Donald J. Trump went on a Twitter storm this morning after his personal attorney, Rudy Giuliani, went on Sean Hannity last night and informed everyone that Trump did in fact reimburse Michael Cohen for his $130,000 payment to Stormy Daniels in exchange for a pre-election nondisclosure agreement. His tweets stated:
“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.”
Setting aside that Trump would most likely win the prize for most closely resembling the title of The Rolling Stones song, “Midnight Rambler,” there are several problematic aspects of this tweet. First, lawyers often do receive retainers from clients. However, the normal usage of that terminology by lawyers is that they obtain the retainer up front for future services to be rendered by the lawyer. Here, what Trump is telling us is that he is receiving a retainer for past services. That is not the norm- ask a lawyer about that.
Secondly, the amount that Trump apparently paid to Cohen is breathtaking in the return- according to reports, Giuliani has stated the payments were $35,000 per month and that Trump has repaid a total of between $460,000 and $470,000, including “incidental expenses.” Incidental expenses for drafting an NDA that he used for more than one deal and that he used with the same lawyer on both? We don’t know those amounts, but they must be de minimis. So, we are to believe there is nothing untoward going on, but that there was an almost 300% return on Cohen’s upfront payment? The Outfit would be ecstatic to get such rates of return on “vig” on the streets.
Finally, lawyers have these pesky rules of professional conduct, including the following: “A lawyer shall not provide financial assistance to a client in connection with pending or contemplated litigation.” We can advance court costs and expenses of litigation, but not settlements. So, this whole episode raises many challenging questions for Giuliani, for Cohen and for Trump.