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Trump's biggest nightmare in the Russia investigation may be about to come true

Business Insider Australia logo Business Insider Australia 14/06/2018 Sonam Sheth

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President Donald Trump was furious when it surfaced in April that the FBI had raided properties of Michael Cohen, his longtime lawyer. Soon after, people in Trump's orbit began discussing the possibility that Cohen would flip.

They were worried, experts said, because as Trump's lawyer and a member of his innermost circle, Cohen could do a lot of damage if he were backed into a corner.

Now, it looks as if he just might be.

Donald Trump wearing a suit and tie: Donald Trump in Washington this month. © Win McNamee/Getty Images Donald Trump in Washington this month. ABC News reported on Wednesday that Cohen may be poised to cooperate with federal prosecutors in New York after his lawyers stopped representing him in the Manhattan US attorney's investigation. That case focuses on whether Cohen committed bank fraud, wire fraud, or campaign-finance violations related to his work for Trump and his payment to the adult-film actress Stormy Daniels shortly before the 2016 presidential election.

CNN later said Cohen had found a new lawyer, but the outlet didn't have a name to report. A source told CNN that Cohen hadn't met with prosecutors to try to cut a deal and that it was unclear whether he was trying to turn on Trump. NBC News' Katy Tur also reported that Cohen expected to be arrested soon.

Patrick Cotter, a longtime former federal prosecutor who has worked with members of the special counsel Robert Mueller's team, said it was likely that Cohen's initial lawyers split because he raised the possibility of cooperating with prosecutors amid his mounting legal troubles.

"There are a lot of defence lawyers who don't want to be associated with a client who cooperates because it hurts their reputation," Cotter said. "So it's entirely likely they pulled out of representing him and told him to find a new defence lawyer who will work with him to strike a deal."

'The damage Cohen can do is far greater than everybody else combined'

Michael Cohen © Spencer Platt/Getty Images Michael Cohen

If Cohen agrees to cooperate, it would be part of what's known as a global resolution. That means Cohen would be cooperating not only with the Manhattan US attorney's office but with any other federal criminal inquiries - like the Russia investigation - that he may have information about.

"Anyone that takes care of problems and buries the bodies is not someone you want to testify against you," said Jeffrey Cramer, a former federal prosecutor who spent 12 years at the Justice Department. "The damage Cohen can do is far greater than everybody else combined."

Cohen has been referred to at different times as Trump's fixer, pit bull, and consigliere. He is a key figure in several threads of the Russia investigation, including:

  • The Trump Organisation's push to build a Trump Tower in Moscow at the height of the campaign.
  • The proposal for a Russia-friendly "peace plan" in February 2017 that called for the US to lift sanctions on Russia in exchange for Moscow withdrawing its support for pro-Russia separatists in eastern Ukraine.
  • The so-called Steele dossier's allegation that Cohen secretly travelled to Prague in the summer of 2016 to meet with representatives of the Kremlin.

Alex Whiting, a longtime former federal prosecutor in Boston and Washington, DC, said Cohen's potential cooperation would be "a very big deal for both the Russia investigation and Trump's actions and knowledge."

"By all accounts, Cohen was close to Trump and was relied on by Trump to clean up some of his messes," Whiting said. "If Trump broke the law with respect to collusion with Russia during the campaign or in other respects, it is very possible that Cohen knows about it."

Whiting also pointed to previous news reports highlighting that Trump and his allies were nervous about Cohen flipping.

"Now it may be happening," Whiting said.

What would happen if Cohen flipped

Donald Trump © Leon Neal/Getty Images Donald Trump

The extent of what Cohen knows that could fall outside attorney-client privilege is unclear.

Cotter said that before the government agrees to a plea deal, prosecutors typically sit down with a defendant's attorney and later with the defendant for a proffer session, during which a defendant tells prosecutors what they know.

If prosecutors decide the information they're getting is valuable enough, they agree to a plea deal with a defendant.

While all parties would need to take steps to ensure attorney-client privilege is protected in the event Cohen cooperates, there's one important exception that would not fall under that umbrella, known as the crime-fraud exception. The rule states that a communication between an attorney and a client is not protected if it was made with the intent to commit or further a crime.

"Just think about Cohen's proximity to Trump, his longevity in the Trump orbit, the fixer nature of his role for Trump, and his involvement in matters of interest to both the Russia and Stormy Daniels investigations," said Andrew Wright, a professor at Savannah Law School who served as an associate White House counsel under President Barack Obama.

Wright added: "This is a seismic development."

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