In the News
National Review: Michael Cohen Pled Guilty to Something That Is Not a Crime
By Bradley A. Smith
The Federal Election Campaign Act holds that an “expenditure” is any “purchase, payment, loan, advance, deposit or gift of money, or anything of value, for the purpose of influencing any election for Federal office.” …
So what does it mean to be “for the purpose of influencing an[] election”? To understand this, we read the statutory language in conjunction other parts of the statute. Here the key is the statute’s prohibition on diverting campaign funds to “personal use.” This is a crucial distinction, because one of the primary factors separating campaign funds from personal funds is that the former must be spent on the candidate’s campaign, while the latter can be used to buy expensive vacations, cars, watches, furs, and such. The law defines “personal use” as spending “used to fulfill any commitment, obligation, or expense of a person that would exist irrespective of the candidate’s election campaign.” …
[I]n writing its implementing regulations for the statute, the Federal Election Commission specifically rejected a proposal that an expense could be considered a campaign expenditure if it were merely “primarily related to the candidate’s campaign.” This was done specifically to prevent candidates from claiming that things that benefitted them personally were done because they would also benefit the campaign. And with that in mind, it is worth noting Mr. Cohen’s sentencing statement, in which he writes that he “felt obligated to assist [Trump], on [Trump’s] instruction, to attempt to prevent Woman-1 and Woman-2 from disseminating narratives that would adversely affect the Campaign and cause personal embarrassment to Client-1 and his family.” (Emphasis in original.)…
Indeed, it is quite probable that many of those now baying for Trump’s scalp for illegal campaign contributions would be leading a charge to prosecute Trump for illegal “personal use” of campaign funds had he made the payments from his campaign treasury.
Politico: The real obstacles to Trump’s prosecution
By Rich Lowry
Did the payments constitute campaign contributions at all? Bradley Smith, a former chairman of the Federal Election Commission and current head of the Institute for Free Speech, argues persuasively that they do not.
Federal law defines a contribution as “any gift, subscription, loan, advance, or deposit of money or anything of value made by any person for the purpose of influencing any election for Federal office.”
That would seem straightforward enough, but Smith points out that another part of the law defines what is a expenditure for personal use, namely anything “used to fulfill any commitment, obligation, or expense of a person that would exist irrespective of the candidate’s election campaign.”
“Irrespective of the campaign” is the key phrase. It is meant to keep campaign monies from being used for things that might influence a campaign, but that a candidate would spend on anyway – food and supplies, clothing, and mortgages, are cited as a few examples.
Payments to mistresses don’t make the list, but the rules weren’t written with Donald Trump in mind. He didn’t undertake his flings with Daniels or McDougal as part of his campaign, and its easy to imagine him paying them off even if he weren’t running. He is a past master at nondisclosure agreements and other tactics of celebrities with potential embarrassing stories to keep under wraps.
Michael Cohen, who has had every incentive to accede to the prosecutor’s interpretation of the law and cooperate against Trump, made a noteworthy point in his sentencing memo. He said he acted to stop stories from getting out that would “adversely affect the Campaign and cause personal embarrassment to Client-1 and his family.”
The latter would have been a strong incentive to buy off Daniels and McDougal, regardless. Indeed, Bradley Smith makes a telling point: If Trump had paid off Stormy Daniels and Karen McDougal with campaign funds, certainly all of his critics would be screaming that he’d improperly diverted campaign resources for personal use.
MLive.com: Complaints by opponent’s supporters led to charges against Michigan Senate candidate
By Ryan Stanton
Criminal charges over a recent Michigan Senate candidate’s campaign literature trace back to complaints made by one of her opponents’ supporters, police reports show…
A hearing in the case is set for January and the American Civil Liberties Union is defending Rajendra, calling the charges unconstitutional and arguing she never intended to mislead voters.
One of her campaign mailers stated, “As a mom of four and as your State Senator, I want my kids and all kids in Michigan to have the same opportunity for quality education and success.”
Another stated, “As your State Senator, I’m steadfast in my commitment to ….” She then listed her support for increasing K-12 school funding and other education matters.
Those two statements are listed in court records as the reasons why Rajendra is now facing two counts of false incumbency designation…
David Keating, president of the Institute for Free Speech in the Washington, D.C., area, said he has reviewed the matter and agrees with the ACLU that the charges are unconstitutional.
