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Anatomy of a Leak (Gwen Moritz Editor’s Note)

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A Trump voter of my acquaintance referred to Michael Avenatti as “that idiot attorney for Stormy Daniels.” May all of us be represented by such idiots. That trick he pulled last week by releasing on Twitter a document describing curious transactions into and out of a bank account associated with President Trump’s sometime lawyer and longtime “fixer” — well, that was simply masterful.

And disturbing.

I’ll let readers decide for themselves how they feel about corporations paying six and seven figures to the president’s personal lawyer for access to the man who declared that he alone could fix the rigged system that favors powerful, monied interests. Since I never bought into the fantasy that Trump had suddenly stopped being a con man at age 70, confirmation that his right-hand man had his palm extended came as neither surprise nor disappointment to me.

The disturbing thing is that Avenatti had acquired details of transactions in the banking account of Essential Consultants LLC, the company Michael Cohen created days before he used the account to pay hush money to the pornographic film actress and producer whose real name is Stephanie Clifford.

Things move quickly in the legal soap opera starring Donald Trump, but at this writing, we don’t know how he got that private information. We know he didn’t make it all up. AT&T and Novartis, having received excellent PR advice, quickly confirmed their payments to Cohen’s company with pathetic explanations that were probably as convincing as they could reasonably muster.

At first I thought maybe Avenatti had received the bank records used to compile his “Executive Summary” through some legal mechanism. He has, after all, sued Trump, Cohen and Essential Consultants on behalf of his client. But Cohen’s lawyers told a federal court last week that they “have no reason to believe that Mr. Avenatti is in lawful possession of these bank records.”

It would be perfectly legal for him to distribute information that was leaked to him, just as it is perfectly legal for those of us in the news business to publish leaked information. The legal jeopardy — as you may recall from the Pentagon Papers or Scooter Libby, recently pardoned by President Trump — belongs to the leaker. As is completely proper, the Inspector General of the U.S. Treasury Department instantly launched an investigation into the source of Avenatti’s information.

Avenatti smartly released the information himself. The fact that he made these claims about Cohen and his benefactors was instantly newsworthy, even as the first media reports were careful to disclaim any confirmation of the actual information.

Had Avenatti instead handed the information to a journalist of any professionalism, it would have taken some time for the journalist to get confirmations, which would have been less urgent to the participants. Then the news organization would have made a decision on whether to publish, and when and how.

It takes something pretty monumental to make bank records public — even about banks themselves. We’ll never know details of the Arkansas State Bank Department’s oversight of Allied Bank of Mulberry because state law protects banks even after they have failed. Some bankers, I’m told, were stunned at the amount of formerly confidential material the Federal Reserve’s Inspector General made public about Allied in March because the expectation of privacy and secrecy is almost absolute.

A few years back, Arkansas Business was leaked confidential documents concerning a different bank that is now defunct. Lots of interesting stuff (and names) in there, believe me, but we used only the small part that we felt was truly of public concern.

A few details of attorney Matt Henry’s client trust account are explored in the story in this week’s issue. Those come from his divorce case, which is public record. Arkansas Business rarely mines divorces for news, although those files can be chock full of interesting details. Occasionally, as in the case of a lawyer who has been in jail nearly two months, there is news value.

Michael Cohen’s transactions are the kind of thing that a federal prosecutor certainly should have access to. And it turns out Special Counsel Robert Mueller’s investigators had already interviewed several of the Essential Consultants clients that Avenatti identified.

Of course they had.

Email Gwen Moritz, editor of Arkansas Business, at GMoritz@ABPG.com and follow her on Twitter at @gwenmoritz.
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