Hush money commotion turns louder
Giuliani disclosure on Trump puzzles some legal experts
WASHINGTON — President Donald Trump and his new legal point man, former New York Mayor Rudy Giuliani, are off to an explosive start together, admitting what Trump had only recently denied — that he reimbursed his personal lawyer for hush money paid to a porn actress before the election.
The question roiling Washington, ever since Giuliani disclosed the stunner late Wednesday, is “Why?”
If the new version of events was meant to reduce Trump’s legal liability, the success of the strategy seemed in doubt on Thursday. Some legal experts say Giuliani may even have made things worse, not only for the president but also for Michael Cohen, the lawyer who paid Stormy Daniels $130,000 shortly before the 2016 election to stay quiet about an alleged affair with Trump.
“What you see here is a real effort to cover this up, and the story keeps shifting,” said Larry Noble, a former general counsel of the Federal Election Commission.
One central issue, legal experts say, is whether the payments amounted to a campaign expense — despite Trump and Giuliani’s denials — to silence an alleged lover and avoid alienating voters. The nondisclosure agreement with Daniels came as the campaign already was contending with the furor over Trump’s boasts suggesting sexual assault that were recorded a decade earlier.
By tweeting early Thursday that he repaid the legal settlement with Daniels, Trump may be trying to protect his attorney from charges that Cohen violated limits on campaign donations and federal reporting requirements. Trump associates worry whether Cohen, who is under FBI investigation in New York, will remain loyal to the president as prosecutors seek Cohen’s cooperation.
Yet Trump, by acknowledging he paid the money, is raising new political questions about his honesty and new legal questions about his own failure to disclose the payments either on campaign finance filings or his personal financial disclosures.
Legal experts noted that if the $130,000 was intended as a campaign loan from Cohen to Trump, that should have been disclosed.
“Giuliani did not materially improve the president’s position. But he may have materially made it worse,” said Jonathan Turley, a law professor. “It’s mystifying to me.”
Cohen’s office, residence and hotel room were raided last month by the FBI. Giuliani and Trump may have been anticipating that, and trying to get ahead of any disclosure.
Last month, in his first public statement about Daniels, the president told reporters that he knew nothing of the payments.
“You’ll have to ask Michael Cohen. Michael’s my attorney,” he said then.
Trump said last week on “Fox & Friends” that Cohen had represented him in the Daniels matter, though he gave no details. The White House has denied that Trump had an affair with her in 2006, as she contends.
Beginning Wednesday night on Fox News, Giuliani gave interviews in which he conceded that Trump reimbursed Cohen through “retainer” payments of $35,000 apiece over several months, giving Cohen “a little profit and a little margin for paying taxes.”
Giuliani told The New York Times that the total paid to Cohen since the end of the campaign was between $460,000 and $470,000, but he did not account for the money spent beyond Daniels’ $130,000, raising another question about the purpose of those payments.
Trump, in his tweets, called the nondisclosure agreement “a private contract between two parties,” unrelated to the campaign — the sort of thing “very common among celebrities and people of wealth.” He again denied he and Daniels had an affair and said he will pursue damages against her for “false and extortionist accusations.”
Giuliani denied in interviews that the payments were an effort to help Trump’s campaign, insisting they were intended to protect his marriage and reputation from Daniels’ allegations. Yet Giuliani undermined that argument by saying on “Fox & Friends” Thursday morning, “Imagine if that came out on Oct. 15, 2016, in the middle of the, you know, last debate with Hillary Clinton.”
“Cohen didn’t even ask” Trump, Giuliani said. “Cohen made it go away. He did his job.”
Giuliani, in his Thursday interview on Fox, said the president “didn’t know the details of this” until “a couple weeks ago, maybe 10 days ago” — a timeline that could account for Trump’s previous denial and failure to report the expenditures.
“But he did know about the general arrangement, that Michael would take care of things like this,” Giuliani told Fox host Sean Hannity during Wednesday’s interview.
Cohen has said he borrowed money to pay Daniels through a home equity line of credit, and his lawyer has said Cohen wasn’t repaid. By spending personal funds, without reimbursement, he could be liable for violating the federal cap on campaign donations, which was $2,700 per candidate in 2016, and Trump’s campaign could face trouble for failing to disclose them as contributions.
Federal enforcement is notably lax and slow-moving. But Trump’s admission that he reimbursed Cohen could result in criminal charges if prosecutors believed the two men had a “knowing and willful intent” to conceal spending intended to influence the election, Noble said.
Stephen Spaulding, a former FEC lawyer who is chief of strategy at the ethics watchdog group Common Cause, called Trump’s and Cohen’s handling of the matter a textbook example of a potentially criminal coverup more serious than the underlying offense.
Common Cause has filed complaints with both the FEC and the Justice Department arguing that the payment to Daniels was an illegal campaign contribution.
Separately, another public-interest advocacy group, Citizens for Responsiblity and Ethics in Washington, has filed a complaint to the Justice Department alleging that if the president knew he owed Cohen money, he violated federal law by failing to report the debt on his 2016 personal finance disclosure.
Daniels’ lawyer, Michael Avenatti, said the revelations that Trump reimbursed Cohen expose the president to criminal liability for potential money laundering and fraud. “This is a bombshell,” Avenatti told CNN.