President Trump’s former lawyer Michael Cohen formed a shell company with the intent of using it to pay a former Playboy model for the rights to her story claiming an affair with Trump, according to a new report.
Cohen created Resolution Consultants LLC in late September 2016, just weeks before the election, a person familiar with the situation told The Wall Street Journal for a report published Wednesday.
The existence of the Delaware-based shell company had been previously reported by the Journal, but it was not known that Cohen intended to use it to pay the former Playboy model, Karen McDougal.
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The report comes days after it was revealed that Cohen secretly recorded a conversation with Trump discussing the possible payment.
American Media Inc. (AMI), the publisher of the National Enquirer, purchased the rights to McDougal’s story for $150,000 in 2016, ahead of the election, but the story never ran, in what is known as a “catch and kill” deal.
In the recording, which aired on CNN Tuesday night, Cohen is heard telling Trump that he needs “to open up a company for the transfer of all of that info regarding our friend David,” apparently referencing David Pecker, owner of AMI and a longtime Trump friend.
While Trump and Cohen are heard discussing the possibility of buying the rights to her story, Trump and Cohen never bought them.
Soon after shutting down Resolution Consultants, Cohen set up Essential Consultants LLC, a shell company he used to pay $130,000 to adult-film star Stormy Daniels as part of a nondisclosure agreement to keep her quiet about an alleged affair with Trump in 2006, shortly after he married now-first lady Melania Trump.
Daniels, whose real name is Stephanie Clifford, is now suing Trump and Cohen to void the nondisclosure agreement. She is also suing the pair claiming defamation when they denied her alleged affair with Trump.
The release of the Cohen recording raises questions about whether Trump knew about the plans to pay McDougal and Daniels in advance. He has denied the affairs, and has maintained that he did not know about the payments, though the recording suggests he was aware of them.
Trump and Cohen’s legal teams are at odds over parts of the conversation included in the recording, specifically whether Trump is telling Cohen to buy the rights to McDougal’s story in “cash.”
The quality of the recording makes it unclear what then-candidate Trump is saying. Trump’s lawyer Rudy Giuliani, as well as a transcript of the recording compiled by Trump’s lawyers, maintains that he is saying, “Don’t pay with cash … check.”
Trump has not yet commented on the substance of the tape, but has criticized Cohen for recording him.