Manhattan District Attorney Alvin Bragg is likely to indict former President Donald J. Trump soon for his role in payments to Karen McDougal and Stephanie Clifford (aka Stormy Daniels) during the 2016 presidential campaign to keep them from going public about sexual encounters they had with Trump. It is likely that Trump will be indicted for falsification of business records (N.Y. Penal Law § 175.10) and may also be indicted for related campaign finance or penal law violations such as filing a false statement. This would be the first time in American history that a former president has been indicted for criminal misconduct.
In January, Manhattan District Attorney Alvin Bragg empaneled a grand jury to present evidence as to whether Donald Trump violated state and federal campaign finance laws during the 2016 presidential campaign. Although the investigation originally began in the summer of 2018 under Mr. Bragg’s predecessor, Cyrus R. Vance Jr., it was suspended in February 2022 shortly after Bragg took office, allegedly because he had concerns about the strength of the case against Trump. At the time the investigation was suspended, the District Attorney’s office had already begun presenting evidence to a grand jury.
According to court documents, in August 2015 American Media Inc., the then-owner of the National Enquirer – whose publisher, David Pecker, was a longtime ally of Trump – agreed to look out for damaging stories about Trump “so they could be purchased and their publication avoided.” Beginning in June 2016, McDougal tried to sell her story to the tabloids about an extramarital affair she had with Trump in 2006 and 2007. Although initially the National Enquirer balked at buying her story, in August 2016 they agreed to buy it for $150,000 after Trump’s longtime fixer, Michael Cohen, promised that they would be reimbursed.
Two months later, in October 2016, Pecker informed Cohen that a second woman, Stephanie Clifford, was preparing to go forward with her own story that she had a sexual encounter with Trump. Cohen negotiated an agreement with Clifford to buy her silence for $130,000. Cohen paid Clifford by taking out $131,000 from his home-equity line of credit and depositing that money into a bank account in the name of Essential Consultants, a shell company that Cohen had established a few days earlier. The next day, Cohen paid Clifford $130,000. Beginning in February 2017, the Trump Organization paid Cohen back for the $130,000 in monthly installments which they invoiced as legal expenses. Although initially these reimbursement checks were paid from the Trump Organization, in August 2017 the reimbursement check was paid from Trump’s personal account.
In August 2018 Cohen pled guilty to multiple counts of campaign finance violations, tax evasion, and bank fraud. He admitted in court that the payments were made “in coordination with and at the direction of a candidate for federal office,” implicating Trump in a federal crime. Moreover, he admitted that the payments were made “in order to influence the 2016 presidential election.” An audiotape of Trump and Cohen discussing the financial payment to McDougal has also been released. Recently, on March 14, 2023, Trump’s current attorney, Joe Tacopina, admitted that “obviously he [Trump] knew about it” and “of course it’s not the truth” that Trump did not know about the payments to Clifford. In 2019, the Department of Justice decided to end their investigation into Donald Trump’s role in the hush money payments at least in part because of the Department’s long standing policy against indicting a sitting president.
Below is a summary of the charges that the grand jury may recommend and an explanation of some of the legal issues likely to arise in the near future that will need to be explained to the American public.
Falsification of business records (N.Y. Penal Law § 175.10)
The core of any prosecution under § 175.10 is the way in which Trump and the Trump Organization reimbursed Cohen for the $130,000 payment to Ms. Clifford. A person is guilty of felony-level falsification of business records under § 175.10 when they “make a false entry in the business records of an enterprise,” “alter. . . a true entry in the business records of an enterprise,” or “omit. . . a true entry in the business records of an enterprise” while also intending to “commit another crime” or conceal another crime. Prosecutors are investigating whether the monthly invoices paid out beginning in February 2017 for legal expenses were falsified if they were, in reality, used for hush money payments. Corporate invoices are business records for purposes of § 175.10. Conviction under § 175.10 requires a prosecutor to prove that Trump personally participated in the scheme to falsify the business records. Cohen’s August 2018 plea already implicated Trump in the scheme, saying that the payments were made “in coordination” with him and for the purpose of influencing the presidential election. Violations of § 175.10 can be charged as a misdemeanor or a felony; to make it a felony prosecutors would need to show that Trump falsified the records to help commit or conceal a second crime. In this case, that could be a violation of either New York State law or, potentially, federal law. Although District Attorney’s typically enforce state laws, there is precedent for people in New York being charged with falsifying business records to cover up a federal crime.
