There has been extensive media coverage of Stormy Daniels, the adult film star who says she had an affair with Donald Trump in 2006. Daniels’ new attorney, Michael Avenatti, has been a fixture on TV. Daniels herself is scheduled to be interviewed on 60 Minutes on March 25.
But another woman, former Playboy Playmate Karen McDougal, whose story has attracted significantly less attention, may end up being a bigger problem for Trump. (McDougal will appear on TV this Thursday on CNN with Anderson Cooper.)
In some respects, McDougal’s story is similar to Daniels’. Like Daniels, she met Trump at a 2006 golf tournament in Lake Tahoe. Trump later wined and dined both women at the Beverly Hills Hotel. He promised them both apartments. And then, as election day approached, both women were paid to keep quiet. They were both represented by the same lawyer, Keith Davidson.
But the nature of the agreements signed by Daniels and McDougal are quite different. From a legal perspective, the structure of McDougal’s contract appears to be worse for Trump and his associates.
Daniels was paid by Trump’s lawyer, while McDougal was paid by a corporation
Daniels was paid $130,000 through a shell corporation set up by Trump’s lawyer, Michael Cohen. Cohen says he was not reimbursed by the campaign or the Trump Organization and it was something he decided to do on his own — and not to influence the election. Cohen’s story strains credulity, and he has not ruled out the possibility of being reimbursed by Trump personally.
If it turns out Trump reimbursed Cohen for the payment in an effort to help his election campaign, it would violate election law because it was not reported. But the underlying contribution — $130,000 from Trump to his campaign — is not illegal. Trump is allowed to donate unlimited sums of money to his own campaign. In fact, Trump repeatedly promised to self-fund his entire campaign but ended up raising millions from other sources.
Daniels argues, among other things, that the contract is invalid because Trump was named as a party and did not sign the agreement.
McDougal, on the other hand, was paid by a corporation. She was paid $150,000 in August 2016 by American Media Inc., the parent company of the National Enquirer. Direct corporate donations to a campaign are illegal whether they are reported or not. McDougal argues that her contract was invaild for that reason — the purpose of the contract, a corporate donation to benefit the Trump campaign — was illegal.
Watchdog groups have already filed FEC complaints against Trump related to the payments to Daniels and McDougal. But the complaint related to McDougal could be more serious.
Daniels signed a non-disclosure agreement, while McDougal signed a contract to talk about her life
The agreement Daniels signed was a non-disclosure agreement. If it was valid, the deal was that she wasn’t to talk about her relationship with Trump. Avenatti argues the agreement is not valid for a variety of reasons, but doesn’t dispute the nature of the contract.
McDougal’s contract, however, was purportedly to give her a platform to speak. It grants the rights for her story about any affairs with married men to A.M.I. and contemplates a number of publicity opportunities for McDougal, including columns and magazine covers. Further, after the agreement was signed, a different attorney was able to negotiate an amendment to McDougal’s contract that allows her to respond to “legitimate press inquires regarding the facts of her relationship with Donald Trump.”
This makes it less likely that a judge will find that McDougal’s contract restrains her from speaking about her relationship with Trump and harder for AMI or any other party to collect damages.
Michael Cohen’s role was shady with Daniels, but shadier with McDougal
In Stormy Daniel’s case, Michael Cohen’s role is certainly suspicious. Cohen created a shell company and then negotiated the non-disclosure agreement on behalf of that company. Still, Daniels signed the contract knowing Cohen and his longtime client, Trump, was involved.
Cohen’s involvement in the McDougal case is even more suspect. He was not a party to the agreement and did not openly negotiate for either side. Nevertheless, according to McDougal’s lawsuit, her lawyer, Keith Davidson, kept Cohen apprised of the status of the negotiations. McDougal essentially alleges that her lawyer at the time, Davidson, defrauded her and was really looking out for the interests of Cohen and Trump.
David Pecker, the president of AMI, publicly stated that he made the deal with McDougal not because he was interested in telling her story but to protect his Donald Trump. He justified the expenditure to the New Yorker’s Jeffrey Toobin by saying he viewed any attack on Trump as an attack on his corporation because Trump was “a personal friend of mine.”
This creates a lot more potential legal liability for Cohen and, by extension, Trump if they are found to have participated in such a scheme.