Michael Cohen Plea Agreement: Possible Meanings of the Campaign Finance Counts

The government has now answered the question of whether it will convert the controversies over Michael Cohen’s payments to Stormy Daniels and Karen McDougal into a criminal case. Along with charges of tax and  bank fraud, the president’s former personal lawyer pleaded guilty in federal court Tuesday to two counts of violating federal campaign finance law in coordinating those payments. Previous reporting had indicated that Cohen arranged for payments to Daniels (the adult-film actress whose real name is Stephanie Clifford) and McDougal to prevent news of their past relationships with Donald Trump from breaking during the 2016 campaign—and that he may or may not have been reimbursed for those payments by Trump or organizations affiliated with him. Now Cohen has admitted that his actions resulted in illegal campaign financing—individual contributions exceeding the lawful limits and illegal corporate funding.

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It was not certain that prosecutors would bring charges against Cohen for these payments. Except for the most clear-cut violations, like those involving “straw donations” that contributors channel to campaigns in the name of others, prosecutors tend to shy away from criminal campaign finance enforcement. The sort of payments at issue in the Daniels and McDougal matters can present tricky issues of motive: How much was Trump moved to silence these women to spare himself personal as well as political pain? Only a motivation materially if not wholly shaped by political objectives would implicate federal campaign finance law in a situation like this.

A different but similar case against vice presidential candidate John Edwards failed to win over a jury. Edwards sought to conceal an affair and the child that it produced, and in making covert arrangements for their support, he accepted substantial financial assistance from two staunch political allies. The government sought to prosecute him for receiving excessive and unreported contributions but could not procure a conviction.

With the Cohen testimony, prosecutors would have good reason to believe that this case is far stronger than the one brought against Edwards. The Edwards trial was notable for the absence of two key witnesses: the Edwards political supporters who financed the scheme of concealment and support for his lover and their child. One witness was dead and the other, at age 101, was unable to testify at trial. In this case, the key witness is talking: His statement to the court Tuesday included the admission that in arranging these payments, he had acted “in coordination with” and “at the direction of … a candidate for federal office.” Cohen’s lawyer Lanny Davis then confirmed on Twitter that his client had “testified under oath that Donald Trump directed him to commit a crime.” Together with other evidence, such as the timing of the payments, Cohen’s plea transforms a potentially difficult case about motive into a solid bet for the prosecution. 

Of course, in a case involving massive alleged financial and tax fraud, there is still the question of why prosecutors troubled themselves with campaign finance violations. The amounts spent represent a sliver of the total spent on the campaign. According to court documents, Trump or those close to him eventually reimbursed Cohen for the payments; the candidate did not call on donors to put up the money. Prosecutors by and large would not consider violations of this nature—involving hush money to hide affairs—to be “heartland” offenses of a law designed to redress the evils of big money in politics.

What distinguishes this case and the decision to pursue the plea is that the candidate behind the subterfuge is the sitting president of the United States. Michael Cohen pleaded Tuesday to a charge that is compelling only because of the story he has to tell, along with other evidence, about the way that Donald Trump operates. And this is not so much about Trump’s clumsy steps, in violation of campaign finance law, to prevent exposure of philandering. This episode, assuming in the instance the form of campaign finance law violations, is about the most powerful man in the country—whom prosecutors have observed displaying contempt for legal considerations and constraints, and consistently lying about his actions.

While the Daniels matter is fairly straightforward—hush money to conceal an affair—the McDougal case is a still-more-elaborate subterfuge entailing a “catch and kill” arrangement by a friendly media company to buy McDougal’s public silence with cash and a disingenuous promise of space for her own writing. As the plea agreement makes clear, this is a count involving third-party corporate contributions, not just the candidate’s personal resources. Cohen may have much to say about how this scheme was hatched, but he stated that it took place at the president’s direction. The criminal information filed Tuesday in the Cohen matters lays out the steps the Trump Organization and Cohen took to falsify documentation to cover the reimbursements he received for his hush-money expenses. The degree to which Donald Trump also directed these activities, or took other actions behind the scenes to encourage Cohen and other witnesses in a course of dishonesty and fraudulent conduct, remains to be seen. 

How the case develops from here is not possible to judge at this time, but the Cohen campaign-finance plea resonates unmistakably with the special counsel investigation, which also concerns what a candidate is prepared to do to win an election and then cover his tracks. The criminal information cites the involvement of unnamed members of the Trump campaign; the campaign, like the candidate, is now clearly in separate legal jeopardy. The similarities between Trump’s problems and those of Richard Nixon continue to grow.

In the short term, should there be any doubt about Trump's unwillingness to sit for an interview with prosecutors, this seems yet another reason why he had no intention to do so. His lawyers will busily attack Cohen, as they have already begun to do, but they do not know what he has told prosecutors or what evidence he has supplied to back up his claims. Any interview with the president would touch on these issues, among others—and the president whose lawyer has proclaimed that "truth is not truth" and who repeatedly rails about “perjury traps” is surely not able to take his chances with his own version of the Daniels and McDougal tales.

This is another possibility raised by the Cohen plea. It may not matter whether the president agrees to testify. Others seem prepared to bear that burden. As Nixon found when one of his lawyers also became a witness for the government, this can be the beginning of very hard times.