Update: On Monday, the FBI raided the offices of Michael Cohen, President Trump’s longtime attorney, apparently with an eye toward investigating possible campaign finance violations. Below, our look from last month about how the payment to Stormy Daniels might have violated campaign finance laws.
NBC News in February reported that Michael Cohen, President Trump’s longtime ally and attorney, had used a Trump Organization email address as he worked to secure the payment to Daniels. Daniels alleges that the money was paid to keep her from telling the media about a sexual relationship she had with Trump; Cohen and Trump continue to deny that relationship.
In particular, NBC received a copy of an email from a banker at First Republic Bank that was sent to Cohen. Cohen then forwarded the email to his private Gmail account and, from there, to Daniels’s attorney.
Notice the email address. The banker emailed Cohen at firstname.lastname@example.org. Trumporg.com redirects to Trump.com. The domain is registered to the Trump Organization. It is, in other words, an email address that belongs to the Trump Organization — an asset of the company.
During the “60 Minutes” interview last month, Daniels’s attorney, Michael Avenatti, added another bit of evidence linking the Trump Organization itself to the settlement. He showed interviewer Anderson Cooper a FedEx receipt showing that the signed agreement Daniels returned to Cohen was sent to him at his office in Trump Tower.
Those two things suggest that federal election law was very likely violated.
We spoke with Lawrence Noble, senior director and general counsel at the Campaign Legal Center, when the Daniels payment was first reported. He walked us through the danger zones for the Daniels payment in terms of what election law prohibits. At the time, it was not clear where the money had come from or how it got to Daniels. We lacked a number of details about how Daniels and Trump’s team, Cohen in particular, had interacted.
We have learned a lot since then. In addition to the email above, we have also seen the lawsuit Daniels filed alleging that the agreement to remain silent was never in effect because Trump didn’t sign it. Included in that lawsuit is this element of the “factual background” to the matter at hand.
Daniels’s lawsuit asserts that Trump learned she was talking to media outlets shortly after a number of women had come forward to rebut Trump’s denial during the Oct. 10, 2016, presidential debate that he had groped women as he had implied in an “Access Hollywood” tape. Hearing that she might tell her story, too, Trump “sought to silence” her, “thus helping to ensure he won the Presidential Election.”
Those two things together — that a Trump Organization email address was used to facilitate the payment and that the payment was linked to the campaign — would constitute a legal violation. (On “60 Minutes,” Avenatti reiterated his sense that the timing of the agreement with Daniels made it very unlikely that it was unrelated to the campaign.) The email from the bank to Cohen does not prove that company money was used to pay Daniels, which Noble told us last month would itself be illegal. Just using that email address is its own problem.
Common Cause‘s Paul Ryan (himself a former lawyer with the Campaign Legal Center) noted on Twitter that the use of Trump Organization resources probably violates 11 CFR 114.2(f). That reads, with our added emphasis:
“Corporations and labor organizations (including officers, directors or other representatives acting as agents of corporations and labor organizations) are prohibited from facilitating the making of contributions to candidates or political committees, other than to the separate segregated funds of the corporations and labor organizations. Facilitation means using corporate or labor organization resources or facilities to engage in fundraising activities in connection with any federal election …”
“The use of the Trump Organization email is evidence that Cohen’s services were, at least in part, being paid for by the Trump Organization,” Noble said in an email. “That would be an illegal corporate contribution to the campaign even if the company did not pay the $130,000.”
Paying someone to be quiet so they do not damage a political effort is an in-kind contribution to that campaign, covering a cost meant to aid efforts to win the election. When we spoke in February, Noble predicted the almost-certain defense will be that the Daniels payment did not qualify as a campaign contribution. That Cohen (who does seem to have fronted the $130,000 himself) made a payment to a woman shortly before the election for reasons that had nothing to do with the election.
Noble was understandably skeptical of this argument, given what was known then. He also pointed out that even if what happened with Daniels was the sort of thing that was very common for Cohen as part of his duties, the Daniels scenario could still be a contribution if Cohen understood it would aid Trump’s electoral effort.
The Daniels lawsuit makes clear that her team, at least, thought this was Cohen’s (and Trump’s) goal. The payment was made in part “to ensure he won the Presidential Election,” the lawsuit reads. What is more, the original agreement includes stipulations that Daniels (identified as “Peggy Peterson” or “PP”) should take certain actions to secure her silence by Nov. 1, 2016 — a week before Election Day.
(“DD” was “David Dennison” — Trump.)
After NBC’s report was published, ABC spoke with Cohen, who offered two new insights.
The first was that he used his Trump Organization email for any number of things.
“I sent emails from the Trump Org email address to my family, friends as well as Trump business emails,” he told the network. “I basically used it for everything. I am certain most people can relate.”
This doesn’t absolve him of the legal jeopardy mentioned above.
What’s more, the ABC interview solidified another significant legal problem for Cohen.
Cohen told the network that the money used to pay Daniels was “taken from my home equity line.” The money, that is, came directly from Cohen. The Wall Street Journal reported that Cohen told others that he had not been repaid for his investment immediately — meaning that he had, in effect, made a loan to the campaign of some duration by covering this cost.
As Noble told us in February (and as he confirmed by phone on Friday afternoon), that means Cohen almost certainly made an illegal contribution of $130,000 (which we know was in the form of a loan) to the campaign.
The only way in which Cohen could have paid the $130,000 without having violated campaign finance laws is if he were totally independent of the Trump campaign and, as a private individual, decided to give Daniels the money to buy her silence. But Cohen was clearly empowered to act on behalf of the campaign, including appearing on CNN to speak on its behalf about campaign staffing changes.
Rick Hasen, professor of law at University of California at Irvine, thinks that it’s unlikely that anyone would face criminal penalties for any possible legal violations.
“As the failed John Edwards prosecution shows, proving a campaign finance violation in these circumstances is tricky,” he wrote. Edwards, a candidate for the Democratic presidential nomination in 2008, was found not guilty of campaign finance violations in 2012 after a donor paid $1 million to keep knowledge of Edwards’s out-of-wedlock child from becoming public the year before his presidential bid.
“A criminal prosecution by the Department of Justice requires proof beyond a reasonable doubt, and here there are two possible motives: one to help Trump’s campaign (making the conduct illegal) and one to help Trump’s marriage or reputation (not illegal). There’s enough here for prosecutors to look to see if there’s some documentary evidence like emails or texts showing Cohen wanted to help Trump’s campaign. But without such evidence a prosecution would be hard. An FEC finding is civil, with a lower burden of proof but even they didn’t go after John Edwards.”
On “60 Minutes,” former Federal Election Commission chairman Trevor Potter thought that the Edwards case wasn’t a strong precedent. Why?
“The timing” of the payment to Daniels, he said. “It wasn’t the year before the election. It’s right in the middle of the run-up to Election Day. When Trump’s conduct with women was a prime campaign issue. In fact, it was what everyone was focused on.”
In short, then, we have an agreement executed right before the election with a mandate that Daniels take certain actions protecting Trump against the story coming out before the election that resulted in a $130,000 payment Cohen facilitated using resources provided by the Trump Organization.
The final call is the Federal Election Commission’s. But in the view of Ryan, Noble and Potter, that is very likely a violation of federal election law.