“I’m appalled that she is being prosecuted,” Keating said. “At most she neglected to use the word ‘would’ in some of the sentences for some of the mailers. Nearly any reasonable person could tell these are things she would do if elected.”
Rather than being prosecuted, Keating said, people such as Rajendra should be praised for giving voters a choice. He said it sends a horrible message to people considering a run for office.
“We should make campaigning simpler, not legally dangerous,” he said.
Washington Examiner: Byron York: Why Republicans ‘shrug off’ the Michael Cohen case
By Byron York
Brad Smith, a former chairman of the Federal Election Commission, is one of the strongest voices in opposition to much of the current campaign finance law structure. He doesn’t believe the Trump-Cohen Stormy Daniels payoff was a campaign finance violation because he doesn’t believe it was a campaign expenditure. In a recent email exchange, Smith explained his position at some length: …
The standard “for the purpose of influencing a campaign” must be read in pari materia with the prohibition in the statute on personal use of campaign funds. That section and its regulations define things that are not campaign expenditures, and personal use includes any obligations that would exist irrespective of the campaign. The obligations to Daniels or others (such as they were) were not created as a candidate. Moreover, even if Trump decided to pay the blackmail in part because he was running for president, in its implementing regulations, the FEC specifically rejected a mixed motive test, i.e. that something would count as a campaign expense if one of multiple motives was to help the campaign. It must exist solely because the candidate is running for office…
Secondly, the prosecutors want “for the purpose of influencing a campaign” to be a subjective test determined by the mindset of the actors. I believe that the test is intended as an objective test according to a reasonable observer, defining expenditures that one makes when running for office – for example, hiring campaign staff, buying ads, purchasing phone service for the campaign, renting office space, printing bumper stickers, etc. I doubt any reasonable jury would deem “payments to mistress” a “campaign expenditure.” If it were literally “anything” “for the purpose of influencing a campaign” then virtually every personal expenditure made by a person in public life might be deemed a campaign expenditure, and at least arguably subject to investigation.
By Jacob Sullum
Donald Trump is no lawyer, of course, and ignorance seems like his best defense against the charge that he “knowingly and willfully” violated the Federal Election Campaign Act (as required for a criminal conviction under that law) by directing Cohen to make those payments…
It is possible that 1) Cohen and AMI both simply said what they thought prosecutors wanted to hear, 2) their understanding of the payments’ purpose was different from Trump’s, or 3) Trump’s motives were both personal and political. Even assuming that the payoffs helped Trump win the election, they would still count as personal rather than campaign expenditures if they would have happened regardless of whether he was running for president. “At a minimum,” former Federal Election Commission Chairman Brad Smith observed in a Reason essay after Cohen’s guilty plea last August, “it is unclear whether paying blackmail to a mistress is ‘for the purpose of influencing an election,’ and so must be paid with campaign funds, or a ‘personal use,’ and so prohibited from being paid with campaign funds.”
Trump’s second defense is less plausible than the first, since it seems that silencing Daniels and McDougal took on a new urgency in light of the election. Still, proving that the payments would not have been made in the alternate universe where Donald Trump did not run for president, like proving that he understood the intricacies of campaign finance law, would be a tall order.
Upstream Ideas: Cohen’s Day Of Reckoning
Was Trump’s hush money a political contribution per the statute despite what Cohen is alleging? Will Trump be unable to have a trial to clear himself and continue to have the issue cloud over his presidency? Are politically ambitious prosecutors overrunning the normal relationship between the FEC and Department of Justice? Former FEC Commissioner, Bradley Smith joins Dan and Amy to discuss [on Chicago’s Morning Answer (AM 560 WIND)].
New from the Institute for Free Speech
Misguided Fears and Misleading Rhetoric: IRS Reform Provides Protections for Privacy in Association
The First Amendment protects the right of all Americans to associate with one another privately. Recognizing this essential right and a recent change in tax law that eliminated any rationale for collecting the information, the Treasury Department and the IRS announced a new policy in July 2018 that 501(c) nonprofits, excluding 501(c)(3) charities, are no longer required to submit the private information of their significant supporters to the Internal Revenue Service…
Critics of the IRS reform suggest that it will allow foreign money to flow into American campaigns and increase the prevalence of “dark money.” These claims are false. In reality, the new rule simply ends the mass collection of sensitive information that the IRS has admitted it neither needs nor uses to enforce tax laws.
