Karen McDougal, the former Playboy Playmate who says she had an affair with Donald Trump in 2006 and 2007, has scored a dramatic and abrupt legal victory over AMI, the parent company of the National Enquirer, which purchased exclusive rights to the story of her affair with Trump and then buried it.
The news suggests that circumstances of McDougal’s contract were unseemly and possibly illegal — and the company was eager to find a way out of the morass. The deal, notably, does not provide any relief for Michael Cohen, the personal lawyer and “fixer” for the president. As a result, McDougal continues to pose a serious threat to Trump.
AMI’s CEO, David Pecker, describes himself as a close friend of Trump.
McDougal signed an agreement with AMI — which, in addition to the National Enquirer, is also the parent company for publications like Star, Men’s Fitness, and Shape — in August 2016, a few months before the presidential election. She was paid $150,000 for the rights to her story about “any relationship she has ever had with a then-married man.” She was also promised a fitness column in various AMI publications and a feature on the covers of AMI magazines.
McDougal alleges that she was pressured into signing the agreement, that she was never given the opportunity to write the columns she was promised, and that her lawyer at the time, Keith Davidson, was secretly colluding with Michael Cohen, the personal lawyer and “fixer” for the president.
McDougal sued on March 20, asking a court to nullify the contract.
Up until a few days ago, AMI seemed prepared to fight the lawsuit. On April 2, AMI’s lawyers filed a lengthy motion with the court to dismiss the case.
But then, on April 9, Michael Cohen’s home and office were raided by the FBI.
On Wednesday, McDougal and AMI announced they had reached a settlement. And the extremely favorable terms of the agreement suggest that AMI ultimately concluded that the suit presented considerable legal risks to the company.
Not only is McDougal fully released from the contract and regains ownership of her story, but she also gets to keep the $150,000. AMI could be entitled to some money if McDougal decides to resell her life rights within the next year, but only 10 percent of the proceeds up to a maximum of $75,000.
In other words, if McDougal sells her story for $750,000, only then would AMI be entitled to $75,000. Meanwhile, McDougal will have been paid $900,000.
What AMI did get was a legal release for its conduct in negotiating the contract. McDougal retains her ability to sue Michael Cohen and her former attorney, Keith Davidson, over the matter.
The company is essentially paying McDougal to go away.
Appearing on Rachel Maddow’s show last night, McDougal’s current attorney, Peter Stris, said that Davidson and Cohen were “working together to pursue a legal fraud.”
If AMI was part of that fraud, things could have gone south quickly. It appears it didn’t want to find out.
Significantly, Stris said that he believed Cohen and Davidson had perpetrated this fraud in other cases as well. Cohen and Davidson, remarkably, seem to end up involved in every sex scandal involving Trump. Cohen has also reportedly referred business to Davidson. In response to the McDougal lawsuit, Davidson acknowledged he contacted Cohen about the AMI agreement, even though Cohen was not a party to it.
Communications between Cohen and Davidson were reportedly part of information targeted by the FBI raid on Cohen’s homes and office.
“I’m very confident that Michael Cohen and Keith Davidson and others will have to account for the things that they’ve done,” Stris told Maddow on Wednesday night.