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.