Watchdog group asks DOJ to probe Cohen dealings

Watchdog group asks DOJ to probe Cohen dealings
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A government watchdog group is asking the Justice Department and officials on Capitol Hill to investigate whether President TrumpDonald John TrumpArizona GOP Senate candidate defends bus tour with far-right activist Alyssa Milano protests Kavanaugh in 'Handmaid's Tale' costume Bomb in deadly Yemen school bus attack was manufactured by US firm: report MORE's longtime personal lawyer Michael Cohen violated lobbying laws.

Public Citizen on Thursday sent a complaint to Attorney General Jeff SessionsJefferson (Jeff) Beauregard SessionsSantorum: Mueller could avoid charges of McCarthyism by investigating DOJ, FBI 8,000 new ways the Trump administration is undermining immigration court independence Watergate's John Dean rips Trump: I doubt you have any idea what McGahn told Mueller MORE, as well as offices in the House and Senate that oversee the compilation of lobbying disclosure records, requesting a probe into whether Cohen willingly failed to file reports about his clients.

The complaint comes after reports surfaced this week that Cohen amassed a handful of corporate clients following Trump's election in 2016, and that the lawyer reportedly promised them access to the new administration.

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“The public record thus far strongly suggests that Cohen made specific solicitations to companies who had business pending before the Trump administration, proposing that he could best assist in the pursuit of their interests, which could well constitute lobbying activity,” Public Citizen wrote in its complaint.

“The public record also raises serious questions about the comingling of funds between Cohen’s firm and Trump and whether paying clients expected official favors in return for enlisting [his] services.”

Pharmaceutical giant Novartis said this week that it hired Cohen in early 2017 to provide strategies for government affairs and lobbying activities, but quickly realized that he would be “unable to provide the services that Novartis had anticipated related to US healthcare policy matters and the decision was taken not to engage further."

However, they kept the contract alive — ultimately paying Cohen $1.2 million over a year. One unnamed employee at the company told industry publication Stat that it did not cancel the relationship because “it might have caused anger.”

Another company, AT&T, reportedly paid Cohen as much as $600,000 for his insights on the Trump administration.

The companies that contracted Cohen paid him through a shell company, Essential Consultants LLC, the entity that Cohen set up shortly before the 2016 election to pay adult-film actress Stormy Daniels $130,000 to keep quiet about her alleged affair with Trump a decade earlier.

“The kindest explanation of Novartis and AT&T’s actions is that they entered into incredibly stupid, sleazy and failed deals with Michael Cohen,” Robert Weissman, president of Public Citizen, argued in a statement Thursday.

“But the emerging evidence suggests more than just stupidity. At minimum, the arrangements appear likely to have violated lobby disclosure rules. But faced with the pay-to-play, transactional Trump administration, it remains entirely possible that Novartis and AT&T violated bribery laws.”

The activity has renewed the debate and attention focused on “shadow lobbying,” which has long existed in Washington in an effort to evade the scrutiny that comes with working with K Street firms.

Those advocating for clients will often label themselves as consultants or strategists, while still engaging in typical lobbying activity, and not register as lobbyists. 

There are specific criteria around what triggers a lobbying registration, primarily around how many contacts to members or aides on Capitol Hill and high-ranking officials in the executive branch. A person must make more than one lobbying contact and spend 20 percent or more of their time advocating for a client over a three-month period to be considered a lobbyist.

The Public Citizen complaint questions whether Cohen has violated the Lobbying Disclosure Act, which covers domestic lobbying, or the Foreign Agents Registration Act (FARA). The two laws have drastically different standards for who should register.

The foreign lobbying law concerns arise from Cohen’s work for Novartis, a Swiss company, among other clients. Although Cohen was working for the company's U.S. subsidiary, the activity could be captured under FARA because of the parent organization. 

Consultants for U.S. subsidiaries of foreign-owned companies — if those companies are not owned, controlled or influenced by a foreign government or official — have the option to register under domestic lobbying laws. 

It is an option that nearly all the advocates for American subsidiaries choose to take because there are much fewer disclosure requirements. 

Cohen’s business dealings are already under investigation by federal prosecutors in New York. Investigators there received a criminal referral from special counsel Robert MuellerRobert Swan MuellerSasse: US should applaud choice of Mueller to lead Russia probe MORE

“It is possible that even more nefarious violations of influence-peddling laws are at stake,” Lisa Gilbert, vice president of legislative affairs for Public Citizen, said in a statement. “Cohen’s corporate clients have huge financial interests at stake before the Trump administration, and they are paying exorbitant fees to Cohen. It’s hard to believe these payments are simply for some advice.”