Trump Finally Speaks On Stormy Daniels, Denies Knowing About Agreement

Donald Trump broke his silence on Stormy Daniels. That was a bad idea.

After a long period of atypical silence, President Trump finally spoke on the Stormy Daniels case, and what he said raises some interesting questions:

WASHINGTON — President Trump denied on Thursday knowing of a $130,000 payment his lawyer made to a pornographic film actress who claims to have had a sexual encounter with him, an assertion that threatened to complicate his legal battle against her.

Mr. Trump made his first public remarks about the matter aboard Air Force One as he returned to Washington from White Sulphur Springs, W.Va., where he had held a round table on tax cuts. Asked by a reporter if he knew about the payment to the actress, Stormy Daniels, whose given name is Stephanie Clifford, he said, “No.”

Asked why Michael D. Cohen, his personal lawyer, had made the payment, Mr. Trump said: “You’ll have to ask Michael Cohen. Michael is my attorney, and you’ll have to ask Michael Cohen.”

The president said he did not know where the money had come from, and ignored a question about whether he ever set up a fund Mr. Cohen could draw from.

Ms. Clifford has said that she was paid $130,000 before the 2016 election to buy her silence. She is now suing Mr. Trump to abrogate a nondisclosure agreement that was supposed to prevent her from discussing the relationship. She claims the agreement is null and void because Mr. Trump never signed it.

The president’s comments on Thursday could create a predicament for him and his legal team. Ms. Clifford’s case is based on the notion that the confidentiality agreement is invalid because Mr. Trump was not a party to it. By saying he was not aware of the agreement, Mr. Trump appeared to confirm that argument, which would mean neither party is legally bound by it, thus potentially paving the way for Ms. Clifford to break her silence without consequences.

Ms. Clifford’s pugnacious lawyer, Michael J. Avenatti, quickly issued a statement to respond to Mr. Trump’s claim. He said that the president’s professed ignorance of the payment would improve his client’s case, suggesting that he would use legal discovery to expose the back and forth around the payment.

“Our case just got that much better,” Mr. Avenatti said in the statement. “We very much look forward to testing the truthfulness of Mr. Trump’s feigned lack of knowledge concerning the $130,000 as he stated on Air Force One.”

“As history teaches us, it is one thing to deceive the press and quite another to do so under oath,” he added.

Later, Mr. Avenatti appeared to exult on Twitter about what he suggested were undisciplined comments by Mr. Trump that would give Ms. Clifford the upper hand in the legal dispute.

“Good (actually GREAT) things come to those who wait!!!” Mr. Avenatti wrote. “The strength of our case just went up exponentially. You can’t have an agreement when one party claims to know nothing about it. #nodiscipline.”

Mr. Cohen did not respond on Thursday to requests for comment. Charles Harder, a lawyer representing Mr. Trump in his legal wrangling with Ms. Clifford, also did not respond to requests for comment on the president’s remarks and how they could affect his case.

(…)

“If the president didn’t know anything about the payment, then he obviously didn’t know anything about the agreement, in which case you can’t have an agreement,” Mr. Avenatti said in an interview on MSNBC. “And then there is no such thing as an NDA,” he added, referring to a nondisclosure agreement.

“Now if, on the other hand, what he said on Air Force One is not accurate — and I, for one, have serious questions as to its veracity or accuracy — they’ve got a whole host of problems,” Mr. Avenatti said.

The president and his lawyers have been working to prevent Ms. Clifford, who sat for a lengthy interview that aired on “60 Minutes” last month, from making further public statements.

In February, she said that she believed that Mr. Cohen had violated the agreement and that she, as a result, was no longer bound by it. Mr. Cohen secretly obtained a restraining order late that month to prevent her from speaking.

Trump speaking at all about this matter is surprising to say the least. Up until now,  Trump had managed to stay silent about the issue both on Twitter and in response to the numerous attempts by White House reporters to get him to comment on the matter. Given the fact that the President is hardly a man known for remaining silent in the face of people making claims against him, the silence here has been notable and likely a reflection of the fact that he had been advised by attorneys that speaking at all about the matter could open legal doors for him that could prove to be publicly embarrassing and potentially legally troublesome for him and for Michael Cohen, most especially in their effort to shut down the lawsuit that Daniels has filed against the two of them seeking to vitiate the arbitration and non-disclosure provisions of the underlying agreement.

