That outline looks like this: Trump paid Cohen a retainer of $35,000 a month (Post interview) despite Cohen’s “doing no work for the president” (“Hannity” on Wednesday night). In total, Cohen was paid at least $460,000 from Trump’s “personal family account” (Times). Although Giuliani told the Times that the payments began after the 2016 election, he told The Post’s Robert Costa that Cohen possibly used some of Trump’s money beforehand, as well.
This is not how retainers typically work.
“It would be highly unusual to use a retainer for that purpose,” explained Peter Margulies, a law professor at Roger Williams School of Law and an expert in legal ethics. “Retainers are routinely used to fund work done by lawyers. So, typically, what you’ll do as a lawyer is you’ll work for a particular period of time understanding that you’re paid by the hour. And then you draw down that retainer as you spend the time. That is the common use of a refundable retainer.”
Were the Trump-Cohen retainer relationship a typical one, in other words, Trump would pay $35,000 a month to Cohen, who would then track the hours he spent working for Trump. At the end of the month, Cohen would either return the unspent portion of that money or, Margulies said, “probably submit a statement to your client for additional money for the work you did.” Cohen carrying a $130,000 line of credit for Trump over multiple months would be “very unusual,” he said.
“Attorneys are usually not in the business of fronting those kinds of costs,” Margulies said.
What’s more, it would be very atypical for a lawyer to be reimbursed for a large settlement payment under the terms of a retainer.
“It would be highly unusual to include specific payments to other individuals, including payments to settle various disputes, within a retainer,” he said. “That’s certainly not the usual practice.” Lawyers can include costs they’ve incurred in their retainers, but that is generally for things such as court filings.
It is “not impossible,” Margulies said, that the terms of Cohen’s retainer agreement with Trump included a stipulation that payments like the one intended to silence Daniels were covered. “But you’d expect that that would then be an express understanding in the terms of the retainer or something that the parties mutually acknowledged through their past dealings,” he said. In other words: that Cohen regularly paid such settlements on Trump’s behalf from his retainer.
“It would be highly unusual to have an amount that is not for a lawyer’s time but for some other purpose apart from incidental costs,” Margulies said. “Is it possible, particularly for someone in Trump’s circumstance, because he’s someone who is obviously unusually wealthy and he may not care as much about money as you know most of the rest of us do? It is possible, yes, but it would be unusual.” Especially, we’ll note, if Cohen was on retainer without doing any work, as Giuliani stated.
It’s worth remembering the context in which Giuliani presented this argument. Last month, Cohen’s office and home were raided by the FBI, which seized documents and duplicates of electronic files. If Trump were familiar with the payment to Daniels before he acknowledged it publicly, that might be reflected in seized documents. After a brief legal fight, the government began sharing seized documents with Cohen’s legal team in recent days.
When Giuliani broached the subject on Fox News Channel on Wednesday night, he did so without prompting in an effort to argue that Trump didn’t violate any campaign finance laws. Admitting that Trump repaid Cohen, Georgetown University professor Louis Seidman suggested in an email to The Post, would improve Trump’s position legally in regard to campaign finance law and would help explain any possible communications with Cohen.
The question that arises, then, is why Giuliani presented the murky case that he did. One can theorize that Trump and Giuliani wanted to publicly argue that Cohen had been repaid but had only the retainer payments documenting flow from Trump to Cohen. Is it possible, I asked Margulies, that Giuliani might be trying to make the best possible case for Trump’s having paid the money given to Daniels by leveraging highly unusual attorney-client practices?
“Yes,” he said. “I think that’s correct.”