Liberals and lawyers (and especially liberal lawyers) have been flogging Cohen attorney Arthur Schwartz all morning for two things he said on cable news. And they’ve got a point. Remember, the hush-money contract between Trump and Stormy Daniels actually involves three parties — there’s Trump himself (“David Dennison”), Daniels (“Peggy Peterson”), and EC, LLC, the company Michael Cohen created to transmit the $130,000 payment to Daniels. The fact that Cohen is (allegedly) wearing two hats in the agreement, as Trump’s attorney and as a party himself in the form of EC, LLC, complicates things. Potentially it’s a conflict of interest, although I’m sure Cohen would argue that his and Trump’s interests are perfectly aligned and therefore there’s no conflict.
The fact that the contract has three parties but only two of them actually signed it — Trump never did, remember — has created a strange problem for Trump and Cohen. Daniels and her lawyer are in court arguing that because Trump never signed, the contract was never completed and therefore isn’t binding. In that sense, it’d be better for Trump and Cohen to show that Trump was fully informed of the agreement, assented to it verbally, and simply chose not to sign because his attorney, Cohen, signed on his behalf. But on the other hand, for political reasons, Trump and Cohen also want to suggest that Trump had nothing whatsoever to do with the deal. Didn’t know about it, didn’t sign it — this was strictly a matter between Daniels and Cohen.
So they’re in a Catch-22. Did Trump agree to the contract, in which case he’s smack in the middle of a hush-money deal involving a porn star who claims she had an affair with him? Or did Trump not agree to the contract, in which case Daniels and her lawyer are right — one of the parties failed to sign and therefore, in theory, the contract is unenforceable? Schwartz was asked about that last night on Erin Burnett’s show. POTUS knew nothing, he said. So … there’s no contract? Daniels wins?
Here is Michael Cohen's lawyer and spokesman saying categorically that Cohen negotiated agreement w/o ever telling his client DJT anything abt it and made him a party to the agreement w/o any intention of telling him abt it or having him sign it. @MichaelAvenatti @renato_mariotti pic.twitter.com/xqNLvcx1uX
— Josh Marshall (@joshtpm) March 29, 2018
If it’s true that Trump knew nothing, one of two other things must also be true. One: Cohen, in his capacity as Trump’s lawyer, agreed to the deal with Daniels on Trump’s behalf without ever telling him the terms. That would be highly, highly unethical. Imagine you had a lawyer who made a deal in your name without so much as informing you of what “you” were agreeing to. Big problem.
Or two: Cohen agreed to the deal on behalf of EC, LLC and no separate agreement from Trump was necessary. Why not? Because, as Megyn Kelly noted early on, the contract was written to make Daniels a party on the one hand and EC, LLC “and/or” Trump as parties on the other. Cohen’s going to argue in court that that “or” means Trump never had to sign to make the contract binding. Only Trump “or” EC, LLC had to. And EC, LLC did, in the person of Michael Cohen. So Cohen wins! Or he would, except:
"Each Party acknowledges that [Stormy] is executing this Agreement in reliance" on *Trump* releasing certain claims he has against Stormy.
Michael Cohen can't offer that. EC LLC can't offer that either. Only Trump can.
So if Trump ain't in the agreement, THERE IS NO AGREEMENT.
— Susan Simpson (@TheViewFromLL2) March 29, 2018
It would be one thing if the contract were a straight-up bargain between Daniels and EC, LLC. In other words, Daniels gives up X,Y, and Z and EC gives her $130,000 and Trump doesn’t give up a damned thing. Maybe then you could argue that he’s not really a party to the contract. But, under its terms, he *does* give up certain things — specifically, he gives up the right to sue Daniels for a civil claim and the right to disclose her name to the authorities (which is itself an awfully interesting provision). Needless to say, EC, LLC can’t give away Donald Trump’s rights in a contract any more than I could give away yours if we were parties to a contract together, especially if what Schwartz says about Trump not even knowing about the deal is true.
The only way Michael Cohen could cede those rights on Trump’s behalf is if he was acting as his lawyer in the contract, not just as the principal of EC, LLC. Which brings us back to option one: According to Cohen’s own lawyer, Cohen executed an agreement for his client without informing his client of the terms. Major ethical issue.
But it gets worse. Cohen has another ethical problem, namely, he’s said all along that the $130,000 for Daniels came out of his own money. Whether that’s true or not, obviously he’s saying it to try to keep Trump’s fingerprints off the payment. Problem: Lawyers can’t use their own money to financially assist clients in contemplated litigation under New York’s ethics rules. How do Schwartz and Cohen wriggle out of that? Simple: Just say that Cohen wasn’t acting as Trump’s lawyer in the Daniels deal.
.@NorahODonnell: [Cohen] took out a home equity loan to pay off Stormy Daniels?
Schwartz: To get the money quickly.@GayleKing: Does that make sense to you?
— CBS News (@CBSNews) March 29, 2018
But wait. We just saw that Cohen *had* to have been acting as Trump’s lawyer in the hush-money contract, otherwise there’s no way Cohen could have signed and ceded any rights on Trump’s behalf. If Cohen wasn’t acting as his attorney but merely as the principal of EC, LLC in signing the deal, then Daniels and her lawyer must be right. Trump’s signature was required to make the deal binding on him and he never signed. It’s unenforceable!
But wait — it gets even worse than that.
"It is not a lawyer-client relationship"
Seriously? Cohen's lawyer just said Cohen's relationship with Trump was not a lawyer-client relationship? Well then I guess Cohen won't be invoking attorney-client privilege. Right? https://t.co/zGVHZSmaWA
— Bradley P. Moss (@BradMossEsq) March 29, 2018
Yeah. If, by Schwartz’s own admission, Cohen wasn’t acting as Trump’s lawyer in the Stormy deal then … how can there be an attorney/client privilege between them? If Michael Avenatti gets to depose Cohen and asks him to reveal everything that he and Trump have discussed about Stormy Daniels, what does Cohen say now to justify his refusal?
Here’s Kelly raking Schwartz over the coals this morning, including pressing him on why Cohen seemed so indifferent at the time to the death threats she was getting three years ago from Trumpers.