By David Brunnstrom and Karen Freifeld
WASHINGTON (Reuters) - U.S. President Donald Trump on Saturday denied any wrongdoing a day after reports that his onetime attorney Michael Cohen had recorded them both discussing buying the rights to a story by a woman who said she had an affair with Trump.
The president said in a tweet it might be illegal for a lawyer to record a client. An attorney for Cohen called Trump's statement "false."
"Inconceivable that the government would break into a lawyer’s office (early in the morning) - almost unheard of," Trump tweeted, in an apparent reference to an FBI raid on Cohen in April.
"Even more inconceivable that a lawyer would tape a client - totally unheard of & perhaps illegal. The good news is that your favourite President did nothing wrong!" Trump added.
Trump lawyer Rudy Giuliani told Reuters on Friday Cohen recorded a conversation with Trump in September, two months before the 2016 election, in which they discussed buying the rights to a story by a former Playboy model, Karen McDougal, who said she had an affair with Trump.
On Saturday, Giuliani told Reuters the conversation was held at Trump’s office in Trump Tower and that Cohen used a hidden device to record the conversation. In New York state, it is legal to record a conversation if one party consents.
Giuliani said no campaign funding was involved in the discussion between Trump and Cohen, who has distanced himself from Trump in recent months as the FBI investigates Cohen's business dealings. If campaign funds were used, that could run afoul of federal election law, legal experts say.
In a tweet on Saturday, Lanny Davis, a lawyer for Cohen, called Trump and Giuliani's strategy "flawed" and the president's Twitter statement against Cohen "false."
Before the election, the Trump campaign denied any knowledge of payment to McDougal, but the taped conversation could undermine those denials.
Giuliani said the conversation involved reimbursing the parent company of the National Enquirer tabloid for McDougal's story rights. The payment was never made, he said.
"It's pretty clear from the tape, it's the first time Trump is finding out ... AMI had bought the rights from McDougal," Giuliani said in a short interview on Saturday.
AMI, American Media Inc., is the parent company of the National Enquirer. Giuliani added that Cohen was speaking with Trump to tell him that information and Cohen recommended Trump buy the rights from AMI.
Giuliani had earlier denied Trump had an affair with McDougal. He said the tape would show that Trump makes clear that if there is going to be a payment, it should be done by check, which would be easily traced.
Speaking on Friday, Giuliani said the FBI seized the recording this year during a raid on Cohen's office.
The FBI investigation stemmed in part from a referral by the U.S. special counsel's office, which is looking into possible coordination during the election campaign between Trump's aides and Russian officials. Moscow denies U.S. allegations that it interfered in the election and Trump denies any campaign ties to Russian officials.
A representative for McDougal has not responded to requests for comment. The White House had also declined comment.
McDougal has said she began a nearly year-long affair with Trump in 2006 shortly after his wife, Melania, gave birth.
She sold her story for $150,000 in August 2016 but it was never published by the National Enquirer, a practice known as "catch and kill" to prevent a potentially damaging story from becoming public. David Pecker, the chairman of parent company American Media Inc (AMI), is a friend of Trump.
The New Yorker magazine reported in February that Trump had an affair with McDougal at the same time he had a relationship with porn star Stormy Daniels and that the National Enquirer prevented McDougal's story being made public.
The White House has said Trump denies having sex with Daniels.
Federal prosecutors in New York are investigating Cohen for possible bank and tax fraud, and for possible campaign law violations linked to a $130,000 payment to Daniels and other matters related to Trump's campaign, a person familiar with the investigation has told Reuters. Cohen has not been charged with any crime.
While the American Bar Association said in 2001 it was not necessarily unethical for a lawyer to secretly record conversations with a client, Fordham University School of Law Professor Bruce Green said New York disciplinary authorities could take a more restrictive view of such recording unless extraordinary circumstances existed.
Such circumstances might include preventing harm to others or the lawyer's need to establish his own defence to the client's conduct.
Green said Cohen was unlikely to raise his need to defend himself to avoid an ethics charge "because if Trump and Cohen were committing crimes together, and that's why Cohen recorded their calls, then Cohen has bigger disciplinary problems."
(Reporting by Andrew Heavens, David Brunnstrom and Karen Freifeld; Additional reporting by Roberta Rampton in Berkeley Heights, New Jersey and Anthony Lin in New York; Editing by Nick Zieminski and James Dalgleish)