Barack Obama’s 2008 presidential campaign was caught hiding the sources of 1,300 large campaign donations, aggregating to nearly $2 million. The campaign also accepted more than $1.3 million in unlawful donations from contributors who had already given the legal maximum.
Under federal law, such campaign-finance violations, if they aggregate to just $25,000 in a calendar year, may be treated as felonies punishable by up to five years’ imprisonment — with offenses involving smaller dollar amounts punishable by incarceration for a year or more. (See Section 30109(d) of Title 52, U.S. Code, pp. 51–52 of the Federal Election Commission’s compilation of campaign laws.)
The Obama campaign did not have a defense; it argued in mitigation that the unlawful donations constituted a negligible fraction of the monumental amount it had raised from millions of “grass-roots” donors. Compelling? Maybe not, but enough to convince the Obama Justice Department not to prosecute the Obama campaign — shocking, I know. During the Christmas holiday season right after the 2012 campaign, with Obama safely reelected and nobody paying much attention, the matter was quietly settled with the payment of a $375,000 fine.
Is the $130,000 in hush money Donald Trump’s personal lawyer paid to porn star Stormy Daniels on the eve of the 2016 election a campaign-finance violation? Probably, although it’s a point of contention. Even if we stipulate that it is, though, we’re talking comparative chump change.
Yet, as that lawyer, Michael Cohen, has discovered, what was not a crime in the Obama days is the crime of the century now. Cohen’s Rockefeller Center law office in New York City was raided by the FBI on Monday. So was his room at the Loews Regency Hotel on Park Avenue, where he has been staying while his apartment is under renovation, the New York Times reports.
The agents seized voluminous files and records pursuant to court-authorized warrants obtained by federal prosecutors. The haul includes presumptively privileged communications between Cohen and his client, President Trump. As one would expect, the president exploded in anger, with Special Counsel Robert Mueller the main target. But his outburst was a misfire.
The rap on Mueller (including from your humble correspondent) has been that his investigation has no limits. In this instance, though, when a potential crime completely unrelated to his Russia probe fell into his lap, the special counsel took a pass. Mueller referred the matter to the Justice Department and the U.S. attorney’s office for the Southern District of New York (the SDNY, in Manhattan, where I worked as a prosecutor for nearly 20 years). This was appropriate: The campaign-finance matter has nothing to do with Russia’s meddling in the 2016 election; and Cohen’s law practice, which is the focus of the investigation involving the payment to Daniels (whose real name is Stephanie Clifford), is in the SDNY.
The Trump camp suggests that there is a sinister tag-team arrangement between the special counsel’s office and the SDNY (whose public-corruption chief, Andrew Goldstein, is now working on Mueller’s staff). But that is hard to square with the fact that Mueller did not need a cat’s paw: If he wanted to control the campaign-finance investigation, he could have done so by simply asking Deputy Attorney General Rod Rosenstein to expand his jurisdiction — similar to what Clinton independent counsel Kenneth Starr did when the Lewinsky scandal emerged in the midst of his unrelated Whitewater investigation.
If the only matter under investigation were a potential campaign-finance violation that would normally not be grist for criminal prosecution, it would be outrageous to raid a lawyer’s office.
Moreover, cooperation between prosecutors’ offices is what’s supposed to happen. If the SDNY investigation turns up evidence relevant to the Russia probe, Mueller will of course get access to it. By otherwise separating himself from l’affaire Stormy, however, Mueller is spared the headache of working an unconnected case fraught with contentious claims that the president’s right to counsel has been shredded.
That will be the SDNY’s headache, which is interesting. The SDNY is no longer run by Preet Bharara, whom Trump dismissed along with other Obama appointees after taking office. The acting U.S. attorney is Geoffrey Berman, a Trump appointee named by Attorney General Jeff Sessions to serve on an interim basis while awaiting confirmation. ABC News reports that Berman is recused from the Cohen investigation, although it does not identify which of his assistants are involved in the case.
The new investigation, and in particular the execution of search warrants against the president’s lawyer, had to have been the subject of high-level consultation between the SDNY and the Trump Justice Department. And that is not only because of Cohen’s obvious relevance to Mueller’s investigation — he is accused in the Steele dossier of being a liaison between the Trump campaign and Russia (an apparently uncorroborated claim that Cohen convincingly denies); and he was on the receiving end of emails from Felix Sater, a Russian immigrant and Trump business associate, who boasted that his friend Vladimir Putin would help “get Donald elected.”