Ultimately, the hysteria surrounding the IRS reform fails to square with the facts. Appropriate laws and tools already exist for government to prevent foreign spending on American campaigns, and the agency’s policy change has no effect on so-called “dark money,” as the public will still have access to the same information it does today. Further, the names and addresses of donors do nothing to reveal whether those donors are U.S. citizens. The IRS admitted it has no need or use for nonprofit donor information in enforcing the tax laws, and the agency isn’t responsible for enforcing campaign finance laws. Moreover, this private information could be used to politically target both individuals and groups opposed to those in power. The Treasury Department made a wise decision to better protect Americans’ privacy, and it would be unwise for Congress to reverse course.
Supreme Court
Electronic Frontier Foundation: EFF To U.S. Supreme Court: Rule Carefully In Free Speech Case About Private Operators, State Actors, and the First Amendment
By Karen Gullo and David Greene
The distinction between private entities and state actors providing forums for communication is crucial for the free speech rights of Internet users and the platforms they use. In a brief filed yesterday in a case before the U.S. Supreme Court, we explained that private entities do not become state actors simply by providing their own platforms for use by other speakers.
The case before the court, Manhattan Community Access Corp. v. Halleck, doesn’t actually involve social media platforms-it’s about whether a public access television station is a state actor that violated the First Amendment rights of two producers by taking down their videos that criticized the station. But the court’s decision could have a profound impact on online speech. Here’s why: the television station is operated by a privately owned nonprofit. The State of New York has no control over or say in the station’s content. It does appoint two of the nonprofit’s 13-member board of directors. A lower court ruled that the station was an arm of the state actor and couldn’t block the videos.
Although EFF does not have a position on whether the public access broadcaster in the case is a public forum, our brief urges the Supreme Court to rule narrowly and take great care in writing its opinion. We want to make sure nothing the court says in this case can be used in unintended ways in the far different context of privately operated Internet platforms. A broadly written opinion, adopting a low threshold for governmental involvement, could threaten the First Amendment rights of platform operators to curate content, and could give the government power to dictate content moderation rules and control what platforms can and can’t publish.
Congress
Washington Post: Senate votes to overturn Trump administration donor disclosure rule for ‘dark money’ groups
By Michelle Ye Hee Lee
The Senate on Wednesday voted 50 to 49 to overturn a Trump administration policy that allows politically active nonprofits to withhold from the government the identities of their donors…
The Senate move is unlikely to survive the GOP-led House, which must vote on the resolution before the end of the year, or receive the support of President Trump, whose Treasury Department enacted the rule earlier this year.
Still, Sens. Jon Tester (D-Mont.) and Ron Wyden (D-Ore.), who pushed for the resolution, cheered the vote, which was made possible with unanimous support from Democratic senators and the backing of one moderate Republican senator, Susan Collins of Maine.
The legislation only required a simple majority to pass under the Congressional Review Act…
Opponents of campaign finance restrictions criticized the resolution, saying donors should be able to participate in politics without fear of reprisal.
“No one should be the subject of intimidation or retaliation based on their personal beliefs,” said Brent Gardner, chief government affairs officer for Americans for Prosperity…
The resolution is a “blatant attempt to stifle free speech and serves no purpose in the enforcement of tax regulations,” said Nathan Nascimento, executive vice president of Freedom Partners Chamber of Commerce…
Some free-speech advocates have long expressed concerns that the names and addresses may be used by the government to politically target the donors, noting previous scandals that found the IRS targeted tea party and progressive groups.
They also note the risk of donor information being released by accident, either by the IRS or by the nonprofits.
The Hill: House Dems follow Senate action with resolution to overturn IRS donor disclosure guidance
By Naomi Jagoda
House Democrats on Thursday offered a resolution that would overturn IRS guidance reducing donor disclosure requirements for some tax-exempt groups, a day after the Senate approved a measure to reverse the agency’s guidance.
The House resolution was introduced by Rep. David Price (D-N.C.) and is co-sponsored by several other Democratic lawmakers. It was offered under the Congressional Review Act, which gives Congress the opportunity to disapprove of recent regulatory items from federal agencies.
