How Hush Money Can Violate Campaign Finance Laws: The Case of Trump and Cohen
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Have you ever wondered what hush money is and how it might land politicians in trouble? In this blog post, I’ll go over the concept of hush money, how it can violate campaign finance regulations, and what happened in the case of former US President Donald Trump and his lawyer Michael Cohen.
What is hush money?
Hush money is money paid to someone to keep them silent about something that could harm the reputation or interests of another person or entity. A politician, for example, may pay hush money to a former lover, whistleblower, or witness in order to keep a scandal or crime hidden.
Hush money is also known as a payback, bribe, or settlement. Sometimes hush money is paid through intermediaries, such as lawyers or businesses, to conceal the identity of the payer or beneficiary.
Why do people pay the hush money?
People pay hush money for several reasons, including:
To avoid legal implications, such as litigation, penalties, or criminal prosecution;
To safeguard their personal or professional reputation, such as avoiding public humiliation, losing credibility, or hurting their career;
To acquire an edge, such as securing a transaction, gaining a contract, or influencing a decision;
To conceal an offense, such as cheating, lying, stealing, or abusing.
What are the hazards associated with paying hush money?
Paying hush money may be risky because:
It can backfire, such as when the recipient breaches the deal, wants more money, or discloses the information anyhow.
It may be illegal, such as when it breaches campaign finance, tax, or anti-corruption legislation.
It can be unethical if it hurts the public interest, breaches other people’s trust, or jeopardizes the payer’s credibility.
How can hush money violate campaign finance laws?
Campaign finance laws govern how money can be raised and spent on political campaigns. In the United States, campaign finance laws are enforced by the Federal Election Commission (FEC), an independent organization in charge of federal election financing.
One of the primary goals of campaign finance rules is to prevent corruption and undue influence by limiting the amount and source of funds that can be donated to politicians and political parties. Campaign finance rules also mandate the disclosure and reporting of campaign contributions and expenditures to maintain transparency and accountability.
Hush money can violate campaign finance regulations if it is paid or received in connection with a federal election and is not declared or disclosed in accordance with the law. For example, if a candidate pays hush money to someone to influence the outcome of an election, the payment may be regarded an illegal campaign donation or expenditure, depending on the situation.
What are the standards for classifying hush money as a campaign donation or expenditure?
The FEC defines a campaign contribution as “anything of value given, loaned or advanced to influence a federal election.” The term “campaign expenditure” refers to “any purchase, payment, distribution, loan, advance, deposit or gift of money or anything of value made for the purpose of influencing a federal election.”
As a result, hush money may be a campaign donation or expenditure if:
- Submitted by or on behalf of a candidate, political party, or political committee.
- Submitted by or on behalf of a candidate, political party, or political committee.
- Designed to influence the election of a candidate for federal office.
- Developed with the knowledge and approval of a candidate, political party, or political body;
- Made with monies subject to federal law’s contribution restrictions and prohibitions;
- Created in collaboration with a politician, a political party, or a political committee.
If hush money satisfies any of these conditions, it must be reported and declared to the Federal Election Commission, as well as comply with federal contribution limitations and prohibitions. Failure to do so may result in monetary penalties, criminal charges, or both.
What are the donation limitations and prohibitions set by federal law?
Individuals, businesses, unions, and other entities are limited in their ability to give money to politicians, political parties, and political committees by federal law.
For example, in 2024, an individual can donate up to $2,900 per election to a candidate, $35,500 per year to a national party committee, and $5,000 to a political action committee (PAC).
Federal law additionally prevents specific sources of money from contributing to federal elections, such as:
Foreign nationals (except lawful permanent residents), federal government contractors, corporations, and unions using separate segregated funds (SSFs) or independent expenditures (IEs).
Contributions over $100 can be made in the name of another individual.
What exactly transpired in the case of Trump and Cohen?
One of the most well-known cases of hush money that violated campaign finance regulations included Trump and Cohen. During the 2016 presidential campaign, Trump’s former lawyer Cohen made payments to two women who claimed to have had previous encounters with Trump. The ladies were Stormy Daniels, an adult film star, and Karen McDougal, a former Playboy model.
Cohen paid Daniels $130,000 and coordinated a $150,000 payment to McDougal, concealing the transactions using shell firms and bogus names. Cohen then stated that he made the payments “in coordination with and at the direction of” Trump, and that he did so “for the principal purpose of influencing the election.”
How did the payments break campaign financing laws?
The payments broke campaign financing regulations in numerous ways, including:
In 2016, individuals could only contribute $2,700 each election. Additionally, corporate funds are forbidden from making federal election contributions.
They were not reported and declared to the FEC, as required by law.
They were created in coordination and cooperation with Trump and his campaign, resulting in in-kind contributions or expenditures. Additionally, they were made with Trump’s knowledge and agreement, making them accountable for the crimes.
What were the implications for Trump and Cohen?
In 2018, Cohen pleaded guilty to eight federal charges, including two counts of violating campaign finance regulations by making and orchestrating hush money payments. He was sentenced to three years in prison and required to pay $1.4 million in restitution, $500,000 in forfeiture, and $100,000 in fines.
Trump, on the other hand, denied any impropriety, claiming that he was unaware of the payments until later. He further maintained that the payments were neither campaign contributions or expenditures, but rather personal transactions unrelated to the election. However, the FEC found “reason to believe” that Trump and his campaign violated campaign finance regulations by failing to register and disclose required payments. The FEC also found “reason to believe” that Cohen contributed excessively and illegally to Trump’s campaign by coordinating the payments.
The FEC, however, took no further action against Trump or his campaign due to a deadlock among its commissioners. The FEC is made up of six commissioners, who are appointed by the president and ratified by the Senate. The law allows no more than three commissioners from the same political party. To take official action, the FEC need at least four votes. In the instance of Trump and Cohen, the FEC only had four commissioners: two Democrats and two Republicans. The two Democrats voted for a probe and a lawsuit against Trump and his campaign.
Conclusion
Hush money is a major issue that threatens the integrity and fairness of elections. Hush money can violate campaign finance regulations if it is paid or received in connection with a federal election and is not declared or disclosed in accordance with the law. The Trump-Cohen case exemplifies how hush money can impact election results and how partisan politics can impede the enforcement of campaign finance regulations.
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