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May 3, 2018 at 12:46 PM 120

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Rudy Giuliani May Have Accidentally Outed Trump for Breaking the Law Over Michael Cohen and Stormy Daniels

Rudy Giuliani went on Fox News to get Trump out of trouble, but may have just given the president a whole new set of problems with federal ethics rules.

Lachlan Markay

05.03.18 12:24 PM ET

Rudy Giuliani may have put his new client, the President of the United States, in a bad spot.

In attempting to head off allegations of illegal fundraising, he may have implicated Trump in an entirely different violation of federal law.

In Fox News interviews on Wednesday night and Thursday morning, Giuliani disclosed, among other pertinent details, that hush money paid to the porn star Stormy Daniels in October 2016 came from Trump’s personal attorney, Michael Cohen.

But contrary to past claims by Trump and his former attorney, Giuliani said in an interview with Sean Hannity, Trump reimbursed him for the $130,000 paid to ensure Daniels’ silence on her alleged affair with the president.

This explanation would, in theory, head off allegations that the $130,000 amounted to an illegal contribution to Trump’s campaign. But in detailing the structure of the payments, Giuliani may have admitted that Trump fudged federal ethics paperwork—paperwork that his lawyers tried, unsuccessfully, to keep Trump from swearing was true and accurate.

By Giuliani’s account, Cohen’s payment to Daniels was effectively a loan, as he knew it would be repaid per the terms of his agreement with Trump. Giuliani insists that it was not a loan to the campaign, which would have amounted to an illegal contribution.

Trump’s repayment was entirely a personal expense designed to avoid personal embarrassment, Giuliani explained. Hence, Cohen’s payment was in effect a loan to Trump personally, which Trump would later repay.

Framing the payment that way could head off allegations of campaign finance violations, though even that is not clear. But Giuliani’s position could be lose-lose for Trump.

“If [the] Cohen loan was not one to [the] campaign, then it was one to you, and you omitted it from your personal federal financial disclosures for the period,” noted Norm Eisen, a former White House ethics lawyer, in a tweet on Thursday. “That’s a crime under 18 USC 1001 & we have filed a criminal complaint with DOJ.”

The complaint, filed by Eisen’s left-leaning group Citizens for Responsibility and Ethics in Washington in March, cited media reports surrounding Cohen’s payment to Daniels.

Those reports, effectively confirmed by Giuliani on Thursday, indicated the payments amounted to a financial liability. But such a liability was not disclosed in Trump’s personal financial statements filed with federal ethics officials last year.

Under the Ethics in Government Act, most federal officeholders, including the president, must file annual reports that give a full accounting of their finances, including income, assets, and liabilities, among other information.

The report that Trump filed last year disclosed no debts owed to either Cohen or Essential Consultants LLC, the company he used to make payments to Daniels.

“The parties involved in the transaction apparently took extreme measures to ensure that their identities would not be disclosed,” CREW wrote in its complaint to the Justice Department and the Office of Government Ethics. “These facts suggest President Trump's failure to report the loan may have been done both knowingly and willfully.”

In April, as Trump’s attorneys gathered information for a financial disclosure report covering 2016 and early 2017, those attorneys met with officials from the Office of Government Ethics.

At that meeting, according to correspondence subsequently reported by the Associated Press, Trump’s attorneys requested that Trump be excused from legally certifying that the disclosure of his assets and liabilities was accurate and complete. OGE balked and required that he do so.

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