The Slatest

Donald Trump Basically Just Said He Should Lose the Litigation With Stormy Daniels

Adult film actress/director Stormy Daniels hosts a Super Bowl party at Sapphire Las Vegas Gentlemen's Club on February 4, 2018 in Las Vegas, Nevada.
Adult film actress/director Stormy Daniels hosts a Super Bowl party at Sapphire Las Vegas Gentlemen’s Club on February 4, 2018 in Las Vegas, Nevada.
Ethan Miller/Getty Images

On Thursday, Donald Trump made his first public comments on an agreement his lawyer Michael Cohen tried to make with adult film performer Stormy Daniels to silence an alleged affair. Trump basically repeated what Cohen and White House press secretary Sarah Sanders have already said: Trump had no idea about Cohen’s attempted $130,000 hush contract with Daniels.

Here are the relevant comments, which Trump made on Air Force One while returning to Washington from a trip to West Virginia:

Q: Mr. President, did you know about the $130,000 payment to Stormy Daniels?

THE PRESIDENT: No. No. What else?

Q: Then why did Michael Cohen make those if there was no truth to her allegations?

THE PRESIDENT: Well, you’ll have to ask Michael Cohen. Michael is my attorney. And you’ll have to ask Michael Cohen.

Q: Do you know where he got the money to make that payment?

THE PRESIDENT: No, I don’t know. No.

Q: Did you ever set up a fund of money that he could draw from?

At this point, the president changed the subject.

Why is it relevant that Trump is denying awareness of a payment made at the height of the campaign that was meant to keep an alleged Shark Week sex affair with an adult film performer secret? Well, Daniels has sued Trump—along with the front company Cohen established to try to set up the agreement—in order to nullify the contract. Whether Trump is a party to the contract is the critical, material question of the suit. Daniels’ attorney has argued that, because Trump never signed it, he’s not a party to it. This would seem to obviously mean that it was never formed.

Now Trump is saying himself for the first time publicly that he did not know about it. Which begs the question: How could he be a party to obligations committed to on his behalf that he didn’t know about?

As I’ve reported before, this is the critical question of the case. The contract is full of language and obligations that only David Dennison, the contract’s pseudonym for Trump, could agree to. If DD, i.e., Trump, never agreed to those material provisions that are the essential components of the contract, then how could the contract have been formed? And why would Daniels be bound to keep silent about her story?

The answer seems to be, it would be impossible.

Meanwhile, though, the lawyer for Cohen’s front company requested earlier this week that the case be moved to arbitration and seemed to argue in a court filing something entirely different from what Trump just said.

“This motion seeks to enforce the arbitration provision in the Settlement Agreement, which was negotiated at arms’ length by the parties’ respective counsel,” attorney Brent Blakely wrote in a motion to the court that is hearing the case. This would seem to argue that DD, i.e., Trump, was a party to the agreement—as the contract language states throughout—negotiated by his lawyer Cohen, and thus he was aware of it. For his part, another of Cohen’s attorneys, David Schwartz, told CBS the opposite last week: that Cohen wasn’t acting as Trump’s attorney in this matter.

Basically, Trump and his apparent representatives are arguing both sides. In public, Trump and his representatives are denying that he knew anything about the agreement. The implication of this argument would be that he is not liable for any potential campaign finance reporting questions around it, or any political or marital fallout. But in court, his lawyer’s shell company’s lawyer is apparently arguing that Trump was a party to it, and so it is a consummated contract, and so the case should still go to arbitration.

“It’s either he chooses to arbitrate, or he says ‘I’m not one of the parties’ and they lose that arbitration agreement and that arbitration settlement,” Georgetown Law professor J. Maria Glover, an expert in arbitration law, told me last week.

“They’re trying to have it both ways,” Glover added. “I don’t in the end think they can.”

Daniels’ attorney Michael Avenatti, meanwhile, has argued that the contract was never consummated and that the judge must rule on this question before sending the entire case to arbitration.

If U.S. District Court Judge James Otero rules that the case indeed should be headed for arbitration, though, then he would be essentially sending it into a black hole hidden from public view.

As Avenatti noted on Twitter on Monday:

From that private conference room, the president’s representatives could confidentially argue whatever side they wanted, no matter what position Trump takes in public. If Judge Otero rules this way, he will be gifting Trump the opportunity to have his cake and eat it too.