Price, a vice chair of the House Democracy Reform Task Force, said he offered the resolution “to hold political groups accountable and shine a light on dark money in our elections.” …
House Minority Leader Nancy Pelosi (D-Calif.) said that “joining the Senate to overturn this dangerous IRS guidance is a critical step toward ending the self-enrichment, secret money and special interests that threaten our democratic institutions and undermine the American people’s voice in our democracy.” …
The House is not expected to vote this year to overturn the guidance, and Trump would likely veto any measure that would reverse the policy.
Democrats plan to make campaign-finance reform a top priority when they take control of the House next year.
Courthouse News Service: Bill to ID Backers of Political Ads Sent to Congress
By Amanda Ottaway
The Political Accountability and Transparency Act, or H.R. 7267, seeks to mitigate the codependence of super PACs and political candidates by forcing television, radio and online campaign ads, as well as other canvassing materials, to disclose their top donors.
“For too long, we’ve allowed outside money to play an outsized and arcane role in our politics, blurring the lines between special interest groups and the candidates they support,” Rep. Kathleen Rice, D-N.Y., said in a statement. Rice co-sponsored the bill with Reps. Mike Gallagher, R-Wis., and Derek Kilmer, D-Wash., who serve with her as co-chairs of the Congressional Reformers Caucus…
Proposed as an amendment to the Federal Election Campaign Act of 1971, the bill calls for the top three donors of an ad to be named within the ad itself, whether those donors are nonprofits, political action committees or companies. The bill also provides examples of prescribed language for these disclosures…
The Political Accountability and Transparency Act would also tighten restrictions on misuse of PAC funds amid reports that some in Congress, thanks to a loophole in PAC spending rules, have used that money for fancy dinners, luxury vacations and country club memberships…
In addition, the bill tightens restrictions on the loophole practice in Washington of coordinating campaign expenditures without designating them as such, as coordinated expenditures are capped but independent expenditures are not. For example, under H.R. 7267, if someone left a job in the office of a representative or a senator for a new position at a PAC and then used the knowledge from the congressional office to help direct the PAC’s funding, those funds would face more restrictions than they do currently.
The Media
New York Times: Tabloid Publisher’s Deal in Hush-Money Inquiry Adds to Trump’s Danger
By Mike McIntire, Charlie Savage and Jim Rutenberg
With the revelation by prosecutors on Wednesday that a tabloid publisher admitted to paying off a Playboy model, key participants in two hush-money schemes say the transactions were intended to protect Donald J. Trump’s campaign for president.
That leaves Mr. Trump in an increasingly isolated and legally precarious position, according to election law experts. Hundreds of thousands of dollars in payments made in 2016 to keep two women silent about alleged affairs are now firmly framed as illegal campaign contributions…
“A.M.I. further admitted that its principal purpose in making the payment was to suppress the woman’s story so as to prevent it from influencing the election,” prosecutors said in a statement announcing they had struck a deal not to charge the company in exchange for its cooperation. As part of the deal, dated in September but previously kept private, the company also agreed to train employees in election law standards and appoint a qualified lawyer to vet future deals that may involve paying for stories about political candidates…
Establishing a nexus between Mr. Cohen’s efforts to silence the women and Mr. Trump’s campaign is central to making a criminal case of election law violations. That is why A.M.I.’s admission carries so much weight, said Richard L. Hasen, an election law professor at the University of California, Irvine.
“It’s looking a lot like an illegal and unreported in-kind corporate contribution to help the campaign, exposing the Trump campaign and Trump himself to possible criminal liability,” Mr. Hasen said.
NBC News: Trump was in the room during hush money discussions with tabloid publisher
By Tom Winter
Donald Trump was the third person in the room in August 2015 when his lawyer Michael Cohen and National Enquirer publisher David Pecker discussed ways Pecker could help counter negative stories about Trump’s relationships with women, NBC News has confirmed.
As part of a nonprosecution agreement disclosed Wednesday by federal prosecutors, American Media Inc., the Enquirer’s parent company, admitted that “Pecker offered to help deal with negative stories about that presidential candidate’s relationships with women by, among other things, assisting the campaign in identifying such stories so they could be purchased and their publication avoided.”
The “statement of admitted facts” says that AMI admitted making a $150,000 payment “in concert with the campaign,” and says that Pecker, Cohen and “at least one other member of the campaign” were in the meeting. According to a person familiar with the matter, the “other member” was Trump.
