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A Project of The Annenberg Public Policy Center

Q&A on Stormy Daniels’ Payment


Update, Aug. 22: This has been updated with new information after Michael Cohen pleaded guilty to campaign finance violations related to the payment to Stormy Daniels. 

In a series of early morning tweets on May 3, President Donald Trump acknowledged for the first time that he reimbursed his personal attorney for the $130,000 payment that was made to porn star Stormy Daniels.

On Aug. 21, Michael Cohen, Trump’s personal attorney, pleaded guilty to two campaign finance law violations, and admitted in open court that he paid $130,000 in hush money to Daniels, whose real name is Stephanie Clifford, to silence her during the 2016 presidential election “at the direction of” Trump. In his guilty plea, Cohen also admitted he received $420,000 from the Trump Organization to reimburse him for the payment, plus expenses and a bonus.

Under federal law, individuals such as Cohen cannot make a contribution that exceeds $2,700 per election and corporations, such as the Trump Organization, cannot make campaign contributions.

Here, we lay out answers to questions about the payment, and what we know, and don’t know, at this point.

How much was paid?

This is not in dispute: Daniels was paid $130,000 in exchange for signing a nondisclosure agreement that barred her from talking about an alleged sexual encounter with Trump in 2006.

Who made the payment?

On Oct. 17, 2016, three weeks before the Nov. 8 election, Cohen incorporated Essential Consultants LLC in Delaware. In February, Cohen released a statement to the New York Times, acknowledging that he authorized the payment.

When was the payment made to Daniels?

On CBS’ “The Late Show with Stephen Colbert,” Daniels’ attorney, Michael Avenatti, held up a receipt from a bank in San Francisco showing that on Oct. 27, 2016, Essential Consultants made a $130,000 payment to Daniels’ attorney at the time.

Did Trump reimburse Cohen? 

Former New York City Mayor Rudy Giuliani, now a member of the president’s legal team, told Fox News on May 2 that Trump used his personal funds — not campaign funds or corporate funds — to reimburse Cohen. (Corporations, by federal law, are prohibited from making contributions to candidate committees.)

The next day, Trump said for the first time that he had reimbursed Cohen for the payment to Daniels.

The criminal information describing Cohen’s conduct and the plea agreement he reached with prosecutors said that he was reimbursed by the Trump Organization. It says that “the Company” reimbursed Cohen from the trust account created when Trump became president. “The Company accounted for these payments as legal expenses,” the criminal information said.

Cohen told the House oversight committee in testimony on Feb. 27, 2019, that Trump “personally signed from his personal bank account” a check for $35,000. That check is dated Aug. 1, 2017. Other checks came from the trust account were signed by two other company executives, Donald Trump Jr., and Allen Weisselberg, Cohen told the House committee.

When and how did the Trump Organization reimburse Cohen? 

According to the plea agreement, Cohen sought reimbursement in January 2017 from the Trump Organization and started receiving $35,000 in monthly payments in February. Over the course of 12 months, Cohen received $420,000 to cover the costs of the $130,000 payment and $50,000 for “tech services,” plus other expenses and fees, and a $60,000 bonus.

The payments were described by the Trump Organization as “pursuant to the retainer agreement” for legal work in 2017. But the Justice Department said, “In truth and in fact, there was no such retainer agreement, and the monthly invoices COHEN submitted were not in connection with any legal services he had provided in 2017.”

That is contrary to how Giuliani and Trump described the monthly payments to Cohen.

Giuliani told the Washington Post in a story published May 3 that Trump — not the Trump Organization — reimbursed Cohen, but he wasn’t clear on exactly when the payments started or ended. “The repayments took place over a period of time, probably in 2017, probably all paid back by the end of 2017,” he said.

Asked how many payments it took to reimburse Cohen, Giuliani told the Washington Post that Cohen received $35,000 in monthly installments as part of a legal retainer, beginning in January or February. He also said the total amount Trump owed Cohen was $250,000 — including the $130,000 payment to Daniels.

The timing of the payments is also important because Trump did not list a debt to Cohen on his 2017 personal public financial disclosure report, which he filed on June 14, 2017. (More on that later.)

Did Cohen mislead the public when he said he wasn’t reimbursed?

Yes. In his February statement to the New York Times, Cohen stated that, “Neither the Trump Organization nor the Trump campaign was a party to the transaction with Ms. Clifford, and neither reimbursed me for the payment, either directly or indirectly.”

On May 3, Trump said in a tweet that “Cohen, an attorney, received a monthly retainer, not from the campaign and having nothing to do with the campaign, from which he entered into, through reimbursement, a private contract between two parties, known as a non-disclosure agreement, or NDA.”

Cohen’s plea agreement makes clear that he was reimbursed and it was from his employer, “the Company,” which was the Trump Organization.

When did Trump learn about the payment to Daniels? 

In pleading guilty, Cohen said he made the payment “at the direction of” a candidate for federal office, which would be Trump. So Trump knew about the payment in October 2016, according to Cohen. “Mr. Trump directed me to use my own personal funds from a home equity line of credit to avoid any money being traced back to him that could negatively impact his campaign,” Cohen testified before the House oversight committee.

Did Trump mislead the public when he said on April 5 that he did not know about the payment to Daniels? 

It would appear so. Aboard Air Force One, the president said on April 5 that he didn’t know about the payment to Daniels.

