Jurisprudence

Rudy Giuliani May Have Just Implicated President Trump In Serious Campaign Finance Violations

Donald Trump walking behind Rudy Giuliani.
The president pictured with his lawyer.
Drew Angerer/Getty Images

Donald Trump’s new lawyer Rudy Giuliani took to Sean Hannity’s Fox News program Wednesday night to defend the president from the ongoing Mueller investigation and to calm the waters for the Trump faithful.

But it looks like he’s gotten the president into potentially greater legal jeopardy by admitting that Trump repaid his fixer Michael Cohen for the $130,000 payment to adult film performer Stormy Daniels to keep her quiet, seemingly contradicting the president and potentially implicating Trump and his campaign in some serious campaign finance violations.

Just to review where we are so far. It is undisputed that Trump’s sometimes-attorney and fixer Michael Cohen negotiated an agreement with Daniels shortly before the 2016 election to get her not to discuss an alleged sexual encounter with Trump in exchange for $130,000. Cohen eventually said that he paid that money out of his own pocket, and he secured a loan to do so. He said that neither the Trump Organization nor the Trump campaign reimbursed him (he did not say that he was not reimbursed at all, leaving open the possibility of a Trump reimbursement). The president told reporters he had known nothing about the payment.

With that state of affairs, Cohen looked like he could be in legal trouble, because someone cannot make a $130,000 in-kind contribution to a federal campaign. The big question before tonight was whether the payment was campaign related. If it was wholly personal, as in made to help Trump’s marriage but not his campaign, then Cohen would be off the hook.

The case drew parallels to John Edwards’ trial for accepting similar in-kind contributions. DOJ could not get a conviction, likely because there was no smoking gun evidence indicating that payments to Edwards’ mistress were campaign related and not aimed at saving his marriage.

The Edwards precedent may be one of the reasons U.S. attorneys from the Southern District of New York raided Cohen’s office and hotel where he was staying: they may have been looking for documentary evidence of his state of mind to determine whether Cohen’s payment was more about Melania or Wisconsin.

But if Cohen made the payment alone and neither Trump nor anyone in the campaign knew anything about it, Trump and the campaign officials would have done nothing wrong. Yes, they have to report contributions and expenditures on federal campaign reports (where they certify they are making truthful statements). But if these campaign officials knew nothing of the contribution, they did nothing wrong. (Cohen might still be on the hook, though, if it could be proven that he did it to support the campaign.)

Now, thanks to Giuliani, the picture looks considerably different. If what Giuliani says is true, and if the payments were made to help the campaign and not (just) to help Trump personally, the campaign may be implicated in illegal activity. If Trump knew that Cohen was advancing him a $130,000 loan for campaign purposes, that would have to be reported by the campaign, as would the payments Giuliani said Trump made in installments to Cohen. These would be campaign expenditures that the committee has to keep track of. As Philip Bump notes, if the Trump Organization facilities were used to help make these payments, then there may be additional campaign violations related to the use of corporate resources for campaigns.

Although many campaign finance violations are handled just as fines, as Giuliani seemed to suggest in his Hannity interview Wednesday night, that’s not true for willful violations of campaign finance law, especially those implicating the public interest. Those can lead to criminal liability. If there was an unreported six-figure loan to the campaign to pay off someone who had an affair with a presidential candidate, with repayments facilitated through corporate resources, that seems like a serious enough violation to merit review by the Justice Department.

Ultimately, Giuliani offered two defenses for Trump on Hannity. One, as mentioned, is that the payments were not campaign-related.

The other is that Trump did not know the specifics of what Cohen was doing; just that Cohen was the fixer taking care of things just like Giuliani said he did for his clients. It is a defense that could well be corroborated or rejected based on what’s in the seized Cohen materials.

In the end, the campaign finance issue may not be the biggest legal problem facing Trump (obstruction of justice, for example, seems far more serious), and perhaps there’s proof in the Cohen documents of an intent for this to be unrelated to the campaign. But it is just as plausible that Giuliani went out there because they know new information will come out, and this is a way to try to get ahead of the story.

Right now, Trump is in a bit of a bind. Either he lied to the American people or he has an incompetent lawyer. (It could be both). For his part, Giuliani told the Washington Post’s Robert Costa that the president was “very pleased” with his performance and knew in advance about the revelation.

Stormy Daniels may not be Russian collusion. But it is a story that just got bigger thanks to Giuliani, and now Trump will face new questions about what he knew and when he knew it.