Rudy Giuliani Just Made Trump’s Stormy Daniels Scandal Even Messier - Fortune

Rudy Giuliani Just Made Trump’s Stormy Daniels Scandal Even Messier

By NATASHA BACH May 3, 2018
President Donald Trump reimbursed the $130,000 his lawyer Michael Cohen paid to porn star Stormy Daniels ahead of the 2016 presidential election.

That’s according to Rudy Giuliani, the former mayor of New York City and recent addition to Trump’s legal team.

The Fox interview
While speaking to Fox News’ Sean Hannity on Wednesday, Giuliani explained that “the money was not campaign money.”

“Sorry, I’m giving you a fact now that you don’t know,” Giuliani said. “It’s not campaign money. No campaign finance violation.”

“They funneled through a law firm, and the president repaid it,” he said.

Cohen paid Daniels $130,000 in hush money to stay quiet about her alleged affair with Trump amid the 2016 race. It’s dogged the president in recent weeks—not only because it points to an extramarital affair, but because it could be seen as a campaign contribution by Cohen and the amount exceeds limits on individual donations.

When pressed further on the matter, Giuliani on Wednesday said that a lawyer handling such a settlement without his client knowing the specifics “is a very regular thing for lawyers to do.”

A contradiction?
Despite Giuliani’s insistence that Trump didn’t know the nature of the $130,000 payment when it was made, Giuliani’s comments to Fox News seemed to contradict Trump’s previous assertions that he knew nothing about the Daniels hush money.

As recently as April 6, Trump told reporters that he did not know about the payment. For his part, Cohen has repeatedly asserted that the hush money paid to Daniels was from his own pocket.

So why would Giuliani give a statement seemingly at odds with the president’s?

In short, Giuliani’s primary goal was to demonstrate that Cohen had not committed a campaign finance violation by stating that Trump had repaid Cohen the $130,000 from his personal funds.

(Cohen is being investigated for possible campaign finance violations, as well as bank fraud and wire fraud.)

Still raises legal questions
However, Giuliani did not paint the full picture, and his attempt to explain the payment arrangement may have made things even less clear.

The nature of the payment to Daniels matters a great deal here.

If it was intended to influence the election, Cohen’s payment would have counted as an in-kind contribution and Trump’s purported repayment would have constituted a campaign expenditure. Both would have required disclosures, according to campaign finance laws.

Trump’s campaign did not disclose the reimbursement to Cohen on its reports.

On the other hand, if the payment to Daniels had a more mundane purpose—to hide the affair from Trump’s wife Melania, for instance—it’s essentially a personal matter and would not factor into campaign finance disclosure regulations.


President Trump’s tweets
President Trump on Thursday took to Twitter to assure the American people that the latter instance is in fact case.

“Mr. Cohen, an attorney, received a monthly retainer, not from the campaign and having nothing to do with the campaign, from which he entered into, through reimbursement, a private contract between two parties, known as a non-disclosure agreement, or NDA,” the president tweeted. Adding: “Money from the campaign, or campaign contributions, played no roll in this transaction.”


Donald J. Trump
✔
@realDonaldTrump
 Mr. Cohen, an attorney, received a monthly retainer, not from the campaign and having nothing to do with the campaign, from which he entered into, through reimbursement, a private contract between two parties, known as a non-disclosure agreement, or NDA. These agreements are.....

8:46 PM - May 3, 2018

Donald J. Trump
✔
@realDonaldTrump
 ...very common among celebrities and people of wealth. In this case it is in full force and effect and will be used in Arbitration for damages against Ms. Clifford (Daniels). The agreement was used to stop the false and extortionist accusations made by her about an affair,......

8:54 PM - May 3, 2018

Donald J. Trump
✔
@realDonaldTrump
 ...despite already having signed a detailed letter admitting that there was no affair. Prior to its violation by Ms. Clifford and her attorney, this was a private agreement. Money from the campaign, or campaign contributions, played no roll in this transaction.

9:00 PM - May 3, 2018

When Trump was informed about the payment is also of significance, and Giuliani was sketchy on that detail. In general, violations of the Federal Election Campaign Act’s disclosure provisions are misdemeanors, but “a knowing and willful violation could be a felony,” explains The New York Times.

Asked in a later interview with The Washington Post whether Trump was not aware of the payment when it was made, or if he was still unaware of it when he spoke to reporters about it in April, Giuliani replied, “Both. I think.”