Campaign finance crimes (N.Y. Elec. Law § 14-120 and § 14-126)
Under New York law, it is illegal to make a campaign contribution “in any name except his own, directly or indirectly.” Additionally, candidates may not receive contributions if they know a contribution was made in someone else’s name. The hush money payments to McDougal and Clifford constitute campaign contributions since they were made to influence the outcome of the election and were coordinated with the candidate. Moreover, the payment to Clifford was made in Michael Cohen’s name even though it was made on behalf of someone else. Cohen implicated Trump directly in the August 2018 court proceedings when he pled guilty to various offenses, with his attorney saying “today [Cohen] stood up and testified under oath that Donald Trump directed him to commit a crime by making payments to two women for the principal purpose of influencing an election. . . If those payments were a crime for Michael Cohen, then why wouldn’t they be a crime for Donald Trump?” Trump directed Cohen to use the money for campaign-related purposes without disclosing it, and the Trump Organization reimbursed Cohen for that payment, likely in violation of § 14-120.
Under New York Election Law § 14-126, solicitation of unlawful campaign contributions for the purpose of evading campaign finance limits is a felony. In 2016, the federal campaign contribution limit for individual donors was $2,700 per election. Cohen’s $130,000 payment to Clifford was therefore more than $125,000 over the campaign finance limit. The available evidence makes clear that Cohen was acting “in coordination” with Trump at the time that the Trump Organization paid him back in monthly installments fraudulently invoiced as legal expenses. Those invoices, which hid the payments as legal expenses, evaded campaign finance limits and were likely made in violation of § 14-126, assuming prosecutors can prove that it was Trump’s intent to dodge campaign finance limits.
New York State penal violations: filing a false statement (N.Y. Penal Law § 175.35)
Under New York law, it is illegal to knowingly and “with the intent to defraud the state or any political subdivision” file a false “written instrument”. A written instrument includes any written or printed “instrument or article…used for the purpose…of conveying or recording information, ” such as a tax return. Violations of § 175.35 in the first degree are a class E felony. In his plea deal, Cohen admitted to creating fake invoices for legal expenses which were then used to reimburse him for the payment to Clifford. When Cohen received his August 2017 reimbursement check for $35,000, it came from Trump’s personal account, rather than from the Trump Organization’s account. If Trump deducted that payment from his New York State taxes as legal fees, he would have likely filed a false financial statement in violation of N.Y. Penal Law § 175.35 when his state tax returns were submitted to the New York State Department of Taxation and Finance; he may also have engaged in tax avoidance in violation of other New York law provisions. Prosecutors will likely be able to prove that the false financial statement was filed knowingly and “with the intent to defraud” as required under § 175.35 because the available evidence makes clear that Cohen was acting “in coordination” with Trump and for the purpose of influencing the presidential election. Moreover, the Trump Organization’s former Chief Financial Officer, Allen Weisselberg, recently pled guilty to tax fraud charges and agreed to cooperate with prosecutors against his longtime employer; Weisselberg would likely have information relevant to any tax fraud charge, such as § 175.35.
Near-term legal issues
The following issues will likely arise in the near future and will need to be explained to the American public.
Issues with timing
Statute of limitations: The statute of limitations requires that charges under § 175.10 for falsification of business records be brought within five years. Although the last payment to Cohen occurred in December 2017, more than five years ago, the statute of limitations has likely been tolled. Statutes of limitations in New York toll when a defendant is “continuously” out of state. Trump has been “continuously” out of state during the relevant time. In addition to changing his residency from New York to Florida in September 2019, he also spent most of 2017-2021 in Washington D.C. Additionally, a 2020 Executive Order suspended statutes of limitations because of COVID-related delays. That Executive Order may also apply here. Additionally, it is possible that the Trump Organization may have issued business records after 2017 that included these falsified records, such that there might be a new violation that prosecutors could pursue that would trigger a new statute of limitations. Therefore, although Trump’s legal team is likely to argue that the statute of limitations has run on the underlying conduct, it has likely been tolled such that felonies associated with the payments to Clifford could still be prosecuted.