Taken in the light most favorable to Daniels, one could argue, as does Judd Legum does at Think Progress, that Trump saying he was unaware of the agreement provides strong support for the argument that the agreement as a whole is invalid because it means that those provisions of the agreement that only Trump could agree to were void since he didn’t about them. This is no doubt the primary argument that the attorney for Stormy Daniels will make in future court proceedings and filings, and it could very well succeed. After all, as Legum notes, there are provisions and representations made throughout the agreement that do not make sense unless Trump is also a party to the agreement. Since it doesn’t appear as if he ever signed the agreement and has now stated for the record, albeit not under oath, that he was not aware it existed that arguably means that the entire agreement is invalid.

One could also argue, though, that Trump’s comments and the fact that he was allegedly unaware of the agreement does not necessarily mean that the agreement as a whole doesn’t exist, or that an agreement in some form that Daniels and the Cohen LLC doesn’t still exist.. As I noted in response to a comment to another post by Michael Reynolds, even taking Trump’s representations here as true, it’s possible to argue that there was still an argument that a sufficient agreement remained such that the agreement as a whole was not void or that a court could still construe the existence of a contract of some kind between Daniels and the LLC notwithstanding the fact that one of the intended parties did not sign off on the agreement. This is especially true since it appears to be the case that Daniels did receive $130,000 from the LLC.

As a general rule, all that’s necessary for a contract of some kind to exist is an offer, acceptance, and consideration. Even if we take Trump out of the equation entirely, I think those three elements still exist here. Daniels was offered $130,000 in exchange for remaining silent about her relationship with Trump. That offer was made, at least as far as the underlying written contract is concerned, between the LLC that Cohen set up and Daniels. Under that agreement, the LLC agreed to pay Daniels $130,000 and Daniels agreed to remain silent about her relationship with Trump. Daniels clearly accepted those terms and accepted the $130,000, which was paid to her. Under the law, it strikes me that this is sufficient to create an agreement of some kind between Daniels and the LLC to which Trump is, at best, a third-party beneficiary.

Leaving that argument aside, though, the fact that Trump spoke out at all on this issue could end up being problematic for him and for Cohen, and I doubt that either Cohen or the attorneys advising Trump with regard to the Daniels case are very pleased that he chose to break his atypical silence on the matter. For one thing, speaking at all about the matter has the potential to open the door much wider on the acceptable boundaries of any discovery that the attorney for Daniels may do in the case now pending in Federal Court. This is important because Trump and Cohen have responded to the lawsuit that Daniels filed by removing it to Federal Court and seeking to have it referred to arbitration pursuant to the terms of the agreement. If Trump didn’t know about the agreement, though, it’s hard to see how he would have the standing to argue that the matter should be referred to arbitration at all.

Additionally, the law on which Trump and Cohen are relying in support of their motion to refer the case to arbitration, the Federal Arbitration Act, provides among other things that the party opposing the effort to compel arbitration has the right to demand a jury trial on the enforceability of the arbitration provisions of the agreement and to conduct discovery regarding the underlying validity of the agreement. This includes the right to seek a deposition of the parties involved. Trump speaking out now about the agreement opens himself up to be put under oath and questioned about his knowledge regarding the agreement, his relationship with Cohen at the time of the agreement, and his knowledge about negotiations between Cohen and Daniels and/or anyone representing Daniels. He could also potentially be deposed on his relationship with Daniels herself, which she has already spoken about during her 60 Minutes interview.

Finally, Trump’s comments here raise some potentially serious legal issue for Cohen, who is already subjected to serious legal vulnerability for what appears for all the world to be an illegal in-kind contribution to the Trump campaign on the eve of the 2016 election. If Cohen was purporting to act on behalf of Trump without his knowledge, for example, then he may have violated several ethical rules that could put his law license at risk. If it turns out that Trump is lying and he was aware of what Cohen was doing and somehow reimbursed him under the table for the payment that was made to Daniels, then this raises potential claims of money laundering, fraud, and mail fraud. And this is just thinking off the top of my head. Suffice it to say, though, that by choosing to break his silence on this issue Trump has probably made this Stormy Daniels case even more stormy for both him and for Cohen.

FILED UNDER: Donald Trump, Law and the Courts, Politicians, US Politics,
Doug Mataconis
About Doug Mataconis
Doug holds a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May 2010 and contributed a staggering 16,483 posts before his retirement in January 2020.

