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CNN Live Event/Special

Donald Trump's Hush Money Cover-Up Trial; Stormy Daniels' Former Attorney Testifying Now. Aired 10:30-11a ET

Aired May 02, 2024 - 10:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[10:30:00]

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JAKE TAPPER, CNN ANCHOR AND HOST, "THE LEAD WITH JAKE TAPPER": And welcome back to CNN special live coverage of Donald Trump's hush money cover-up trial. Keith Davidson, he is the attorney who represented the adult film star and director Stormy Daniels, as well as Karen McDougal, the 1998 Playmate -- Playboy Playmate of the Year. Keith Davidson is now walking through -- walking the jury through how he brokered this deal at the heart of this case to keep her quiet. It is allegations that Mr. Trump and his team falsified those business records for that deal that is at the heart of this case.

My panel is back with me. Elie Honig, Steinglass -- the prosecution attorney, Joshua Steinglass is walking Keith Davidson through this confidential settlement agreement paperwork between Stormy Daniels and Donald Trump. This was the agreement between David Dennison and Peggy Peterson. These are the pseudonyms that Keith Davidson had come up with for Donald Trump and Stormy Daniels. So, Stormy Daniels is Peggy Peterson. And Donald Trump is David Dennison according to Keith Davidson.

ELIE HONIG, CNN SENIOR LEGAL ANALYST: Yes, and Davidson testified earlier that he got that name, David Dennison, from a high school classmate of his who is none too happy with it now. Davidson is an important --

TAPPER: Condolences to Mr. Dennison out there and all -- and Mrs. Dennison especially, yes.

HONIG: For real. Keith Davidson's an important go between in this case. He's a lawyer who had a very specific niche practice where he represented both Karen McDougal and then Stormy Daniels, both of whom were seeking to market their stories. What they were looking to do was get paid in order to stay silent.

And he spent most of his last day on the stand explaining the whole negotiation that he had with AMI, the company that runs the "National Enquirer", primarily with this guy, Dylan Howard, who we're not going to hear testify in this trial.

And Davidson laid out the back and forth, how they ended up selling Karen McDougal's story to AMI. At the end of that negotiation, Michael Cohen gets involved. And Davidson testified, it was my understanding that this was being done to protect Donald Trump's campaign. And then weeks later, and that's where we are now in the testimony, Keith Davidson is representing Stormy Daniels, and now AMI, the "National Enquirer", they're out. They've had enough of this. They don't want to keep paying --

TAPPER: But also -- but they -- right, they don't want to keep paying because David Pecker thought that he was going to be repaid --

HONIG: Exactly.

TAPPER: -- by Donald Trump, according to his testimony.

HONIG: He got stiff.

TAPPER: And he got stiffed.

HONIG: Yes.

TAPPER: The prosecution right now is going over the liquidated damages provision --

HONIG: Right.

TAPPER: -- in this nondisclosure agreement. The stated amount was $1 million per breach of contract. So, if Stormy Daniels went out there and told her story against the orders of this non-disclosure agreement, she would have to pay Donald Trump, a.k.a. --

HONIG: Right.

TAPPER: -- David Davidson or whatever the name was, Denny Dennison.

HONIG: Dennison, yes.

TAPPER: Denny Dennison a million dollars.

[10:35:00]

HONIG: Right, exactly. So, they end up, of course, entering into this deal through Keith Davidson. The contacts here, Michael Cohen and Keith Davidson, they're representing on behalf of Donald Trump and Stormy Daniels, respectively. And this is what leads us to the $130,000 payment to Stormy Daniels that lies at the heart of this case.

TAPPER: And, Elliot, I mean, again, there is nothing necessarily illegal about an NDA. There is nothing necessarily illegal about a hush money payment.

ELLIOT WILLIAMS, CNN LEGAL ANALYST AND FORMER FEDERAL PROSECUTOR: Not -- there's nothing necessarily illegal about both. And this is actually why Steinglass is asking these very questions now. How do NDAs work and --

TAPPER: Right, Steinglass right now are asking Keith Davidson, Stormy Daniels' attorney, whether it's unusual to have an amount so much higher for the penalty for breaking it than the amount in the contract. Davidson testifies, he doesn't think that would have been actually legally enforceable because, "It is so far in excess of the settlement amount of the contract." In other words, $130,000 to keep quiet.

