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Law & the Courts

Payoffs to Mistresses as In-Kind Contributions? It’s an Open Question

Michael Cohen arrives for his sentencing at the United States Court house in the Manhattan, N.Y., December 12, 2018. (Jeenah Moon/Reuters)

In response to Are Payoffs to Mistresses Campaign Expenses?

Kevin, if I can butt into your exchange with Rich for a moment (since you raise a question that he and I batted around in The McCarthy Report podcast this week), the question of whether the Trump/Cohen transactions are campaign expenditures as a matter of law has not been addressed, much less settled.

The Southern District of New York (SDNY) lodged campaign-finance charges against Cohen. He elected to plead guilty without contesting them. This, I believe, was more a strategic calculation than an assessment of the legal adequacy of the charges: The campaign-finance counts had a negligible effect on the sentencing-guidelines calculation (which was driven by the more serious tax- and bank-fraud charges); and Cohen’s defense team perceived that the SDNY is trying to make a case on President Trump, so pleading guilty to two extra felonies paradoxically improved his chances for sentencing leniency.

The strategy worked. Though his sentencing guidelines called for 51 to 61 months’ imprisonment and he was not a full-fledged cooperator, the SDNY nevertheless agreed to a nine-to-19-month shave off his guideline range (i.e., about 42 months). The SDNY said this was because Cohen cooperated with the Mueller probe; I think Cohen’s rolling over on the campaign-finance allegations made the SDNY more amenable to leniency. In agreeing to the reduction, the SDNY was well aware that, with such a signal sent, it would be routine for the court to go below the reduction suggested by prosecutors. Judge William H. Pauley did just that, imposing a sentence of just 36 months. (To repeat my pet peeve on this point, I believe President Trump’s highly inappropriate agitation for Cohen to be given a severe sentence probably influenced the judge to reduce the sentence, in order to show independence.)

Because Cohen never challenged the legal sufficiency of the charge, Judge Pauley never ruled on it. To my mind, it would have been preferable if Pauley had directed the parties to brief the issue. I do not believe a judge should ever take a plea if there is a colorable legal question about whether what is charged is actually a crime. To be fair, though, the question of whether a third-party payment that is not a direct campaign expense constitutes an in-kind contribution is arguably what we call a “mixed question of law and fact” on which even experts have differed. In the John Edwards case, to take the best example, the FEC believed similar transactions were not in-kind contributions; the Justice Department disagreed and indicted Edwards on them; the trial judge allowed the case to go to the jury (implicitly a finding that a rational juror could convict); the jury acquitted on some counts and hung on others; and then the Justice Department decided to drop the case rather than retry it. The question is murky.

In any event, all Judge Pauley did in Cohen’s case was accept guilty plea. Without ruling on the matter, he assumed that the charge was legally adequate. In a guilty plea, the defendant typically waives his right to challenge legal and factual issues on appeal. The most we can say, then, is that the matter is settled as to Cohen, but that’s because of the waiver, not because the judge made a ruling on the pertinent question.

Even if Judge Pauley had made a ruling, that would have been binding only in Cohen’s case. There is a doctrine of law called “collateral estoppel,” which is akin to double-jeopardy, but it applies to issues rather than charges. What it holds is that a defendant may not raise in a subsequent prosecution an issue that has been settled in an earlier one. But it only applies if the defendant was in the earlier prosecution and had a full and fair opportunity to litigate the relevant issue. Trump was not a defendant in Cohen’s case, and he has not had an opportunity to litigate the question whether these transactions are in-kind contributions.

The bottom line is that the issue is not settled as to President Trump. The fact that Cohen pled guilty to two ostensible felonies does not establish that they actually are felonies (except as to Cohen, because he has forfeited the right to contest that point).


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