Trump Has Really Stepped Into It Now
By
David Cay Johnston, DCReport Editor-in-Chief
Donald Trump and his
enablers may face numerous legal problems over $130,000 of hush money paid to
porn star Stormy Daniels, one of two women known so far to have taken money in
return for promising to keep silent about illicit sexual relationships with
Trump after his 2005 marriage to Melania Knaus.
We don’t know how
Daniels was paid—in cash installments, a single check or some other device.
How
hush money is paid has implications for federal banking and tax laws, as three
major politicians learned the hard way in this century.
Indictable offenses
are possible for campaign finance law violations, banking law violations and
tax law violations. Of course, since Trump is president he may be able to
cajole, persuade or threaten administration officials into taking no action.
There is an
alternative explanation, a lurid one for sure, for why Trump would want to keep
porn actress Daniels from speaking about their sexual encounter. That reason
may, or may not, have been campaign related, as we shall see below.
For now, the best
forum to learn how many other Stormy Daniels were paid off, and who bore the
cost, would be for Congress to get involved.
So far Congress has mostly refused
to do its duty under our Constitution’s system of checks and balances on the
exercise, and abuse, of executive power.
Congress could hold
public hearings, after investigators armed with subpoenas obtain financial
records and compel testimony, about all hush money payments since Trump announced
his presidential bid in June 2015.
If the facts warrant, going back further in
time could reveal significant facts Trump has hidden that go to his fitness to
hold any public office.
Trump has a long
history of demanding absolute silence from those around him, sometimes using
structured payments to ensure that silence endures for years or decades, as we
shall see below.
Trump even required
some campaign volunteers to sign nondisclosure agreements.
Because of his
extensive use of hush money and nondisclosure agreements much of Trump’s
unsavory conduct has been hidden from public view. Trump and his lawyers are
quick to make sure anyone who has an agreement requiring them to keep quiet
follows it to the letter, as we shall see below.
She has
implied in an interview with a magazine with a delightfully relevant
title, In Touch Weekly, that Trump also romped with
Jenna Jameson, who is believed to be the biggest grossing porn star in the
world.
The timing of the
Daniels hush money is significant. It was paid just before voters went to the
polls in November 2016.
The hush money clearly
was paid to keep the bosomy performer from becoming Trump’s Gennifer Flowers,
which might have cost Trump the White House. Flowers is a cabaret singer and
onetime Arkansas State employee who went public about a long-running affair with
Bill Clinton, nearly derailing the Democrat’s 1992 presidential campaign.
The official line on
the porn actress payoff is classic Trump: nothing here folks, so move along.
Michael Cohen, a
longtime Trump lawyer, gave a Feb. 13 statement to The New York Times that is
designed to create the impression that he paid the hush money out of the
kindness of his heart:
“Neither the Trump Organization nor the Trump campaign was a party to the transaction with Ms. Clifford, and neither reimbursed me for the payment, either directly or indirectly. The payment to Ms. Clifford was lawful, and was not a campaign contribution or a campaign expenditure by anyone.”
Notably missing from
the artfully worded denial is Donald Trump himself.
The statement would
also exclude any business entity Trump owns that is not under the umbrella of
the Trump Organization.
Only an audit of
Cohen’s billings to Trump, Trump-related entities and other sources of money he
received could establish whether the statement given to The Times is true,
false or misleading.
And only a thorough review of money that changed hands
between Trump and Cohen could resolve the issue of why Donald Trump is notably
unmentioned in the Cohen statement and why the statement refers only to Trump
entities that are considered part of the Trump Organization.
Cohen can assert
whatever he wants about the hush money having no connection to the Trump
campaign. However, he doesn’t get to decide that. The Federal Election
Commission, and, potentially, jurors in a criminal trial, get to determine
whether the Daniels payoff was a disguised campaign contribution.
Individual donors
legally can give no more than $2,700 to a presidential candidate.
The Daniels payoff was more than 48 times that limit.
The Federal Election
Commission’s guide for citizens notes that contributions can be made in many
forms.
“Most people think of
contributions as donations of money in the form of checks or currency. While
these are common ways of making a contribution, anything of value given to
influence a Federal election is considered a contribution,” the FEC guide
explains. “All the contributions you make—whatever their form—count against
your per committee limits.”
Paying a porn actress
to keep silent about an illicit affair just days before an election would seem
to qualify as “anything of value” to aide a presidential campaign.
On the other hand, if
indeed Cohen paid off Daniels as a self-motivated act of kindness and this has
absolutely nothing to do with the election—a far-fetched interpretation, for
sure — then the IRS should be asking questions.
Congress allows
individuals to make gifts worth no more than $15,000 per person to anyone else.
Larger gifts must be reported on Form 706 and are subject to the gift tax. If
Cohen filed a gift tax return, he could just make it public.
The gift tax and hush
money became an issue for former Senator John Edwards when he sought the
Democratic party nomination for president in 2008 after being John Kerry’s
running mate in 2004.
Edwards was indicted
over hush money he paid to Rielle Hunter (who was also known by four other
names). Hunter became the former senator’s mistress in 2006 and had a love
child with him. Edwards lied and denied about the affair and the child until
2010, when he came clean.
