Judge Merchan Bars Use of Cohen’s Guilty Plea to Prove Trump Committed Campaign-Law Crimes

I noted in a post on Thursday that Judge Juan Merchan has made a couple of rulings that are beneficial to former president Trump in the so-called hush-money case. I addressed one on Monday: the decision precluding Manhattan DA Alvin Bragg from introducing additional evidence of alleged sexual misconduct by Trump — additional, that is, beyond (a) what Bragg formally alleged regarding Trump’s supposed extramarital affairs with porn star Stormy Daniels and Playboy model Karen McDougal, and (b) a redacted transcript of some of Trump’s statements recorded on the infamous Access Hollywood tape (though not the recording itself).

The other ruling is of greater consequence. Judge Merchan has barred prosecutors from using Michael Cohen’s plea of guilty to two federal campaign-finance crimes as evidence that Trump committed federal campaign-finance crimes.

Ever since Cohen’s 2018 guilty plea in the Southern District of New York (SDNY), I have contended that his admission of guilt to the campaign violations is of no evidentiary value in the prosecution of Trump. Indeed, I don’t even think Cohen’s guilty plea should be taken seriously as evidence that he himself committed campaign crimes.

To repeat what I related a year ago:

While his apologists would like us to develop amnesia about this history, Cohen did not plead guilty in federal court because of campaign-finance violations, which were merely an opportunistic add-on. Cohen pled guilty because the SDNY had him dead-to-rights on serious fraud charges.

Cohen committed bank fraud in connection with a multimillion-dollar line of credit. Bank fraud carries a penalty of up to 30 years’ imprisonment. As the most severe offense he faced, it was the driver of the federal sentencing guidelines that would apply to his case. Cohen’s crimes were not sufficiently heinous that he was going to be sentenced to anything close to 30 years; but once a 30-year crime was in the mix, it didn’t much matter to his ultimate sentence whether he pled guilty to ten less-egregious offenses, no such offenses, or something in between.

In addition to the bank fraud, Cohen pled guilty to five counts of tax evasion, each carrying a potential five-year prison term. By the Justice Department’s description, these felonies involved over $4 million in unreported income. The evidence of what the SDNY called “The Tax Evasion Scheme” covered four years. If the case had ever gone to trial, that fraud scheme would have been the framework within which the SDNY unfolded its bank-fraud proof. That was the heart of the Cohen prosecution.

That is why Cohen pled guilty. He was looking at years of incarceration. And as is common when a suspect is in such straits, Cohen desperately sought to become a cooperating witness for the government. Why? Because under the federal sentencing guidelines, if the prosecutors can be persuaded to file a pre-sentencing motion attesting to the court that the defendant has provided substantial assistance in the investigation or prosecution of other suspects, especially suspects higher up in the food chain, the judge is then authorized to ignore the sentencing guidelines and impose a sentence of no jail time — or, at least, minimal jail time.

Cohen was trying to sell himself as a cooperator. But here’s the problem: The guy the prosecutors wanted to nail was Trump, and Trump was not complicit in any of the tax- and bank-fraud schemes at issue in Cohen’s case.

To the extent that Cohen was relevant, all the SDNY had on Trump were these hush-money arrangements. Since NDAs [i.e., non-disclosure agreements] are not illegal, the question was how to transform them into crimes. The only way to do that, the creative SDNY prosecutors decided, was to invoke the campaign-finance laws. But to say that was a stretch is putting it mildly. The NDAs were not traditional campaign expenses. Yes, the women involved turned up the heat during the campaign, extortionately threatening to go public, which might have torpedoed Trump’s presidential bid in the wake of the infamous Access Hollywood tape. But this was just commonsense hardball, striking when their leverage against the notoriously parsimonious Trump was at its height; it didn’t mean that NDAs — which Trump had plenty of other personal, political, and business incentives to pay for — were necessarily in-kind campaign expenses.

On this, the law was not on the SDNY’s side. But the prosecutors did have Cohen over a barrel. So they held the carrot out to him, but made no firm promises: Plead guilty to two campaign-finance felonies (the Daniels and McDougal NDAs), implicate Trump in the underlying schemes, and they’d consider giving him a cooperation agreement.

It was a no-risk calculation on both sides. For Cohen, the campaign-finance counts, which carried five-year maximum sentences, involved amounts of money that were minor compared to the fraud counts. They would thus have no material impact on whatever sentence was imposed. More to the point, Cohen was trying to avoid prison all together, and this was his only shot at a cooperation agreement.

The SDNY, meanwhile, for case-building and public-relations purposes, would get Cohen, a key participant, to brand the scheme as a pair of campaign-finance felonies in which Trump was the main culprit; but the allegations would never be tested at trial because Cohen was pleading guilty. Even better, in pleading guilty, Cohen would also waive his right to appeal, so if the district court accepted his plea (which it did), the dubious campaign-finance counts would never be reviewed by the Second Circuit appellate court, let alone the Supreme Court.

