Much was made this week of the fact that Donald Trump’s lawyer Michael Cohen pleaded guilty without a written cooperation agreement.
He pleaded guilty to multiple federal offenses, including tax fraud, campaign finance violations and bank fraud. The guidelines range agreed to in the plea deal is around 4 to 6 years.
Now, it’s true that his plea agreement did not have a cooperation provision in it. In fact, it said
The parties agree that neither a downward nor an upward departure from the Stipulated Guidelines range set forth above is warranted. Accordingly, neither party will seek any departure or adjustment pursuant to the Guidelines that is not set forth herein.
Even though the plea agreement said that neither party would seek a downward departure (even for assistance), it’s still very possible that Mr. Cohen will get cooperation credit during the whole sentencing process.
Let’s explore how that could happen.
What’s in the Plea Agreement About the Possible Sentence?
For those unfamiliar with the Sentencing Guidelines, we need to take a step back to understand why it matters that neither the government nor the defense will seek a “downward departure” from the guidelines range in the plea agreement.
During plea negotiations in a federal case, the defense and the government will try to reach agreement about the sentencing range. The sentencing range is calculated by applying the complex rules in the Sentencing Guidelines. They are publicly available here if you have a few extra hours to spare or ran out of Ambien.
The sentencing range is based on two factors—the offense level and the defendant’s criminal history. The Sentencing Guidelines contain base offense levels plus various sentencing factors for pretty much every crime out there. If you engage in a $5 million fraud and were the mastermind, then you will end up with a higher offense level than if you engage in a $100,000 fraud and had a very minimal role in it.
Criminal history is calculated based on the seriousness of the defendant’s prior convictions. For most white-collar defendants, Mr. Cohen included, the criminal history is Category I, the category reserved for zero or very minimal criminal history.
Sometimes there is disagreement among the government and the defense about the guidelines range. For example, they may disagree about the loss amount or whether the defendant was a “minimal participant” in the crime. But, generally, the parties try to reach an agreement and that’s the number that goes into the plea agreement.
In Mr. Cohen’s case, the government and the defense have almost agreed on the sentencing range. Mr. Cohen’s lawyers propose a final range of 46-57 months, and the government proposes 51-63 months.
(They have a minor disagreement about whether certain offenses “group” or should be considered separately under the Guidelines—a topic too mundane even for this blog.)
To be clear, even if they agreed 100% on the sentencing range, there is still no guarantee that the court will sentence Mr. Cohen within that range. But, most federal judges do sentence in the range proposed by the plea agreement even though not required to do so (except in a Rule 11(c)(1)(C) plea agreement, but that’s a topic for another day).
So How Does a Downward Departure Fit into Things?
That was a bit of a wind-up to the main event—the downward departure. Once the court decides on the sentencing range, it can then depart upward or downward from the range. Here’s the Sentencing Commission’s April 2018 Primer on Departures and Variances.
One of the few situations when a court will depart downward is when a defendant provides “substantial assistance” to the government. That’s called a “5K departure” or the government’s motion to ask the court to depart downward is called a “5K motion.”
Bruno Mars has 24K Magic; we have 5K departures. That’s how lawyers roll.
Here’s section 5K1.1 of the Sentencing Guidelines
5K1.1. Substantial Assistance to Authorities (Policy Statement)
Upon motion of the government stating that the defendant has provided substantial assistance in the investigation or prosecution of another person who has committed an offense, the court may depart from the guidelines.
(a) The appropriate reduction shall be determined by the court for reasons stated that may include, but are not limited to, consideration of the following:
(1) the court’s evaluation of the significance and usefulness of the defendant’s assistance, taking into consideration the government’s evaluation of the assistance rendered;
(2) the truthfulness, completeness, and reliability of any information or testimony provided by the defendant;
(3) the nature and extent of the defendant’s assistance;
(4) any injury suffered, or any danger or risk of injury to the defendant or his family resulting from his assistance;
(5) the timeliness of the defendant’s assistance.
Generally, when a defendant cooperates during the plea process—by providing information about other defendants or other crimes—then the government will agree to file a motion for downward departure under Section 5K.
