Stormy Daniels payment disclosure raises new legal issues for Trump

Revelation could cause trouble for president if payment is seen to constitute campaign financing

Donald Trump's legal woes have taken a fresh turn after his recently-appointed lawyer, Rudy Giuliani, told Fox News that the president reimbursed his attorney for a payment to adult film star Stormy Daniels.

The revelation directly contradicted a claim by the president last month that he knew nothing about the $130,000 payment to Daniels by Michael Cohen, his personal lawyer.

Giuliani’s intervention prompted an extraordinary series of tweets by Trump on Thursday morning confirming that he had reimbursed Cohen, but insisting it was a “private contract between two parties” that had “nothing to do with the campaign”.

The president, who has denied knowing Daniels, said the agreement was used “to stop the false and extortionist accusations made by her about an affair”.


While Guiliani appeared to take even his Fox News host, Sean Hannity, off guard with the disclosure on Wednesday night, he insisted that Trump and his lawyers were aware of what he was going to say during the interview.

Whether the latest development causes trouble for Trump rests on a key issue – does the payment constitute campaign financing?

A lawsuit brought by government watchdog group Common Cause claims that the payment violated campaign financing rules. The argument is that the payment to silence Daniels was an attempt to influence the election by preventing a negative story about Trump from surfacing.

Guiliani and Trump have argued that the payment was not campaign financing, but was a private payment.


In follow-up interviews with newspapers, Giuliani said he had documentation showing that Trump personally made the payments to Cohen, proving that there had been no campaign financing violation – under US law, candidates can donate as much money as they like to their own campaigns. Others argued that the fact the money was loaned by Cohen and was not reported by Trump means it still constituted campaign financing.

But the latest controversy raises other issues. Trump has appeared to contradict his own statement last month to reporters on Air Force One. He was specifically asked whether he knew where Michael Cohen had got the money for the Stormy Daniels payment. “No,” Trump replied. “I don’t know.”

Stormy Daniels's lawyer, Michael Avenatti  reacted with outrage on Twitter to the development. "Every American, regardless of their politics, should be outraged by what we have now learned. Mr Trump stood on AF1 and blatantly lied," he said.

But Giuliani appeared to suggest that Trump may not have not known about the details of the payment until two weeks ago. The president “didn’t know about the specifics of it all, as far as I know”, the former New York mayor said, though he said Trump did know about the general arrangement. “These are busy people,” he said.

Trump did not address the question of when he knew about the payment in his tweets on Thursday morning.

Stormy Daniels continues to pursue Trump in the courts – she lodged a defamation suit against the president earlier this week, and is already suing Cohen. Should these cases proceed in open court, they could spell trouble for the president.

Cohen himself is under investigation, following an FBI raid of his offices last month.

Whether Giuliani slipped up or not, the Stormy Daniels payment controversy is just the latest in a series of legal difficulties for the president as the special counsel investigation into Russian interference in the 2016 election continues.