A former top executive at the Trump Organization took the witness stand in Donald Trump's criminal trial Monday to describe his role in the payments the former president made that led to charges he falsified business records, while jurors got to see the Trump-signed checks at the heart of the case.
Former Trump Organization controller Jeff McConney testified that he was told Trump was reimbursing his then-lawyer Michael Cohen $130,000 but that he didn't know what exactly the repayment was for. McConney said neither his immediate supervisor, then-chief financial officer Allen Weisselberg, nor Trump told him what the payments were for.
Prosecutors charge Trump was repaying Cohen the amount he shelled out to porn star Stormy Daniels in the closing days of his 2016 presidential campaign to keep her quiet about a sexual encounter she alleged she had with Trump. Trump denies her claim.
Weisselberg, he said, told him the payments should be "grossed up" — essentially doubled — to spare Cohen from losing money come tax time.
Prosecutors also called Deborah Tarasoff, an accounts payable supervisor at the company and the first current Trump Organization employee to take the stand. Prosecutors used her testimony to display the $35,000 checks to Cohen that Trump signed and are at the heart of prosecutors’ case.
At the beginning of Monday's proceedings, the judge presiding over the case fined Trump for violating his gag order and threatened to impose jail time if he continued to do so.
“The last thing I want to do is to put you in jail. You are the former president of the United States and possibly the next president, as well,” Judge Juan Merchan warned Trump, but “I will, if necessary.”
In his written ruling, Merchan found Trump in contempt for having said in an interview that his jury is overwhelmingly made up of Democrats. The gag order bars Trump from talking about the jury.
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The violation is the 10th that Merchan has found Trump in contempt for, and he noted the maximum fine he's allowed to impose doesn't seem to have had any impact. “It appears that the $1,000 fines are not serving as a deterrent," Merchan said, leaving him with one other option.
"There are many reasons why incarceration is truly a last resort for you,” he said. “To take that step would be disruptive to the proceedings,” to court officers, the Secret Service, prosecutors and court staff members, he said, "but at the end of the day, I have a job to do.”
Trump's “continued willful violations of this court’s orders threaten the administration of justice and constitute a direct attack on the rule of law. I cannot allow that to continue,” Merchan said of Trump, who sat with his arms crossed while he spoke.
Ex-company controller takes the stand
McConney, the prosecution's 10th witness, began by discussing the company's ledger and accounting practices — both of which are at issue. Trump is accused of falsifying business records by classifying the money to repay Cohen for a hush money payment to Daniels as legal expenses. He has pleaded not guilty to 34 counts of falsifying business records, a low-level felony.
McConney, who said the Trump Organization is paying his legal bills, testified Weisselberg told him to pay Cohen in January 2017. They discussed the need to repay Cohen the $130,000 and $50,000 more for tech services. Weisselberg also instructed that Cohen should be “grossed up” to cover his state, federal and city taxes, McConney said.
They eventually decided that Cohen would be paid double the $180,000 he spent, plus a $60,000 bonus. The total $420,000 would be paid in increments of $35,000 a month, McConney said.
Asked by prosecutor Matthew Colangelo, “Are you aware of another instance where an expense reimbursement was doubled to account for taxes?" he answered, "No."
McConney said he later asked Cohen for invoices so he could begin paying him. Cohen sent him an email that said, "Pursuant to the retainer agreement, kindly remit payment for services rendered for the months of January and February, 2017," each for $35,000.
Asked whether he ever saw a retainer agreement, McConney said, "I did not." In an email shown in court, Weisselberg told McConney on Feb. 14, 2017, that the payments were approved as "per agreement with Don and Eric," the Trump sons who took over day-to-day management of the company after their father took office.
The next month and afterward, the checks were paid from Trump's personal account instead of his trust, so the check had to be signed by Trump at the White House and then sent back to the company, which "was a whole new process for us," McConney said.
Trump's 2016 debt to Cohen wasn't mentioned in his 2017 federal financial disclosure form, McConney, who prepared the disclosure form, acknowledged. It was added the following year, after news of the payment had become public.
“In the interest of transparency," the filing said, in 2016 "expenses were incurred by one of Donald J. Trump’s attorneys, Michael Cohen. Mr. Cohen sought reimbursement of those expenses and Mr. Trump fully reimbursed Mr. Cohen in 2017,” said the 2018 disclosure, which was signed by Trump.
On cross-examination, Trump's attorney Emil Bove asked McConney whether Trump had given him any direction about the Cohen payments. He said he hadn't.
"Payments to lawyers by the Trump Organization are legal expenses, right?” Bove asked. "Yes, sir," McConney replied.
Weisselberg had 'his hands in everything'
After McConney finished testifying, Tarasoff took the stand and testified that Weisselberg was a person who "had his hands in everything" but would run financial decisions by Trump.
Tarasoff, who has worked at the company for over 20 years, also said Cohen's office was at one point right next to hers.
Both she and McConney testified at the Trump Organization's criminal tax fraud trial in 2022, which the Manhattan district attorney's office also prosecuted. The company was convicted and fined $1.6 million. Weisselberg pleaded guilty in that case and testified against the company, and he was sentenced to five months in jail.
Weisselberg is in jail after he pleaded guilty to perjury charges stemming from the New York attorney general's civil fraud case against Trump and his company. That case resulted in a $464 million judgment, the bulk of which was against Trump and his company, but Weisselberg and McConney were penalized, as well. The ruling is being appealed.
At the end of court Monday, prosecutor Joshua Steinglass estimated that the DA's office has two more weeks of evidence to present.
In his opening statement in the case, Colangelo said that Trump, Cohen and David Pecker, the former National Enquirer publisher who was involved in the Daniels' discussions, conspired in a bid to influence the 2016 election and that Trump “covered up that criminal conspiracy by lying in his New York business records over and over and over again.”
Trump's attorney Todd Blanche said in his opening statement that nondisclosure agreements are legal and that there was nothing criminal about Trump’s payments to Cohen. As for the conspiracy allegations, Blanche said, “I have a spoiler alert: There’s nothing wrong with trying to influence an election. It’s called democracy.”
Merchan found Trump in contempt last week and fined him $9,000 for violating the gag order barring him from publicly disparaging potential witnesses in the case and others.
