I previously wrote about how the payments to both a former porn star and a former Playboy bunny could prove a greater threat to President Donald Trump than the still unsubstantiated collusion allegations that led to the appointment of the Special Counsel. Now, one of those woman is formally in court after Stormy Daniels (AKA Stephanie Clifford) filed an action against President Trump. I have previously criticized counsel for both Trump and Daniels for bizarre actions in this controversy and this lawsuit is no exception. The lawsuit introduces new facts including the allegation that President Trump’s lawyer used a fake name for the President, David Dennison, as part of this effort to pay what the complaint calls “hush money.” After differing accounts by Daniels, she has not only stated that she did have a year long affair (something Trump’s counsel has denied) but stated it in a court filing as opposed to a tabloid newspaper.
In the lawsuit, Clifford says that she began an affair after meeting him at Lake Tahoe. Daniels’ 2011 interview was never litigated as defamation because it was never published. It could have been litigated as slander but Trump’s counsel succeeded in deterring the magazine with a threat of a defamation lawsuit (despite the problematic elements of such a case). The statute of limitations on defamation in New York and California is one year. However, if she were say that the interview’s representations were true, that would constitute a new act of defamation if the representations are untrue.
Cohen conduct in this matter has been bizarre and highly questionable. As discussed earlier, Cohen created a shield company and anonymous identity to pay off Daniels has stated that the money was his, not Trump’s or the campaign’s. In an interview with NBC, Michael Cohen, said “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.” He has also informed the Federal Election Commission that this was his money and thus not an illegal “in kind” political contribution. As a personal payment, Cohen insisted that it “was not a campaign contribution or a campaign expenditure by anyone.”
Cohen told CNN “Just because something isn’t true doesn’t mean that it can’t cause you harm or damage. I will always protect Mr. Trump.”
Cohen’s incredibly generous payment for Trump does not resolve the legal questions. If Cohen was receiving money from the campaign or Trump, the payment could be viewed as little more than a pretense or shielding tactic. Cohen curiously set up a corporate structure and used an assumed name to carry out the transaction. The use of personal funds added yet another wall between Daniels and Trump. The question will likely be asked if Cohen received a padded or inflated payment to cover the “personal” payment. Moreover, since Trump was running for president, the payment could be viewed as a form of political contribution that evaded federal election laws by the plaintiffs. That is the John Edwards problem discussed earlier.
Cohen was representing Trump in this matter, including sending threats of defamation lawsuits. He continues to represent Trump and has even become a plaintiff himself in a defamation action. Becoming personally involved in a case of representation through personal contributions blurs the lines of the attorney-client relationship. It also raises the aforementioned questions of indirect payments and the use of counsel to circumvent reporting laws. There is clearly a gray zone on gifts or such personal payments. However, attorneys are barred from entering into business transactions with clients.
Cohen however was recently alleged to have told other individuals that he did not pay Daniels in a timely manner because he was waiting to speak with Trump. He also allegedly complained that Trump had failed to reimburse him for the $130,000 payoff. That not only contradicts his legal position but it reinforces the campaign finance allegations. Cohen could not have handled this matter more poorly and ineptly.
The complaint seeks a declaratory judgment that the agreement is null and void because Trump never signed it. However, Daniels took signed the agreement and took the money. Her stronger argument is that Cohen nullified the agreement by speaking publicly on the affair — another remarkably reckless decision.
Notably, Daniels says that on February 27,2018, Cohen initiated a “bogus” arbitration proceeding against her in Los Angeles. She accused Cohen of still trying to muscle her. Cohen is rather infamous for such threats and actions. In complaint below states: “Put simply, considerable steps have been taken by Mr. Cohen in the last week to silence Ms. Clifford through the use of an improper and procedurally defective arbitration proceeding hidden from public view.”
As I wrote earlier, this is a real danger if the White House handles this as poorly as Cohen. Special Counsel Mueller is already investigating Cohen’s involvement with deals in Moscow for the Trump Tower. If he turns to the campaign finance allegations, this could easily metastasize into a serious problem.
Here is the complaint: Daniels filing