The following article by Matt Zapotosky, Devlin Barrett, Carol D. Leonnig and Michelle Ye Hee Lee was posted on the Washington Post website May 3, 2018:
Rudy Giuliani’s disclosure that President Trump repaid his attorney for the hush agreement with Stormy Daniels could still be a campaign finance violation. (Whitney Shefte/The Washington Post)
Rudolph W. Giuliani’s media blitz to convince the public that neither Donald Trump nor his lawyer had violated the law by paying a porn star to keep quiet about an alleged affair might have backfired, giving investigators new leads to chase and new evidence of potential crimes, legal analysts said.
Giuliani made statements that speak to Trump and lawyer Michael Cohen’s intent — an important aspect of some crimes — and he made assertions that investigators can now check against what they have already learned from documents and witnesses, legal analysts said. His comments to media outlets underscore a growing tension for the White House: The FBI investigation of Cohen presents a legal problem for the president that his own lawyer might have exacerbated.
“I’m sure his strategy was damage control,” said Barbara McQuade, a former federal prosecutor who now teaches at the University of Michigan, “but I’m not sure he controlled much.”
Starting with a Fox News appearance on Wednesday night, Giuliani, who joined Trump’s legal team just a few weeks ago, seemed to be trying to play down Cohen’s $130,000 payment in October 2016 to adult-film actress Stormy Daniels and President Trump’s reimbursement of his longtime lawyer. He might have been trying to get ahead of investigators in making public facts they already know, though legal analysts said his statements could reinforce any case they might bring.
Giuliani first contradicted Trump’s assertion last month that he was unaware of the payment to Daniels, then offered details of which federal investigators are sure to take note. He mused on “Fox & Friends,” for example, about what might have happened to Trump’s campaign had Daniels made her allegation on the eve of the election.
“Imagine if that came out on Oct. 15, 2016, in the middle of the last debate with Hillary Clinton,” Giuliani said. “Cohen didn’t even ask. Cohen made it go away. He did his job.”
That comment is important because it suggests Cohen made the payment with the intention of protecting the Trump campaign. In that case, the payment would constitute a campaign contribution or loan — rather than a personal expense. Such a contribution would have to be reported publicly, and the amount would have far exceeded the legal limit of $2,700 that Cohen could have given.
Matthew Sanderson, who served as a campaign finance lawyer for the 2008 McCain-Palin campaign, said the timing of the payment “strongly suggests it was related to the election, and therefore is either a contribution, or at least a reportable expenditure by the campaign.”
But Charlie Spies, who served as counsel for Mitt Romney’s 2008 presidential campaign, said Giuliani’s comments must be weighed against Trump’s history of aggressively protecting his corporate and personal reputation.
“Remember, at this time, people didn’t expect him to win, so his business and personal reputation were much more important,” Spies said.
Rudolph W. Giuliani said President Trump personally repaid his lawyer the $130,000 that was used to buy Stormy Daniels’s silence about an alleged affair. (Amber Ferguson/The Washington Post)
Trump himself asserted Thursday on Twitter that Cohen “received a monthly retainer, not from the campaign and having nothing to do with the campaign” and that he used that retainer to pay Daniels.
Campaign finance violations can be difficult to prove. Federal prosecutors failed in their effort to convict former North Carolina senator and Democratic presidential candidate John Edwards of accepting illegal campaign contributions for payments made to a woman with whom he had an extramarital affair and fathered a child.
Giuliani also revealed what legal analysts say might be tantalizing leads for investigators, who already were exploring Cohen’s business practices and whether any crimes may have been committed as part of a pattern or strategy of paying hush money to keep damaging stories about Trump from appearing when he was a candidate, according to people familiar with the matter.
In an interview with The Washington Post, Giuliani said that Trump paid Cohen $35,000 a month as a retainer and that “there probably were other things of a personal nature that Michael took care of, for which the president would have always trusted him as his lawyer, as my clients do with me. And that was paid back out of the rest of the money. And Michael earned a fee out of it.” He declined to specify what those things might be.
“I think they were all certainly much less significant than the $130,000,” Giuliani said. “I’d be surprised if they made up even an appreciable portion of the amount.”
