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Fact Check: Stormy Daniels' Payment Q&A

FactCheck.org lays out what we know, and don’t know, at this point

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    Fact Check: Stormy Daniels' Payment Q&A
    A file photo of Stormy Daniels.

    In a series of early morning tweets on May 3, President Donald Trump acknowledged for the first time that he reimbursed his personal attorney for the $130,000 payment that was made to porn star Stormy Daniels.

    Still, there are many unanswered questions about the payment — which was made less than two weeks before the 2016 presidential election — and whether it may have run afoul of campaign finance or ethics laws.

    Here, we lay out some of those questions and what we know, and don’t know, at this point.

    How much was paid?

    Trump Unaware of Stormy Daniels Payment: Giuliani

    [NATL] Trump Unaware of Stormy Daniels Payment: Giuliani

    Bombshell revelations from President Trump's attorney, Rudy Giuliani, may place the president and personal lawyer Michael Cohen further into the crosshairs of special counsel Robert Mueller's investigation. Giuliani said he disclosed the president's payments to Cohen on Fox News to avoid having the information leaked later by federal investigators.

    (Published Friday, May 4, 2018)

    This is not in dispute: Daniels, whose real name is Stephanie Clifford, was paid $130,000 in exchange for signing a nondisclosure agreement that barred her from talking about an alleged sexual encounter with Trump in 2006.

    Who made the payment?

    On Oct. 17, 2016, three weeks before the Nov. 8 election, Trump’s personal attorney Michael Cohen incorporated Essential Consultants LLC in Delaware. In February, Cohen released a statement to the New York Times, acknowledging that he authorized the payment.

    When was the payment made to Daniels?

    On CBS’ “The Late Show with Stephen Colbert,” Daniels’ attorney, Michael Avenatti, held up a receipt from a bank in San Francisco showing that on Oct. 27, 2016, Essential Consultants made a $130,000 payment to Daniels’ attorney at the time.

    Did Trump reimburse Cohen?

    Yes. Former New York City Mayor Rudy Giuliani, now a member of the president’s legal team, told Fox News on May 2 that Trump used his personal funds — not campaign funds or corporate funds — to reimburse Cohen. (Corporations, by federal law, are prohibited from making contributions to candidate committees.)

    The next day, Trump confirmed for the first time that he had reimbursed Cohen for the payment to Daniels.

    When and how did Trump reimburse Cohen?

    Giuliani told the Washington Post in a story published May 3 that Trump reimbursed Cohen, but he was wasn’t clear on exactly when the payments started or ended. “The repayments took place over a period of time, probably in 2017, probably all paid back by the end of 2017,” he said.

    Later, when the newspaper asked how the repayments to Cohen were structured, Giuliani said: “Don’t know. Don’t know. Actually, I think probably in 2018.”

    Asked how many payments it took to reimburse Cohen, Giuliani told the Washington Post that Cohen received $35,000 in monthly installments beginning in January or February. He also said the total amount Trump owed Cohen was $250,000 — including the $130,000 payment to Daniels.

    “Do the arithmetic, right? $35,000 a month, probably starting in January or February. By the time you get to $250,000, it’s all paid off. Remember, he also paid for the taxes,” he said. “Then there probably were other things of a personal nature that Michael took care of, for which the president would have always trusted him as his lawyer, as my clients do with me. And that was paid back out of the rest of the money. And Michael earned a fee out of it.”

    The timing is important because Trump did not list a debt to Cohen on his 2017 personal public financial disclosure report, which he filed on June 14, 2017.

    Did Cohen mislead the public when he said he wasn’t reimbursed?

    In his February statement to the New York Times, Cohen stated that, “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.”

    On May 3, Trump confirmed in a tweet that “Cohen, an attorney, received a monthly retainer, not from the campaign and having nothing to do with the campaign, from which he entered into, through reimbursement, a private contract between two parties, known as a non-disclosure agreement, or NDA.”

    So, is Cohen’s statement in February contradicted by the president’s tweet? Not necessarily.

    Cohen’s carefully-worded statement to the New YorkTimes says he was not reimbursed by the Trump Organization or the Trump campaign, but it did not rule out that he may have been reimbursed personally by Trump.

    When did Trump learn about the payment to Daniels?

    Giuliani told the Washington Post that Trump did not know about the payment at the time it was made in October 2016. He also said he did not know when Trump learned of it. He said he spoke to Trump “about two weeks ago” about the payment, and it was at that time that Trump “probably” got “the full picture for the first time” about payment.

    Giuliani later told Fox News reporter John Roberts that the president wasn’t aware that Cohen used his retainer fees to reimbursement himself the $130,000 he paid Daniels.

    Asked if Trump knew about the $130,000 payout on April 5, when the president denied knowing anything about them, Giuliani said he did not know the answer.

    “I never asked him that. So you probably should be careful,” Giuliani said. “I don’t know the answer to that, except to say that when I talk to him, it seems to me that he was getting the full picture for the first time.”

    Did Trump mislead the public when he said on April 5 that he did not know about the payment to Daniels?

    Aboard Air Force One, the president said on April 5 that he didn’t know about the payment to Daniels.

    Question, April 5: Mr. President, did you know about the $130,000 payment to Stormy Daniels?

    Trump: No. No. What else?

    Question: Then why did Michael Cohen make those if there was no truth to her allegations?

    Trump: Well, you’ll have to ask Michael Cohen. Michael is my attorney. And you’ll have to ask Michael Cohen.

    Question: Do you know where he got the money to make that payment?

    Trump: No, I don’t know. No.

    Question: Did you ever set up a fund of money that he could draw from?