Comments

  1. SKI says:

    As a general rule, all that’s necessary for a contract of some kind to exist is offer, acceptance, and consideration. Even if we take Trump out of the equation entirely, I think those three elements still exist here. Daniels was offered $130,000 in exchange for remaining silent about her relationship with Trump. That offer was made, at least as far as the underlying written contract is concerned, between the LLC that Cohen set up and Daniels. Under that agreement, the LLC agreed to pay Daniels $130,000 and Daniels agreed to remain silent about her relationship with Trump. Daniels clearly accepted those terms and accepted the $130,000, which was paid to her. Under the law, it strikes me that this is sufficient to create an agreement of some kind between Daniels and the LLC to which Trump is, at best, a third-party beneficiary.

    Reasonably confident that Avenatti will argue that the consideration Daniels bargained for included the representations from Trump, not just the $130,000. Daniels effectively made this claim already in the 60Minutes interview when she noted that she had gotten larger offers but went with the one involving Trump. His involvement, in this telling, was an essential element.

    Now add in that the issue of whether the contract is valid comes *before* the Court considers whether to enforce the mandatory arbitration provisions and we have a lovely period of discovery….

    5
  2. Kathy says:

    There’s no doubt Trump is his own worst enemy.

    The rest of us, being number two, have to try harder.

    14
  3. SKI says:

    If Cohen was purporting to act on behalf of Trump without his knowledge, for example, then he may have violated several ethical rules that could put his law license at risk

    I think it is more than “may have”. Pretty sure that settling a legal matter without informing your client is verboten under the NY ethical rules unless he had a standing power of attorney or similar authorization to do so because this type of situation happens so often….

    Another fun discovery topic… 🙂

    6
  4. @SKI:

    I don’t think a Court would find that there was no contract at all, especially since there’s no question that Daniels did in fact receive the money from Cohen’s LLC. Remember that an agreement does not have to be in writing to be a contract. The Court could find, then, that there was at the very least an oral agreement between Daniels and the LLC related to the $130,000.

    That being said, I think the most likely outcome based on what Trump said, though, is that he made it more likely that a Court could find that, as you said, the arbitration and confidentiality provisions of the agreement cannot be enforced.

    3
  5. SKI says:

    @Doug Mataconis: Maybe but I’m struggling to think of what Cohen would have bought for the $130,000 without the confidentiality provisions.

    At the end of the day, I think that any result that leads to discovery in federal court, rather than arbitration, is a huge loss for Trump.

    3
  6. @SKI:

    It strikes me that the Court is unlikely to find that the $130,000 payment to Daniels was just a gift.

    In any case, as to discovery it’s worth remembering that civil discovery is generally not made public and, in this case, the attorneys for Trump and Cohen are likely to ask the Court that any discovery responses, including depositions, be sealed except to the extent they are used in Court.

    2
  7. SKI says:

    @Doug Mataconis:

    It strikes me that the Court is unlikely to find that the $130,000 payment to Daniels was just a gift.

    Agreed. The issue is whether the overall agreement was made unenforceable due to the failure of Trump to provide his part of the consideration (in which case Daniels likely has to return the $130,000 to be freed of the confidentiality provisions).

    In any case, as to discovery it’s worth remembering that civil discovery is generally not made public and, in this case, the attorneys for Trump and Cohen are likely to ask the Court that any discovery responses, including depositions, be sealed except to the extent they are used in Court.

    Sure but information like this is highly likely to (a) be released – even if in summary form from an anonymous source and (b) serve as another potential perjury trap.

  8. Kathy says:

    @Doug Mataconis:

    In any case, as to discovery it’s worth remembering that civil discovery is generally not made public and, in this case, the attorneys for Trump and Cohen are likely to ask the Court that any discovery responses, including depositions, be sealed except to the extent they are used in Court.

    It’s worth remembering, too, that 1) this case hasn’t been distinguished by high levels of legal talent and 2) L-E-A-K is literally a four-letter word.

    Some tactical advise for Team Stormy: whenever Trump answers anything, reply with “Is that all you have?”, “I’m not impressed at all,” or “Hillary would have been smarter about this.”

    3
  9. CSK says:

    I just read, over at Trump Central (Lucianne.com), a truly hilarious defense of Trump: He never had a fling with her because he’s a germaphobe.

    Apparently his phobia doesn’t prevent him from kissing women strangers and grabbing their crotches, as he’s boasted of doing.