WILLIAMS: Right.

TAPPER: And if she doesn't keep quiet, she has to pay a million.

WILLIAMS: And part of what the prosecution has to do here is sensitize the jury to how NDAs work as contracts, but also what the penalties are and what might have been normal or abnormal about this.

TAPPER: But Michael Cohen, according to Davidson, is the one who demanded that the provision be included and set at a million dollars. Who knows if he was doing that at the behest of Mr. Trump or just serving as his lawyer. But either way, they wanted a tough penalty, so Stormy Daniels could not tell her story.

WILLIAMS: Right, and it can absolutely be a normal thing in contracts if there's a very high penalty for a breach to disincentivize people from going out and breaking the contract. So, even though it's $130,000 amount, a million dollars, it doesn't really jump out to me that much.

TAPPER: And Kasie, one of the things that the Trump attorneys are going to argue is that he did all this because he didn't want it out there for the Trump brand, for his wife, for his children, maybe incidentally for his campaign, but the campaign was not the focus. You can't say this is an entirely election related expense.

KASIE HUNT, CNN ANCHOR AND CHIEF NATIONAL AFFAIRS ANALYST: Right, and that, of course, is the burden of proof that the prosecutors have, right, to make the case that this is a cover up, because at the end of the day, that's the case that they're trying to make. There was a reason why they falsified these business records that makes that crime more significant, right?

So, it -- I still go back to, kind of, the calendar and kind of the place where we are in the election campaign, which is when this is all going on, which is just -- and I want to be precise. I'm not sure exactly when this kind of NDA is floating around. But the dates that they have been lining up --

TAPPER: It's all October --

HUNT: All October.

TAPPER: October 2016.

HUNT: Yes.

TAPPER: Yes.

HUNT: If 2016, right, literally -- I mean, likely we would have described that as days before election day, right? So, that, I think, is probably where we're headed here, at least that's how we saw it kind of unfold earlier in this testimony.

WILLIAMS: And moreover, this is -- assuming it's happening at that moment, this is when folks, for instance, at the "National Enquirer" are texting with Davidson about the potential impact on the campaign. They were aware of the political moment that they were in.

HUNT: You couldn't deny it.

WILLIAMS: Right, you can't deny it.

TAPPER: Yes, Josh Steinglass, the prosecutor, is asking who was accepting service on behalf of David Dennison, a.k.a. Donald Trump, "Essential Consultants", that's the name of this Shell corporation in Delaware formed by Michael Cohen. Essential Consultants in care of Michael Cohen Esquire. Steinglass is showing Davidson a side agreement which includes Trump's real name and not David -- Dennison.

And Jamie Gangel, something to think about here also, is that Donald Trump stands a decent, if not better than decent, chance of becoming the next president of the United States, if today's polls prove predictive. And by the way, Davidson is saying that Trump's name in this agreement, in the side agreement, is written in his handwriting. Proving, that Donald Trump was actually involved. That David Davidson -- or whatever, David Dennison. I'm sorry. David Dennison is a fictitious. David Dennison is actually Donald Trump, et cetera.

It is further agreed that neither party shall keep a copy of this document, this is the one with Trump's actual signature. And that only Keith Davidson, Stormy Daniels' attorney, and Michael Cohen, his counsel for the parties, would maintain possession of it. But something overshadowing all of this, Donald Trump has a decent chance of being re-elected president in November. And he has sworn retribution and revenge against his political enemies.

In a recent interview with "Time Magazine", he said that if U.S. attorneys did not carry out his instructions to prosecute people he wanted prosecuted, he felt it was with -- totally within his rights to fire them and replace them. Davidson explaining the side letter agreement decodes the agreement that uses the pseudonyms.

JAMIE GANGEL, CNN SPECIAL CORRESPONDENT: Exactly. I am your retribution, I believe, is the quote we keep hearing. And that just goes back to the need for the gag order. Because people are intimidated. They are fearful. And if he's the next president, he's given them some reason. He's been very transparent about why they might be.