    The president did not answer the question of whether he set up a fund of money that Cohen could draw on. However, we now know from Giuliani and Trump that Cohen did receive a monthly retainer that was used to reimburse Cohen.

    In a series of threetweetson May 3, the president said that he kept Cohen on a monthly retainer and that Cohen was reimbursed from the monthly retainer.

    @realDonaldTrump, May 3: Mr. Cohen, an attorney, received a monthly retainer, not from the campaign and having nothing to do with the campaign, from which he entered into, through reimbursement, a private contract between two parties, known as a non-disclosure agreement, or NDA. These agreements are…..

    ..very common among celebrities and people of wealth. In this case it is in full force and effect and will be used in Arbitration for damages against Ms. Clifford (Daniels). The agreement was used to stop the false and extortionist accusations made by her about an affair,……

    …despite already having signed a detailed letter admitting that there was no affair. Prior to its violation by Ms. Clifford and her attorney, this was a private agreement. Money from the campaign, or campaign contributions, played no roll in this transaction.

    The timing of the reimbursement payments is important because Trump and/or his campaign may have violated campaign finance laws by accepting an illegal campaign contribution.

    Did the Trump campaign or Cohen violate campaign finance laws?

    It depends on Cohen’s intention when he made the payment to Daniels and whether he coordinated the payment with anyone from the Trump campaign.

    If there is evidence that Cohen intended to influence the election by preventing voters from learning of Trump’s alleged affair, then the $130,000 payment is an illegal contribution — whether or not it was repaid.

    Federal law states that a personal loan or “anything of value made by any person for the purpose of influencing any election for Federal office is a contribution.” (Bank loans and lines of credit are treated differently under the law than individual loans or gifts.)

    A loan from an individual is considered a campaign contribution — subject to the limits of individual donations to candidate committees. That limit was $2,700 per election in 2016, meaning that Cohen may have exceeded the limit by more than $127,000.

    “A loan that exceeds the contribution limitations of 52 U.S.C. 30116 and 11 CFR part 110 shall be unlawful whether or not it is repaid,” according to the Federal Election Commission.

    Trump and Giuliani have said the Trump campaign did not violate any campaign finance laws because Trump’s personal funds — not campaign or corporate funds — were used to reimburse Cohen.

    In a May 3 tweet, Trump said the payment to Daniels had “nothing to do with the campaign.”

    In the May 2 Fox News interview, Giuliani said, “It’s not campaign money. No campaign finance violation.” He also told the Washington Post that Trump was “really wise” to use his personal funds.

    “Was the president really wise to take it out of personal funds rather than from campaign funds? Thank God he did, [or else] he’d get a campaign finance violation they’d try to drum up into a felony or something,” Giuliani said.

    Giuliani is wrong, according to Larry Noble, a former general counsel at the FEC, who is now senior director and general counsel at the Campaign Legal Center. Noble told us that Cohen and Trump could have committed a campaign finance violation, regardless of how Trump reimbursed Cohen

    What matters is Cohen’s intent when he paid Daniels and whether Trump or someone in his campaign knew about the payment, Noble told us in a phone interview.

    “If Michael Cohen really did this on his own and was not an agent to the campaign in any way and wasn’t motivated by the election — then it is not a violation of the law,” Noble told us. “As soon as the campaign knows about it, then it is an [illegal] in-kind contribution. The question here is, when did the campaign know about it and did Trump know about it?”

    Noble told us there is enough evidence for the FEC to investigate possible campaign finance violations, which could lead to either civil fines or a criminal referral to the Department of Justice.

    The fines vary from $5,701 to $66,666 and could be tripled if the FEC determines that the violations were knowing and willful, Noble said. He also said the FEC could refer the case to the Department of Justice for criminal prosecution.

    Also, Noble said, the Justice Department can decide on its own to bring charges — as it did against former Democratic presidential candidate John Edwards in 2011. In that case, Edwards was charged with — but never convicted of — multiple campaign finance violations related to payments that were made to Edwards’ pregnant mistress during the 2008 campaign.

    If Trump knew about Cohen’s payment, then “he can be held personally liable for accepting an illegal campaign donation,” Noble said.

    Did Trump have to disclose the payment as a liability on his personal financial disclosure statement?

    Trump and Giuliani say the payment to Daniels was not campaign-related. Even if it was not, a complaint filed by Citizens for Responsibility and Ethics in Washington (CREW) with the U.S. Attorney’s Office alleges it may be considered a personal loan to Trump that should have been reported in a public financial disclosure report filed by the president in June 2017. Since it was not, tweeted Norm Eisen, CREW board chairman, the nondisclosure could run afoul of federal laws on knowingly filing false or fraudulent statements with the federal government.

    The issue is muddied, however, by the timeline provided by Giuliani in his interview with the Washington Post.

    As we say above, Giuliani said Cohen was paid in monthly installments of $35,000 “probably starting in January or February.” But he didn’t say what year. Later he said, “I don’t know when they started reimbursing him. I would think it would be earlier than mid-last year.” He also said, “The repayments took place over a period of time, probably in 2017, probably all paid back by the end of 2017.”

    But later, when asked about how the payments were structured, Giuliani said he didn’t know but that they were “probably in 2018.” It would also matter when Trump found out about Cohen’s payment, and his need to reimburse him. We don’t yet know the answers to those questions.

    Filing a false report can result in a fine of up to $50,000, and knowingly and willfully filing a false report can result in a jail sentence of no more than one year and/or a fine of $50,000.

    FactCheck.org is a nonpartisan, nonprofit “consumer advocate” for voters that aims to reduce the level of deception and confusion in U.S. politics. FactCheck.org will check facts of speeches, advertisements, interviews and more for NBC.