Trump's personal lawyer attacked by U.S. prosecutor over privacy claim

[April 14, 2018]  By Brendan Pierson and Jonathan Stempel

NEW YORK (Reuters) - A U.S. prosecutor on Friday attacked a claim by President Donald Trump's longtime personal lawyer Michael Cohen that many of the materials seized this week in FBI raids on Cohen's office and home as part of a criminal investigation should remain private.

Prosecutors also confirmed in a court filing on Friday that they have been investigating Cohen for months, largely over his business dealings rather than his legal work.

Uncertainty over exactly what FBI agents seized from Cohen comes as Trump faces an intensifying probe by Special Counsel Robert Mueller into whether his presidential campaign colluded with Russia. The raids were partly a referral by Mueller's office.

U.S. District Judge Kimba Wood in Manhattan ordered Cohen to appear in court on Monday afternoon, after holding three hearings on Friday into his request for a temporary restraining order (TRO) blocking prosecutors from reviewing seized materials.

Assistant U.S. Attorney Tom McKay accused Cohen of trying to invoking "wildly overbroad" claims of attorney-client privilege to avoid the disclosure of thousands of allegedly privileged communications related to the president and other cases.

These could include claims by Stormy Daniels, the adult film star who claimed to have had a sexual encounter with Trump in 2006.

Daniels, whose given name is Stephanie Clifford, wants to be freed from a nondisclosure agreement under which she was paid $130,000 shortly before the 2016 presidential election to keep quiet about that encounter.

Cohen wants Wood to let them or a "special master" review the seized materials to decide what can be turned over, without violating the right of his clients to shield communications with their lawyers.

"We're pretty confident there are thousands of privileged communications," Cohen's lawyer Todd Harrison told the judge.

But "the attorney-client privilege can't at the same time be used as a sword and as a shield," McKay told Wood.

"What they are trying to do is use attorney-client privilege as a sword to challenge the government's ability to review evidence" obtained lawfully, McKay added.

He called Cohen's failure to provide "basic facts" about what might be privileged was "fatal" to his request for a TRO.

Michael Avenatti, a lawyer for Daniels, suggested at one of the hearings that his client might be the subject of some of the seized materials, and her interests needed protection as well.

President Donald Trump's personal lawyer Michael Cohen exits a hotel in New York City, U.S., April 13, 2018. REUTERS/Jeenah Moon

'ACUTE INTEREST'

The judge also heard from a new lawyer for Trump, Joanna Hendon, who said the president had "an acute interest" in the case.

Hendon, who said Trump hired her on Wednesday evening, urged Wood not to decide who gets first shot to review seized documents until after she files a brief by Sunday night.

"I'm not trying to delay anything but nor do I see a particular rush," Hendon said.

In Friday's filing, prosecutors said it would be "unprecedented" to allow Cohen's lawyers to decide what it is privileged, and that the government should be allowed to use its own "taint team," or "filter team," to do the job.

They also downplayed the scope of potential privilege, saying they had before Monday secretly searched multiple email accounts belonging to Cohen, and which they said indicated that Cohen "is in fact performing little to no legal work."

The raids infuriated Trump, who tweeted "Attorney-client privilege is dead!" on Tuesday.

McKay said Trump's ability to invoke the privilege is "no different" from anyone else's.

FBI agents who conducted the raids were seeking information on payments to Daniels and former Playboy model Karen McDougal, who also claims to have had a sexual relationship with Trump, a person familiar with the matter has said.

Investigators have also looked for a possible broader pattern of fraud, tax evasion, money laundering and other crimes in Cohen's private dealings, including his work for Trump and real estate purchased by Russian buyers, the person said.

(Reporting by Karen Freifeld, Brendan Pierson and Jonathan Stempel; Editing by Frances Kerry and Clive McKeef)

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