There had to have been SDNY–Main Justice consultations because Justice Department guidelines require that district U.S. attorney’s offices receive Washington approval before seeking a warrant to search an attorney’s premises. (See U.S. Attorney’s Manual, Section 9-13.420.) When one reads the guidelines, one suspects that there must be more to the SDNY’s investigation of Cohen than the Stormy Daniels transaction — a suspicion echoed in the aforementioned Times report, which describes the searches as “related to several topics, including a payment to a pornographic film actress” (emphasis added). Prosecutors are admonished that, because raiding a lawyer’s office has serious constitutional implications, it should be avoided unless truly essential to a significant criminal investigation. If the only matter under investigation were a potential campaign-finance violation that would normally not be grist for criminal prosecution, it would be outrageous to raid a lawyer’s office — especially the president’s lawyer. Not only must high-level Justice Department approval be obtained before seeking a search warrant for an attorney’s premises; the prosecutors and their superiors must explore whether less intrusive investigative alternatives — such as seeking the desired materials by grand-jury subpoena — would be viable.
That the government must have decided they were not viable is remarkable. A prosecutor gets a search warrant when the subject cannot be trusted to cooperate and hand over materials voluntarily. But Cohen has been cooperating with investigators, at least ostensibly. His counsel, Stephen Ryan, maintains that Cohen has been giving information to “all government entities,” intimating that he has cooperated with Mueller in addition to providing extensive documentary evidence and testimony to congressional committees. The fact that Cohen’s law practice was searched anyway cannot help but remind us of former Trump-campaign chairman Paul Manafort’s case. Manafort’s Virginia home was raided by Mueller’s team even as he was in the midst of cooperating with and surrendering documents to congressional investigators. Manafort, of course, was ultimately indicted on a wide array of felony charges.
The issuance of search warrants necessarily means a federal judge found probable cause that evidence of at least one crime would be uncovered in Cohen’s premises. In addition to the potential campaign-finance offense, the feds are reportedly weighing bank-fraud charges — possibly on a theory that steps taken to hide the nature and purpose of the payment to Clifford entailed misrepresentations to a financial institution, although that is just speculation at this point.
Whenever a law office is searched, the Justice Department imposes safeguards to protect the attorney–client privilege. The search is conducted, and the materials seized are reviewed, by a “clean team” of prosecutors and agents who are knowledgeable about the investigation but are not working on it. The clean team determines what files are relevant to the matter under investigation, with any irrelevant files returned to the attorney. With respect to any files the clean team deems relevant, the attorney and any affected clients are given an opportunity to claim that the files contain privileged communications and should be returned. Where the parties cannot agree, such privilege claims are decided by a judge.
After this process has run its course, any documents that have been found relevant and unprivileged are provided to the prosecutors and agents handling the investigation. This way, the right to counsel is vindicated and the clean team ensures that the investigation team is not tainted by exposure to privileged communications. As I can attest, SDNY prosecutors and judges are adept at conducting this process with minimal intrusion on the attorney–client privilege.
That will not comfort the president much, and it probably shouldn’t.
As I explained last November, when we learned that Mueller had forced an attorney who had represented Manafort to testify against him, there is a so-called crime-fraud exception to the attorney–client privilege. If a client’s communications with a lawyer are for the purpose of carrying out a fraudulent scheme, they lose any claim to confidentiality. Theoretically, then, Trump and Cohen have a legal as well as a factual problem. Legally, if they conspired to execute a payment in violation of campaign laws in order to silence Clifford, their communications in this regard would not be privileged. Factually (if implausibly), both Cohen and Trump claim that the former did not tell the latter about the payment to Clifford; and that Cohen made the payment in his personal capacity, not as Trump’s lawyer. How, then, can they now claim attorney–client privilege in connection with the transaction?
About two weeks ago, I tried to explain that the Stormy Daniels scandal could be more perilous for Trump than the Russia investigation has been: Even if it’s not nearly as consequential as the specter of “collusion” with a hostile foreign power, the porn-star payment undeniably happened. I argued then, and I’m even more convinced now, that “the best argument in Trump’s favor is one that claims mitigation, not innocence.”
Compared with other possible campaign-finance infractions that have been settled without criminal charges, this one — if it is one — is a trifle. And while the underlying behavior is debauched, it happened a decade before Trump was elected. While extramarital, the tryst was consensual by Clifford’s account. (The White House half-heartedly denies it happened.) As for Trump’s fitness for the presidency, the scandal tells us exactly nothing that we didn’t already know about the flawed man that Americans chose to elect.
There’s one problem with a mitigation strategy, though. To carry it off requires a measure of genuine contrition — being sorry for what happened and for any technical violation of law that may have resulted. That would start with some self-awareness. This particular scandal was not caused by the Russia investigation, much as Trump seems determined to conflate the two. It is not the work of Bob Mueller, Jeff Sessions, or Rod Rosenstein. None of them had anything to do with the porn star going public. It was Trump’s conduct that caused this mess; it was the hare-brained scheme to cover up the mess that brings us to this pass.
Trump doesn’t do contrition. That approach has taken him a long way, but I don’t think it will serve him well on this one.