Team Trump’s $130K payment to Stormy Daniels was illegal, argues leading national expert in campaign finance law.

When the nation discovered that former Sen. John Edwards, once a darling of the Democratic Party and the 2004 vice presidential nominee, had been quietly funneling money to his girlfriend, through two of his wealthy friends, his reputation was forever tarnished. His wife left him. His adult children were repulsed by him. And the Department of Justice pursued a criminal case against him. But according to Paul S. Ryan, the Vice President of litigation and policy at the non-profit watchdog group Common Cause and one of the nation’s leading experts in campaign finance law, the government’s potential case against Team Trump for a $130,000 payment to adult film star Stormy Daniels “is even stronger” than the one against Edwards. On Jan. 22nd, Common Cause filed a pair of complaints with both the Department of Justice and the Federal Election Commission, arguing that Team Trump violated campaign disclosure laws and, depending on where the $130,000 actually came from, potentially other laws prohibiting corporate donations and limiting individual donations. The Bayou Brief sat down with Ryan last Saturday in New Orleans during the first-ever Unrig the System Summit. Among other things, we asked Ryan to unpack his complaints against Team Trump and to describe the case against them. This portion of our conversation has been edited for clarity. Lamar White (LW): Thank you so much for taking the time to speak with us, Paul. There’s obviously a Louisiana connection- multiple Louisiana connections- to the Stormy Daniels story. She is from Baton Rouge and, as you probably know, once flirted with a run for U.S. Senate against David Vitter. You are the lawyer on record who filed the first complaint with the Federal Election Commission alleging that the $130,000 payment to her from Donald Trump’s lawyer could constitute an illegal campaign contribution. Could you explain why and how? Paul S. Ryan (PSR): Yes, I’d love to. The Wall Street Journal broke the story early on a Friday morning a couple of weeks ago. The fact that an LLC had been set up in Delaware, that the LLC had listed as one of its officials- the human connected to this LLC- as Michael Cohen, who, at the time the LLC was set up in 2016, was the head lawyer at the Trump Organization. Cohen also had self-identified repeatedly and continues to identify himself as Trump’s personal lawyer, and he was a spokesperson and surrogate for Trump during the 2016 election cycle as well. He was also sort of an attack dog for the Trump campaign. So, his name was the human name connected to this LLC. The LLC was set up to provide a $130,000 payment to Stormy Daniels, whose real name is Clifford, I believe, to her attorney. LW: Stephanie Clifford, yeah. PSR: Stephanie Clifford. And the report from The Wall Street Journal was that this was a $130,000 payment from Michael Cohen and the Trump team to Stormy Daniels via the LLC and Stormy Daniels’ lawyer. A couple of factors, but the big one here is the timing. The payment came on Oct. 15th or 16th, three weeks before the election, one week after the Access Hollywood tapes, which had just been made public. So, the Trump campaign was really reeling from the sexual misconduct scandal that was front page news. This certainly looks like a payment for the purpose of influencing the federal election. The federal statutory definitions of both “contribution” and “expenditure,” two important terms of art in federal campaign finance law, both boil down to and include the phrase “for the purpose of influencing.” The definition of the term “contribution” is money or anything of value given for the purpose of influencing an election. The definition of the term “expenditure” is any payment made for the purpose of influencing a federal election. And I thought there’s almost certainly one violation of federal campaign law here, and depending on where the money came from, possibly another violation of campaign finance law. So, what are the violations? First, this comes within the scope of federal campaign finance law, I believe, and we assert that in complaints we filed the following Monday morning with the Department of Justice and with the Federal Election Commission. This all comes within the scope of the Federal Election Campaign Act because it was payment made for the purpose of influencing a federal election; it was an expenditure under federal campaign finance law. Part two, the next relevant accusation we make is that it was from Team Trump, because Michael Cohen is an agent of the Trump campaign; he worked for Donald Trump the candidate. This was not an independent expenditure under federal law, which would have been treated differently and probably not subject to any regulation for reasons I will spare you unless you want to get into it. This was an actual expenditure by the Trump campaign, through an agent of candidate Donald Trump. And it was not disclosed to the FEC. Federal law requires that any expenditure by a candidate committee must be disclosed to the FEC on its regularly filed disclosure reports. This was not. That’s a violation. That’s the violation that I’m very confident occurred. It also should have been disclosed by the Trump campaign committee as an in-kind contribution received by the committee. Committees have to have books that balance, so when they are the beneficiaries of a payment by someone else to the committee’s benefit, it has to be reported both as a payment by the committee and a payment to the committee. So, two very closely related disclosure/reporting violations by the Trump campaign committee: Failure to report the payment as an expenditure and failure to report whatever the source of the money was as an in-kind contribution to the committee. That’s the first cluster of legal issues, campaign reporting and disclosure violations. Now, we get to the second issue of a possible violation. The uncertainty here is that I don’t