    6
  10. MarkedMan says:

    I’m trying to understand the legal ramifications of a partially fulfilled contract. What about this hypothetical: I, being a YouTube star, agree to put a link to OTB prominently displayed in perpetuity in exchange for $130K and your agreement to get James to never disparage me on the site. I put the link up, you give me the $130K (OTB readership soars!), but I later found out that you never even approached James about the issue. I sue. Whatever the final result, it seems incredible to me Court would find I have to keep the link up despite not receiving everything in the contract, while you benefitted substantially from my efforts.

    In fact, one way of looking at Daniels case is that she was getting two things in exchange for perpetual silence. She only got one of them, and Trump and Cohen’s shell company received something of significant value in return – her silence during the election. Since she only got part of what was promised, Cohen is only entitled to part of what he asked for. He certainly shouldn’t get full value from her. Since what she was offering was silence in perpetuity , the only recovery for her is to release her from that vow after a certain amount of time.

    2
  11. OzarkHillbilly says:

    If Trump didn’t know about the agreement, though, it’s hard to see how he would have the standing to argue that the matter should be referred to arbitration at all.

    I was theorizing this just the other day (only from Cohen’s and his idiot lawyer’s statements and trump’s reticence to talk about it all) and you are confirming my hammer and saw legal prognosticating. 😉

    The standard legal practice would be to ask to be dropped from the suit altogether.

  12. @Kathy:

    If a Judge issues an order sealing discovery, anyone who violates that order would be subjecting themselves to sanctions and a very upset Federal Judge.

    1
  13. Daryl's other brother Darryl says:

    Agreement or not…it seems to me, at this point, that any court is going to say that the non-disclosure is void. Everyone knows that she fvcked him. Everyone knows he is lying about it. All that’s left is the slimy details. As Erin Gloria Ryan lamented; it’s inevitable, at some point we are going to see a picture of his c@ck.
    The biggest question in my mind is why Cohen would willingly sacrifice his license for Donny, a man who has been proven over and over again to have no loyalties?

    2
  14. Kathy says:

    @Doug Mataconis:

    Would a judge order such seal as a matter of course, or would they need to be asked by the chickenfeed Trump legal team? Granted ti’s something so obvious, especially in a non-disclosure case, that even they should think to ask.

    But what if the leaks come from Trump himself? You know, one fine day, after a deposition, he’ll be fuming in bed, covered in cheeseburger crumbs, watching “The Shows,” and calling his billionaire friends to rant “Would you believe that lawyer asked me such and such? I lied, of course! That idiot judge will never figure it out! What do you mean I can’t lie under oath? Do you know I won the election with the GREATEST LANDSLIDE EVER!!”

    1
  15. James Joyner says:

    I haven’t been following this all that closely but what was the penalty specified in the contract for breach? Having already gone public, specific performance is no longer possible. So what does she owe?

  16. Joe says:

    @Doug Mataconis:

    Actually, discovery in federal courts is part of the court proceeding and presumptively public. You can enter into a protective order to keep it from being public, but one thing a judge has to consider before entering even into an agreed protective order is the public interest in allowing the court to be used for a proprietary matter.

    @Kathy:

    This mad cap misadventure has confirmed what a poor lawyer Cohen is (and just another hack in Trump’s parade). It would have been the simplest thing in the world not to include Trump in the non-disclosure agreement. What real concern would Clifford have had that Trump was going to talk about this? Cohen’s LLC could have entered a two-party agreement with Clifford and we would not be having this conversation about either Trump or Cohen’s law license.

    2
  17. Joe says:

    @James Joyner:

    The agreement has liquidated damages for $1 million per disclosure, which is the source of the huge damage claim that Trump’s lawyers have been asserting. On the one hand, those seem punitively high and contract damages cannot be punitive. On the other hand, I can see these disclosures having that kind of economic impact on Trump.

    2
  18. MarkedMan says:

    @Doug Mataconis:

    If a Judge issues an order sealing discovery, anyone who violates that order would be subjecting themselves to sanctions and a very upset Federal Judge.

    I know this is widely repeated by lawyers, but I can’t help but think back to Bill Clinton’s deposition. The judge repeatedly warned against leaking and every night “someone” leaked the juicy bits. As I remember it, exactly nothing happened to the leakers.

    1
  19. James Pearce says:

    Asked by a reporter if he knew about the payment to the actress, Stormy Daniels, whose given name is Stephanie Clifford, he said, “No.”

