Last week, legal counsel for Stephanie “Stormy Daniels” Clifford, Michael Avenatti, tweeted cryptically about financial documents he claimed to possess proving Trump had financial ties to Russia during and after his 2016 bid for the American presidency.
Subsequently, major news outlets began corroborating Avenatti’s claim, ultimately exposing a slush fund that Trump’s attorney Michael Cohen had established to accept and disseminate the funds.
Trump and his team, who have noticeably pulled back from public appearances and social media usage, effectively proved the validity of Avenatti’s claim when they immediately began to question how he came to possess the documents and spent almost no effort denying the information contained within.
Since then, speculation of the source of the leak has plagued the White House and Trump allies, but a new report in The New Yorker penned by investigative journalist Ronan Farrow discusses a conversation with the anonymous source who has finally revealed the motivation behind their decision to leak.
Reportedly, the official had grown alarmed after being unable to find two important reports on Cohen’s financial activity in a government database. The official, worried that the information was being withheld from law enforcement, released the remaining documents.
The payments that Avenatti shared with the public were recorded in a “suspicious activity report” (SAR) filed by First Republic Bank, the financial institution home to Michael Cohen’s slush fund, Essential Consultants LLC.
The SAR about which Avenatti tweeted detailed the hundreds of thousands of dollars in payments that Cohen received from telecom giant AT&T, pharmaceutical company Novartis, and an investment firm with links to Russian oligarch Viktor Vekselberg.
In the windfall of Avenatti’s revelation, most reports seemed to overlook the missing SARs, but Farrow has shown a spotlight on the gaping hole in Trump’s legal defense.
The prior SARs detail more than three million dollars in additional transactions, triple the amounts disclosed on Avenatti’s. The specifics of these transactions remain a mystery because, according to the official who spoke to Farrow, they were deleted from the database maintained by Treasury Department’s Financial Crimes Enforcement Network, or FinCEN.
Noticing the SARs’ erasure from the database prompted the official to act.
“I have never seen something pulled off the system. . . . That system is a safeguard for the bank. It’s a stockpile of information. When something’s not there that should be, I immediately became concerned. That’s why I came forward.”
There doesn’t seem to be an official explanation for unexplained removal of these two SARs, but the news of their absence prompts universal concern among government officials.
Some speculate that FinCEN could have made the choice to classify the documents as highly sensitive, therefore choosing to require “strict limitations on access,” but a former prosecutor who spent years working with FinCEN told Farrow that she knew of no mechanism to restrict access to SARs. She speculates:
“It may be that someone reached out to FinCEN to ask to limit disclosure of certain SARs related to an investigation, whether it was the special counsel or the Southern District of New York.” (The special counsel, Robert Mueller, is investigating Russian interference in the 2016 Presidential election. The Southern District is investigating Cohen, and the F.B.I. raided his office and hotel room last month.)
FinCen offered a statement explaining its confidentiality policy, but that did little to shed light on the discrepancy. Reportedly, SARs can range in confidentiality “in order to protect both filers and potentially named individuals,” adding, “FinCEN neither confirms nor denies the existence of purported SARs.”
Spokespeople for both Cohen and Mueller’s special counsel failed to respond to Farrow’s request for comment.
Banks are legally mandated to file suspicious-activity reports with the government in order to call attention to activity that resembles money laundering, fraud, and other criminal conduct. The reports are a routine response to any financial activity that appears suspicious. They are not proof of criminal activity, and often do not result in criminal charges, though the information in them can be used in law-enforcement proceedings.
The official who leaked the documents further elaborated on his decision to make this news public, worriedly stating, “This is a permanent record. They should be there.”
By January of 2018, Cohen’s Essential Consultants already had three SARs recorded against it by First Republic Bank. The most recent report is the one made public by Avenatti, an examination of Cohen’s transactions from September 2017 through January of 2018. It refers to two previous reports, neither of which could be found by the official in the FinCEN database.
The first report covered a seven month period which lists just over a million dollars in transactional activity. The second report investigated a three month period between June and September of 2017 with a mysterious infusion of more than two million dollars.
A large portion of that money seemed to be funneled directly to Cohen’s personal accounts, and Cohen would then turn around and make payments from there– sometimes for personal use, like on his Mercedes Benz, or to other businesses or officials to whom Trump owed money.
Farrow pointed to a separate SAR filed by Morgan Stanley Smith Barney which shows two accounts set up with the firm by Cohen during the same three month period that Essential Consultants received the mysterious two million dollars.
Cohen reportedly deposited three checks from Essential Consultants into the Morgan Stanley Smith Barney account totaling more than a million dollars. The firm flagged the transactions as possible signs of “bribery or gratuity” and “suspicious use of third-party transactors (straw-man).”
Other banks had their own suspicions about Cohen’s transactions. One in particular ties Cohen to Elliott Broidy, at the time the deputy finance chairman for the Republican National Committee. Broidy has said that Cohen and another lawyer, Keith Davidson, worked out a deal in which Broidy would pay $1.6 million to a former Playboy model that he had impregnated. Cohen took two payments from Broidy into his personal account, and the third into the Essential Consultants fund.
Given the confusion, Michael Avenatti insists that “the Treasury Department should release all of the SARs immediately to the American public.” Unfortunately, suspicious-activity reports are kept confidential per federal law. In fact, the former prosecutor who spoke to Farrow said, “I don’t think there’s a safe harbor for somebody who discloses it.”
The official who released the information was aware of the potential penalties, ranging from a two-hundred and fifty thousand dollar fine to five years jail time. “To say that I am terrified right now would be an understatement,” he confessed to Farrow.
Still, the fear that he might have uncovered some covert operation by the Trump campaign compelled him to act in spite of the potential penalties:
“We’ve accepted this as normal, and this is not normal. Things that stand out as abnormal, like documents being removed from a system, are of grave concern to me.”
Most unsettling was his assessment of the climate inside government offices right now.
“This is a terrifying time to be an American, to be in this situation, and to watch all of this unfold.”
If justice is served, the horror will soon be over. Until then, every American should be concerned by the consistent and obvious subjugation of America’s basic democratic principles for the betterment of one person – Donald J. Trump.
May the age of stupidity die with his presidency.