Rekubit Exchange:Trump trial hears testimony from Keith Davidson, lawyer who represented Stormy Daniels and Karen McDougal

Prosecutors in former President Donald Trump's criminal trial in New York called their fifth witness to the stand as proceedings continued Tuesday: Keith Davidson,Rekubit Exchange an attorney who represented Daniels and model Karen McDougal as they sought deals in 2016 for their stories alleging sexual encounters with Trump.

Former National Enquirer publisher David Pecker testified previously that he paid McDougal $150,000, through Davidson, in August 2016, but never received a reimbursement he expected from Trump. When Davidson approached the Enquirer with Daniels' story that October, Pecker said he referred him to Trump's then-attorney, Michael Cohen. Pecker said he told Cohen he would not pay to buy the rights to another story about Trump, but advised Cohen to do so himself.

Cohen paid Daniels $130,000 via wire transfer. Prosecutors say Trump and Cohen "conspired" in a scheme to cover up Trump's reimbursements to Cohen for the payment, with the goal of hiding why Trump was paying Cohen. Trump has pleaded not guilty to 34 felony falsification of business records counts in the case and has denied all allegations, including that he had extramarital sexual encounters.

Davidson took the stand after testimony from Gary Farro, Cohen's former banker who told jurors about Cohen's "urgent" efforts to set up new bank accounts to use to wire the money. He was followed by two other witnesses who verified other pieces of evidence.

Keith Davidson's testimony

Under questioning from prosecutor Joshua Steinglass, with Trump looking on from the defense table, Davidson recounted a series of conversations with Dylan Howard, the editor of the National Enquirer in 2016. He said they were "professional acquaintances and friends," and that they would speak several times a week.

Davidson said he represented McDougal beginning in June 2016 regarding the "personal interaction she had … with Donald Trump." Prosecutors displayed texts and emails that Davidson produced pursuant to a subpoena.

Soon after agreeing to represent McDougal, Davidson texted Howard that he had a "blockbuster" story about Trump. Howard responded that he would "get you more than ANYONE for it. You know why…"

"I don't know if I had a clear understanding at that time, but I knew that Dylan's boss at that time, David Pecker, and Mr. Trump were longtime friends and had a business relationship," Davidson said on the stand. "And AMI had announced explicitly that they endorsed Mr. Trump's candidacy."

He said he met with Howard soon after and kept in touch over the following weeks. He testified that he was also talking to ABC about McDougal's story, and was "trying to play two entities off each other."

Prosecutors showed a text from Davidson in July 2016 that read: "Don't forget about Cohen. Time is of the essence. The girl is being cornered by the estrogen mafia." He said on the stand that the text was "regrettable," and that the phrase "is not one that I use or came up with."

Other texts showed Davidson negotiating through Howard, seeking a deal from AMI. He said he thought the outlet was a better fit, since the company wouldn't require McDougal to tell her story.

Davidson indicated he understood that a deal with AMI would also benefit Trump for the same reason: McDougal's silence.

"Throw in an ambassadorship for me. I'm thinking Isle of Man," he texted Howard, referring to a self-governing British Crown dependency.

Asked by a prosecutor to explain what he meant by that text, Davidson replied, "That somehow if Karen did this deal with AMI that it would help Donald Trump's candidacy."

He added that he didn't specifically know that AMI had struck a deal with Trump, but understood it to be supportive of his candidacy.

"I need this to happen," Davidson later texted Howard, a comment he explained in court as referencing McDougal's desire to strike a deal that did not involve her making public comments about the alleged affair.

McDougal ultimately received $150,000 in exchange for the rights to her story, which the Enquirer never published.

Trump's contempt order

Judge Juan Merchan began the day by giving Trump good and bad news. He approved a request by Trump to adjourn court on May 17 so he can attend his son's high school graduation.

But then the judge issued a ruling that prosecutors have sought for more than a week. Merchan found Trump in contempt of court for violating a gag order limiting what he can say about those involved in the case. 

Merchan said Trump violated the order nine times in recent weeks in posts on his Truth Social platform and campaign website. He fined Trump $9,000 and ordered him to delete the posts. He noted in his written ruling that New York law doesn't allow him to impose a fine of more than $1,000 per violation, and said that amount might not dissuade future violations by defendants who can afford to pay the fine. 

Merchan concluded the written ruling with a warning to Trump: "Defendant is hereby warned that the Court will not tolerate continued willful violations of its lawful orders and that if necessary and appropriate under the circumstances, it will impose an incarceratory punishment."

After the contempt ruling, Farro retook the stand.

He walked a prosecutor through a harried series of emails and phone calls on Oct. 26, 2016 and Oct. 27, 2016, when Cohen set up the new bank account and funded it with $131,000 from his own personal home equity line of credit.

The next day, Cohen authorized a transfer of $130,000 to an account associated with Davidson, Daniels' attorney. Cohen had described the account and transaction as related to real estate consulting, Farro testified, reiterating that the request was "urgent."

Farro said the transaction would have been delayed if Cohen indicated the transfer involved either a political candidate or an adult film star. He said any transaction involving a political candidate would have received "additional scrutiny" to ensure it was legal.

But he offered a different explanation of why the bank would have scrutinized a payment to Daniels. He said the bank was wary of facilitating the adult film industry.

"For something like that, we might have considered that a reputational risk," Farro said.

In:
• Michael Cohen
• Donald Trump
• Stormy Daniels

Graham Kates

Graham Kates is an investigative reporter covering criminal justice, privacy issues and information security for CBS News Digital. Contact Graham at [email protected] or [email protected]