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The Latest | Former Trump Organization controller testifies about reimbursement payments to Cohen

May 6, 2024, 3:12 AM | Updated: 9:44 am

NEW YORK (AP) — Jurors in Donald Trump’s hush money trial heard for the first time how and why Michael Cohen’s reimbursement for payment the Stormy Daniels’ payment was entered as a legal expense.

Former Trump Organization controller Jeffrey McConney testified Monday about conversations he had with the company’s longtime finance chief Allen Weisselberg in January 2017 about reimbursing Cohen for $130,000 he’d paid to lawyer Keith Davidson, Daniels’ then-lawyer.

McConney said handwritten notes from Weisselberg detailed how much to reimburse Cohen for. All expenses had to be entered in the general ledger with a category code, and “we were paying a lawyer,” McConney explained. So it was coded as such.

Prior to witness testimony, Trump was sanctioned a second time for violating a gag order barring him from publicly speaking about witnesses, jurors and others connected to the trial.

Judge Juan M. Merchan fined him $1,000 and warned that going forward, additional violations could result in jail time.

The trial is in its 12th day.

Overall, prosecutors are inching further into those in Trump’s orbit, setting the stage for a deeper dive into what they say was a scheme to influence the 2016 presidential election by buying and burying negative stories about the then-candidate.

Cohen is the prosecution’s star witness and went to prison for the hush money scheme.

Trump has pleaded not guilty to 34 felony counts of falsifying business records.

The case is the first-ever criminal trial of a former U.S. president and the first of four prosecutions of Trump to reach a jury.

Currently:

— Read the judge’s ruling on Trump’s most recent gag order violation

— Hush money, catch and kill and more: Terms to know in Trump trial

— What Trump’s gag order means in his hush money case

— Key players: Who’s who at Donald Trump’s hush money criminal trial

— The hush money case is just one of Trump’s legal cases. See the others here

Here’s the latest:

MCCONNEY SAYS HE WASN’T TOLD TO RECORD PAYMENTS AS LEGAL EXPENSES

former Trump Organization controller Jeffrey McConney testified Monday that Donald Trump never directed him to log Michael Cohen’s payments as legal expenses, nor did Allen Weisselberg relay to him that Trump wanted them logged that way.

In fact, McConney said he never spoke to Trump about the reimbursement issue at all.

As for Cohen, McConney said his interactions with Trump’s then-lawyer were “minimal.” He said that other than emails about invoices, he never spoke to Cohen about the reimbursement arrangement.

Though he testified that he logged Cohen’s payments as “legal expenses” because Cohen was a lawyer, McConney again appeared somewhat skeptical of his work.

At the time of the payments, “Mr. Cohen was a lawyer,” Bove said, seeking to underscore that the payments were legitimate legal expenses.

“OK,” McConney testified, spurring laughter throughout the courtroom. “Sure. Yes.”

CROSS-EXAMINATION OF MCCONNEY BEGINS

Donald Trump’s attorneys began cross-examination of Jeffrey McConney on Monday with questions that hit on a key defense theme: that Michael Cohen was a lawyer, and “payments to lawyers are legal expenses.”

McConney agreed that such payments were.

It’s a point the defense wants to make because part of its argument is that there was nothing illegal about the way Cohen was paid for his handling of the $130,000 Stormy Daniels pay.

Underscoring the point, Trump lawyer Emil Bove directed the former Trump Organization controller to the signature under Cohen’s email address, which read: “Personal attorney to President Donald J. Trump.”

“It doesn’t say ‘fixer’ does it?” Bove asked, referencing a title commonly applied to Cohen. “No,” McConney responded.

The email was from February 2017, just after Cohen left the company’s full-time payroll. It listed his title as “Personal Attorney to President Donald J. Trump,” with a Gmail address, rather than a Trump Organization email.

Bove posited that by that point, Cohen was “akin to a vendor to President Trump” and was paid accordingly.

JURORS PAY ATTENTION AS MCCONNEY GOES THROUGH DOCUMENTS

While noontime testimony in Donald Trump’s criminal trial took a dry turn with Jeffrey McConney authenticating and describing various ledger printouts and tax documents, jurors nevertheless watched the former Trump Organization controller and some appeared to take notes. One juror cradled his chin in his hand.

