The following article by Philip Bump was posted on the Washington Post website May 3, 2018:
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)
This article has been updated.
It didn’t take former New York mayor Rudolph W. Giuliani long to make his mark after joining President Trump’s legal team. Unfortunately, the mark Giuliani left was on his client.
During an interview with Fox News Channel’s Sean Hannity on Wednesday, Giuliani volunteered a startling bit of information. The $130,000 that Trump’s attorney Michael Cohen admitted paying to porn star Stormy Daniels? Trump had repaid it.
“That money was not campaign money, sorry. I’m giving you a fact now that you don’t know,” Giuliani told Hannity, raising the subject on his own. “It’s not campaign money. No campaign finance violation.”
It’s not entirely clear what Giuliani is claiming happened. Over the course of the interview, he told Hannity that Trump repaid Cohen through a monthly $35,000 retainer over several months “when he was doing no work for the president,” an amount that Giuliani said included “a little profit and a little margin for paying taxes for Michael.” Later, he speculated that the money might have been paid out of “law firm funds.” Regardless, Giuliani said, it didn’t matter for legal purposes.
According to Lawrence Noble, senior director and general counsel at the Campaign Legal Center, that’s true: How the payment was made doesn’t affect the legality.
There was still almost certainly a campaign finance violation.
“We still have the same question: What was the purpose of this,” Noble said when we spoke by phone Wednesday evening. We’ve noted in the past that the question of whether the payment was meant to aid Trump’s candidacy is central to campaign finance considerations — and that it’s hard to argue that this payment wasn’t related to the campaign.
“If the purpose of this was to stop [Daniels] from hurting the campaign,” Noble continued, “then what you have is Cohen made a loan to the campaign. And it was an excessive loan because lending the campaign money is a contribution. It was an excessive contribution until it’s repaid.”
On “Fox and Friends” on Thursday morning, Giuliani bolstered the argument that the payment was linked to the campaign.
“If we had to defend this as not being a campaign contribution, I think we could do that. This was for personal reasons. The president had been hurt personally, not politically, personally so much and the first lady by the false allegations,” Giuliani said.
But then he undercut that claim substantially.
“However. Imagine if that came out on October 15, 2016, in the middle of the last debate with Hillary Clinton,” he said. “Cohen didn’t even ask. Cohen made it go away. He did his job.”
Trump, Noble said, could make contributions of any size to his own campaign. (Giuliani alluded to this, too.) But the campaign can’t just take loans of any size from anyone without reporting them as long as Trump pays them back later. If that were legal, there would be no point in having campaign finance laws: Candidates could accept giant loans, not report them, and pay them back after the election. (The Wall Street Journal reports that the repayment occurred after the campaign.) By not reporting a loan from Cohen meant to aid Trump’s election, the campaign would have violated the law. Had Cohen not been repaid, the violation was his own, as an agent of the campaign making a contribution to it of that size.
When asked by reporters, Trump claimed not to be familiar with the payment to Daniels. Had Giuliani argued that Trump repaid Cohen only after he learned about it, it might bolster the argument that the payment had nothing to do with the campaign, Noble said. But Giuliani said that the repayment took place over months in the form of a payment for services not rendered.
What’s more, even if the loan didn’t have anything to do with the campaign — again, a questionable premise — Trump may have had to report the loan on his ethics forms as a federal officeholder.
In an interview with The Post’s Robert Costa, Giuliani went further.
“The repayments took place over a period of time, probably in 2017, probably all paid back by the end of 2017,” Giuliani said. “That and probably a few other situations that might have been considered campaign expenses.” Here he’s trying to say that the Daniels payment was different from campaign expenses — but he also admits that Cohen lent the campaign money in the form of expenses that Trump later repaid. Cohen isn’t listed in the campaign’s contribution or expenditure disclosures.
All of that aside, there’s another issue. We learned from NBC in March that Cohen had finalized the payment to Daniels from his Trump Organization email address. In other words, he used corporate resources to engineer a contribution to Trump’s campaign — violating a prohibition against corporations “facilitating the making of contributions to candidates or political committees.”
It gets worse.
“Giuliani suggesting it was funneled through the firm as legal fees,” Noble said, “is evidence of an intent to hide the source, which could make it knowing and willful, which is criminal.” There could also be tax violations, he added.
There’s admittedly a vagueness to Giuliani’s assertions. At one point, he claims that Trump “didn’t know the specifics” of the Daniels payment, perhaps giving Trump a bit of cover after the president denied knowing about it at all.
But to Giuliani’s central thesis — that the repayment meant that no campaign finance laws were broken — the law is fairly clear. If Cohen lent Trump $130,000 by making the payment to Daniels so that her story wouldn’t come out before the election, that loan would have had to have been reported.
And it would have been reported before Election Day.