Stormy Daniels’s Lawyer Michael Avenatti Complicates Michael Cohen Probe - WSJ

A lawyer for former adult-film star Stephanie Clifford has frustrated efforts by federal prosecutors to obtain information about a hush-money deal involving President Donald Trump’s personal lawyer, according to people familiar with the matter.

In public, Michael Avenatti, Ms. Clifford’s current attorney, has been among the most vocal critics of Michael Cohen, the lawyer who paid her $130,000 in October 2016 to sign a nondisclosure agreement about an alleged 2006 sexual encounter with Mr. Trump.

But behind the scenes, Mr. Avenatti has slowed prosecutors’ efforts to discuss the nondisclosure agreement with Ms. Clifford’s former lawyer, these people say. Mr. Avenatti also demanded to review documents investigators subpoenaed from Ms. Clifford’s former manager, they said.

Mr. Cohen is under criminal investigation for possible campaign-finance violations and bank fraud related to the payment to Ms. Clifford, known professionally as Stormy Daniels, and other business dealings, according to other people familiar with the probe. He has denied wrongdoing and hasn’t been charged with any crime. Mr. Trump has denied having sex with Ms. Clifford.

Mr. Avenatti hasn’t yet acted on multiple requests from federal prosecutors in Manhattan for Ms. Clifford to waive the attorney-client privilege that prevents her former lawyer from discussing their communications about the nondisclosure deal, the people familiar with the matter said. In April, Mr. Avenatti, acting in his capacity as Ms. Clifford’s current lawyer, sent a cease-and-desist letter to her former lawyer, Keith Davidson, ordering him not to disclose any communications related to her, one of those people said.

Mr. Avenatti made similar demands of Ms. Clifford’s former manager, Gina Rodriguez, who helped engineer the hush-money deal. Mr. Avenatti tried to block Ms. Rodriguez from providing her communications with Ms. Clifford to federal prosecutors until he had reviewed them, other people familiar with the matter said.

Mr. Avenatti has told federal prosecutors he is trying to get Ms. Clifford to agree to waive her attorney-client privilege, but prosecutors have come to believe he is stringing them along, the people familiar with the matter said. The delays in responding to their requests to waive privilege aren’t seen as highly damaging to the probe but have frustrated investigators, they said.

On Monday, Mr. Avenatti said he and Ms. Clifford have “cooperated fully” with government prosecutors. He said he and Ms. Clifford are still determining whether to waive privilege and “ironing out the details,” including reviewing documents he has sought from Mr. Davidson.

“We have already started producing documents to the government so any suggestion we are not cooperating is meritless,” Mr. Avenatti said.

Mr. Avenatti said he instructed Mr. Davidson to stop communicating about Ms. Clifford, accusing him of “conspiring behind her back with Mr. Cohen.” Mr. Davidson has denied allegations that he worked with Mr. Cohen against his former client’s interests.

Steven Lubet, a professor at Northwestern Pritzker School of Law who isn’t involved in the matter, said while the situation involving Ms. Clifford is unusual, lawyers in general are reluctant to give up attorney-client protections.

Separately, a federal judge last month appointed a special master to assess whether any of the materials seized by Federal Bureau of Investigation agents in a raid on Mr. Cohen’s premises should be protected by attorney-client privilege and excluded from the investigation.

As Ms. Clifford’s former lawyer, Mr. Davidson has information that could be important to the investigation, because he spoke to Mr. Cohen extensively while negotiating the nondisclosure agreement during Mr. Trump’s campaign.

Ms. Rodriguez also worked closely with Ms. Clifford on the deal. Through her lawyer, she has turned over to prosecutors her text messages and emails with Ms. Clifford since 2016 in response to a subpoena, over Mr. Avenatti’s objections, other people said.

Mr. Avenatti said in an emailed statement that Ms. Rodriguez’s communications with Ms. Clifford are protected by attorney-client privilege because Ms. Rodriguez was acting as a go-between for Ms. Clifford and Mr. Davidson.

Mr. Avenatti said he had a right to review the documents and had threatened to sue Ms. Rodriguez if she refused to provide him with those communications for review.

“We never told her not to provide documents to the government nor did we tell her not to cooperate,” Mr. Avenatti said.

Prof. Lubet said Ms. Rodriguez’s communications with Ms. Clifford would be protected only if they were for the purpose of conveying legal advice from or giving direction to Mr. Davidson.

Mr. Avenatti also has threatened to sue Ms. Rodriguez to enforce a 2016 nondisclosure agreement between the manager and Ms. Clifford that prevents Ms. Rodriguez from speaking publicly about her work for Ms. Clifford, people familiar with the matter said.

Mr. Avenatti denied making those threats. “That never happened. Period,” he said.

The information investigators have requested from Ms. Clifford’s former representatives could shed light on her motivations in agreeing to the 2016 deal.

Ms. Clifford has recently said she agreed to the $130,000 deal with Mr. Cohen in 2016 not for the money, but because she feared for her family’s safety. That fear, she said, was based on a threat she received from an unidentified man who told her to “leave Trump alone” when a magazine nearly published her story several years earlier.

During Mr. Trump’s campaign, “the story was coming out again,” Ms. Clifford has said, so she agreed to the hush-money deal rather than subject herself and her family to possible danger.

But in the communications sought by prosecutors, Ms. Clifford didn’t mention being threatened or fearing for her safety before making the deal with Mr. Cohen, according to people familiar with the situation. Rather, she was trying actively to sell her story to various outlets, these people say.

Mr. Avenatti called that account “patently false,” and said Ms. Clifford spoke of the threat to many people before executing the hush agreement.

Write to Joe Palazzolo at joe.palazzolo@wsj.com, Michael Rothfeld at michael.rothfeld@wsj.com and Nicole Hong at nicole.hong@wsj.com

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