Trump lawyer Cohen floats four names for 'special master' in criminal probe. Prosecutors suggest judge who ruled for Trump

Federal prosecutors in New York on Wednesday suggested that a retired judge who once awarded President Donald Trump $5 million from a beauty pageant winner be appointed to review sensitive files seized from his lawyer Michael Cohen's office.

Theodore Katz was just one of seven names floated by prosecutors and Cohen's lawyers for the position of "special master." That watchdog, if appointed by a judge, would help decide which documents seized from Cohen could be seen by prosecutors conducting a criminal probe of Cohen.

Katz was acting as a private arbitrator for Trump's claim of defamation against the beauty queen. He was one of three retired federal magistrate judges suggested by the United States Attorney's Office for the Southern District of New York for a potential special master.

All three men were judges in that district, which includes Manhattan and The Bronx.

Cohen's lawyers suggested four former prosecutors from the Southern District.

A spokesman for the U.S. attorney's office declined to comment on its list or Katz specifically.

A special master, if appointed, would review all or some of the files seized from Cohen's home and office last week to see if any of them should not be turned over to prosecutors because they are protected by attorney-client privilege. Such privilege could preclude them from being used in a criminal case against Cohen or other people.

Katz, in a 2012 private arbitration, ruled that Miss Pennsylvania USA 2012, Sheena Monnin had to pay Trump $5 million because she defamed him by saying his Miss USA pageant was rigged.

Cohen, then general counsel to the Trump Organization, was quoted in a news story in 2012 saying that a clause in the Miss USA pageant gave pageant officials the right to pick the top five finalists and the eventual winners. But Cohen said Trump never used his power to overrule pageant judges.

Monnin, who did not place in the top 15 in the Miss USA Pageant, later told reporters that the case with Trump "has been resolved."

"I can say that no money was paid out of my pocket," she said in 2016, according to a news story.

Trump had insulted Monnin's looks after she claimed the pageant was rigged.

"If you look at her compared to the people who are in the top 15, you'll understand why she's not in the top 15," Trump said.

Prosecutors on Wednesday also reiterated their opposition to a special master being appointed, saying it would slow down a review of Cohen's files by at least two months.

Prosecutors additionally revealed that they expect to start giving Cohen copies of the materials seized from him on April 27, and expect to finish that process by May 11.

Cohen and Trump lost a bid during a court hearing Monday to get first crack at reviewing the files seized from Cohen's office last week to identify files that might be held back from prosecutors because of attorney-client privilege protections.

Lawyers for both Cohen and Trump expressed deep concern about the prosecution's plan to have a "filter team" of prosecutors not connected to Cohen's case conduct that review. The filter team, prosecutors said, would prevent the case prosecutors from seeing information that could taint the legality of any case filed against Cohen or someone else.

But U.S. District Judge Kimba Wood left open the possibility that she would appoint a special master to help make that determination to some extent. She asked prosecutors and representatives for Cohen to identify candidates for that post.

Wood also left open the possibility that she would have a filter team of prosecutors handle all or some of the initial review work.

Prosecutors, in their court filing Wednesday, said any review conducted by a special master would not begin until June, at the earliest.

In contrast, prosecutors said, a filter team could begin that review this month.

"The Government continues to believe ... that a Special Master is not warranted to review the seized materials for privilege and that a Government Filter Team would fairly and most efficiently accomplish this task," prosecutors wrote.

But in the event a special master is needed, they added, prosecutors asked that one of three retired magistrate judges be appointed to that post.

The recommended names were Frank Maas, James Francis and Katz.

Maas and Katz are both currently associated with JAMS, the largest private provider of mediation and arbitration services in the world.

Francis is a distinguished lecturer at the law school of the City University of New York.

Cohen's first choice is Bart Schwartz, chairman of Guidepost Solutions, a corporate intelligence firm. Schwartz previously served as chief of staff to Rudy Giuliani when Giuliani headed the U.S. Attorney's Office for the Southern District of New York.

Giuliani, a former New York City mayor, is a supporter of Trump's who was considered but rejected, for the post of United States Attorney General in the Trump administration.

Cohen's second choice is Joan McPhee, a partner in the Manhattan law firm Ropes & Gray. McPhee represented an engineer indicted for obstruction of justice in the Deepwater Horizon oil drilling rig spill in the Gulf of Mexico. Three weeks before trial in 2015, charges were dropped against her client.

Tai Park, a partner in the Manhattan firm Park Jensen Bennett, is Cohen's third choice. Park had served for a decade in the U.S. attorney's office, where he was chief of the narcotics unit as well as senior trial counsel in the securities and commodities fraud task force.

The fourth proposed candidate is George Canellos, a partner in the New York office of Milbank, Tweed, Hadley & McCloy, where he is global head of the litigation and arbitration group. Canellos had previously been at the Securities and Exchange Commission, where he served as co-director of the SEC's enforcement division. At the SEC, he supervised the insider trading actions against Raj Rajaratnam of Galleon Management.

Cohen is being investigated for business-related matters, according to prosecutors.

On April 9, FBI agents, armed with a search warrant signed by a federal judge, raided Cohen's office, apartment and a hotel room where he has been staying while his home is being renovated. Agents seized computer files, cellphones and boxes of documents.

Among the files seized were ones relating to a $130,000 payoff that Cohen made shortly before the 2016 presidential election to porn star Stormy Daniels.

Daniels has said Cohen gave her that money in exchange for her agreement not to publicly discuss an affair she claims to have had with Trump in 2006. The White House has said Trump had no such affair, and Trump has said he was unaware of the deal Cohen cut with Daniels at the time it occurred.

Prosecutors also reportedly sought files related to a payment made by the National Enquirer to another woman, Playboy model Karen McDougal, who likewise claims she had sex with Trump.

At a court hearing Monday, Cohen's lawyers revealed that in addition to Trump, Cohen had two other clients who he had recently done legal work or consulting for.

One is now-former Republican Party fundraiser Elliott Broidy, a venture capitalist who consulted with Cohen about a $1.6 million payoff the married Broidy made to another Playboy model whom he had an affair with and impregnated. Broidy quit his GOP post last Friday after his infidelity came to light.

The other client Cohen identified was Fox News host Sean Hannity, who had asked Cohen's lawyers to keep his name out of court filings.

Hannity, after his name was revealed in court by Wood's order to Cohen's lawyer, said he only had "brief discussions" relating to legal issues with Cohen, most of which concern real estate.

Hannity also said the discussions "never involved any matter between me and a third party."