If not the juiciest testimony heard so far, it’s legally important, allowing the documents to be entered into evidence. They show the source and scope of payments, including that Cohen was paid $315,000 out of Trump’s personal account and $105,000 out of the trust that handled his assets while he was in the White House.

WHERE IS WEISSELBERG?

Like Michael Cohen, Allen Weisselberg’s has been name checked numerous times during Donald Trump’s hush money trial but is otherwise absent from the courtroom.

The former Trump Organization executive, described by a witness Monday as the architect of an arrangement to reimburse Cohen for a hush-money payment, is currently in jail for lying under oath in another Trump-related case.

Weisselberg, 76, was sentenced last month to five months in jail for lying under oath while testifying in New York Attorney General Letitia James’ civil fraud lawsuit against Trump. He is currently serving the sentence at New York City’s notorious Rikers Island jail complex.

It’s his second time behind bars. The ex-chief financial officer served 100 days last year for dodging taxes on $1.7 million in company perks, including a rent-free Manhattan apartment and luxury cars. He was also ordered to pay $1 million as part of Trump’s civil fraud judgment.

Weisselberg’s plea agreement does not require him to testify at the hush money trial, and neither side has indicated it plans to call him as a witness.

Cohen told Congress in 2019 that it was Weisselberg who decided how to structure his reimbursement for the payment to Daniels. Cohen said Weisselberg paid the money out over 12 months “so that it would look like a retainer.”

CHECKS TO COHEN WERE PAID FROM TRUMP’S PERSONAL ACCOUNT, MCCONNEY SAYS

After paying the first two reimbursement checks to Michael Cohen through a trust, the remainder of the checks — covering payments for April to December 2017 — were paid from Donald Trump’s personal account, Jeffrey McConney testified on Monday.

With Trump, the only signatory to that account, now in the White House, the change in funding source necessitated “a whole new process for us,” McConney added.

“Somehow we’d have to get a package down to the White House, get the president to sign the checks, get the checks returned to us and then get the checks mailed out,” he testified.

Cohen was being reimbursed for making a payment to Keith Davidson for porn actor Stormy Daniels’ silence about a sexual encounter with Trump from years prior.

McConney served as the Trump Organization’s controller for nearly three decades before retiring last year.

MCCONNEY EXPLAINS WHY REIMBURSEMENT WAS ENTERED AS LEGAL EXPENSE

Getting to a key part of Donald Trump’s hush money case — how and why Michael Cohen’s reimbursement for the Stormy Daniels payment was entered as a legal expense — former Trump Organization controller Jeffrey McConney testified that he instructed an accounting department employee to do so.

All expenses had to be entered in the general ledger with a category code, and “we were paying a lawyer,” McConney explained on Monday. So in went the code: 51505.

He said he also instructed the employee to record that the first two payments were for a “retainer” for the months of January and February 2017.

“I was just taking information from the invoice” that Cohen had typed into an email, McConney said, though he acknowledged he’d never seen a retainer agreement between Cohen and the company.

BANK STATEMENT, NOTES LAY OUT PLAN TO REPAY COHEN

A bank statement displayed in court during Donald Trump’s criminal trial on Monday showed Michael Cohen paying Keith Davidson, the lawyer for porn actor Stormy Daniels $130,000, on Oct. 27, 2016, out of an account for an entity Cohen created for that purpose.

Weisselberg’s handwritten notes about reimbursing Cohen were stapled to the bank statement in the company’s files, Jeffrey McConney, formerly the Trump Organization’s controller, testified.

The notes spell out a plan to pay Cohen a base reimbursement of $180,000 — covering the payment to Davidson and an unrelated technology bill. That total was then doubled or “grossed up” to cover the state, city and federal taxes that Weisselberg estimated Cohen would incur on the payments.

Weisselberg then added a $60,000 bonus, for a total of $420,000, according to the notes.

McConney’s own notes were also shown in court. After calculations that laid out that Cohen would get $35,000 a month for 12 months, McConney wrote: “wire monthly from DJT.”

Asked what that meant, McConney said: “that was out of the president’s personal bank account.”

McConney said he didn’t know of any other time when the company added onto an employee reimbursement to cover the cost of taxes. Employee reimbursements, if characterized as such, are not subject to taxation.

