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The financial crimes that stem from the payments involving Stormy Daniels, Michael Cohen and Donald Trump can be difficult to follow, much less understand.
But journalist and author Kurt Eichenwald has done a masterful job in a 27-tweet thread of breaking down exactly how Trump might be implicated and brought down by the payments and how they were structured:
1. Everyone has some area of expertise. Mine is in corporate crime. I reported about it for 20 years at NY Times, wrote all or parts of 4 books about it, give lectures at biz schools and major corporations about it.
Which leads us to the Michael Cohen sentencing memo....
2...many are ranting with little understanding of corporate crime, the law and the implications. They are mixing up one payment with another - or many others. They don't understand the magnitude of what is going on here. And that is because it is not their area of expertise...
3...so, let's discuss this so that everyone can understand what the memo says happened, because it is jaw dropping.
There are two payments at issue here - one of which for $460,000 was broken up into 12 payments. Let's call them P1 and P2, recognizing that P2 was broken up....
4...the distinction between these two payments is absolutely critical. Trump himself has been implicated in P1 both by Cohen and in the sentencing memo. The Trump Organization...and officials there...have been implicated in P2 through the sentencing memo. Both P1 and P2 are...
5...as described, crimes. P1 is the one where Individual 1 is specifically implicated - that being Trump. That constitutes a campaign finance violation. However, this is a low level violation, and one that is open to interpretation depending on the specifics of what Cohen says..
6...Trump could fight this one and, in the end, he might defeat it by simply saying "Cohen told me this was out of his home equity, I considered it a favor, and did not have anything to do with my campaign." Not so believable? Sure. But without specific designation of Trump's....
7...knowledge & intent regarding that payment, he could easily argue technical violation based on poor information -or disagree that there was a violation at all by saying this was not about the campaign, but for, say, keeping Melania from finding out he had banged a porn star...
8...which leads us to P2 - the MAJOR crime, with the payments coming out of the Trump Organization.. The sentencing memo does not say that Trump was involved in P2. It doesn't say he wasn't. If he WAS, he belongs in jail. And prosecutors know if he was already....
9...one of the most interesting witnesses in all of this case was the CFO of the Trump Organization. When I saw he had been granted immunity in August, I thought: Financial crime. I assumed it was linked to info related to Cohen, but knew that was speculation....
10...the CFO, Allen Weisselberg, would know everything about P2. Including if Trump's approval was sought for it. If so, Trump would definitely be implicated in not only of campaign finance violations through P1 and P2, but MORE important, would be implicated in...
11...conspiracy, money laundering, fraud AND campaign finance violations. To explain: In P1, Cohen sent money from his home equity line through a corporate shell ultimately to Stormy Daniels. The proof, without P2, that this was in violation of campaign finance laws is largely...
12...interpretive: was this considered a contribution from Cohen, and was it done purely for election purposes? The repayment was always the important issue. The potential illegality of the original payment was hard to prove without knowing about the repayment (P2). I figured...
13...given what Cohen said in court when he pleaded guilty, he had been reimbursed, but the question was down to who and how. It could have come from Trump, which would have made a campaign violation almost impossible to prove. Or it could have come from the Trump campaign....
14...which would have been a lock-down, undeniable campaign finance violation.
It is much much much much worse than that. The payment - P2 - came from Donald Trump's company, the Trump Organization. And everything about how it was paid suggests - or shows - criminal activity....
15...so, what do we know about P2? It was paid after submission of an invoice - a frigging INVOICE - from Cohen to Trump Org saying it was for campaign expenditures. It billed not only the $130,000 for the Stormy payoff, but also another $50,000 in IT work for the campaign...
15...the IT payment is the drop dead element. Given the supposed IT work was done for trump CAMPAIGN, paid for by the Trump ORGANIZATION, it shows that his company was issuing checks to cover campaign expenditures. This establishes the intent to commit the crime - that is, to....
16...use the Trump Organization as a slush fund for cash to the campaign. Think of it as being like the slush fund of Nixon in Watergate. Nixon WH shook down corporations for $ which was then under the control of campaign and white house officials. It was used to finance....
17...innumerable operations, including the break in. Here, the Trump Organization is the sole contributor to the slush fund. Now, making this all the worse is that the money flowed through multiple sources to disguise its ultimate source - from a HELOC to a bogus corporation to..
18...the recipient of the payment, reimbursed by a corporation to the owner of a HELOC, all in violation of campaign finance rules. That is money laundering - manipulating directions of cash used in a crime for the purpose of concealing its provenance. The more....
19...steps it takes, the more evidence of money laundering. Making it all the worse - they upped the amount to account for taxes, kicked in a $60,000 bonus. This is strong evidence of conspiracy to commit a crime. Think about it - how often does anyone get paid money with....
20...a roundup for taxes PLUS a bonus for what was done. And it was done for the campaign.
Next, fraud: The Trump Organization has what are called covenants with its banks. The only bank in the world that is willing to lend these bozos money anymore is Deutschebank. As in....
21...the bank that was raided not too far back. If Deutsche KNEW of this crime, then it is part of the conspiracy. If it did not, then the Trump Organization engaged in fraud by violating its covenants with the bank (i.e.: Don't commit crimes) and failing to disclose....
22...if the Trump Org received ANY additional loans since 2016, and failed to disclose these activities, it will be an ongoing bank fraud. There may be tax issues, but hard to know yet.
Back to the CFO: He is the key witness in all of this, potentially the key participant.....
23...BUT he was given immunity. And you don't get immunity if all you have to offer up is lower-level executives.
Which brings us to the last piece: We do not know yet if Trump was involved in this. We also don't know that he wasn't. What we know is this happened - and that...
24...Trump was involved on the front end - P1. We will know, once the testimony of the CFO comes out, whether Trump was involved in P2, the back end.
One fact I forgot: The $460,000 payment to Cohen (the stormy payoff, the fake IT work, the tax bump up and the $60,000 bonus)....
25...was paid in 12 broken up pieces to disguise it from being a pure reimbursement. Instead, it was portrayed as a consulting payment. This, again, is evidence not only of criminal intent, but of money laundering.
So, P2 is the key to this. If Trump knew of P2, he....
26...belongs in jail, not just impeached and convicted. These are major financial crimes, far more than a campaign finance violation.
BUT...dont jump the gun. Dont proclaim his guilt or make up standards ("CEOs are responsible even if they don't know" or other nonsense)....
27...you can't go to jail for fraud - and money laundering that follows it - if you do not have the intent to commit fraud. There is no transitive property of financial fraud.
So, if the CFO testified Trump knew...thats the end of his presidency. Or would be in a normal country.
https://www.dailykos.com/stories/2018/12/7/1817770/-Kurt-Eichenwald-explains-clearly-how-Trump-is-in-danger-on-fraud-money-laundering-and-other-crimes?detail=emaildkre