[10:40:00]

Just to go back to Keith Davidson. I thought it was interesting, Kaitlan Collins was in the courtroom and she mentioned earlier that he's a very good witness and -- for the lawyers that when he answers a question, he turns to the jury. He addresses them that he has --

HUNT: Because he's a lawyer. GANGEL: He knows what he's doing in there. And he said, you know, earlier -- in earlier testimony that Trump was the beneficiary, that he believed it was election related. And let's not forget to Kasie's point, that this is October, two weeks, we have heard testimony that it was possible they didn't, you know, Stormy Daniels, they were not sure they were going to get paid. They thought that they were being stalling, was the word. And there was some discussion that, well maybe if we get past the election, we won't have to make the payment. That connects it to the election as opposed to the brand during the time.

TAPPER: So, most jurors right now in the courtroom are looking at the monitors in front of their seats as the document is displayed on it. This is the actual document. There were only two copies of, one, Keith Davidson had on behalf of Stormy Daniels. One, Michael Cohen had on behalf of Donald Trump. It had Donald Trump's actual signature.

Keith Davidson says, he never saw a copy of the agreement where there was a signature on the line for David Dennison. Only -- that's the pseudonym for Donald Trump in this, agreement. Only Michael Cohen signed the agreement on Trump's behalf.

So, Keith Davidson never saw that agreement. So, I suppose it's only Michael Cohen, actually, that had the -- unless Stormy Daniels had a copy of -- for herself. But the -- this one document that actually had Donald Trump's signature was elusive.

DANA BASH, CNN CHIEF POLITICAL CORRESPONDENT AND CNN ANCHOR, INSIDE POLITICS: And so, the question is whether or not this testimony that we're seeing right now helps the defense.

WILLIAMS: It -- I wouldn't go as far as they helps the defense, but it's certainly something that they can and should cross examine --

BASH: Meaning --

WILLIAMS: -- hard about. You don't know --

BASH: -- because you're not -- it's not very -- it's not clear --

WILLIAMS: Absolutely.

BASH: -- based on the signature here that Trump was involved.

WILLIAMS: Yes, you don't even know what those documents that you've --

BASH: There's other evidence that shows different --

WILLIAMS: -- that you're talking about, you know, who signed it. Who saw it? And I think that's a smart defense attorney would really push that point well.

HONIG: And one of the continuing features that we're going to see here is, to what extent was Michael Cohen freelancing? Act -- obviously he's acting on Donald Trump's behalf, but to what extent is he implementing the details of these deals without apprising Donald Trump? And virtually everything in this case is going through go betweens. You're not going to see direct contact between Donald Trump and Stormy Daniels.

Keith Davidson, he did everything for Daniels and for Karen McDougal. For -- when it came to AMI, they dealt through Dylan Howard, not David Pecker. Michael Cohen is doing business for Donald Trump. So, the defense is going to say the principles, most importantly, Donald Trump, they're not getting the details. This is being worked out at lower levels.

So, they're going to argue a knowledge and intent defense. He didn't know about the specifics. And that's the battleground that we're seeing right now.

TAPPER: Yes, and as for Donald Trump's signature, I'm sure the argument will be he just got, you know, he got thrown documents all the time. And they came in, he just signed them, he signed them, he didn't even know what was going on. I'm sure that's what the defense will argue.

Keith Davidson trying now to decode the hush money deal to stop Stormy Daniels from telling her story of an alleged tryst with Donald Trump. We're going to have much more from the reporters inside the courtroom. You're watching CNN special live coverage of the Trump trial.

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[10:45:00]

KAITLAN COLLINS, CNN ANCHOR, THE SOURCE AND CNN CHIEF CORRESPONDENT: Any minute, we do expect to hear from the president of the United States to address the coast-to-coast uproar that we have seen on college campuses. We're keeping a close eye on that as Biden has said relatively little about it so far. As we wait for President Biden to begin speaking, we are also closely following the developments in his predecessor, Former President Donald Trump's hush money trial here in New York.

