Private or political? Charges over hush money hinge on payment’s purpose

By MICHAEL ROTHFELD

Is paying hush money a crime?

In most cases, the answer is no. Hush money agreements, also known as nondisclosure agreements, have long been used by companies and private individuals to avoid litigation and keep embarrassing information confidential. Harvey Weinstein, the former producer convicted of rape, used such agreements for years to conceal his harassment and assault of women.

But the question is thornier when it comes to candidates in the midst of political campaigns, and it has not often been posed in federal or New York state courts.

As it relates to former President Donald Trump and porn star Stormy Daniels, the Manhattan district attorney, Alvin Bragg, revealed his answer Tuesday when he unsealed an indictment of Trump: A hush money payment can constitute a crime if made to protect a political candidate.

All of the felony counts Trump is facing stem from reimbursements to his former fixer, Michael Cohen, for paying $130,000 to Daniels in exchange for her silence about the liaison she said she had with Trump.

Having charged Trump with falsifying business records, Bragg’s office will have to navigate complicated legal terrain. A conviction would hinge on proving that reimbursements to Cohen were falsely disguised as legal fees to conceal another crime: perhaps a violation of election laws. The indictment did not, however, charge Trump with an election law violation; Cohen has admitted to committing one with the payment to Daniels.

The case bears some similarities to the prosecution of a former U.S. senator, John Edwards of North Carolina, who was charged in 2011 with federal campaign finance violations for payments to help a mistress during his own presidential run in 2008. The case ended without a conviction.

Federal and state campaign laws require reporting of campaign-related payments, and if they are made by third parties coordinating with the candidate, such as Cohen, they are subject to certain limits. Cohen’s payment to Daniels before the 2016 presidential election was well beyond the federal legal limit.

The indictment of Trump charged him with 34 counts of falsifying business records in reimbursing Cohen for the hush money. Trump, who is once more seeking the Republican nomination for president, has denied sleeping with Daniels; called the prosecution by Bragg, a Democrat, political; and said he has done nothing wrong. Appearing in a state Supreme Court Tuesday, he pleaded not guilty.

On its own, falsifying business records is a misdemeanor in New York state — but it can be charged as a felony if it is intended to conceal another crime. In this case, the indictment accuses him of falsifying business records; an accompanying statement of facts says Trump orchestrated a scheme to violate election laws.

Proving that element will most likely hinge on whether the hush money is interpreted to have been paid in the service of Trump’s 2016 presidential campaign or for personal reasons, such as shielding his wife, Melania, and youngest son, Barron, from Daniels’ story.

That is the sort of transaction that Trump’s lawyers say took place.

“This was a personal expenditure, not a campaign expenditure. Had it been a campaign expenditure, he would have used campaign funds,” one of the lawyers, Joe Tacopina, said on CNN Sunday.

Trump’s team has pointed to the failed prosecution of Edwards to bolster its argument that the payment to Daniels was not a campaign contribution.

Bragg’s office might be able to make a stronger case in arguing that the payment to Daniels was made to influence the election on Trump’s behalf rather than for personal reasons.

For one thing, Daniels had tried to sell her story of sleeping with Trump for at least five years, but he had never before agreed to pay for her silence. Cohen did so weeks before the election, and days after the so-called “Access Hollywood” tape — in which Trump was heard talking about groping women — was made public, potentially tanking Trump’s campaign.

For another, Trump met with Cohen and David Pecker, the publisher of The National Enquirer, at the beginning of his campaign in August 2015 to discuss a strategy for bottling up negative stories. And Pecker’s company paid to suppress the story of another woman, the Playboy model Karen McDougal, less than three months before Daniels received her payment.

Both Pecker and Cohen have testified before the grand jury that indicted Trump, and would be expected to do so at a trial.

Jeff Tsai, a San Francisco lawyer and former federal prosecutor who worked on the Edwards case, said in an interview that because of the “elasticity” of whether money is primarily spent to help a campaign or for personal reasons, the facts in a particular case are extremely important. “Jurors will have to decide as to whether or not these funds, putting some of the salacious details aside, are fundamentally being used for campaign purposes,” Tsai said.