Stormy Weather for Campaign-Finance Laws

April 11, 2018   •  By Brad Smith   •    •  ,

When you stretch the law to “get” a political opponent, it’s rarely possible to return the law to its original shape. Which brings us to Stormy Daniels.

Shortly before the 2016 election, one of President Trump’s lawyers, Michael Cohen, arranged a $130,000 payment to the porn star in return for silence about a 2006 affair she claimed to have had with Mr. Trump. (Both the president and Mr. Cohen have denied the affair; Mr. Trump has said he did not know of the payment to Ms. Daniels until this February.)

Not satisfied with an old-fashioned sex scandal—perhaps because the president seems impervious to that—some want to turn this into a violation of campaign-finance law. Trevor Potter, a former member of the Federal Election Commission told “60 Minutes” the payment was “a $130,000 in-kind contribution by Cohen to the Trump campaign, which is about $126,500 above what he’s allowed to give.” The FBI raided Mr. Cohen’s office, home and hotel room Monday. They reportedly seized records related to the payment and are investigating possible violations of campaign-finance laws.

But let’s remember a basic principle of such laws: Not everything that might benefit a candidate is a campaign expense.

Campaign-finance law aims to prevent corruption. For this reason, the FEC has a longstanding ban on “personal use” of campaign funds. Such use would give campaign contributions a material value beyond helping to elect the candidate—the essence of a bribe.

FEC regulations explain that the campaign cannot pay expenses that would exist “irrespective” of the campaign, even if it might help win election. At the same time, obligations that would not exist “but for” the campaign must be paid from campaign funds.

If paying hush money is a campaign expense, a candidate would be required to make that payment with campaign funds. How ironic, given that using campaign funds as hush money was one of the articles of impeachment in the Watergate scandal, which gave rise to modern campaign-finance law.

When the FEC adopted these regulations, it specifically rejected a rule under which campaign contributions could fund an expenditure “related to” a candidacy. The FEC was concerned that would make it too easy for candidates to use campaign funds for personal benefit. Personal debts, for example, are “related to” the campaign—if unpaid, the candidate’s reputation might suffer. A Rolex watch, a new suit, or a haircut might help a candidate look good on the trail.

If the Trump Organization paid bonuses to employees, it might improve Mr. Trump’s image, helping his re-election prospects. Could those bonuses be paid with campaign funds? Every charitable expenditure made by the Clinton Foundation arguably assisted Hillary’s run for president. Campaign expenditures? The Clintons famously conducted polls on where to vacation. The polls were probably campaign expenses, but how about the trips?

And how about Stormy? There are many reasons, including personal and commercial ones, why Mr. Trump might want to keep allegations of extramarital affairs out of the press. Ms. Daniels claims that when she first tried to sell her story in 2011, she was threatened by a man in a Las Vegas parking lot: “Leave Trump alone. Forget the story.” If true, it shows that her silence was desired long before Mr. Trump ran. The New Yorker published a story claiming to provide “a detailed look at how Trump and his allies used clandestine hotel-room meetings, payoffs, and complex legal agreements to keep affairs . . . out of the press.” If true, this also suggests a pattern outside the campaign.

Campaign contributions should not become politicians’ personal slush funds. Many ardent anti-Trumpers sincerely believe that the president is a threat to the rule of law. The real threat to the rule of law, however, comes from abusing laws to “get” a political opponent. Some matters are for voters to decide.

This post originally ran in The Wall Street Journal on April 10th 2018.

Brad Smith

https://www.ifs.org/author/bsmith/

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