A reminder, it is Keith Davidson who is on the stand. That's the attorney who negotiated these deals for Stormy Daniels. He just said something important. Talk about how Michael Cohen was complaining about a "Wall Street Journal" story about Donald Trump and Karen McDougal because it's timing so close to the 2016 election.

We have all of our experts here with us. Judge Konviser, I would like to start with you because we're listening to this line of questioning with Keith Davidson and the prosecutors where he's saying that Michael Cohen is very upset when a story came out about Karen McDougal and Donald Trump and their relationship in the "Wall Street Journal" just four days before the election actually happened.

And what we're seeing right now is that Keith Davidson texted Dylan Howard from the "National Enquirer", the night of the election and said, what have we done? Dylan Howard responded, "Oh, my God." It seems very clear, the prosecutors are trying to tie all of this to that date of November 8th, 2016. JILL KONVISER, FORMER NEW YORK STATE SUPREME COURT JUSTICE: That's right. The prosecutors, of course, have the burden of proving this case to the jury beyond a reasonable doubt. And in order to do that, they need to convince them that this whole arrangement had to do with whether or not this was going to affect the election, that's their theory, as opposed to just cover his tracks because he was cheating on his wife.

So, the closer these texts get to the election, the more people from the campaign or who eventually work in the White House who are involved in this are going to be the focus of the prosecution to show that this was about something bigger than just a man cheating on his wife. This was about the concerns the former president had about how this would look on the campaign trail.

COLLINS: Yes, and Keith Davidson is describing it right now as, kind of, gallows humor as they were watching the election results come in that night. And he said there was an understanding that our efforts may have, in some way -- our activities, may have, in some way, assisted the presidential campaign of Donald Trump.

[10:50:00]

I mean, that is where prosecutors have been leading Keith Davidson to getting. To drawing that direct line between negotiating these agreements and at least the people who negotiated them on behalf of Stormy Daniels with Trump's attorney believed it was going to help him in the election.

KONVISER: That is powerful evidence, not just because of what the people need to prove, but the people have a problem, as you've talked about all morning and on prior occasions, that Michael Cohen is a damaged witness. They need to make sure they get as many of his comments corroborated by as many people on as many avenues as possible, because the jurors are going to need to make sure that they have a good reason to accept his testimony because the man has lied under oath.

COLLINS: And Judge Konviser, we also have Adam Kaufmann here with us, who's here in New York. He's a Former Executive Assistant District Attorney for the Manhattan D.A.'s office. He's been watching this trial very closely.

And Adam, looking at what Keith Davidson is testifying right now, he's doing the same tactic that I witnessed him doing on Tuesday, which is when he's answering these questions, he's looking directly at the jury, even when they're asking him, you know, basic questions like who won the 2016 election? And he's answering, obviously, it was Donald Trump. Looking at the jury as he's answering these questions, I wonder how impactful you believe that is.

ADAM KAUFMANN, FORMER EXECUTIVE ASSISTANT DISTRICT ATTORNEY, MANHATTAN DISTRICT ATTORNEY'S OFFICE: You know, it's always good for a witness to remember who your audience is. And you often -- when you're prepping your witnesses, tell them, look, you know, you're -- I'm asking you the questions, but your audience is the jury. And so, having a witness -- he's a lawyer who knows this area. And so, he knows that when he's providing information to the court, he could be directing it to the jury. So, I'm not surprised to see someone who is a lawyer and knows the court system, you know, knowing how to do that.

COLLINS: And Adam, I -- this -- we're getting these updates in real time from the room. I want to read to you what we just heard. Keith Davidson said he remembers near the holidays that he was in a weird apartment or department store strangely decorated. And that he got a call from a very despondent and saddened Michael Cohen and he said -- Keith Davidson says, referencing Michael Cohen, he said something to the effect of, Jesus Christ, can you effing believe I'm not going to Washington after everything I've done for that effing guy.

I'm quoting Michael Cohen here. I'm not going to actually say the word, but that is what Keith Davidson is saying Michael Cohen said to him. Upset that he wasn't getting a job in the Trump administration. Where do you think prosecutors are going with this line of questioning?

