Legal analysis
The companies that have admitted to paying President Donald Trump’s personal attorney have said that while hiring Michael Cohen may have been a mistake, no laws were broken in the process.
They may be right. The corporate payments to Essential Consultants, Cohen’s one-man Delaware company also used to pay off adult film actress Stormy Daniels, do not appear to fit squarely within the definition of bribery or extortion under federal law. But they are getting very close.
Cohen is alleged to have received large sums of money from pharmaceutical giant Novartis, AT&T, the state-run Korea Aerospace Industries, and a company controlled by a Russian oligarch. The lawyer has disputed some of the claims, but had not offered details.
According to Novartis, Cohen contacted the Swiss company after the 2016 election "promising access" to the new administration, which resulted in Novartis signing a one-year, $1.2 million contract with Cohen.
AT&T has since admitted that, after the 2016 election, it entered into a consulting agreement with Cohen "to help [AT&T] understand" how Trump might approach policy issues of concern to the telecommunications industry.
It sounds like influence peddling. It sounds like rogue lobbying. It's not clearly a federal crime. But with every new revelation about the corporate payments, the reported conduct gets closer to the kind prohibited by federal anti-corruption statutes.
U.S. Attorneys have a vast array of options in their anti-corruption arsenal: the federal bribery statute, gratuities, extortion under the Hobbs Act, federal programs bribery under Section 666, the mail-fraud statute, and even the Racketeer Influenced and Corrupt Organizations Act (RICO). The federal bribery and extortion statutes are just two of the favorites of U.S. Attorneys.
The federal official bribery statute, 18 U.S.C. § 201, requires that the defendants corruptly intended to engage in a "quid pro quo," giving or receiving something of value in exchange for an official act. The statute applies to all federal public officials, which means that Cohen’s arrangements or promises must involve a federal official. However, the law may also reach bribes given to third parties if a public official sought them with the intent to be influenced.
Ultimately, though, the bribery statute requires proof of an "official act." The Supreme Court in the 2016 case McDonnell v. United States restricted this formerly expansive concept to two elements: First, there must be a specific, focused matter before the official that involves the exercise of government power. Second, there must be some decision to be made on that matter.
Setting up a meeting, calling up a senator friend, or hosting a meet-and-greet does not, by itself, qualify as an "official act." But it's still dangerously close. The issue is: What exactly did Cohen claim he could provide to these companies?
In a recent interview with MSNBC’s Rachel Maddow, Daniels’ attorney, Michael Avenatti, sharply framed the issue under the bribery statute when he charged, "[Cohen] was selling access to the highest office in the land. At best, that’s what he was doing. At best."
He's right. In a post-McDonnell bribery world, "selling access" might indeed be the "best" scenario for Cohen, so long as "access" didn’t rise to the level of influencing an "official act."
Prosecutors also frequently charge Hobbs Act extortion. Extortion differs from bribery in that bribery involves two crimes: one by the payor and one by the payee. Extortion involves a victim, who is often facing a threat of financial ruin if he doesn’t accede to the demands of the extortioner. However, the majority of courts do not extend the Hobbs Act to private citizens, as seen in one case where a private attorney solicited bribes from clients to influence public officials. On the other hand, other courts have upheld extortion convictions for private citizens, viewing them as accomplices of or conspirators with the public official.
Novartis apparently allowed a contract with Cohen and Essential Consultants to lapse early in 2018 because canceling it early "might have caused anger," according to reports quoting an unnamed insider. If true, this would be incriminating evidence in an extortion "under color of official right" prosecution. This alone tends to show (1) some involvement of a public official (the president); (2) a corporate victim’s belief that the official has influence over their economic fortunes; and (3) the fear of some coercive misuse of public office. These are all important pieces of evidence in any Hobbs Act extortion case.
Extortion and bribery are ultimately just a tiny sampling of the anti-corruption options available to prosecutors. With the revelation of these corporate payments to Cohen’s Essential Consultants, three critical questions will determine a large swath of potential liability under these laws: First, what did Cohen and his company promise to other corporations? Second, what did those corporations reasonably believe he could deliver? Third, was any public official, or any "official act," involved?
Danny Cevallos is an MSNBC legal analyst. Follow @CevallosLaw on Twitter. He attended the American Swiss Foundation Young Leader's Conference in Switzerland in 2016, which was partially funded by Novartis.