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2024

Hush money isn’t a crime. Slush money is

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Editor’s Note: The following first appeared in Political Junkie, Claire’s newsletter. –JS

Thursday, Michael Cohen, former president Donald Trump’s former attorney and fixer, completed his third day on the stand in People v. Donald J. Trump. The prosecution is expected to rest its case. So far, we have been reminded of all kinds of delicious facts about Cohen, a man from central casting if there ever was one. For example, that after Trump abandoned him, he said things like: “You better believe I want this man to go down and rot inside for what he did to me and my family.”

You can never tell how something like that might land with a New York jury. Todd Blanche, Trump’s lead defense attorney, hopes that it will plant the idea that Cohen would say or do anything to hurt Trump.

But it may backfire and add to Cohen’s authenticity, making him more believable to the jury. Why? Because most New Yorkers would feel the same way. There are undoubtedly people sitting in that jury box thinking, “Yeah. I can see that. I’m surprised he didn’t go after Trump with a crowbar. No offense meant.”

If you are a New Yorker, you know this is true. If you are not a New Yorker, and you need supporting evidence, take a look at Jacob Bernstein’s piece in the Times about how and why Rosie O’Donnell became Michael Cohen’s friend after Cohen participated in Trump’s vicious smear campaign against her.

The quick answer is that after he went to jail, O’Donnell felt sorry for him. “Mr. Cohen, with his heavy Nassau County accent, reminded her of the boys she knew growing up in Commack, on Long Island,” Bernstein writes. “'He was every guy I went to high school with,' she said.”

Friday was a day off in Criminal Court (although sadly, not for the other criminals), during which Trump attended the graduation of Barron Trump (otherwise known by his father as “Melania’s son”) from Oxbridge Academy in West Palm Beach, Florida. Trump then skipped the rest of the festivities and flew to Minnesota for a campaign fundraiser, a normal Dad way of saying “I love you” when your youngest kid is at a turning point in his life.

Since the defense will not begin its case until Monday, this is a good time to take a breath and remind everyone what this trial is about, since it will be the defense’s job next week to make that very confusing.

The sensational testimony, much of which we have heard before, also makes the trial confusing, even though the prosecution is knitting it together in a story that is not about sex, tabloids or payoffs. Prosecutors are telling that story because it establishes meaning, motivation and a chain of verifiable facts for the real crime: that Donald Trump used his company as a slush fund and an arm of his 2016 campaign; and that under his direction, fake bookkeeping enabled this felony.

The charging document lists 34 counts of falsified business records, all of which pertain to a payment of $130,000 made to adult film star Stephanie Clifford (aka Stormy Daniels) to buy her silence about a one-night stand in 2006. Each payment occurred in 2017, and they are identical, but for two things.

They have different check, voucher or invoice numbers; and they were authorized or paid on different dates: on or about February 14, 2017 (4), March 16 (1), 2017, March 17 (1); April 13 (1), June 19 (2), May 22 (2), (May 23 (1), June 16 (1), June 19 (2), July 11 (3), August 1 (3), September 11 (2), September 12 (1), October 18 (3), November 20 (2), November 21 (1), December 1 (2), and December 5 (1).

Every check has Donald Trump’s signature on it.

But let’s talk about what this case is really about: whether these acts pertained to fees for legitimate legal and personal services provided by Michael Cohen; or, as the prosecution alleges, whether Cohen (as he claims) fronted a payment of $130,000 to Clifford, at Trump’s direction, and was repaid over time via invoices for legal fees, invoices that were padded to conceal the reimbursement.

These payments exceeded the original sum by about $50,000 to account for Cohen’s total expenses (wiring and transfer fees, interest paid on the home loan and taxes on the “income”), a sum that represented less than half of what Trump paid Cohen that year.

Although this is commonly referred to as a “hush money” trial, none of these charges are about hush money: it’s where the hush money came from, how it got to where it was intended to go, and why it needed to be paid.

So it would be more accurate to say this is a slush money case, because Trump is alleged to have used his corporate, rather than his personal, accounts as a slush fund for making problems go away. Had he used his own funds, and concealed the payments, it is likely these charges would never have been filed.

But he’s a cheapskate, and he did, and they were.

So here is the thing to hold in your head as the defense goes to work next week.

Trump is being prosecuted because of crimes he has not yet been charged with. The crimes are: committing a fraud on the American public by conspiring to hide a sexual encounter that might have influenced voters; by failing to disclose this payment in his 2017 annual financial disclosure; and by making an unreported contribution to his own political campaign. These are felonies, and under New York State law, misdemeanors in pursuit of a larger crime or crimes are felonies. This, Alvin Bragg’s theory of the case, transforms each of the 34 misdemeanors into felonies.

This is obviously complicated. So let’s look at how Trump, Trump supporters, and the broader extreme right are trying to use this complexity to insist on the Former Guy’s innocence. I have framed what follows around four common, but false, assertions that deliberately misread what has happened in this trial so far.