    I love how these reporters ask the president questions as if he isn’t going to just flat-out lie to them. And then they’re all “Trump denies knowing about the payment!”

    No, he swatted at some flies that were annoying him.

    2
  20. SKI says:

    @James Joyner: One Million dollars per incident.

    Given the amount actually paid ($130,000), it would strike me that these damages would be construed by a Court to be more punitive in nature rather than a estimate/liquidation of actual damages and thus would be unenforceable – particularly when Trump’s own attorney discussed the relationship before Daniels did publicly (the source of the rumors/leaks Cohen was responding to were from a disclosure that occurred prior to the Agreement).

    1
  21. @MarkedMan:

    If I remember correctly, the only part of Clinton’s deposition that was ever released was the section involving his relationship with Monica Lewinsky since that was the basis for the perjury charge against him.

    1
  22. SKI says:

    @Doug Mataconis: That is a big “if” given the public interest factors but, more to the point, the source would have to be identified in order for the Judge to enforce sanctions. Given how leaky Trump’s team is…

    1
  23. @James Joyner:

    As others have stated it’s $1,000,000 per incident, which has led both Cohen’s LLC and Trump to claim in their filings in the case that Daniels already owes $20,000,000 although I’m not sure what the basis for that number is.

    In any case, if the Judge voids the arbitration and NDA portions of the agreement, that would also likely void the liquidated damages provisions of said NDA.

    2
  24. SKI says:

    @Doug Mataconis: But the substance of the testimony was leaked repeatedly. Over and over.

  25. michael reynolds says:

    Stormy Daniels? Never heard of her.

    Stormy Daniels? Yeah, I may have had my picture taken with her.

    Stormy Daniels? Well, I’m not saying anything, but I’ll let my professional White House liars deny everything.

    Stormy Daniels? No idea why my lawyer Michael Cohen – he’s the one under the bus – paid her $130,000.

    And the Truth:
    Stormy Daniels? Yeah, I walked her right past my wife’s room, four months after Melania gave birth, and I fcked her because she reminds me of my daughter. Then I lied about it and had Michael Cohen – no, look under the back wheels of the bus – pay her off, as I usually do. And of course we called her a liar and threatened her. May even have had a thug threaten her in front of her child.

    Can I get an amen from white evangelicals? Can I get a ‘thank you, Jeeeesus-uh!’

    15
  26. Daryl's other brother Darryl says:

    @James Joyner:
    @Doug Mataconis:
    I believe a case can be made that Cohen himself violated the NDA, by disclosing the existence of the NDA, before Daniels ever did.
    Cohen is incompetent at his job as Dennison is at his. If you can’t work a deal with a porn star…how can you negotiate a trade war with China, or a Nuclear Pact with Iran, or Mid-East Peace?
    The leader of the Republican Party is a laughingstock.

    2
  27. MarkedMan says:

    @Doug Mataconis: That may be what was officially released. But during the deposition itself, in real time, someone was leaking what Clinton was saying. My recollection was that the judge merely waggled his finger at the lawyers and pontificated and bloviated, but he let the depositions go on and the leaking continued.

    And of course, once Congress got the reports, everything salacious was leaked, frequently with “improvements”.

  28. @michael reynolds:

    In the end, I don’t care about the salacious aspects of this story, and I doubt his supporters will either. I’m more interested in the legal implications for Cohen, and potentially Trump but that’s not clear at this point.

    1
  29. michael reynolds says:

    @Doug Mataconis:
    Screwing a porn star while you’re married is not a salacious detail, it’s about moral character and fitness for office. Or so Republicans, especially white evangelicals used to tell us.

    7
  30. Kathy says:

    @Daryl’s other brother Darryl:

    Cohen is incompetent at his job as Dennison is at his. If you can’t work a deal with a porn star…how can you negotiate a trade war with China, or a Nuclear Pact with Iran, or Mid-East Peace?

    Easy. Neither Iran nor North Korea are buxom. leggy women who seem to Dennison to be easy.

    So if these adversaries were to hire such women to be present at the negotiations, and put some blue pill dust in Dennison’s drink…

    1
  31. CSK says:

    @Kathy:

    Well, as he’s said, he’d just start kissing them, because he can’t control himself.

    2
  32. Kathy says:

    @CSK:

    Have you thought he’s eager to grab p***y because it’s like hugging himself?

    2