Ethics watchdog files complaint alleging Trump lawyer's payment to Stormy Daniels violates law

Michael Cohen, personal attorney for President Donald Trump, as he arrives to appear before Senate Intelligence Committee in Washington, September 19, 2017.
Jonathan Ernst | Reuters

A $130,000 payment made by President Donald Trump's attorney to an adult film star should be probed as a financial obligation that the president "knowingly and willfully" failed to report, a watchdog has argued.

In a legal complaint filed late last week with the Department of Justice and the Office of Government Ethics, the Citizens for Responsibility and Ethics in Washington (CREW) argued that Trump lawyer Michael Cohen's payment to Stormy Daniels "constituted a loan to President Trump that he should have reported as a liability on his public financial disclosure."

The filing raised the question of whether, as a general election candidate, Trump deliberately failed to disclose it.

CREW's argument has been raised with increasing regularity by some legal experts, who say Cohen's surreptitious payment could be viewed as an illicit campaign contribution. The attorney disclosed recently that he used a home equity loan to arrange a payment to Daniels, buying her silence for an alleged affair she had with Trump more than a decade ago.

In CREW's judgement, Trump "seemingly violated a federal law by failing to disclose it" on his campaign filings. Experts have said that had Trump paid Daniels with his own money, the payment wouldn't be an issue since candidates can contribute to their own campaigns. Yet since a disclosure wasn't made, there could be a violation.

As the legal basis for its action, the watchdog organization cited a 1978 law, the Ethics in Government Act, that requires candidates to report all liabilities owned to any creditor exceeding $10,000 "at any time during the preceding calendar year." Cohen's payment to Daniels — made as part of a nondisclosure agreement — was reportedly arranged days before the election.

In fact, a number of legal observers note Cohen's actions could imperil his own good standing as a lawyer. Above the Law, a legal blog, pointed out last week that American Bar Association rules say lawyers are generally prohibited from providing financial assistance to a client, unless specific conditions are met.

"The more we learn about the [Stormy Daniels] affair, the more it looks like something is missing from the president's financial disclosures," CREW board chair Norman Eisen said in a statement. "If he failed to disclose this situation, we must ask, what else is he hiding?"