Cohen will also say that Trump directed negotiations for a real estate project in Moscow even as he campaigned for the presidency and publicly stated he had no business interests in Russia, according to a draft of Cohen's planned testimony.
In the text of his planned statement before a House of Representatives committee, Cohen calls Trump a "racist," a "conman" and a "cheat," and said he would be handing over documents to support his assertions.
Cohen says Trump ordered him to pay $130,000 to an adult film actress known as Stormy Daniels in order to cover up an affair in violation of campaign finance laws, and also told Cohen to lie about it to First Lady Melania Trump.
He will try to turn the tables on his former boss in congressional testimony that promises to be a media spectacle with potentially high stakes for the Trump presidency.
Cohen plans to offer "granular detail" about Trump allegedly directing the hush-money payments to women in violation of campaign finance law, a person familiar with his testimony said. Cohen pleaded guilty to his role in arranging the payments, and prosecutors in New York said in a December court filing they believed the president ordered the payments to protect his campaign.
Trump has repeatedly denied ordering the payments.
Cohen, 52, who testified behind closed doors to the Senate Intelligence Committee on Tuesday and has another non-public hearing before the House Intelligence Committee on Thursday, said he would use Wednesday's hearing to make the case to the public why it should believe him rather than Trump.
The hearing before the House Committee on Oversight and Reform is scheduled to start just as Trump wraps up a dinner with North Korean leader Kim Jong Un in Hanoi, and TV networks may show both simultaneously on a split screen.
The White House again questioned Cohen's credibility on Tuesday, with presidential spokeswoman Sarah Sanders calling him "a convicted liar."
It is not clear whether the hearing will significantly alter the public's perception of Trump's business practices or put him in greater legal peril.
"It will be a spectacle. No question about that," said Michael Zeldin, a former federal prosecutor. "But after the midday TV drama is over, we'll see if there is anything that amounts to something from a legal perspective."
While Cohen is expected to talk on Wednesday about Trump's interest in the proposed skyscraper project in Moscow long after he secured the Republican presidential nomination in 2016, the bulk of his testimony will be about allegations of wrongdoing by Trump as a businessman and the hush payments, the source said.
According to a staff memo seen by Reuters, Democratic lawmakers will ask Cohen about evidence they believe shows Trump's lawyers misled ethics officials about how Cohen was reimbursed for the $130,000 paid to Stormy Daniels.
I’m old enough to remember less than one yr ago, when Cohen, David Schwartz and others on the right publicly attacked me and called me a liar for months because I insisted that Trump had to know of the NDA agreement and that he had made the reimbursements to Cohen. #Vindicated— Michael Avenatti (@MichaelAvenatti) February 27, 2019
The Republicans on the oversight panel, including ranking member Jim Jordan, are likely to question Cohen's credibility, given his guilty plea for lying to Congress and other crimes.
Republican US Representative Matt Gaetz, another staunch Trump ally, who is not on the oversight committee, sparked controversy with a tweet on Tuesday suggesting there was compromising information about Cohen's private life.
"I guess tomorrow we will find out if there is anyone who Michael Cohen hasn't lied to," Gaetz said on the House floor amid criticism that his tweet amounted to witness intimidation. Gaetz later apologized and deleted the tweet, after he was rapped by Democratic House Speaker Nancy Pelosi.
Speaker, I want to get the truth too. While it is important 2 create context around the testimony of liars like Michael Cohen, it was NOT my intent to threaten, as some believe I did. I’m deleting the tweet & I should have chosen words that better showed my intent. I’m sorry. https://t.co/Rdbw3sTQJD— Matt Gaetz (@mattgaetz) February 27, 2019
How Cohen handles the Republican assault could determine whether he is perceived as credible and if his congressional testimony ends up having a similar impact to that of John Dean, who helped bring down President Richard Nixon in the Watergate scandal of the 1970s.
Advocates for Cohen have likened his decision to come clean to federal prosecutors in Manhattan and US Special Counsel Robert Mueller, who is investigating possible collusion between Russia and the Trump campaign, to that of Dean.
But Dean himself said the significance of Cohen's testimony would depend on what he had to say. He noted that Cohen did not fully cooperate with prosecutors in the Southern District of New York, which is the reason he is due to start a three-year prison sentence in May despite pleading guilty to financial crimes.
Dean, former White House counsel to Nixon, told Reuters that he expected the Republicans to hammer at why he did not cooperate fully with Manhattan prosecutors.
"It could be historic," Dean, now a frequent commentator on TV, said of Cohen's testimony. "But if he just gets beat up by the Republicans, it won't be."