Question, April 5: Mr. President, did you know about the $130,000 payment to Stormy Daniels?

Trump: No. No. What else?

Question: Then why did Michael Cohen make those if there was no truth to her allegations?

Trump: Well, you’ll have to ask Michael Cohen. Michael is my attorney. And you’ll have to ask Michael Cohen.

Question: Do you know where he got the money to make that payment?

Trump: No, I don’t know. No.

Question: Did you ever set up a fund of money that he could draw from?

The president did not answer the question of whether he set up a fund of money that Cohen could draw on.

In a series of three tweets on May 3, the president said that he kept Cohen on a monthly retainer and that Cohen was reimbursed from the monthly retainer.

@realDonaldTrump, May 3: Mr. Cohen, an attorney, received a monthly retainer, not from the campaign and having nothing to do with the campaign, from which he entered into, through reimbursement, a private contract between two parties, known as a non-disclosure agreement, or NDA. These agreements are…..

..very common among celebrities and people of wealth. In this case it is in full force and effect and will be used in Arbitration for damages against Ms. Clifford (Daniels). The agreement was used to stop the false and extortionist accusations made by her about an affair,……

…despite already having signed a detailed letter admitting that there was no affair. Prior to its violation by Ms. Clifford and her attorney, this was a private agreement. Money from the campaign, or campaign contributions, played no roll in this transaction.

The timing of the reimbursement payments is important because Trump and/or his campaign may have violated campaign finance laws by accepting an illegal campaign contribution.

Did the Trump campaign or Cohen violate campaign finance laws?

Cohen pleaded guilty to two election law violations.

Federal law states that a personal loan or “anything of value made by any person for the purpose of influencing any election for Federal office is a contribution.” (Bank loans and lines of credit are treated differently under the law than individual loans or gifts.)

A loan from an individual is considered a campaign contribution — subject to the limits of individual donations to candidate committees. That limit was $2,700 per election in 2016, meaning that Cohen exceeded the limit by more than $127,000.

“A loan that exceeds the contribution limitations of 52 U.S.C. 30116 and 11 CFR part 110 shall be unlawful whether or not it is repaid,” according to the Federal Election Commission.

Trump and Giuliani have said the Trump campaign did not violate any campaign finance laws because Trump’s personal funds — not campaign or corporate funds — were used to reimburse Cohen.

In a May 3 tweet, Trump said the payment to Daniels had “nothing to do with the campaign.”

In the May 2 Fox News interview, Giuliani said, “It’s not campaign money. No campaign finance violation.” He also told the Washington Post that Trump was “really wise” to use his personal funds.

“Was the president really wise to take it out of personal funds rather than from campaign funds? Thank God he did, [or else] he’d get a campaign finance violation they’d try to drum up into a felony or something,” Giuliani said.

Giuliani is wrong, according to Larry Noble, a former general counsel at the FEC, who is now senior director and general counsel at the Campaign Legal Center. Noble told us that Cohen and Trump could have committed a campaign finance violation, regardless of how Trump reimbursed Cohen.

What matters is Cohen’s intent when he paid Daniels and whether Trump or someone in his campaign knew about the payment, Noble told us in a phone interview.

“If Michael Cohen really did this on his own and was not an agent to the campaign in any way and wasn’t motivated by the election — then it is not a violation of the law,” Noble told us. “As soon as the campaign knows about it, then it is an [illegal] in-kind contribution. The question here is, when did the campaign know about it and did Trump know about it?”

We now know, however, that Cohen pleaded guilty to a campaign violation and, in doing so, said the payment was “for the purpose of influencing the election.” He also implicated the president in the crime.

Noble told us campaign violations could lead to either civil fines or a criminal referral to the Department of Justice.

The fines vary from $5,701 to $66,666 and could be tripled if the FEC determines that the violations were knowing and willful, Noble said.

Did Trump have to disclose the payment as a liability on his personal financial disclosure statement?

Trump and Giuliani say the payment to Daniels was not campaign-related. Even if it was not, a complaint filed by Citizens for Responsibility and Ethics in Washington (CREW) with the U.S. Attorney’s Office alleges it may be considered a personal loan to Trump that should have been reported in a public financial disclosure report filed by the president in June 2017. Since it was not, tweeted Norm Eisen, CREW board chairman, the nondisclosure could run afoul of federal laws on knowingly filing false or fraudulent statements with the federal government.

Filing a false report can result in a fine of up to $50,000, and knowingly and willfully filing a false report can result in a jail sentence of no more than one year and/or a fine of $50,000.

Update, May 16, 2018: Trump filed his 2017 public financial disclosure report on May 15. The president reported that he fully reimbursed Cohen in 2017, without providing any dates or exact amount. He described the amount as being in the range of $100,001 to $250,000. Trump’s disclosure form says Cohen’s expenses were being disclosed “in the interest of transparency,” even though they were “not required to be disclosed as ‘reportable liabilities.'” However, the Office of Government Ethics disagreed with that statement. A notation in the report says, “OGE has concluded that the information related to the payment made by Mr. Cohen is required to be reported and that the information provided meets the disclosure requirement for a reportable liability.”

Update, Feb. 27, 2019: We updated this story to include information Cohen provided on Feb. 27, 2019, to the House Committee on Oversight and Reform.