Stormy Daniels–Donald Trump scandal
The Stormy Daniels–Donald Trump scandal involves allegations of an affair between Donald Trump and porn star Stormy Daniels, alleged "hush money" payments by Trump to Daniels to buy her silence during Trump's 2016 campaign for US presidency, and allegations Trump falsified business records to further bury the story in the run-up to the election. Regarding the allegations of falsifying business records, Trump has been indicted for making these alleged fabrications to cover up other alleged crimes. He is being criminally prosecuted in New York, in the first criminal trial of a former US president.
On January 12, 2018, The Wall Street Journal reported that in October 2016, just before the 2016 United States presidential election, Michael Cohen, lawyer for then-presidential candidate Donald Trump, arranged a payment of US$130,000 to pornographic film actress Stormy Daniels to stop her disclosing an affair she and Trump allegedly had in July 2006.[1][2] Daniels had signed a non-disclosure agreement (NDA). At first, Cohen denied Trump had the alleged affair and sought to suppress the allegation based on the NDA, but a month later publicly acknowledged making the payment.
Besides allegations surrounding the details of the affair itself, the acknowledged payment raised legal and ethical questions as to whether the payment violated federal campaign finance laws, either because the payment was not duly disclosed as a campaign contribution or because campaign funds may have been used towards the payment.[3] On February 13, Cohen said he paid the money out of his own pocket, not as a campaign contribution; and that neither The Trump Organization nor the Trump campaign reimbursed him for making it.[4] On April 5, Trump said he had no knowledge of Cohen's payment; but on April 26 admitted for the first time that Cohen represented him in "the Stormy Daniels deal". On May 2, Trump's new lawyer Rudy Giuliani said that Trump had reimbursed Cohen for the payment.[5]
In August 2018, Cohen pleaded guilty to eight criminal charges, including a campaign finance violation for Daniels's payment. He stated under oath that he paid her "in coordination with and at the direction of a candidate for federal office". Cohen was sentenced to three years in federal prison on various charges, and was disbarred.[6]
Daniels filed three lawsuits against Trump and/or Cohen. In the first lawsuit she argued that the NDA was invalid. She won the lawsuit, though it was dismissed after Trump and Cohen agreed not to enforce the NDA.[7] A California court subsequently ordered Trump pay $44,100 to reimburse her legal fees.[8] She lost the second lawsuit, in which she argued she was defamed, and was ordered to pay almost $300,000 in legal fees and court sanctions.[9] In the third lawsuit she claimed that Cohen colluded with her previous attorney Keith Davidson against her interests when he negotiated the payment. The lawsuit did not name Trump as a defendant, and settled in May 2019.[10]
Trump's accounting firm, Mazars, provided his tax returns and related documents to the Manhattan District Attorney, Cyrus Vance Jr., following the outcome of the Supreme Court's Trump v. Vance ruling in February 2021.[11] Although an internal report said there was "reason to believe" Trump's campaign had knowingly violated campaign finance law, the Federal Election Commission (FEC) abandoned an inquiry into the payment to Daniels. The FEC's vote on May 6, 2021, split 2–2 along party lines.[12]
On March 30, 2023, a Manhattan grand jury indicted Trump for his alleged role in the scandal. Trump was arraigned in the Manhattan district court on April 4.[13]
Allegation and non-disclosure agreement
In October 2011, both the blog The Dirty and the magazine Life & Style published the first reports of an alleged July 2006 affair between Trump and Daniels (the latter took a polygraph test).[14][15] Daniels talked about the alleged affair with the gossip magazine In Touch Weekly, who chose not to publish the interview after Cohen threatened to sue the magazine around the same time.[16] The Wall Street Journal reported on January 12, 2018, that Cohen paid Daniels $130,000 in October 2016, a month before the election, to stop her discussing the alleged affair.[1][2]
Cohen denied the existence of the affair on behalf of his client Donald Trump on January 14[17] but acknowledged on February 13 that he paid Daniels $130,000.
