Trump trial jurors see financial documents to disguise hush money reimbursement

President Trump speaking to reporters leaving court for the day from his criminal trial in New York on Monday. Credit: AP

A pair of Trump Organization financial managers Monday described in detail the paper trail at the heart of the hush money trial - 34 invoices, checks, and ledger entries – that form the basis of former President Donald Trump's 34 criminal charges of falsifying business records.

Prosecutors say the payments were intended to disguise reimbursements to Trump’s former top lawyer, Michael Cohen, to reimburse him for paying $130,000 to pornographic film actress and director Stormy Daniels to keep her silence during the 2016 campaign about the sexual encounter she says she had with Trump a decade earlier - a year-and-a-half after he had married former First Lady Melania Trump, his third wife.

Jeffrey McConney, the company’s former controller, and Deborah Tarasoff, the current accounts payable supervisor, testified about $35,000 monthly payments they executed to Mr Cohen from January through December 2017, Trump’s first year in the White House.

Mr Cohen, who had been the company’s top lawyer, did not get a job in the Trump Administration and left the company’s payroll on January 27, 2017.

He set up shop in his own Manhattan office, outside Trump Tower, and billed the company as an independent vendor.

Mr McConney testified, at a meeting in January 2017, that Trump Organization Chief Financial Officer Allen Weisselberg, his boss, produced a First Republic Bank statement showing a $130,000 withdrawal and wire by Cohen’s LLC, Essential Consultants, to Ms Daniels’ attorney Keith Davidson, the amount of her nondisclosure agreement negotiated by Mr Davidson and Mr Cohen.

Mr McConney was not told why Mr Cohen had sent the money to Mr Davidson.

Mr Weisselberg’s handwritten notes on the bank statement indicated the extra payback breakdown he wanted - the $130,000 Mr Cohen spent out of his personal funds; another $130,000 to cover an estimated 50% federal, state, and city income taxes; $50,000 for technical expenses; and $60,000 as a bonus for 2016 - according to Mr McConney, who oversaw accounting.

Mr McConney took notes outlining those numbers on a Trump notepad and kept their notes stapled to the bank document in a locked drawer in his office.

“That was Allen telling me what he wanted to do,” Mr McConney testified about the notes.

“Are you aware of another expense reimbursement that was doubled for taxes?” Assistant Manhattan District Attorney Matthew Colangelo asked.

“No,” Mr McConney said.

On Feb. 6, 2017, Mr McConney sent an email to Cohen. The subject line: “$$.”

“Mike,” Mr McConney wrote, “Just a reminder to get me the invoices you spoke to Allen about.”

Mr Cohen responded but did not send invoices. Mr McConney nudged him again by email on February 14.

“I needed invoices to get checks cut or wires released,” Mr McConney testified.

Mr Cohen wrote back, “Please remind me of the monthly amount.”

Mr McConney told him - $35,000.

Mr Cohen typed an invoice, embedded into an email reply, and addressed it to Weisselberg, requesting $35,000 each for January and February “pursuant to the retainer agreement.”

No cameras are allowed inside the Manhattan courtroom where Trump's hush money trial is underway. Credit: CNN

Mr Weisselberg forwarded the email to Mr McConney, adding: “OK to pay as per agreement with Don and Eric,” referring to the president’s sons, Donald Jr. and Eric.

Mr Tarasoff testified that Weisselberg ran all financial decisions by Trump.

The CFO could approve up to $2,500 until 2015, and then afterward up to $10,000, but only Trump or his sons could approve greater amounts, she said.

Eric Trump sat in the first row of the courtroom behind his father during Monday’s testimony.

Initially, the funds to reimburse Mr Cohen came from the Donald J. Trump Revocable Trust, which held the company’s assets while Trump was president.

Eric Trump and Mr Weisselberg signed the first Cohen check, for $70,000, for the January and February 2017 invoices.

Don. Jr. and Mr Weisselberg signed the second Cohen check, for $35,000, for March.

On March 16, 2017, Mr McConney told Mr Tarasoff: “Please pay. Post to same g/l as last month.”

The rest of the payments followed the same routine.