In the end, the Cohen/SDNY deal went about as well as the Trump/Stormy deal. Cohen did not get his cooperation agreement (even after upping the ante by agreeing to plead to a perjury charge in the Mueller investigation) and was sentenced to three years’ imprisonment because of his frauds. He now claims the SDNY double-crossed him, and he has suddenly decided he wasn’t guilty after all of the tax-evasion charges to which he pled guilty — a posture that not only further weakens him as a prosecution witness for Bragg, but must also be a source of at least some embarrassment for those who now argue that the campaign-finance crimes were real because Cohen admitted to them when he pled guilty.

As for the SDNY, after a great deal of effort, prosecutors dropped the campaign-finance investigation of Trump because the case just wasn’t there — at least not until Manhattan’s progressive prosecutor came along.

Speaking of that progressive prosecutor, Alvin Bragg, he published a Statement of Facts, so-called, in conjunction with unsealing the Trump indictment. Its recitation about the Cohen guilty plea is a disgrace. Here’s what the elected Democrat asserts:

[A]t the Defendant’s [i.e., Trump’s] request, a lawyer who then worked for the Trump Organization as Special Counsel to Defendant (“Lawyer A”) [i.e., Cohen], covertly paid $130,000 to an adult film actress [i.e., Daniels] shortly before the election to prevent her from publicizing a sexual encounter with the Defendant. Lawyer A made the $130,000 payment through a shell corporation he set up and funded at a bank in Manhattan. This payment was illegal, and Lawyer A has since pleaded guilty to making an illegal campaign contribution and served time in prison.

Where to begin?

Bragg is an experienced prosecutor who worked, among other places, in the SDNY. Having worked there nearly 20 years myself, I can assure you that federal prosecutors are well aware of the rudimentary criminal-law principle that Defendant A’s guilty plea to a charge is not evidence that Defendant B is guilty of that charge, even if A claims that he and B supposedly committed the crime together. A is permitted to testify to the actions he and B took, but his claim that he is guilty is an irrelevant (and in this instance, incompetent) legal conclusion; as fact testimony, it is irrelevant. A “statement of facts” — outlining what prosecutors represent they will be able to prove at trial — has no business relying on such a guilty plea; transparently, Bragg included that detail for the improper purpose of intimating that, since Cohen pled guilty to federal campaign crimes, Trump must also be guilty of them.

Bragg claims that Cohen’s “payment” to Daniels was “illegal,” which he implies is why Cohen made it “covertly,” sluicing it “through a shell company he set up and funded at a bank in Manhattan.”

Sheesh.

The payment was not illegal. NDAs (which are darkly described a “hush-money” deals) are a staple of legal settlements in the United States, which is what the legally enforceable written agreement between Cohen/Trump and Daniels was — the absurd pseudonyms used in the NDA notwithstanding. All NDAs are “covert” — that’s what non-disclosure means. It doesn’t make them illegal. Nor was there anything illegal about Cohen’s setting up a “shell company” and “funding” it (with money he lawfully drew down from a bank line of credit).

Bragg’s claim that the payment was illegal hinges on two things: (a) Cohen’s guilty plea, and (b) Bragg’s theory, under the federal laws that he has no authority to enforce, that Cohen’s payment of $130,000 to Daniels was a campaign expenditure that exceeded the contribution limit. As we’ve seen, the guilty plea is not evidence. The payment was not a campaign expenditure under federal law (if it were, then candidates could lawfully buy the silence of porn stars with campaign contributions). And the contribution limit to which Cohen would have been subject if the payment had been a campaign expenditure was inapplicable to Trump, who, as the candidate, was not subject to a contribution limit.

Finally, Bragg’s representation that Cohen had “since pleaded guilty to making an illegal campaign contribution and served time in prison” is a whopper the media would festoon with Pinocchios if Trump had said it. Bragg conveniently leaves out that the crimes to which Cohen pled guilty principally included over $4 million in willful tax evasion and false statements to a financial institution — all based on conduct in which Trump had no involvement, resulting in charges carrying a potential statutory penalty of 55 years’ imprisonment. That’s why he served time in prison. Bragg neglected to mention that these more serious felonies — which actually were felonies — involved dollar amounts that dwarfed the money involved in the McDougal ($150,000) and Daniels ($130,000) payments (which were not actually crimes — that’s why the federal authorities that have jurisdiction to enforce federal campaign law never charged Trump). Bragg also leaves out that Cohen’s sentence was informed by his perjury conviction in the Mueller investigation.

Other than those little details, though, Bragg’s statement is flawlessly accurate, no?

The Cohen guilty plea to phantom campaign crimes was never proof of anything, yet it is the foundation of Bragg’s grotesque attempt to turn a misdemeanor business-records allegation, on which the statute of limitations lapsed years ago, into 34 felony counts of fraudulent concealment of a federal campaign crime. It is now out of the case as evidence of anything other than Cohen’s mendacity. It should never have been in the case . . . but then again, the case should never have been brought.