Grand jury time limits: There is some speculation around whether District Attorney Bragg is using a grand jury or a special grand jury. Grand juries in New York are empanelled for two weeks to three months or more, at the discretion of the presiding judge. Special grand juries on the other hand are sworn in to serve for six months, and are often used for more complex cases. Both grand juries and special grand juries consist of 23 Manhattan residents chosen at random. The panel in this case was empanelled at the end of January, so the standard three month limit, if not extended by the judge, would run until the end of April if this is a grand jury or would run at the end of July if it is a special grand jury. Trump’s attorney Joseph Tacopina confirmed on Thursday, March 9th that the Manhattan District Attorney’s Office extended an offer for Trump to testify before the panel, an offer that usually indicates an indictment is close. Tacopina also indicated that Trump has “no plans” to appear before the panel.
Right to a speedy trial: Defendants in New York have a constitutional and statutory right to a speedy trial. Prosecutors would have to be ready for trial within six months of issuing charges, assuming one of those charges was a felony offense.
Issues with elements of the crimes/evidence at trial
Reliability of Cohen as a witness: For Trump to be convicted of these crimes, a jury would need to find Michael Cohen to be a reliable witness. Trump’s lawyers will likely argue that, as a convicted criminal, he is not reliable. However, Cohen has consistently been a cooperating witness since his 2018 plea agreement. That agreement specifically states that Cohen must “give complete, truthful, and accurate information and testimony.” The agreement notes that Cohen will be subject to prosecution for various crimes, including perjury and obstruction of justice, if he violates the terms of the agreement. Additionally, Cohen has already served his prison term, so he is not seeking a sentencing reduction; he has also accepted responsibility for his actions. Prosecutors may also have documentary evidence and testimony from other witnesses supporting Cohen’s account, which could render his reliability less central to the case.
Potential defenses raised by Donald Trump
Trump’s lawyers will likely argue a variety of defenses that either downplay his conduct or seek to shield it from prosecution. This includes the following defenses:
“I’m running for president”: Trump will likely claim that he should not be prosecuted because he is running for president, yet again. Although the Department of Justice’s Office of Legal Counsel (OLC) issued an opinion saying sitting presidents cannot be indicted, the opinion does not preclude the indictment of presidential candidates. Trump’s lawyers cited this OLC opinion in a brief before the Supreme Court in Trump v. Vance where they argued, unsuccessfully, that a president could not be investigated while in office – hinging their argument to his constitutional status as president and seeming to admit that, as a private citizen, a former president could be investigated and, if necessary, indicted.
Advice of counsel: Trump will likely claim he was relying on the advice of counsel, Michael Cohen, when the payments were made to Clifford. To use this as a defense, Trump would have to prove that he was told the hush money payments were legal, and that he relied on that advice in good faith. (See United States v. Scully). This argument is likely to be unpersuasive since Cohen has already admitted, in his plea agreement, that he knew the payment to Clifford was unlawful at the time he made it.
District Attorney dropped previous charges: District Attorney Alvin Bragg abandoned earlier grand jury proceedings examining the hush money payments, among other crimes, because of concerns with the strength of the evidence involved. Since the prior case wasn’t seemingly strong enough to proceed then, Trump will likely argue that the case also is too weak to proceed now. It is important to note that the prior grand jury was reportedly considering a broader swath of financial crimes; whereas the current grand jury is more narrowly tailored, reportedly focused exclusively on the hush money payments. The difference in the scope of the investigation should undercut Trump’s argument.
Intent: Misdemeanor falsification of business records requires “intent to defraud,” and felony-level falsification requires “intent to defraud” and “intent to commit another crime.” Trump will likely argue that he did not have the requisite “intent to defraud.” New York courts have held that “intent to defraud” involves “intent to frustrate legitimate state interests and processes.” (People v. Headley, 951 N.Y.S.2d 317, 331 (Sup. Ct. 2012).) By violating campaign finance laws, Trump clearly intended to interfere with state processes, namely campaign finance regulations. He’ll also likely argue that he did not “inten[d] to commit another crime,” namely, any of the campaign finance or penal law violations. He may also argue that the $130,000 payment to Ms. Clifford was to avoid embarrassment and protect his marriage, as opposed to avoiding campaign finance limits. However, given the extensive efforts to hide the reimbursements in a legal form that would evade campaign finance disclosures and tax liability, that argument is less than convincing.