Michael Cohen, Donald Trump's former personal lawyer, has pleaded guilty to violating campaign finance rules—those malleable laws that regulate how much of their own money Americans can spend to voice their political views, and that require citizens to report to the government their political associations. Cohen admitted to two felonies: knowingly and willfully facilitating an illegal corporate contribution and making an illegally large campaign contribution, in each case by arranging hush money payments to women who claim to have had extra-marital affairs with Trump. Cohen says he did so under the direction of "a candidate"—obviously Trump—and for the purpose of "influencing the election," a very important phrase in all this.
Democrats in Congress are already talking with renewed enthusiasm about impeachment, while a bevy of commentators on both the left and right now consider it a fact that, as John Podhoretz puts it at Commentary, "the President committed a felony." We can reasonably guess why Cohen pleaded guilty—the fraud and tax charges against him could have left him in prison for most of his remaining life. By pleading guilty, it now appears he'll be sentenced for just a few years. But leaving aside what Cohen pleaded to, are the alleged campaign finance violations really a crime?
Back in 2013, Antonin Scalia made a remarkable admission at oral argument in the Supreme Court when he said, "this campaign finance law [the Federal Election Campaign Act] is so intricate that I can't figure it out." Three years before that, a group of former Federal Election Commission (FEC) chairmen (including this author) warned the Court, in an amicus brief in the famous Citizens United case, that, even leaving aside specific prohibitions, the growing complexity of campaign finance law threatened free speech and political participation: "There are now unique and complex rules imposed by [the Federal Election Campaign Act] on 71 distinct entities," the former chairmen wrote. Further, they noted that the government also had unique regulations for 33 different forms of political speech.
In 2005, while presiding over the trial of a Democratic Party fundraiser accused of filing false campaign finance reports, federal judge Howard Matz told the FEC witness who was attempting to explain the reporting requirements:
"[T]o set up this regimen at the FEC, with the reporting consequences, and the transferring at least for accounting purposes of moneys, and the distinctions that some of the witnesses testified to before the jurors, I'm confident that the jurors—I would be surprised if any single juror could follow that extremely complicated evidence. I think it would be a lot more comprehensible to read the Internal Revenue Code from start to finish than to figure out some of the evidence that was issued on the Federal Election Commission requirements."
Increasingly, campaign finance laws now illustrate the classic situation where the government can always get you for something—it's just a question of what they'll get you for.
In the Cohen case, the prosecutors hung their hat on FECA's definition of "contributions" and "expenditures" as anything spent or contributed "for the purpose of influencing any election." That's a pretty broad definition, and certainly it may have been thought that paying hush money to Trump's old memories would "influence an election." Thus, they argue, payment of the hush money was subject to limits on the size of contributions used to pay, could not include corporate funds, and had to be reported to the FEC.
But there is another provision in the statute that prohibits a candidate from diverting campaign funds to "personal use." "Personal use," in turn, is defined as any expenditure "used to fulfill any commitment, obligation, or expense of a person that would exist irrespective of the candidate's election campaign." These may not be paid with campaign funds, even if they are intended to influence the election.
In passing regulations implementing the "personal use" portion of the statute, the FEC specifically rejected an interpretation that would have allowed campaign funds to be used any time the primary purpose of making a payment was to influence the election. Rather, it insisted that unless the obligation was created as a necessary part of the candidacy, using campaign funds was off-limits. Its goal was to prevent candidates from using campaign funds to pay personal expenses. After all, if campaign contributions can pay for tooth-whitening or buying new clothes for a debate, they appear much more like bribes than constitutionally-protected efforts to fund political speech.
The upshot is that TV ads, polling, hiring a campaign accountant to comply with federal laws, and renting office space are all examples of expenses that exist only because the person is running for office—they are campaign expenses. But if Trump or some other candidate were to tell his personal lawyers, "I want all the lawsuits against me settled. I think they're a bunch of B.S., but they're hurting my candidacy," the settlements would not be "campaign expenses," even though the payments were made to "influence an election."
Now we can see the dilemma the Trump campaign faced. It could pay with funds from outside the campaign, risking prosecution for failing to use campaign funds or file reports. Or it could pay with campaign funds, risking prosecution for an illegal diversion of campaign funds to personal use. "Heads I win. Tails you lose." Such are our complex campaign finance laws.
The best interpretation of the law is that it simply is not a campaign expense to pay blackmail for things that happened years before one's candidacy—and thus nothing Cohen (or, in this case, Trump, too) did is a campaign finance crime. But at a minimum, it is unclear whether paying blackmail to a mistress is "for the purpose of influencing an election," and so must be paid with campaign funds, or a "personal use," and so prohibited from being paid with campaign funds.
Normally, given this lack of clarity, we would not expect a prosecutor to charge those involved with a "knowing and willful" violation, which means a criminal charge with possible jail time. Typically, at most a civil fine for an unintentional violation would be the response. But prosecutors may be using a guilty plea from Cohen as a predicate for going after the bigger fish, and our simultaneously vague, sometimes contradictory, and incredibly complex campaign finance laws give them that opening.
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