Cohen pleads guilty

US President Donald Trump's former lawyer Michael Cohen has pleaded guilty to violating campaign finance laws.

Background

Michael Cohen is a long-time personal lawyer to Donald Trump. Cohen was charged for transgressions related to non-payment of taxes, making a false statement to a financial institution and wilfully causing an unlawful corporate contribution. Cohen first came under scrutiny after it surfaced that he had paid US$ 130,000 to a porn star who claimed to have had an affair with the President, a claim that the President has denied.

Read more of our extensive analysis of the allegations against Michael Cohen here.

Analysis

Michael Cohen, who worked as President Trump’s personal attorney, pleaded guilty on Tuesday to charges of bank fraud, tax fraud and campaign finance law violations, delivering a potentially significant legal blow to the president.

The charges against Cohen included tax fraud, false statements to a bank and campaign finance violations tied to his work for Trump, including payments Cohen made or helped orchestrate that were designed to silence women who claimed to have had affairs with the then-candidate.

The charges also included that Cohen acted with Trump and his allies, including David Pecker, the CEO of the National Enquirer's publisher, American Media Inc., to suppress potentially damaging claims against the now-President.

While Trump himself isn't named, the court filing refers to an Individual-1, who by January 2017 had become president of the United States.

Though not named in the plea deal filed in court, the women whom Cohen helped silence are two who have since gone public with their claims of sexual encounters or affairs with Trump: a porn star named Stephanie Clifford, who goes by the stage name Stormy Daniels, and a former Playboy model named Karen McDougal. Trump had on both occasions denied the claims.

Sentencing has been set for December 12 under a plea agreement with prosecutors, which calls for a sentence of between 46 and 63 months in prison. Bail was set at $500,000. The plea bargain could increase legal risks for the President, as it raises the possibility that Cohen will provide information to US Special Counsel Robert Mueller in his investigation into Russian meddling in the 2016 election and possible coordination with the Trump campaign.

Deputy U.S. Attorney Robert Khuzami said at a press conference that Cohen failed to disclose $4.1 million in reported income, which allowed him to obtain various loans to which he would otherwise have not have been able to access. Cohen said “a candidate for federal office” had directed him - presumed to be Mr. Trump himself - to break federal election laws.

He was asked whether he had consumed any alcohol or drugs before making his guilty plea. Cohen told the judge he had only had a glass of 12-year-old Glenlivet, a single-malt scotch, with dinner the night before.

Robert Khuzami, the deputy US attorney for the Southern District of New York, said: "Mr. Cohen disregarded that training, disregarded that tradition and decided that he was above the law, and for that, he will pay a very, very serious price."

At almost the same moment Trump’s former campaign chairman Paul Manafort was convicted in Alexandria, Virginia, of eight financial crimes in the first trial to come out of special counsel Robert Mueller's sprawling Russia investigation.

Assessment

Our assessment is that this might end up being two doses of bad news for Trump. We believe the plea deal could be a significant blow for Trump as Cohen was part of his inner circle for more than a decade. We feel that President Trump risks being impeached if the Democrats are able to take back the house.