Daniels filed a lawsuit against Trump on March 6, 2018, claiming that the non-disclosure agreement she signed about the alleged affair was invalid since Trump never personally signed it despite acknowledging that she accepted the payment made in exchange for her silence in the matter.[18][19] It also alleged that Trump's attorney tried to intimidate Daniels and "scare her into not talking". Cohen initiated an ex parte arbitration process the next day that resulted in an order barring Daniels from disclosing "confidential information" related to the non-disclosure agreement. The order that Daniels's lawyers called "bogus" was to remain confidential.[20]
In an interview with 60 Minutes that aired March 25, 2018, Daniels said that she and Trump had sex once. She also said that she was threatened in front of her infant daughter after a fitness class in Las Vegas in 2011. The threat pressured her to later sign a non-disclosure agreement.[18][19][21]
FBI agents raided Cohen's office and seized emails, tax documents, and business records relating to several matters, including the payment to Daniels, on April 9, 2018.[22]
Status of Cohen's payment
Daniels's lawyer said that the $130,000 payment to her was a cover-up, while others also raised questions about whether the payment violated federal campaign finance laws, which may be the case if campaign funds were involved.[3] The Wall Street Journal reported on January 12, 2018, that Daniels was paid $130,000 after a non-disclosure agreement via a Delaware limited liability company called Essential Consultants LLC that Cohen created for the purpose.[23][24][25] The political watchdog group Common Cause filed a complaint on January 22, calling on the Federal Election Commission (FEC) and U.S. Department of Justice to investigate if the reported payout violated campaign finance rules, saying the alleged payment amounted to an in-kind donation to Trump's presidential campaign that should have been publicly disclosed in its official reports.[26][27][28]
Cohen responded to The New York Times on February 13 that he paid Daniels the $130,000 from his own pocket, not as a campaign contribution, and that neither the Trump Organization nor the Trump campaign reimbursed him for making it.[4] The Washington Post later noted that Cohen never ruled out the possibility that Trump reimbursed Cohen for the payment stating that he used his own money to "facilitate" it.[29] Cohen said on March 13 that he transferred funds from his home equity line of credit to Essential Consultants LLC and from the company to Daniels's attorney.[30]
On April 5, 2018, Trump claimed that he had no knowledge of Cohen's payment to Daniels but admitted that Cohen represented him in "the Stormy Daniels deal" for the first time on April 26.[31][32] Trump's new lawyer Rudy Giuliani said on May 2 that Trump reimbursed Cohen for the payment, stating Trump "didn't know about the specifics of it but he did know about the general arrangement, that Michael [Cohen] would take care of things like this".[31] Trump tweeted the next day that Cohen entered into the non-disclosure agreement and stated that Cohen was reimbursed for the $130,000 through monthly $35,000 retainer payments to him tweeting "Money from the campaign, or campaign contributions, played no roll [sic] in this transaction".[33] Trump contradicted Giuliani's statements on May 4, saying that Giuliani "wasn't familiar with everything" and that, "He started yesterday. He'll get his facts straight."[34] Giuliani later released a statement saying "the payment was made to resolve a personal and false allegation in order to protect the President's family".[35]
Cohen pleaded guilty to eight charges on August 21, 2018, including a campaign finance violation, for his role in the payment. He implicated Trump, saying that he acted "in coordination and at the direction of a candidate for federal office".[36] Trump said that he only knew about the payments "later on", adding that the payments "didn't come out of the campaign, they came from me".[37] The New York Times reported on August 22 that Cohen's court documents revealed two senior Trump Organization executives were also involved in the hush-money payments. It also said that Cohen "coordinated with one or more members of the campaign, including through meetings and phone calls" about the payments.[38]
Trump denied directing Cohen to make hush payments on December 13, 2018.[39]
Legal matters
Common Cause filed complaints with the Department of Justice and the FEC claiming that the $130,000 payment to Daniels was a campaign contribution and that Trump's campaign violated campaign finance laws by not disclosing the payment to the FEC.[26] If the payment was made by Cohen, there is also a question whether it is an illegal or undisclosed in-kind contribution to the Trump campaign. However, several members of Trump's legal team deny the payment related to the campaign, instead claiming that it was a personal payment, to save Trump's marriage.[40] Questions have also been raised about how the payment was categorized for tax purposes, and if there is a possibility of tax-based charges or fees relating to the payment.[41]
Daniels filed a civil suit in an attempt to nullify the non-disclosure agreement between Trump and her on March 6, 2018.[42] The hearing was set for July; but U.S. district judge S. James Otero pushed it back, citing the possible indictment of Cohen in the ongoing criminal probe by federal prosecutors.[43][44]
Cohen also faces discipline from the State Bar of New York under the New York Rules of Professional Conduct that prohibits lawyers making loans to clients.[5]
A well established principle of contract law is the offer and acceptance of "consideration" or something of value, in exchange for a promise to do something (or not do something, as in the case of a non-disclosure agreement). Legal experts argue that the $130,000 payment being accepted by one party is valid consideration and enforceable regardless of the unsigned state of the Daniels non-disclosure agreement, but other elements in the Daniels agreement make predicting the outcome difficult. Issues like the use of pseudonyms and the disclosure exception for law enforcement investigations may favor Daniels's position.[45]
Cohen pleaded guilty to eight charges on August 21, 2018, including tax fraud, bank fraud, and campaign finance violations, for his role in the payment, and implicated Trump, who in response said that he only knew about the payments "later on".[36]
The Wall Street Journal reported on November 9, 2018, that federal prosecutors have evidence of Trump's "central role" in payments to both Stormy Daniels and Karen McDougal that violated campaign-finance laws.[14]
In a sentencing memorandum for Cohen on December 7, 2018, federal prosecutors implicated Trump in directing Cohen to commit the campaign finance law felonies that Cohen pleaded guilty to. Trump tweeted shortly after the memorandum court filing, "Totally clears the president. Thank you!"[46] Cohen was sentenced to three years in federal prison.[47]
NBC News reported on December 13, 2018, that Trump was present in an August 2015 meeting with Cohen and David Pecker when they discussed how American Media could help counter unfavorable stories about Trump's relationships with women, confirming previous reporting by The Wall Street Journal.[48][14]
The U.S. Attorney for the Southern District of New York investigated the possible role of Trump and others regarding concealment of hush-money payments, but indicated in a sealed court filing that it is unlikely to bring additional charges.[49] On July 17, 2019, U.S. district judge William H. Pauley III, finding the investigation to be over, ordered that filing and materials related to the probe be unsealed on July 18, 2019.[50]