know, The Wall Street Journal doesn’t know, no one knows (except some folks on Team Trump and maybe Stormy Daniels) where this money came from. If this money came from President Trump’s personal pocket, there are no additional violations, because candidates are permitted under federal law- and this is a constitutionally protected right according to the US Supreme Court in its 1976 Buckley v. Valeo decision- to spend as much of their own money as they want to get themselves elected. So, if the money came from Donald Trump’s own pocket, there are no additional violations. If, however for example, the money came from the Trump Organization- again, Michael Cohen was the Trump Organization lawyer, not the campaign lawyer- that would constitute an illegal corporate contribution from the Trump Organization to the Trump campaign committee. If it came from someone or some entity other than the Trump Organization, if it came from a human individual, it is similarly illegal because it would have dramatically exceeded the $2700 campaign contribution limit. In our complaint, we make this allegation that there was a reporting violation by the Trump campaign committee for both the unreported expenditure and contribution, and we allege that there was quite possibly an illegal contribution, either an illegal corporate contribution or an illegally large contribution. We named as the respondent to the complaint the Trump campaign committee and the Trump Organization as well as a “John Doe.” We named the Trump campaign committee because they’re the ones who definitely violated, in our view, the reporting requirements. They also potentially received an illegal contribution if the money didn’t come from Donald Trump’s personal finances. We named the Trump Organization because of Michael Cohen’s association there, with the allegation that if the money came from the Trump Organization, it violated the prohibition on corporate donations to candidates. And we named John Doe, covering the possibility that maybe the money didn’t come from the Trump Organization or from Donald Trump personally. LW: A lot of folks have compared this to the situation with former Senator John Edwards. What’s the punishment for this violation? Is this a potential felony? Obviously John Edwards was completely disgraced. PSR: Disgraced and, importantly, not acquitted on all of the charges. John Edwards was indicted and criminally prosecuted by the Department of Justice. John Edwards was prosecuted on six counts. The jury acquitted him on one of those six counts. The jury deadlocked and was a hung jury, and the judge declared a mistrial for the other five counts. Different than an acquittal. To me, this is important. Right after we filed the complaint, I was fortunate enough to get a bunch of TV attention. I was on Ari Melber’s show and a couple of other MSNBC and CNN shows, and Ari Melber was like, “Oh, they let him (John Edwards) off the hook!” No, they didn’t. A hung jury is different than being let off the hook or being acquitted. There was a series of payments from two different rich people who were friends of John Edwards to John Edwards’ girlfriend, who was pregnant with his child during the 2008 presidential election campaign, leading up to the earliest primaries and the Iowa caucus and then the New Hampshire primary. One of those payments or some of those payments covered by one of the six counts came after Edwards decided to drop out of the race; it came in late January. He got acquitted on just that charge, and there the idea was if money was given to you when you’re no longer a candidate, the purpose could not have been to influence a federal election. The other five counts, some of them had to do with the payments; there was one that was about making materially false statements to the federal government that was to cover his committee’s failure to report to the FEC. Hung jury. What differentiates Stormy Daniels from the John Edwards’ prosecution? There was no evidence in the record during the John Edwards trial that his girlfriend at the time was talking to the national press and contemplating going or, in fact, going public. That severely weakened the Department of Justice’s case that the payment to her was to keep her quiet for the sake of preserving his electoral prospects. And what his lawyers were able to argue, somewhat successfully, is that he was really trying to keep these payments unknown to his wife, who was battling cancer at the time. In the Edwards’ case, the timing of these payments were staggered over several months, and that’s another important fact. Here, in the Stormy Daniels’ case, the payout was made three weeks before the general election for activity that had occurred a decade earlier. Now, I believe that for many years Stormy Daniels was trying to get paid. I speculate- pure speculation on my part but I think it’s reasonable speculation- that she saw the election as an opportunity to increase her own leverage with Donald Trump. Perhaps she has been trying to get a payment from Donald Trump for a long time and realized, “Okay, this is my chance.” We do know from The Wall Street Journal and other sources that she was talking with Good Morning America; she was talking to Slate and possibly several other news organizations. LW: She did an interview with In Touch several years prior. PSR: I think there are multiple facts that distinguish this from the John Edwards case. I believe and Common Cause believes that the Justice Department was correct in prosecuting John Edwards; it was not a successful prosecution, but Common Cause put out a statement praising the indictments when they happened. I think that prosecution was well-founded. And I think the case against Team Trump in this matter is even stronger because of some key factual differences. The Bayou Brief is a non-profit news publication that relies 100% on donations from our readers. Help support independent journalism about the stories of Louisiana through a monthly or one-time donation by clicking here.