The 34 actions cited in the indictment were minor mistakes that are common in corporate life, and obviously, this trial was concocted to interfere with Trump’s presidential campaign.

Here’s an example of this falsehood. As recently as mid-April, in an appearance on Sean Hannity’s evening show, Lara Trump (who is Donald Trump’s daughter-in-law and co-chair of the Republican National Committee) characterized the 34 actions under scrutiny as "bookkeeping errors." According to Newsweek, she then said that:

Manhattan District Attorney Alvin Bragg "refused to prosecute this case until ... Donald Trump decided he was running for president."
"Everyone can see what this is about," she said. "They have, and are forcing, Donald Trump to sit in a courtroom — this is a former president of the United States, the current nominee for the Republican side of the aisle for president — for weeks on end. For what, Sean? They claim a bookkeeping error. Really?"

First, this case has been in the works since 2020 when Cy Vance was Manhattan DA. Second, while it is not uncommon to conceal payoffs for sexual misbehaviors and crimes by passing the money through someone else, the bookkeeping actually is crucial. Harvey Weinstein used his brother Bob for this purpose, and it was vile — but legal.

Yet even if it was a series of bookkeeping errors — perhaps Lara means that the invoices were not properly itemized? — it would still be, as the IRS says, “inadvisable,” to make a personal pay off with corporate money. Why? Because it is almost impossible to stay on the right side of the law if you do.

Notably, if the jury convicts, it will establish two facts that can be referred to the Southern District: that Trump took extra, unreported income from his company, used that money for his campaign, and took the payoff to Clifford as a corporate deduction.

Stephanie Clifford tried to extort Donald Trump and should be charged with blackmail.

This is false: Clifford never approached Trump for money. Nor did Karen MacDougal, the Playmate and preschool teacher who also allegedly shtupped Trump, and who was paid $150,000 via National Enquirer publisher David Pecker in August 2016. Instead, like McDougal, Clifford began to shop her story about a sexual encounter with Trump in early October, 2016, around the time Trump was under fire for the "Access Hollywood" tape.

But Pecker balked: Trump had not yet paid him back for the McDougal story, and this is why the payment to Clifford had to go through Cohen. Allegedly, Trump believed that he would lose the presidency if the story about Clifford came out, compounding the damage done by having publicly admitted that he sexually assaulted women.

It’s also important to emphasize that the damage from such revelations was entirely reputational. While adultery is illegal in 16 states, Nevada, where the alleged sexual encounter took place, is not one of them; and Pecker’s “catch and kill” operation — paying someone money for the rights to a story you will never publish — is also perfectly legal, and a longstanding tabloid technique

The Biden administration is using the courts to persecute its political enemies.

The New York case is not a federal case, and the Manhattan District Attorney is not a federal employee. If Trump were convicted, no president could pardon him. But as I said above, there could be federal referrals.

Trump just needs one juror to not convict. Just one.

That’s true. There is a meme on the right about how to force the judicial system to heel, and it is called “jury nullification” or “jury independence.” This means that a juror or jurors break the oath they take at the beginning of the trial, not just to be honest about their views and decide the case impartially, but to decide it according to the law. A juror who “nullifies” makes a statement that the law itself is unjust, and/or ignores the judge’s instructions about how the law applies to the evidence they have heard.

Jury nullification has been associated with both progressive and rightwing causes. But excitement about the practice has accelerated on the right under Trumpism, because MAGA-world is anti-institutionalist. This excitement seemed to have been vindicated in 2022 when Timothy Shea, charged (along with Steve Bannon) in the Build the Wall fraud, received a mistrial because of a juror who refused to convict.

The juror did not object to the law, however. He objected to people he liked being tried under it, and this is commonly how jury nullification plays out on the right. According to Ben Feuerherd at Politico, “during the deliberations in Shea’s case, in US district court in Manhattan,

the holdout juror spoke about a “government witch hunt” and accused the other members of the jury of being “liberals,” the New York Times reported at the time.
“Tim Shea is a good man. He doesn’t beat his wife,” the man reportedly said during deliberations. “You just can’t vote to lynch someone.”
The juror also accused the government of bringing the case in a blue state like New York to secure a conviction.

But jury nullification enthusiasts often forget that the practice, when successful, generally conceals the fact that the prosecution has made a very strong case for conviction. Shea, for example, simply got a new trial and, according to Feuerherd, “was later convicted for his role in the scheme and sentenced to more than five years in prison in July 2023. Two of his co-defendants in the case were also sentenced to prison for the fraud.” And Shea’s alleged co-conspirator, Steve Bannon, although convicted and then pardoned by Donald Trump, will be retried for Build the Wall in New York State.

And let’s remember: Trump has lost every case that has come to trial so far, and one involved a jury. I would put money on it (from my private bank account, of course) that he will lose this slush money case too.








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