Adult film star Stormy Daniels has offered to return a $130,000 payment she received from President Trump’s lawyer in 2016, in a bid to speak freely about a months-long affair she alleges she and the president began having in 2006.
Daniels, whose legal name is Stephanie Clifford, offered to return the sum, which she received from lawyer Michael D. Cohen, via a direct wire transfer to Trump or “an account designated by the President.” She’d accepted the cash, of course, in exchange for acquiescing to a non-disclosure agreement (NDA) surrounding her interactions with Trump.
The settlement letter offered by Daniels on Monday is a particularly theatrical piece of lawyering meant to make it more difficult for Trump to distance himself from the proceedings. It also aims to force Cohen and Trump to either release her from the NDA or admit they’re still hellbent on keeping Clifford quiet.
How’d we get here?
This latest, most salacious scandal arises from an alleged 2006-07 affair between Trump and Clifford. Although it’s been percolating for years, not months, as recent observers might think, the denouement appears to be fast approaching.
The Wall Street Journal first reported on the $130,000 payment to Clifford in January. Cohen, after weeks of denials, admitted on Feb. 13 that he’d made the payment from personal funds without the knowledge of Trump or his campaign in another effort to protect Trump.
At that point, Clifford became vocal about her intention to fight the NDA. She announced that Cohen’s disclosure and reported intent to publish a book including the topic constituted breaches of the NDA, releasing her from its terms as well. On Valentine’s Day, In Touch published a 2011 interview with Clifford about the alleged affair.
Shortly thereafter, Cohen initiated arbitration proceedings against Clifford in secret, relying on the NDA’s arbitration clause and California’s bias toward arbitration. Forcing Clifford to submit to a private arbiter and a closed-door proceeding instead of open court would be a huge, perhaps game-ending defeat for her.
That’s one reason why Clifford filed a civil complaint challenging the non-disclosure agreement last Tuesday. She argues that neither the NDA as a whole nor the arbitration clause stands because Trump (“DD” in the documents) never signed. A day later, an arbiter granted Cohen’s request for a restraining order to keep Clifford from speaking, and Sarah Huckabee Sanders declared a vague victory, confirming Trump’s involvement.
Sanders’s statement was not only unapproved by Trump but incorrect. The arbiter characterized the order as tentative (putting the brakes on a conflict until the threshold legal questions can be resolved is Law 101) and Clifford’s lawyer says the Feb. 27 order is invalid. She intends to proceed with the civil complaint—or to settle on terms that allow her to speak.
Even if Clifford fails, the series of events, agreements, and payments she’s exposed guarantee Trump and Cohen ongoing legal struggles.
Cohen is with LaRocca Hornik Rosen Greenberg & Blaha, a firm that received $30,500 from the Trump campaign in October and November 2017. (This was a large leap, CNN points out, from the $2,400 payment it took in September 2017.) The 10-member firm works out of the Trump Building, and it’s been Trump’s go-to legally for years.
LaRocca Hornik partner Larry Rosen told CNN in an email Friday that the firm's late 2017 earnings from the Trump campaign were unrelated to Daniels "nor have we ever represented the Trump campaign in any way related to Ms. Clifford." ...
He declined to say what the Trump campaign paid for the law firm to do last year. Rosen added that his firm is currently representing Cohen's company Essential Consultants in arbitration over the hush agreement and the payment it used for Daniels.
Where else has LaRocca Hornik popped up in the Trump scandal landscape?
LaRocca Hornik defended Trump, his companies and his bodyguard-turned-White House aide Keith Schiller in a lawsuit in 2015, after protesters said they were attacked by Trump's security outside Trump Tower. The case is ongoing.
The firm was also the Trump Organization's counsel when Time magazine and the Reporters Committee for Freedom of the Press sought in 2016 and last year to unseal records from a union workers' class action suit in the 1980s. The class action ended decades ago in a $1.4 million settlement paid by Trump's companies, and the journalists were able to convince a judge last fall to unseal some of the records from the case.
The ethical problems with Cohen’s $130,000 payment to Daniels are myriad and, for the most part, obvious.
Paul S. Ryan of Common Cause, which filed a complaint with the Federal Elections Commission questioning the Cohen payment as an unreported Trump campaign contribution that exceeded election law limits, noted on Twitter that corporations and labor organizations (including officers, directors or other representatives acting as agents of corporations and labor organizations) are prohibited from facilitating the making of contributions to candidates or political committees.
The Center for Responsibility and Ethics in Washington (CREW) has likewise filed a complaint, this one with DOJ and the Office of Government Ethics.
[CREW] argued that Trump lawyer Michael Cohen's payment to Stormy Daniels "constituted a loan to President Trump that he should have reported as a liability on his public financial disclosure."
...
In CREW's judgement, Trump "seemingly violated a federal law by failing to disclose it" on his campaign filings. Experts have said that had Trump paid Daniels with his own money, the payment wouldn't be an issue since candidates can contribute to their own campaigns. Yet since a disclosure wasn't made, there could be a violation.
CREW’s relying on the Ethics in Government Act, which requires candidates to report financial liabilities in excess of $10,000 at any point during the preceding year.
Even if legal action’s unsuccessful, Cohen could still suffer stiff professional consequences.
[A] number of legal observers note Cohen's actions could imperil his own good standing as a lawyer. Above the Law, a legal blog, pointed out last week that American Bar Association rules say lawyers are generally prohibited from providing financial assistance to a client, unless specific conditions are met.
"The more we learn about the [Stormy Daniels] affair, the more it looks like something is missing from the president's financial disclosures," CREW board chair Norman Eisen said in a statement. "If he failed to disclose this situation, we must ask, what else is he hiding?"
Resist the temptation to draw more than a macro comparison to John Edwards. The Trump-Daniels situation is more (and increasingly) legally fraught. Raleigh’s News & Observer consulted a legal scholar with subject matter expertise.
Peter Henning, a law professor at Wayne State University in Detroit and co-author of “The Prosecution and Defense of Public Corruption," questioned the Justice Department's decision to pursue the Edwards case after the 2012 trial, and this month questioned any pursuit of similar charges against Trump given what had been revealed at the time.
But Henning drew distinctions between the Edwards case and details coming from the Daniels allegations, the recent lawsuit she filed and the non-disclosure agreement that she signed but says Trump did not. …
While Trump could borrow a defense similar to the one used by Edwards — that he was trying to hide an affair from his wife and family — if the porn star's allegations are true, there now are questions about the limited liability company that Cohen created called Essential Consultants, through which the $130,000 payment was made.
"The Edwards case was more or less salacious," Henning said. "There are more moving parts with the Trump side."
Henning also recommended investigating the possibility that the payment to Daniels involved money laundering.