In addition to discussing the payment to Daniels, Giuliani asserted that Trump fired James B. Comey as FBI director because Comey would not reveal publicly that the president was not under investigation. Special counsel Robert S. Mueller III is investigating whether Trump obstructed justice by firing Comey.
“I think even asking him to publicly exonerate him does interfere with the investigation and could constitute obstruction of justice,” McQuade said.
Giuliani said the president paid Cohen $35,000 monthly for a period of time in 2017. Precisely when the payments started and stopped is unclear; at one point, Giuliani indicated there could have been payments in 2018. He also said the Daniels settlement was covered by those payments.
Investigators are likely to ask witnesses about the topic and compare what Giuliani said publicly about Trump’s arrangement with Cohen with what people have told them in the past, McQuade said. Lying to federal investigators is a crime, though lying on TV is not.
McQuade said investigators are also likely to explore money-laundering issues, though legal analysts said that, by themselves, Giuliani’s comments did not present clear evidence on that front.
For prosecutors to charge someone with money laundering, the money at issue has to come from a crime, and paying someone to keep quiet does not qualify. It is possible, though, that the money should have been reported on a financial disclosure. Norm Eisen, chair of Citizens for Responsibility and Ethics in Washington, said his group had filed a complaint saying Trump should have reported it.
“It’s not strictly criminal money laundering unless the underlying money is proceeds of another crime, and I don’t think we have any indication that that’s the case,” said former federal prosecutor Randall Eliason.
The growing legal questions around Cohen’s services for Trump come as the lawyer faces a grand jury investigation being led by federal prosecutors in New York City who are exploring bank fraud, wire fraud or campaign finance charges, according to people familiar with the matter who, like others, spoke on the condition of anonymity to discuss an ongoing investigation.
That case, according to officials, stems from a referral made by Mueller but has functioned as a stand-alone case in New York for months. Mueller is investigating whether the Trump campaign coordinated with the Russian government to influence the 2016 election, as well as whether the president obstructed justice.
Trump’s and Cohen’s lawyers believe the New York investigation is largely aimed at pressuring Cohen to cooperate with the special counsel team, according to several people familiar with their discussions. They believe investigators want to push him to reveal his conversations with Trump amid Russian efforts to help his campaign.
The Manhattan prosecutors’ search warrant for Cohen’s home and office — which FBI agents executed on April 9 — specifically sought communications between Cohen and Trump. The agents seized boxes of papers and more than a dozen digital devices. Those electronic and paper documents are now being reviewed by a court-appointed special master to determine what material is protected by attorney-client privilege and what is eligible to become part of the criminal investigation of Cohen. That process is expected to take weeks.
Two lead prosecutors handling the case — Thomas McKay and Nicolas Roos — are part of the public corruption unit of the U.S. Attorney’s Office in Manhattan and prosecute public officials and people engaged in conspiracy or fraud against the government. Trump advocates argue the corruption unit wouldn’t be involved unless their work was steering toward the president.
“This is about trying to get the president,” said one person familiar with the Trump lawyers’ discussions.
A spokesman for the special counsel’s office declined to comment.
Former federal prosecutor Jonathan Biran, who is now in private practice at Rifkin Weiner Livingston, said it is possible that investigators already know what Giuliani revealed publicly Wednesday and that his TV appearances were merely an attempt at “trying to get out in front of it.”
Giuliani and Stephen Ryan, who is Cohen’s lawyer, have known for weeks of Trump’s reimbursing Cohen, but even people who were close to Trump were stunned by the news that Giuliani divulged late Wednesday evening.
“I think there are two issues — there are the legal issues, and then the political side of it,” Biran said. “Reasonable minds can differ about whether politically it’s a good tactic to reveal this information in the way he did. . . . I think that Mueller’s going to find out what the facts are, so that makes me think he was more worried about the political calculus.”
McQuade said Giuliani’s TV interviews might have been an effort to speak to Cohen and to reassure him that the White House still has his back. “Maybe the strategy there is to try to calm him down so he’s not tempted to cooperate,” she said.
After all, legal analysts said, charging Trump’s lawyer with a campaign finance or bank fraud violation seems far less weighty than Mueller’s pursuit of potential campaign coordination with Russia.
“I feel like a few months from now, campaign finance violations are going to be the least of these guys’ worries,” Eliason said.
Robert Costa contributed to this report.