KAUFMANN: Well, I -- I'm not sure. I think -- I'm not sure where the prosecutors are going. But you know, it's clear where the defense will go with this. And it brings up a point. We talked about this with David Pecker the other day where, you know, when we get to the cross examination with Pecker, they didn't really have to go after Pecker and destroy him because he gave the defense a lot of material that they could use. So, there was a lot they could bring out from him that would help the defense case.

And so, with a witness like that, and I think we're probably going to see it with this witness, there's a lot that he's saying that the defense will embrace. And they will, elevate, you know, things like Cohen's obvious dissatisfaction with Trump at this moment. Things like, someone was commenting earlier, the fact that they never saw Trump sign this. That Trump wasn't a party to this. There's a lot of material for the defense to work with.

And also, I'm -- I would imagine that we'll see the defense also attacking Cohen's credibility through this witness in many ways. So, I think it will be interesting when we get to the cross to see how they react and what they take from the direct examination and try to amplify to make certain points with the jury.

COLLINS: Yes. And Paula Reid, I mean, just reading this, there was an update that we just missed there where Michael Cohen is, kind of. treating Keith Davidson like a therapist to a degree, I guess. And every single sentence has the eff word in it. So, I apologize. I won't actually say it.

But Davidson, he -- said he recalls Michael Cohen saying, that effing guy is not even paying me the $130,000 back. The person he is referring to when he says that effing guy is the president-elect of the United States of America.

PAULA REID, CNN SENIOR LEGAL AFFAIRS CORRESPONDENT: Exactly, at that time. So, I think defense attorneys are really going to seize on this. First, they're going to say, clearly this guy has an axe to grind with the defendant going back all the way to the winter of 2016. And then also the idea that he didn't think at that point he was going to get paid back the $130,000.

[10:55:00]

Now, right now, we're told Trump's eyes remain closed while Davidson is testifying. His lawyer, Todd Blanche, whispered something in Trump's ear while his eyes stayed shut, which Trump acknowledged but didn't react to. I think defense attorneys are going to seize on that and argue, look, there was no grand conspiracy. Some brilliant plan that we devised to suppress Stormy Daniels story by Michael Cohen paying her and then we're going to pay her back.

You know, prosecutors will also be able to try to untangle that. But I think this, right here, this is something that they are definitely going to revisit when they have a chance to cross examine him.

COLLINS: Well -- and what about the significance of Michael Cohen complaining that he didn't get a job in the White House? I mean, that was the time when Trump was interviewing people at Trump Tower for cabinet positions, White House counsel, all these positions. And Michael Cohen did, as we reported at the time, wanted to join the admin.

KAREN FRIEDMAN AGNIFILO, CNN LEGAL ANALYST AND FORMER MANHATTAN CHIEF ASSISTANT DISTRICT ATTORNEY: Yes, I mean, what the prosecution is doing right now is they're taking the sting out of the bad facts in the case. They're not going to wait for the defense to bring this up. They know it's coming out.

And so, prosecutors will often bring up these, what I would call, bad facts. Like he didn't get paid back. Like he didn't get a job in the White House. Because it's coming out one way or another. You don't want the jury to hear it from the first -- for the first time from the defense, as if you're hiding from it.

Really, you have to embrace all your facts as a prosecutor, the good, the bad, the ugly, and then tell the jury what it means, ultimately, in summation. So, these are the facts of the case. It is what it is. And the defense is going to use this as a way to show Michael Cohen has an axe to grind against Donald Trump.

COLLINS: Yes, also citing denials from Keith Davidson to reporters about this story. A reminder for you, as we are watching closely what's happening in court, we are waiting to hear from President Biden. We are told that he plans to speak about the chaos that we're seeing play out with these protests on college campuses across the country.

Meanwhile, here in New York, inside the court, prosecutors trying to connect the dots using this testimony to show Donald Trump wanted to keep Stormy Daniels quiet to boost his chances of winning the election. We're covering both stories very closely, more CNN special live coverage next. (COMMERCIAL BREAK)

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