For example, here’s standard language from an Eastern District of Virginia plea agreement:
The parties agree that the United States reserves the right to seek any departure from the applicable sentencing guidelines, pursuant to Section 5K1.1 of the Sentencing Guidelines and Policy Statements, or any reduction of sentence pursuant to Rule 35(b) of the Federal Rules of Criminal Procedure, if, in its sole discretion, the United States determines that such a departure or reduction of sentence is appropriate.
The plea agreement also defines what is included in “cooperation.” It includes testifying at any proceeding, providing documents upon request, being available for any “debriefing” requested by the government and so forth.
In the EDVA, the government will file a motion describing the cooperation and suggesting a percentage of the sentence that should be reduced, such as 25% or 33%.
Note that this type of language gives the government the ability to back out and not file a 5K motion. It’s always in the government’s discretion.
Why Didn’t Michael Cohen Get a 5K Deal?
Jeez, I don’t know. If I knew, I’d be on CNN talking about it.
I have no inside baseball, but I have a few ideas. The key fact is that the process is far from over.
The plea negotiation process is a somewhat graceless dance between defense counsel and the prosecutors. It’s a little bit like dating—you shouldn’t give it all up on the first date. You have to hold something back for later.
Mr. Cohen’s lawyers want to get the best possible deal for their client. So, although he may have given the government some information, he may not have given them everything he knows at this point. It’s very possible that his lawyers have given the government a bare-bones attorney proffer describing what Mr. Cohen knows so that the government has a sense of what he knows.
If what Mr. Cohen knows is helpful enough—or implicates an important defendant (cough cough)—then the government will have an incentive to sweeten the deal to get Mr. Cohen to cooperate further with them.
Mr. Davis has said that Mr. Cohen is “more than happy” to talk to prosecutors and has information about whether President Trump knew about the Russian hacking efforts to affect the 2016 election. That would be very useful information to the Special Counsel, particularly since the other people who have this information (Donald Jr., Jared, Ivanka) are extremely unlikely to spill the beans. (UPDATE: Mr. Davis has now backed away from this claim a bit.)
It’s clear that Mr. Cohen provided some cooperation before he entered into the plea deal. It surely was no surprise to the prosecutors that he said at the plea hearing that he paid Stormy Daniels at the direction of a candidate for federal office to influence the election. (If there was any doubt that the candidate was President Trump, Mr. Cohen’s lawyer Lanny Davis tweeted after the hearing to confirm that fact.)
Why, then, didn’t the plea agreement mention a cooperation deal? Or promise a 5K motion? Why does it instead say that there are no deals to request a downward departure?
It may be that the SDNY was playing hardball. It’s an office known for an aggressive approach. They may have said that if he provided the cooperation they requested, they’d agree to this plea deal and nothing else. The itself deal took his cooperation into account, and they weren’t about to offer a departure from the agreed guidelines range as well.
Or, the prosecutors may have decided that Mr. Cohen would be the best witness for them at a future trial if he wasn’t subject to any cooperation deal. A government witness’ cooperation deal is the focus of any defense cross-examination since a witness whose sentence will be reduced by cooperating is biased to “cooperate” (i.e., to shade the facts in a way that is most helpful to the government).
Or, the government may have a very informal (and unwritten) agreement with the defense to make certain arguments at sentencing that would encourage the judge to sentence at the low end of the range. This option strikes me as unlikely since it would require a level of trust between the government and the defense that doesn’t usually exist.
Or, prosecutors may change their mind and file a 5K motion before the sentencing hearing scheduled for December 12. There is a lot of time between now and then for Mr. Cohen to provide more cooperation. Nothing stops them from agreeing to a new plea agreement. All the current plea deal says is that they don’t have a deal right now.
Plus ça change, and all that.
There’s at least one other option for cooperation credit here, particularly if Mr. Cohen actually has information about the Russian investigation that is the primary focus of the Mueller investigation. But you’ll just have to wait until next week to find out.
Reblogged this on FCPA Compliance and Ethics Blog.
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