Wednesday, March 7, 2018

Sex, Lies, and Trump Videotape–The Ethical and Legal Problems of the Trump-Daniels Contract

Donald Trump’s attorney Michael Cohen has major ethical and legal problems, potentially meriting
disbarment and prosecution for crimes.  In addition, in light of Ms. Daniels’ lawsuit challenging the enforceability of the agreement, was this contract even valid?
I have taught legal ethics in law school for nearly 15 years.  As I tell my students, attorneys are expected to conform to the law.  They also must follow ethical rules as lawyers, mandated by the states where they practice.  These rules generally follow the American Bar Association’s Model Rules of Professional Conduct (MRPC).  Failure to follow them invites disciplinary action, including in New York where Cohen is licensed.
In the circumstances surrounding his paying Stormy Daniels hush money out of his own pocket to silence her about her alleged affair with Donald Trump during the 2016 presidential election, Cohen may have broken several laws and ethical rules.  First, Cohen seems to be admitting that he did make this payment.  If this admission is being made without the express or implied authorization of Trump, Cohen has violated MRPC 1.6.  Specifically, if Cohen is revealing information protected by attorney-client confidentiality without permission this is the first ethical problem.
Second, in paying money to Stephanie Clifford (Stormy Daniels), he is violating MRPC Rule 1.8 (e) that bars an attorney from providing “financial assistance to a client in connect with  pending or contemplated litigation.”  While it is not clear if there would have been litigation surrounding the possibility of Ms. Daniels disclosing the affair, suits for defamation of character or a contract not to disclose the affair could have been possible and therefore paying her to settle would have been a potential violation of 1.8 (e). Moreover, if Cohen badged Daniels into this settlement, that is a violation of Rule 3.4, fairness to opposing party.
In addition, Rule 1.8 (d) prohibit an attorney prior to conclusion of representation of a client from negotiating an agreement to get media or literary rights to issues relating to the representation.  The basis for this rule is to prevent attorneys from compromising their zealous advocacy for a client and perhaps altering their legal strategy or advice in the hope that a different outcome would make for a more profitable story.  This is an issue of conflict of interest.  Cohen is reportedly shopping a book about Trump, potentially including the telling of the story of the latter’s relationship with Ms. Daniels.  Not only might the book include information protected by attorney-client information, but it is possible that the representation with Trump is not done and that he violated this rule.  Even if the representation is done, if Cohen paid off Ms. Daniels or did anything in representation of Trump with the idea that he might be able to personally profit, that is a conflict of interest that violates Rule 1.8.   
It is also possible he violated Rule 1.1–competence–in not providing appropriate advice or representation to Trump and also perhaps committed malpractice in acting in a way that under-minded a duty to his client.  In fact one can also argue that if the payment was made to Ms. Daniels without Trump’s knowledge or consent, Cohen violated Rule 1.2, acting beyond his scope of representation for his client, and Rule 1.4, failure to communicate with his client and keep him informed about the status of a matter.
Another problem for Cohen is that if he made an expenditure of $130,000 to Ms. Daniels with the purpose of silencing her so as to prevent her disclosure from affecting the 2016 election, this might violate federal law.  This is an argument that Common Cause is making.   Federal election law would require expenditures such as this to be reported.  If Cohen then tried to hide this payment by working with Trump or others, it might constitute aiding and abetting or conspiracy to obstruct justice, both of which are violations of federal law.  Breaking the law is also a violation of Rule 8.4, in that such acts are either prejudicial to the administration of justice or that speak to the honesty or trustworthiness of an attorney.
Aside from raising the questions about the ethical and legal behavior of Trump’s attorney,  was this contract even valid without Trump’s signature.  On the one hand yes–this is the argument  based on detrimental reliance.  Did all the parties act in a way that they assumed there was a contract?  Yes, all parties did it seems act that way and it really is not required to have the agreement signed.  Many oral agreements are enforceable and since this was not a contract for goods the statute of frauds does not apply and no written agreement is needed.
However, I am still questioning whether there was a contract from the start that is enforceable.    By that, if the contract was made where money was exchanged for the purposes of silencing Ms. Daniels, that very contract may be illegal and void.  How so?  The exchange of money to silence her was done so with the intent of affecting the 2016 election.  Moreover, that silencing  includes, as alleged in Ms. Daniels’ suit, preventing her from releasing some materials (videotape?) about the affair. If that is the case and it was not reported as a campaign expenditure, this is a contract for an illegal purpose.  Conversely, if Ms. Daniels  was  paid money to remain silent about her sexual relationship with Trump, this may be a form of bribery meant to influence individuals to vote in a specific way, or to vote at all.  The quid is silence about the sexual relationship, the money is the quo, and the purpose is to affect voters.  Trump and his attorney bribed Ms. Daniels to remain silent about a sexual relationship in other to affect voting.  It is awkward, but a possible bribery case can be made here.
Finally, remember agency law.  Except in rare cases, we attribute the actions of lawyers to their clients.  Trump may be estopped from arguing that he did not know that his lawyer was doing all this unless he can show there was neither explicit not implicit authority from him for his attorney to bribe Ms. Daniels.
Overall, Cohen appears to have committed a lot of ethical and legal mistakes and it will be interesting to see what disciplinary action he faces and which actions of his cn be attributed back to  Trump.

1 comment:

  1. This particular case, with all of it's media attention, appears so egregious for such an apparently experienced attorney. But what of these same kinds of shenanigans with the everyday attorneys, misrepresenting thousands of citizens who have retained them for their expertise? Can we as "regular Janes" file some kind of complaint against them when they partake in these kinds of illegal or unethical activities? Where/how would we do this?