Trump is accused of falsifying business records by labeling the money paid to Cohen in his company’s records as legal fees. Prosecutors contend that by paying him income and giving him extra to account for taxes, the Trump executives were able conceal the reimbursement.

JURORS HEAR ABOUT REIMBURSEMENTS PAID TO COHEN

For the first time, jurors on Monday heard about the reimbursements at the root of the charges against Donald Trump in his hush money trial.

Former Trump Organization controller Jeffrey McConney testified about conversations he had with the company’s longtime finance chief Allen Weisselberg in January 2017 about reimbursing Michael Cohen for $130,000 he’d paid to lawyer Keith Davidson.

“Allen Weisselberg said we had to get some money to Michael, we had to reimburse Michael. He tossed a pad toward me and I started taking notes on what he said,” McConney testified. “That’s how I found out about it.”

Cohen, who’d worked for the Trump Organization for about a decade, had just been taken off the payroll as a salaried employee.

MCCONNEY SPEAKS ABOUT MICHAEL COHEN

As prosecutors in Donald Trump’s hush money trial shifted their questions to the subject of Donald Trump’s former lawyer Michael Cohen, Jeffrey McConney, like multiple witnesses before him, didn’t seem to be a fan.

Asked if he was familiar with the former Trump fixer, McConney paused briefly, before adding: “I’ve had conversations with him by the coffee machine.”

In response to a question about Cohen’s position within the Trump Organization, McConney responded dryly: “He said he was a lawyer.”

FORMER EXEC RECALLS EARLY LESSON FROM TRUMP

In an anecdote from early in his career, former Trump Organization controller Jeffrey McConney testified in court about Donald Trump’s close attention to his cash and hardball approach to bills.

When he went to drop off a report on Trump’s desk one day in the late 1980s, he said, the then-real estate mogul looked up while on the phone and said, “Jeff, you’re fired.”

McConney was taken aback. Then Trump added, according to the ex-controller: “You’re not fired, but my cash balances went down from last week.”

McConney said he explained that various expenses had come up. Trump responded that he should “focus on my bills, negotiate my bills.”

“It was a teaching moment,” McConney recalled. “If someone’s asking for money, negotiate with them,” rather than just paying.

From the defense table, the former president appeared to enjoy hearing the story, lifting his chin and smiling broadly in McConney’s direction.

STUDENTS WATCH TRIAL FROM OVERFLOW ROOM

People watching Donald Trump’s hush money trial from the courthouse were joined in the overflow room Monday morning by a group of students from a Manhattan private school, who said they were given the morning off to attend.

“That’s him!” one of the high schoolers yelped earlier in the morning as Trump appeared on the video monitor. She was promptly shushed by one of her classmates.

FORMER TRUMP ORGANIZATION CONTROLLER TAKES STAND

Former Trump Organization controller Jeffrey McConney took the stand Monday morning in Donald Trump’s hush money case.

McConney worked for the company for more than three decades, retiring last year after he was granted immunity in exchange for testifying for the prosecution at the Trump Organization’s New York criminal tax fraud trial. During that trial, he admitted breaking the law to help fellow executives avoid taxes on company-paid perks. The company was convicted and is appealing.

McConney, who left with $500,000 in severance, went on to testify tearfully last fall at the civil fraud trial of Trump, the company and key executives. The ex-controller said he’d been worn out by his entanglement in a litany of Trump-related investigations and legal proceedings.

“I just wanted to relax and stop being accused of misrepresenting assets for the company that I loved working for,” he said at the time.

THE COMMENT THAT VIOLATED THE GAG ORDER

The judge in Donald Trump’s hush money case found on Monday that Donald Trump had violated his gag order with comments he gave to a program called “Just the News No Noise” on April 22, which is broadcast on Real America’s Voice.

On the program, the former president criticized the speed at which the jury was picked and claimed it was stacked with Democrats. “The jury was picked so fast. 95 percent Democrats. The area’s mostly all Democrat,” he is quoted as saying.

In his ruling, Judge Juan M. Merchan said the comments “not only called into question the integrity, and therefore the legitimacy of these proceedings, but again raised the specter of fear for the safety of the jurors and of their loved ones.”

“Defendant is hereby put on notice that if appropriate and warranted, future violations of its lawful orders will be punishable by incarceration,” the judge wrote in the order.

