Trump fined $1,000 for gag order violation in hush money case as judge warns of possible jail time

The judge presiding over Donald Trump's hush money trial fined him $1,000 on Monday and warned of jail time for future gag order violations while jurors heard testimony for the first time about the financial reimbursements at the center of the case.

The testimony from Jeffrey McConney, the former Trump Organization controller, provided a mechanical but vital recitation of how the company reimbursed payments meant to suppress embarrassing stories from surfacing during the 2016 presidential campaign and then recorded them in internal ledgers as legal expenses in a manner that Manhattan prosecutors said broke the law.

McConney's appearance on the witness stand came as the landmark criminal trial, the first involving a former American president, entered its third week of testimony. His account has so far lacked the human drama offered Friday by longtime Trump aide Hope Hicks, but it nonetheless yielded an important building block for prosecutors trying to pull back the curtain on the transactions designed to protect Trump's presidential bid during a pivotal stretch of the race.

His testimony followed a stern warning from Judge Juan M. Merchan that additional violations of a gag order barring Trump from inflammatory out-of-court comments about witnesses, jurors and others closely connected to the case could result in jail time.

The $1,000 fine imposed Monday marks the second time since the trial began last month that Trump has been sanctioned for violating the gag order. He was fined $9,000 last week, $1,000 for each of nine violations.

“It appears that the $1,000 fines are not serving as a deterrent. Therefore going forward, this court will have to consider a jail sanction,” Merchan said before jurors were brought into the courtroom. Trump’s statements, the judge added, “threaten to interfere with the fair administration of justice and constitute a direct attack on the rule of law. I cannot allow that to continue.”

Trump sat forward in his seat, glowering at the judge as he handed down the ruling. When the judge finished speaking, Trump shook his head twice and crossed his arms.

Yet even as Merchan warned of jail time in his most pointed and direct admonition, he also made clear his reservations about a step that he described as a “last resort.”

“The last thing I want to do is put you in jail,” Merchan said. “You are the former president of the United States and possibly the next president as well. There are many reasons why incarceration is truly a last resort for me. To take that step would be disruptive to these proceedings.”

The latest violation stems from an April 22 interview with television channel Real America’s Voice in which Trump criticized the speed at which the jury was picked and claimed, without evidence, that it was stacked with Democrats.

Once testimony resumed, McConney recounted conversations with longtime Trump Organization finance chief Allen Weisselberg in January 2017 about reimbursing Michael Cohen, Trump’s former lawyer and personal fixer, for a $130,000 payment intended to buy the silence of a porn actor who has said she had a sexual encounter with Trump a decade earlier.

Weisselberg "said we had to get some money to Michael, we had to reimburse Michael. He tossed a pad toward me, and I started taking notes on what he said,” McConney testified. “That’s how I found out about it.”

“He kind of threw the pad at me and said, ‘Take this down,’” said McConney, who worked for Trump’s company for about 36 years, retiring last year after he was granted immunity to testify for the prosecution at the Trump Organization’s New York criminal tax fraud trial.

A bank statement displayed in court showed Cohen paying Keith Davidson, the lawyer for porn actor Stormy Daniels $130,000, on Oct. 27, 2016, out of an account for an entity Cohen created for the purpose.

Weisselberg’s handwritten notes about reimbursing Cohen were stapled to the bank statement in the company’s files, McConney said. Those notes spell out a plan to pay Cohen $420,000, which included a base reimbursement that was then doubled to reflect anticipated taxes as well as a $60,000 bonus.

McConney’s own notes, taken on the notepad he said Weisselberg threw at him, were also shown in court. After calculations that laid out that Cohen would get $35,000 a month for 12 months, McConney wrote: “wire monthly from DJT.”

Asked what that meant, McConney said: “That was out of the president’s personal bank account.”

Trump is accused of falsifying business records by labeling the money paid to Cohen in his company’s records as legal fees. Prosecutors contend that by paying him income and giving him extra to account for taxes, the Trump executives were able conceal the reimbursement.

McConney testified that he had instructed an accounting department employee to record the reimbursements to Cohen as a legal expense.

After paying the first two checks to Cohen through a trust, the remainder of the checks, beginning in April 2017, were paid from Trump’s personal account, McConney testified. With Trump, the only signatory to that account, now in the White House, the change in funding source necessitated “a whole new process for us,” McConney added.

“Somehow we’d have to get a package down to the White House, get the president to sign the checks, get the checks returned to us and then get the checks mailed out.”

McConney's testimony follows an account given to jurors Friday about Trump's reaction to a politically damaging recording that surfaced in the final weeks of the 2016 campaign.

Hicks offered jurors an insider's view of that chaotic and pivotal stretch of the campaign, when a 2005 recording showing Trump talking about grabbing women sexually without their permission was made public and when he and his allies sought to prevent the release of other potentially embarrassing stories.

That effort, prosecutors say, included hush money payments to Daniels and Playboy model Karen McDougal, who both have said they had sexual encounters with Trump before he entered politics.

“I had a good sense to believe this was going to be a massive story and that it was going to dominate the news cycle for the next several days,” Hicks said of the “Access Hollywood” recording, first revealed in an October 2016 Washington Post story. “This was a damaging development.”

Prosecutors are continuing to build toward their star witness, Cohen, who pleaded guilty to federal charges related to the hush money payments. He is expected to undergo a bruising cross-examination from defense attorneys seeking to undermine his credibility with jurors.

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Tucker reported from Washington.