Mr Cohen emailed an invoice to Mr Weisselberg, who forwarded it with his approval to Mr McConney, who then asked Mr Tarasoff to cut the check and post the payment to the company’s general ledger as legal expenses, coded 51505.

From April 2017 onward, Mr McConney switched the source of the reimbursements from the Donald J. Trump Revocable Trust to the "DJT" account – the president’s personal checking account – and had the checks sent by Federal Express to the White House for him to sign.

Mr McConney never saw a Mr Cohen retainer agreement and said it was unusual for the legal department not to be involved.

Mr Tarasoff has worked for 24 years for the company. Mr McConney worked there for 37 years until retiring last year. Both employees had offices on the 26th floor where Trump and the legal department had offices.

Of Mr Weisselberg, Mr Tarasoff said, “He had his hands in everything.”

On cross-examination, Trump's defense attorney Emil Bove asked Mr McConney if Mr Weisselberg ever told him Trump had instructed him to arrange the Cohen payments the way he did.

“Allen never told me that,” Mr McConney said. But he also knew this: “An expense reimbursement is not taxable.”

Mr McConney said he never talked to Cohen about the 2017 payments and his interactions with him were “minimal.” Nor did Mr McConney know what legal work Cohen might have done for Trump when he was in the White House.

“You don’t know what he did?” Mr Bove asked of Cohen’s services rendered.

“That’s correct,” Mr McConney said.

Mr McConney also said he was not privy to any conversations among Trump, Weisselberg, and Cohen about the Cohen-Daniels expense reimbursements.

“This was all happening above your head?” prosecutor Colangelo asked.

“Yes,” Mr McConney said.

“You were told to do something, and you did it?” Colangelo said.

“Yes,” Mr McConney said.

By the end of December 2017, the Trump Organization had received and approved 11 Mr Cohen invoices and sent him 12 checks for $35,000 amounting to $420,000, the evidence showed.

Trump Organization ledgers for 2017 and 2018 did not list any legal expenses paid to Mr Cohen.

However, a 2019 ledger, for the combined two year-period, from January 1, 2017, through December 31, 2018, did show the first three Cohen payments, totaling $105,000, issued by Donald J. Trump Revocable Trust, and nine payments totaling $315,000 from Trump’s personal bank account.

The company reported $420,000 in non-employee compensation to Cohen in 2017 to the Internal Revenue Service, and a federal Office of Government Ethics annual report, signed by Trump in May 2018, indicated Trump had reimbursed Cohen for expenses in 2017 between $100,000 and $250,000.

As the trial reconvened Monday, before the jury returned to the courtroom, New York Supreme Court Judge Juan Merchan announced he had again found Trump in contempt of court for violating the court’s gag order prohibiting the defendant from making hostile public remarks about potential witnesses, jurors, and families of the judge or prosecutors involved in the case.

The charges levied against Trump refer to hush-money payments made to Stormy Daniels. Credit: AP

Mr Merchan ruled Trump violated the order on April 22, after the jury was seated, by making public statements in a news interview about the jury and how it was selected.

"That jury was picked so fast - 95% Democrats. The area's mostly all Democrat," Trump said in an interview with right-wing streaming network Real America's Voice.

"It's a very unfair situation that I can tell you."

Mr Merchan previously found Trump in contempt of court for nine previous violations, fining him the maximum allowed by law, $1,000 per instance, or $9,000. On Monday, Merchan threatened to jail Trump if another violation occurs.

“It appears, for the tenth time, that the $1,000 fines are not serving as a deterrent.

Therefore, going forward this court will have to consider a jail sanction," Mr Merchan announced.

“Mister Trump, you have to understand, the last thing I want to do is put you in jail,” the judge said, addressing the former president.

“But I have a job to do, and part of that job is to protect the dignity of this judicial system.”

Mr Merchan said he understood the “magnitude” and the “broader implications” of incarcerating a former and possibly future president, but he told Trump his “continued willful” violations of the gag order are a “direct attack on the rule of law.”

"So, as much as I don't want to impose a jail sanction,” Mr Merchan warned Trump, “I want you to understand that I will, if necessary and appropriate."

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