The bombshell revelations from President Trump and his lawyer Rudolph W. Giuliani Wednesday night and Thursday morning about the election-eve payment to adult-film actress Stormy Daniels seemed like they were meant to show that the payments did not violate federal campaign laws.
Instead, all they did was shorten the fuse on that particular bomb.
Under the old story line, Trump attorney Michael Cohen paid Daniels $130,000 of his own money in October 2016 in exchange for her agreement not to talk about her relationship with Trump, borrowing against a personal home equity line to do so. Cohen claimed he did this without Trump’s or the campaign’s knowledge, and without reimbursement by anyone. This sounded highly dubious, but if true, it could have been a pretty good defense against charges that federal election laws limiting the amount donors can contribute to campaigns and requiring the disclosure of expenditures were broken. Cohen could argue — implausibly, given the timing — that the hush money payment was not intended to help Trump in the election. And he had a good fallback position: So what if it was? Cohen could say that a citizen may legally make an unlimited independent expenditure to assist a candidate with his own money, and that is all he did.
Now, however, that defense has blown up. Given that the new statements from Giuliani and Trump came shortly after federal agents raided Cohen’s offices, Trump and his legal team clearly realized that the prosecutors now have evidence that the old story was false. Thus, they decided to admit that Cohen was in fact reimbursed by Trump — after the election.
There are questions still to be answered: Did Trump know about the payoff at the time it was made? Giuliani appeared to argue on Fox News Channel that Cohen was merely acting as Trump’s agent and lawyer in this transaction. But he also suggested that Cohen acted on his own and Trump only learned about it later, after the election, and thus did not authorize it while he was a candidate. Who knows which story they will tell next time they talk about it?
At least until the next round of self-contradictory explanations, though, the current picture appears to be this: Cohen advanced $130,000 to pay hush money to Daniels. The central reason was to avert another Trump sex scandal in the closing days of the 2016 campaign. Cohen was later reimbursed by Trump.
For the federal election law’s contribution and disclosure provisions not to apply to these transactions, they cannot be “in connection with an election.” The circumstances of the payment seem to indicate it was: The payment was made hurriedly, just days before the election, and shortly after the Trump campaign had already been battered by the “Access Hollywood” tapes and other women alleging sexual harassment. As Giuliani told “Fox & Friends”: “Imagine if that came out on October 15th, 2016, in the middle of the, you know, last debate with Hillary Clinton.”
So according to Trump and Giuliani, it now appears both that Cohen violated campaign finance law when he fronted the $130,000 payment (because the expenditure was in connection with the election and constitutes a campaign contribution by him well in excess of the $2,700 limit) and that the Trump campaign (through its agent, the candidate) violated the law by accepting an excessive contribution and failing to report it. If this is the case, then the campaign further violated the law by failing to report Trump’s subsequent repayments to Cohen.
The fact that Trump later reimbursed the payments by Cohen does not cure either violation. Giuliani seems to think that since there is no legal limit on the amount that a candidate may spend on his own campaign, the Federal Election Commission violations now go away because Trump later reimbursed Cohen. But the reality is that Cohen used his own money to do this, effectively making a large loan to the campaign, and was only later reimbursed. None of this activity was disclosed on the campaign’s reports to the FEC as required. “Knowing and willful” violations of campaign rules — deliberately ignoring the law, which is what a prosecutor could argue Trump and Cohen did — are prosecutable as criminal offenses.
Further, there is a booby trap in the argument that the money Trump owed Cohen was not related to the election, and therefore not a contribution by Cohen or a campaign expenditure by Trump but merely a personal loan by Cohen for purely personal reasons. This would open Trump himself to a different legal violation: signing a false financial disclosure report. When Trump filed his report with the Office of Government Ethics in June 2017, the law required him to disclose any personal loan that was greater than $10,000 at any time during 2016 or the first half of 2017. If the loan from Cohen was a personal matter, Trump would have had to disclose it. He did not. Intentional omissions from that form, filed by every president and every senior government official, are subject to civil or criminal penalties.
This matter must be fully investigated and appropriate enforcement action taken. Otherwise, the lesson future candidates and campaigns will learn is that the disclosure provisions of the Federal Election Campaign Act are merely unenforced suggestions. Campaigns must not be allowed to get away with not reporting hundreds of thousands of dollars in election-related contributions in the required time frames before the election. That is, after all, when disclosure matters most — after the election, the damage has been done.