - another indication the prosecution should have tried to get that testimony. At this point the DA can’t really call him at trial, having no idea what he would say. The time to learn that was during the grand jury investigation.

So the jury will be left to wonder why this critical witness, whom they heard so much about and who was at the center of all these events, did not testify. The judge may instruct them that Weisselberg was unavailable and that they should not speculate about why he wasn’t called. But they are human, and I think they are going to wonder about that empty chair.

Regardless of its effect on the outcome of the trial, if it’s true the DA made no attempt to get Weisselberg’s testimony before indicting this case, I think that was irresponsible. I can’t think of any tactical or legal justification for not putting Weisselberg in the grand jury. It's completely baffling to me. 

D.C. Federal Case - January 6 Allegations