Cohen's Campaign Finance Laws Breach: What Happened?

Michael Cohen, former lawyer to President Donald Trump, broke campaign finance laws by orchestrating hush money payments to two women who alleged they had affairs with Trump. Cohen paid $130,000 to adult film actress Stephanie Clifford, known as Stormy Daniels, and arranged for a $150,000 payment to former Playboy model Karen McDougal, in exchange for their silence during the 2016 election campaign. These payments exceeded the legal limit for individual contributions to a single candidate and violated the ban on corporations contributing directly to campaigns. Cohen pleaded guilty to these charges, among other offences, and was sentenced to three years in prison.

Cohen's payment to Clifford exceeded the $2,700 limit on personal contributions

In 2016, Michael Cohen, then-President Donald Trump's personal attorney, paid adult film actress Stephanie Clifford, also known as Stormy Daniels, $130,000. In exchange for the payment, Clifford signed a non-disclosure agreement that barred her from discussing an alleged sexual encounter with Trump in 2006. Cohen also arranged for a publishing company to pay $150,000 to model Karen McDougal for her story, in exchange for both women agreeing not to go public with allegations that they had affairs with Trump.

In August 2018, Cohen pleaded guilty to two campaign finance law violations, including making an excessive campaign contribution. He admitted in court that he made the payment "at the direction of" Trump, to influence the 2016 election. Cohen was sentenced to three years in prison.

Trump has denied having affairs with either Clifford or McDougal and has downplayed the charges against Cohen, suggesting that he pleaded guilty to violations "that are not a crime".

The payment to McDougal flouted the ban on corporations contributing to campaigns

During the 2016 election, Michael Cohen orchestrated hush money payments on behalf of President Donald Trump. Cohen paid $130,000 to adult film actress Stephanie Clifford, known as Stormy Daniels, and arranged for a publishing company to pay $150,000 to former Playboy model Karen McDougal. Both women agreed not to go public with allegations that they had affairs with Trump (which he has denied).

The payment to McDougal flouted the ban on corporations contributing directly to campaigns. Cohen arranged for a publishing company, American Media Inc. (AMI), to pay McDougal for her story. AMI paid McDougal $150,000 for her detailed account of a nine-month affair with Trump between 2006 and 2007. However, AMI never published the story, despite purchasing it just three months before the 2016 general election.

A watchdog group, Free Speech for People, filed a complaint with the Federal Election Commission (FEC) against Trump's campaign and AMI, arguing that the timing of the payment and the decision not to publish McDougal's story could have been a way to influence the election's outcome. Shanna Cleveland, an attorney for Free Speech for the People, stated that "the payment may have been an effort to conceal a politically embarrassing fact, and influence the 2016 general election."

Cohen's actions in arranging the payment to McDougal through a corporation were in direct violation of the Federal Election Campaign Act, which prohibits corporations from making direct contributions to political campaigns. This led to Cohen being charged with "causing an unlawful corporate contribution" and making an excessive campaign contribution. These charges are felonies, carrying significant potential penalties, including prison time and fines.

The payment to McDougal was just one aspect of Cohen's violations of campaign finance laws, which also included the excessive payment to Clifford and his failure to report these transactions as campaign contributions. Cohen pleaded guilty to these offenses and was sentenced to 36 months in prison.

Cohen's payment to Clifford was made with a fraudulently obtained home equity line of credit

Michael Cohen, former personal lawyer to President Donald Trump, was found guilty of violating campaign finance law. Cohen paid $130,000 to adult film actress Stephanie Clifford, known as Stormy Daniels, to keep quiet about an alleged affair with Trump before he became president. The payment exceeded the $2,700 limit on personal contributions to a single candidate for an election.

Cohen obtained the funds for the payment to Clifford through a home equity line of credit. He took out a loan from First Republic Bank, which he claimed was for renovations on his home. Cohen transferred the funds from the loan internally to his LLC account in the same bank and then wired the money to Clifford.

First Republic Bank reported the transaction as potentially suspicious to the US Treasury Department. Cohen may have had to explain to the bank why he was making the payment, as transactions over $10,000 can trigger automatic reporting to financial authorities.

The US bank fraud statute makes it illegal to "obtain any of the moneys, funds, credits, assets, securities, or other property owned by, or under the custody or control of, a financial institution, by means of false or fraudulent pretenses, representations, or promises." If Cohen explicitly lied about the purpose of the loan, he could be guilty of bank fraud.

In addition to the campaign finance violation, Cohen was also charged with tax evasion and sentenced to three years in prison.

Cohen pleaded guilty to causing an unlawful corporate contribution

In August 2018, Michael Cohen pleaded guilty to eight criminal charges, including one count of causing an unlawful corporate contribution. Cohen, who served as President Donald Trump's personal attorney, orchestrated hush money payments to two women who alleged they had affairs with Trump. The payments, totaling $280,000, were made to adult film actress Stephanie Clifford, known as Stormy Daniels, and former Playboy model Karen McDougal. Cohen paid Clifford $130,000 and arranged for a publishing company to pay McDougal $150,000 in exchange for their silence about the alleged affairs. These payments were made to influence the 2016 election and were treated as campaign contributions, which are subject to restrictions under the Federal Election Campaign Act.

The Justice Department asserted that the hush money payments were unreported campaign contributions intended to influence the election outcome. Cohen himself acknowledged that the goal was to affect the election and protect Trump's candidacy. The payments exceeded permissible campaign contribution limits, with individual contributions capped at $2,700 per election in 2016. Cohen's payment to Clifford exceeded this limit, and the payment he facilitated for McDougal violated the ban on corporations contributing directly to campaigns.

Cohen was charged with "causing an unlawful corporate contribution" and making an excessive campaign contribution. These charges carried significant penalties, with each count punishable by up to five years in prison, three years of supervised release, and a fine of up to $250,000. Cohen's plea agreement estimated a sentence of 46 to 63 months in prison on all charges.

In December 2018, Cohen was sentenced to three years in federal prison and ordered to pay a $50,000 fine. He was also required to pay $1.4 million in restitution and forfeit $500,000. Cohen's sentence reflected the seriousness of his crimes, which the judge described as "a veritable smorgasbord of fraudulent conduct."

Cohen pleaded guilty to making an excessive campaign contribution

On August 21, 2018, Michael Cohen pleaded guilty to eight counts, including one count of making an excessive campaign contribution. This came as part of a plea agreement with the U.S. attorney's office in Manhattan. Cohen was sentenced to 36 months in prison, in part for "brazen violations of the election laws" during the 2016 election.

Cohen's guilty plea was the result of an investigation that uncovered various financial crimes, including tax evasion, fraud, and deception. Cohen, who was President Donald Trump's personal attorney and fixer, admitted to making hush money payments to two women who alleged they had affairs with Trump. The payments were made to influence the 2016 election and were treated as campaign contributions, which are subject to restrictions under the Federal Election Campaign Act.

Cohen's payment of $130,000 to adult film actress Stephanie Clifford, known as Stormy Daniels, exceeded the $2,700 limit on personal contributions to a single candidate for an election. He also arranged for a publishing company to pay $150,000 to former Playboy model Karen McDougal for her story, flouting the ban on corporations contributing directly to campaigns. These payments were structured as payments for "limited life rights" and "retainer" fees, with the true purpose of the payments being to suppress the women's stories to prevent them from influencing the election.

The excessive campaign contribution charge against Cohen is a felony that carries a maximum prison sentence of five years, along with a potential fine of $250,000. Cohen's estimated sentence under federal guidelines for all the charges against him is 46 to 63 months in prison.

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