Trump Exposes the Holes in Campaign-Finance Laws

Some of the acts documented by the Cohen tape may prove difficult to prosecute—but in other crucial ways, it’s devastating for the president’s defense.

Donald Trump
Joshua Roberts / Reuters

The release of a taped telephone conversation between Michael Cohen and Donald Trump has given rise to renewed questions about whether President Trump committed federal campaign-finance violations in hiding extramarital affairs. He had denied knowing of payments to Stormy Daniels and of American Media’s financial arrangements with Karen McDougal. In both instances, in an unusual turn of events, his own lawyers—Rudy Giuliani and Cohen—revealed that he knew more than he had admitted. Whether the campaign-finance laws apply depends on the motive for the original concealment: Was it driven by personal or political considerations, or both?

But it is also likely that months or years from now, when more or all of the facts have been collected and a full assessment is possible, the campaign-finance laws will not be the story. The tape may play a very different role in Trump’s legal travails and eventual downfall.

To this point, the campaign-finance case has been more or less circumstantial: It was based on various factors such as the timing of the Daniels and McDougal payments on the eve of the election. Now that we have statements from the candidate himself, on tape, recorded by his own lawyer, the quality of the evidence on this point has been upgraded. The president and Cohen discuss what the current polling shows, and then turn to a possible payment to American Media, or AMI, to buy the rights to the McDougal story, to ensure that it cannot see the light of day.

The Cohen tape is not helpful to the president, but because of the structure of campaign-finance rules, it may not be conclusive. The question for legal purposes is whether Trump would have made this payment even if he had not been a candidate.

Trump would argue that even if he had powerful political reasons to hide the McDougal relationship, he also had personal ones. He does not have to deny that politics played some part in his and Cohen’s plotting to bury the McDougal story. After all, he may contend, a revelation in the heat of the political season would be even more intensely covered and add considerably to whatever marital or family reaction he would have to deal with. And he could have both objectives in mind—to spare himself political as well as personal trouble. Under the rules, a dual motive is enough to muddy the legal waters.

So the short and not entirely intelligible recording does not clearly settle this motive issue. On the other hand, Cohen has his own story to relate, with perhaps more telling details about motive, at which point it’s a duel between competing narratives offered by two individuals with dismal reputations for truth-telling.

One conclusion invited by this episode is that a rule triggered by the presence of a certain "purpose”—an election-related purpose—is not well-designed to address this and similar cases. But that is not to say that the public did not have a legitimate interest in knowing that Trump was making these arrangements. The rules as currently written simply do not serve that interest. At some time in the future, when the discussion of reform will be possible, there might be effective fixes to the law worth considering.

For example, rather than stumbling over the vagaries of “purpose,” the law could be changed to provide that candidates for president would have to disclose any substantial payments that they made, or that third parties paid on their behalf, within six months of the election. Any unusual financial activity during a candidacy for the presidency seems fair game for public disclosure. Candidates, including nonincumbents, are already required to file personal financial-disclosure statements pursuant to the Ethics in Government Act. An amendment to this act to capture exceptional financial transactions in the election period would force the disclosure of both the kind of activity at issue in the Trump-McDougal case, and perhaps other spending by or for the benefit of a potential president that the public would have reason to be concerned about.

The campaign-finance law’s uncertainties are exposed in one other aspect of the case. Assume that the McDougal deal with AMI was a “catch and kill” enterprise meant to aid the Trump candidacy. No doubt AMI will plead that it was not playing politics and that its agreement with McDougal is protected under the campaign-finance law’s so-called media exemption, which exempts from regulation standard journalistic activity that may affect an election. It is for this reason that a newspaper can publish and publicize an endorsement without violating the campaign-finance laws. So AMI may rest its case on a supposed legitimate interest in her story and the right to make editorial decisions about whether and when to publish it.

The Federal Election Commission has never exhibited much appetite for fighting over press-exemption issues, and the Department of Justice would be similarly disinclined to pursue criminal cases in which “journalistic” purpose, or lack thereof, is litigated. But the protection of the exemption is only available to news organizations engaged in a legitimate press function—or, in the FEC’s words, acting as a “press entity” would. And it is specifically intended as protection for the publication of new stories or commentaries: The law refers to the activity of “distributing,” or “covering or carrying,” newsworthy publications. AMI, however, was not publishing; the facts may reveal its intention to collect the materials solely for the purpose of keeping them from public view. In doing so, moreover, it may have been collaborating on this scheme directly with agents of the candidate.

If so, AMI was not acting as a press entity, performing a legitimate press function, in a “catch and kill” operation. If it did not, then the sums paid to Ms. McDougal would constitute a contribution to the campaign. It would also be an illegal contribution on two levels: It would be a prohibited corporate in-kind, and the campaign would not have reported it. All that having been said, the chances of AMI facing serious liability should not be overstated. The relevant precedent to guide regulators is scarce, there are significant constitutional issues to contend with in any investigation involving the press (even the tabloid press), and the regulators’ weakness of will in dealing with issues of this nature—indeed, any controversial issues—is well-established.

The campaign-finance laws do not, however, exhaust the tape’s role in exacerbating Trump’s legal troubles. It does not help Trump overall in his legal defense for it to have been publicly revealed, yet again, that he lies routinely as it suits him. Not that the tapes are the first evidence of it, but prosecutors are confronted time and again with the fact of the president’s chronic dishonesty. Even the story within the story—the question of whether Trump directed payment for the McDougal material with untraceable cash—adds to the grim appraisal of this president’s character and credibility. The prosecutors will be reminded of this on each occasion that the president uses Twitter to express opinions on his legal issues. He yells “NO COLLUSION!” and his adamance may only suggest to investigators, along with all the other contrary evidence, the need to keep digging.

Cohen is also signaling with the release of this tape, as well as with interviews he has recently given, that he feels abandoned and that his patience with his former client’s lack of compassion or assistance is running out. He has made it known that he has more recordings in his possession. If the goal of this extraordinary behavior is to oil the way for a pardon, as some speculate but his lawyer denies, Cohen’s release of the tape will have the opposite effect. The president’s grant of a pardon in response to what is in effect an extortionate demand would open a new phase in the criminal investigation. While Trump seems to be convinced that he cannot engage in obstruction of justice, the use of the pardon to promote the destruction of evidence, or to tamper with witness testimony, is a prosecutable criminal offense—even under Alan Dershowitz’s reading of constitutional law.

The net result of this is to lock Cohen into a leading role as Donald Trump’s adversary. He can no longer look to Trump for relief, and now whatever he hopes for is available only from law enforcement. Trump may one day reflect bitterly on the irony of it all: Cohen learned the art of the deal from his former boss, and now the best deal to be struck is with the prosecution. It’s not really personal, just business.