Hunter was paid about
$1 million to keep quiet, some of which prosecutors charged was run connected
to the campaign, which would violate federal election law. Prosecutors said
$700,000 of the money came from a Mellon banking and oil heiress, then 100
years old.
However, the heiress had filed a gift tax return, which made the
gift proper as a matter of tax law. Edwards was free to use the money any way
he chose.
In 2012, Edwards
was acquitted on one count and a mistrial was declared on the
other five. The Justice Department declined to try the five
remaining charges a second time.
A related tax question
is whether Trump or Cohen took the $130,000 as a tax deduction. Hush money
payments for sexual misconduct can, in many cases, be tax deductible. That
means you and other taxpayers share in the cost of payoffs to hide
indiscretions.
How the payments were
made is also important.
The highest-ranking
elected official to go to prison is former House Speaker Dennis Hastert.
The Illinois
Republican and former high school wrestling coach confessed in 2016 of
violating banking laws by structuring $1.7 million in hush money to avoid
filing cash transaction reports.
These reports are used to reduce tax cheating,
track drug trafficker money as well as spot terrorist cash flows.
Hastert, after initial
denials, confessed to abusing several boys including a 14-year-old wrestler,
who as an adult was paid to keep silent. Hastert served 13 months in prison. He
is now suing to get his victim to get back the $1.7 million.
Similarly, the IRS
Criminal Investigation Division looked into payments arranged by Eliot Spitzer,
then governor of New York, to prostitution services. Spitzer, a wealthy
Democrat, paid at least $80,000 for sex, using wire transfers, some of them for
$4,000.
While Spitzer escaped
prosecution, he had to resign in disgrace as governor of New York in March
2008 after The New York Times exposed the corruption. Four people were
indicted in the Emperor’s Club V.I.P. prostitution ring which employed 50
working women in New York Washington and as far away as London and Paris.
Among those who could
reveal much about Trump’s conduct are his ex-wives, Ivana and Marla.
However,
if either woman spoke up it would put them in financial and legal jeopardy
because their divorce decrees require them to never speak about Trump without
his explicit permission.
Ivana, for example, is
covered by this language, approved by a New York family court judge:
“Without obtaining [Donald Trump’s] written consent in advance, [Ivana] shall not directly or indirectly publish, or cause to be published, any diary, memoir, letter, story, photograph, interview, article, essay, account, or description or depiction of any kind whatsoever, whether fictionalized or not, concerning her marriage to [Donald Trump] or any other aspect of [Donald Trump’s] personal, business or financial affairs, or assist or provide information to others in connection with the publication or dissemination of any such material or excerpts thereof.”
Trump has publicly
warned Marla Maples to keep her mouth shut.
In 1999, when Trump
made a failed bid to win the presidential nomination of fringe organization,
the Reform Party, Trump told Neil Cavuto of Fox News that Marla Maples would
not be making any more unflattering comments about him in public after she said
she would not be silent if he was on the road to the White House.
“We have a
confidentiality agreement, and I’m sure that she’ll abide by it now,”
Trump told Cavuto on Oct. 20, 1999.
“You have a
confidentiality—you’re not allowed to talk!” Trump continued. “And she [Maples]
goes out and says I wouldn’t this, I wouldn’t that. So, I say why am I paying
money to somebody that’s violated an agreement? But we’ll see what happens in
the future. And if in the future she continues, I guess I’ll have to take very
strong measures.”
New York State, where
the cash-for-silence payments were arranged, has a 1991 law against secret
agreements in court-approved settlements. That law is incredibly weak, however, allowing
judges to seal records for “good cause.”
The alternative
explanation for the payoff to porn actress Daniels relates to some creepy
details and to how Trump used repeatedly has Rupert Murdoch’s New York Post to
create the impression that he is a great Don Juan.
Among other puff pieces, the
Post ran a cover with his smiling face and the headline “best sex ever.”
Maples, playing
herself on the sitcom Designing Women after the couple
divorced in 1999, looked into a camera and declared she never said that.
Daniels gave numerous
interviews about her fling with Trump in 2011, including to the ironically
named magazine In Touch Weekly, which included
a put down of Trump the self-imagined great lover.
She said described sex
with Trump as “textbook generic. It wasn’t like, ‘Oh my God, I love you.’ He
wasn’t like Fabio or anything. He wasn’t trying to have, like, porn sex…. It
was one position, what you would expect someone his age to do. It wasn’t bad.”
Those comments and
others she made about another porn star, Jenna Jameson, raise the prospect that
Trump and Cohen were alarmed about how revelations that he was nothing special
in the sack would devastate Trump’s ego.
During the campaign, Trump made
self-praising references to the size of his genitals, including during a debate
with other candidates from the party of family values.
As a result of these
anxieties, also expressed with the way Trump wears his trademark neckties long
below the belt line that is standard fashion, the possibility that’s sexual
panic rather than fear of losing the election motivated the hush money payment
has to be considered.
And, of course, the
hush could have been paid for both reasons—fear of losing an election and fear
of becoming known for coming up short in the bedroom.
Featured
photo: Trump with Stormy Daniels (MySpace)