Below is my column in The Hill Newspaper on the potential legal fallout from the Stormy Daniels interview on CBS 60 Minutes. Notably, yesterday the White House again expressly denied not just the “allegations” but specifically the allegation that President Donald Trump had a sexual tryst with the porn star. That direct denial is precisely what I have warned against in this and other columns. While the Daniels matter is not currently on the table with the Special Counsel, the worsening situation only reinforces why I believe Trump should close the deal on a sit down on the four prior subject matters lead out by Robert Mueller. Notably, my repeatedly stated view that Trump should sever any ties with his radioactive personal counsel Michael Cohen does not appear likely since Trump just arranged a dinner with Cohen at Mar-a-Lago.
Here is the column:
The long-anticipated interview of Stormy Daniels on “60 Minutes” was certain to disappoint after two weeks of unrelenting build up. For the first time, millions of viewers were impatiently waiting for the NCAA basketball tournament to end to get to the real action.
The interview itself added few new details beyond a description of a parking-lot threat made to Daniels. On this and other issues, there was a maddening failure to follow up for greater details. Indeed, Anderson Cooper looked about as comfortable as Alastair Cooke introducing “Debbie Does Dallas” to the “Masterpiece Theatre” audience.
Nevertheless, the interview represented a key legal moment in which Daniels unequivocally smashed the non-disclosure agreement (NDA) that she signed with Trump’s personal counsel, Michael Cohen. The stakes have thus changed for the array of figures swirling around Stormy Daniels.
The most immediate risk in the interview runs to Daniels, who admitted that she knowingly signed a “strict contract” not to disclose the information. That agreement comes with a $1 million-per-violation penalty, not just for disclosures but also threatened disclosures. She could also face other civil liability from Cohen or even President Trump, including defamation actions. Such tort claims, however, would open both men up to potentially damaging discovery and depositions.
Of course, the danger to Daniels diminishes dramatically if the agreement is found to be invalid. While the court generally enforces NDAs where money has been accepted, this could be a close question: The agreement itself is missing the signature of Trump (who is identified under the agreement with the false name of “David Dennison”) and boilerplate language on unneeded elements like paternity liability. There is the question of whether the agreement was truly executed without Trump’s signature. The agreement has obligations going both ways, but Trump never appears to have agreed to it.
Moreover, it does appear that the arbitration clause allowed Trump, not Cohen, who signed on behalf of a shell company of his own creation, to seek arbitration. The $1 million penalty would also seem unconnected to any measure of reasonable or cognizable damages that a court would be willing to enforce. In the worst case scenario, the concerns of Daniels are largely financial, which is better than some of the others in this scandal.
There are growing concerns over the role played by Keith Davidson, the attorney representing Daniels during the agreement’s drafting and execution. Curiously, Davidson was also the attorney used by former Playboy playmate Karen McDougal, who was given roughly the same amount of $150,000 to sign away her rights to her story in what appears a “catch and kill” agreement with the National Enquirer and its owner (and Trump friend) David Pecker.
McDougal’s filing suggests that Davidson may have had a conflict of interest or undisclosed relationship with Cohen. Davidson has been accused of facilitating false statements from Daniels. When Daniels raised questions over the truth of the statements, Davidson issued an email assuring the media that Daniels was just “having fun…and being her normal playful self.”
In her interview, Daniels says she signed the agreement after being warned that “they can make your life hell in many different ways.” She does not say that it was Davidson who told her that, but there is a question of what Davidson said or did before Daniels signed her statements. Davidson (whose law license was previously suspended but is currently a bar member in good standing) could face possible ethics questions over his role in this scandal.
Cohen is facing the most serious legal jeopardy for his ham-handed representation of Trump. I have previously discussed the troubling ethical questions in Cohen using his own funds to pay “hush money” to a porn star for a client. There also are questions over his alleged failure to confer with Trump on a critical binding agreement, as well as the propriety of representations and threats made to different individuals.
However, it is not just Cohen’s license but his liberty that could be at stake if this matter goes criminal. Special counsel Robert Mueller is already looking closely at Cohen’s involvement in Trump deals like the proposed Trump Tower in Moscow and, reportedly, has been asking about payment to women associated with Trump. Cohen’s greatest exposure could be the payment to Daniels just days before the election.
When this payment was first disclosed, I warned that it could present a serious threat to Trump as an “in-kind” campaign contribution. Former Democratic presidential candidate John Edwards was indicted for such payments by third parties to a mistress. Cohen later made matters worse by publicly saying that Trump never reimbursed him. That left an arguable campaign contribution that was unlawful under federal law.
Most campaign-finance violations are treated as civil, not criminal, matters — but this is not most cases. Cohen could find himself under a microscope and is unlikely to improve with closer examination of his methods or dealings. Indeed, Cohen may be one of the few lawyers who could make Daniels look virtuous in comparison.
The threat to President Trump is still to be seen. For an administration notorious for self-inflicted wounds, this could be lethal if it is not handled correctly. If Trump conferred on the payment to Daniels, he could be accused, like Edwards, of being a party to a campaign-finance violation. McDougal’s payment also could be raised as a possible violation. Nevertheless, it is easy to overstate this danger. When Edwards was indicted, I was critical of the prosecution as an overextension of the federal law. Ultimately, Edward was not convicted on the counts.
The greatest danger will come not from allegations by Daniels but from Trump’s reaction to them. He has, thus far, remained wisely and uncharacteristically silent on the controversy. He would be wise to sever any and all contact with Cohen. The ultimate question is whether Trump will do what Bill Clinton found impossible to do when first confronted with the Monica Lewinsky scandal: Tell the truth.
The vast majority of people believe Trump has had affairs. Indeed, many of his supporters simply do not care. If Trump fails to tell the truth in any interviews with Mueller, a John Edwards problem would become a Bill Clinton problem. He should instead drop the litigation with Daniels and simply say that he will not discuss any past sexual relationships. If forced to answer questions, he should ask to respond in written interrogatories as outside of the four areas laid out by Mueller for his proposed interview.
While Trump could take the Fifth, such an invocation would be a first for a president and raise huge political risks. If he has to respond, he should admit the affair (if it occurred) and be done with it. What he cannot do is try to spin the scandal. That is what caused the ongoing investigation over the statement that he reportedly dictated on Air Force One for Donald Trump Jr. on the meeting at Trump Tower with Russian figures.
Whatever political or personal costs the Daniels scandal presents, those costs have already been largely incurred through leaks and the “60 Minutes” interview. The key is to stop the scandal from metastasizing from a civil to a criminal matter. Daniels is a self-admitted liar and adulterer. However, a lack of credibility does not mean that she does not present a credible threat.