The gag order bars Trump from making comments about the jurors, key witnesses and some others connected to the criminal trial.

JUDGE FINES TRUMP AGAIN FOR CONTEMPT, THREATENS JAIL TIME

The judge presiding over former President Donald Trump’s hush money trial has fined him an additional $1,000 for again violating a gag order barring him from making inflammatory comments about witnesses and jurors.

Judge Juan M. Merchan warned on Monday that additional gag order violations could potentially result in jail time.

“The last thing I want to do is put you in jail. You are the former president of the United States and possibly the next president as well,” Merchan said. “There are many reasons why incarceration is truly a last resort for me. To take that step would be disruptive to these proceedings.”

Trump sat forward in his seat, glowering at the judge as he handed down the ruling. Once the judge finished speaking, Trump shook his head twice and crossed his arms.

Prosecutors had accused Trump of four violations, but the judge only concurred with one.

The judge had previously fined Trump $9,000 for nine earlier violations in posts on Truth Social and his website.

TRUMP TALKS COLUMBIA COMMENCEMENT CANCELLATION BEFORE COURT

Before heading into the courtroom Monday morning, Donald Trump spoke to reporters, relaying familiar complaints about the fairness of the trial, the judge and the gag order that stops him commenting on witnesses and jurors.

He also noted the breaking news that Columbia University canceled its main commencement following weeks of pro-Palestinian protests.

“That shouldn’t happen,” he said.

TRUMP ARRIVES AT COURT

Donald Trump has arrived at the courthouse in lower Manhattan as witness testimony in his hush money trial enters its third week.

WHO’S BEEN ON
THE STAND SO FAR

Witness testimony in Donald Trump’s criminal trial is entering its third week on Monday and it remains to be seen who will take the stand next.

Over the past couple weeks, jurors have heard from a host of different people.

Following a weeklong jury selection process that began mid-April, jurors heard first from former National Enquirer publisher David Pecker, who among other things explained his pledge to be the “eyes and ears” of Trump’s 2016 presidential campaign.

Keith Davidson, a lawyer who represented porn actor Stormy Daniels and former Playboy model Karen McDougal in hush money negotiations, also took the stand. And jurors heard from others such as a forensic analyst who examined Michael Cohen’s phones and a paralegal with the Manhattan district attorney’s office.

Former White House press secretary and ex-Trump adviser Hope Hicks on Friday painted a vivid picture of the chaos that unfolded after the “Access Hollywood” tape leaked and the Wall Street Journal ran a story about McDougal’s hush money deal.

The defense cross-examined Hicks for roughly 20 minutes before court adjourned early last Friday.

THE WITNESS HEARD, BUT NOT YET SEEN

Although an ensemble of different people have testified in Donald Trump’s hush money case over the past two weeks, one pivotal witness has been frequently heard but not yet seen: Michael Cohen, Trump’s former lawyer and personal fixer.

Jurors last week began hearing Cohen’s words on audio recordings as prosecutors worked to directly tie Trump to payments to silence women with damaging claims about him before the 2016 election.

Jurors heard, in particular, a potentially crucial piece of evidence: a recording of Trump and Cohen, then his attorney, discussing a plan to pay off an ex-Playboy model who claimed to have an affair with Trump. The former president denies the affair.

They also heard a few witnesses recount their interactions with Cohen — some pleasant and others far less so.

It’s unclear when the prosecution’s star witness will take the stand.

TRUMP EXPECTED IN COURT AS TRIAL ENTERS 12TH DAY

Donald Trump is expected to return to Manhattan court as his hush money trial enters its 12th day.

Last week’s proceedings saw a frenzy of witnesses take the stand, including former Trump adviser Hope Hicks and Keith Davidson, a lawyer who represented porn actor Stormy Daniels and former Playboy model Karen McDougal in hush money negotiations with Cohen and the National Enquirer.

The week also saw Trump fined $9,000 by Judge Juan M. Merchan for violating a gag order that bars the former president from speaking publicly about key witnesses, jurors and others in the case. A second contempt hearing was held on Thursday over four more prospective violations, but Merchan did not immediately issue a decision.

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The Latest | Former Trump Organization controller testifies about reimbursement payments to Cohen