Donald Trump could be criminally charged in the Stormy Daniels hush money case

Amidst the many ongoing investigations into former President Donald Trump, a new one — or an older one — has gained unexpected momentum.

This week, the New York district attorney’s office began presenting evidence to a grand jury on whether Trump broke the law in connection with a $130,000 cash payment to Stormy Daniels, the New York Times reports.

You might be thinking: “Stormy Daniels… That’s a name I haven’t heard in a while.” Absolutely.

The world first learned about Daniels in 2018, when the Wall Street Journal broke the news that the Trump Organization lawyer Michael Cohen had arranged a payment, made shortly before the 2016 election so that the adult film actress would not go public with the claim that she had a relationship with Trump. Cohen, who had been scrutinized by investigators, eventually pleaded guilty in August 2018 to violating federal campaign finance laws with those payments and others, by filing documents identifying Trump as “Individual-1.”

Cohen claimed that he had made illegal payments in Trump’s direction, prompting much speculation about whether Trump also violated campaign finance laws.

However, the case failed. The federal investigation closed in 2019, and the New York district attorney’s office is looking into it, but it seems to have lost interest in pursuing an investigation into Trump’s business dealings.

So why return now, in 2023?

Only Manhattan district attorney Alvin Bragg knows the answer. But some context is that when Bragg first took office early last year, he halted the Trump business investigation — a decision that led to the resignation of two prosecutors and was widely criticized.

Amidst the backlash, and increasing legal threats to Trump federally and in the state of Georgia, Bragg appears to have reconsidered his earlier hesitation. And now he’s embracing what the Times reports has come to be known in his office as the “zombie theory” — pursuing accusations based on quiet money.

But whether the possible charges, if filed, would prove strong enough to survive court scrutiny is unclear.

It’s been a while. What about the hush money scandal?

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In October 2016 – a few weeks before the presidential election, because Trump was publicly besieged by a series of sexual harassment or assault allegations from various women – adult film actress Stormy Daniels prepared to come forward with her own story about her consensual sexual encounters. ‘d been with Trump in 2006. However, his representatives let him know, he would also be willing to accept payment for his silence.

Earlier in the campaign, Cohen had worked with American Media Inc. – the parent company of the National Enquirer – to “catch and kill” unflattering stories about Trump, which AMI will pay the accusers for exclusive rights to the story, and then not. published the story. AMI executives were also involved in discussions about paying Daniels, but ultimately disagreed — so Cohen had to take care of it himself.

Cohen created a shell company, Essential Consultants, and sent $130,000 to Daniels’ attorney on October 27. Later, after Trump won the election, he paid Cohen back in installments in 2017.

The problem, federal prosecutors in the Southern District of New York later alleged, was a violation of campaign finance laws. He said the money was used to help Trump win the election, so it should be disclosed as campaign spending and subject to legal limits on donations. Cohen pleaded guilty to this charge as part of a larger plea deal, so the case was never tried in front of a jury.

But the prosecutor’s theory is not universally accepted. The New York Times described it as a “relatively new use of campaign finance laws,” and Attorney General Bill Barr pointedly questioned it after taking office. In any case, SDNY prosecutors told a judge in July 2019 that the case was closed, in part because Trump is a sitting president and under Justice Department policy he cannot be indicted.

As Trump prepares to leave office in 2021, SDNY prosecutors are re-examining the case, debating whether to reopen it when he no longer has presidential immunity. According to CNN legal analyst Elie Honig’s new book Untouchable, Prosecutors were divided on the strength of the case.

“Some believe the evidence is more than enough to charge a regular case, while others think it’s still a close call, even if charges are still possible,” Honig wrote, continuing, “Even if the evidence is sufficient to support charges, it’s not a slam-dunk case either.” in the majority view.

He added that some on the team believed the quiet money scheme was “serious, but not the end of the world,” and that it seemed “insignificant and outdated” compared to subsequent actions like trying to overturn Joe Biden’s election victory. So in the end, the SDNY decided to lie.

So how does this move to the Manhattan district attorney?

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After public news that the SDNY had dropped the quiet money case in 2019, Manhattan district attorney Cy Vance took over, bringing Cohen in for an interview and seeking Trump’s tax returns.

But the investigation soon spread out.

First there is the case of real estate valuation. Prosecutor Vance developed a theory, supported by public evidence and Cohen’s testimony, that Trump overvalued certain properties when looking for loans and insurance policies, but undervalued these assets for tax purposes, so he owes less in property taxes. They explore charges of tax fraud, bank fraud, and insurance fraud.

But the issue proves Trump knows his company is breaking the law, as he can argue that everything the company does is approved by its chief financial officer and legal team, who are experts on the matter. So prosecutors focused on that CFO, Allen Weisselberg, pushing him for months to bring down Trump. Weisselberg didn’t do that.

So next is the case of “fringe benefit”. In July 2021, Vance’s office charged Weisselberg and several Trump business entities with tax fraud. The company has paid for Weisselberg’s apartment and car rent and private school for his grandchildren, tax-free. Trump himself was not prosecuted, and the maximum penalty for Trump’s company is relatively small, so this is not all that threatens the case.

With the trial pending, Vance left office, and Bragg, the newly elected district attorney, inherited the Trump investigation in early 2022. After being briefed on the real estate valuation case, he was reportedly unimpressed. According to the New York Times, Bragg told two prosecutors that he had doubts about proceeding with the case, and paused jury activity. The two lead prosecutors resigned in February, and one, Mark Pomerantz, has a book coming out next week detailing the incident.

Bragg, elected as a criminal justice reformer, later faced intense criticism in the media and from Democrats for being too impatient with Trump. He said it was the first time, but in April he said the real estate valuation case was still moving forward. The fringe benefits case, meanwhile, is still going to trial, and in August, Weisselberg agreed to change his plea to guilty (although he still defies Trump, and was sentenced to five months in prison). Trump’s business was later convicted in court, and sentenced to pay a fine of $1.6 million.

And at some point last year, Bragg’s office returned to where the Manhattan DA’s investigation began: quiet money. It recently summoned a grand jury to hear evidence, and brought in Cohen for further deliberations.

We don’t know why they have returned the money, and we don’t know what the case is. Importantly, the DA can only charge for violations of New York state law, so federal campaign finance charges are not relevant here.

According to New York Times reporters William Rashbaum, Ben Protess, Jonah Bromwich, and Hurubie Meko, though, prosecutors have a theory about how to charge him. The main thing is that when Trump reimburses Cohen for the quiet money, it is classified as legal fees. Prosecutors wanted to argue that it was an unauthorized falsification of business records.

But since it will only be a misdemeanor and almost not worth the power, they also want to argue that this is done in violation of the New York State Election Law, which makes it a crime. “The second aspect is largely untested, and therefore would create a risky legal case against the defendant, let alone a former president,” the Times reporter wrote.

It seems likely that the case of quiet money is a little bit of a reach, the “zombie” legal theory is being resurrected now that Bragg has realized that he will benefit more politically as he appears to be trying to destroy Trump – although we can’t say for sure without knowing more about evidence and legal considerations.

Now, it can only be added to the pile of other legal problems Trump is dealing with, which is far from over.