This is the third in a (now) five-part series on Manhattan DA Alvin Bragg’s indictment of Donald Trump for making false entries on the Trump Organization books regarding his hush-money payments, through attorney Michael Cohen, to porn actress Stormy Daniels to cover up Trump’s alleged affair with her. In Part One, I looked at the creative arguments Bragg will require to get around the five-year statute of limitations for payments and book entries that came to an end in December 2017 — five years and five months ago. In Part Two, I delved into the additional aggressive arguments for expansion of the law that Bragg will require in order to allow him to turn misdemeanor false entries into felonies by claiming that they covered up another crime. That crime, which is still unstated, appears to be a violation by Cohen of federal campaign-finance rules.
Bragg is also apparently bidding to argue that Trump violated state campaign-finance laws by engaging in a conspiracy with National Enquirer’s parent company, American Media Inc. (AMI), to cover up a separate set of payments made by AMI to a different woman, Karen McDougal — even though none of the false entries alleged in the indictment had anything to do with payments made by AMI. That, to me, is a slam-dunk argument for throwing out the whole AMI piece of the case. There’s just nothing alleged here to show that Trump’s accounting for payments to Cohen and Daniels in any way furthered or concealed AMI’s payments to McDougal. Moreover, for this to be a continuous scheme, Trump would have to have intended all along to accept an illegal campaign contribution from AMI — but instead, he originally proposed to reimburse AMI.
Before I go on to the next installment on the core problem of prosecuting a crime with no victim, since I was writing this in a white heat yesterday, let me put a further pin in two pieces of the “where’s the other crime?” problem. First, one might ask, if there was a violation of New York Election Law § 17-152 by Trump conspiring with AMI, why didn’t Bragg indict him for that? He surely has jurisdiction over a state-law violation. The most obvious answer would seem to be that this is a misdemeanor, so it has a two-year statute of limitations, meaning that Bragg can’t charge that anymore even if he gets around the five-year limitations period.
Second, I noted yesterday that federal law may preempt New York from using this prosecution as a backdoor way of enforcing federal campaign-finance laws — which it would be doing if it premises the felony counts on the notion that Trump concealed or advanced a federal campaign-finance-law violation by Cohen. It is worth explaining two weighty reasons why a court might reasonably bar state prosecutors from using their powers to enforce federal campaign-finance laws.
One is the clarity and uniformity of the law. Federal campaign-finance laws are a dense and often contradictory and counterintuitive thicket of rules. Ideally, in a nation of laws that wishes to permit people to engage in democratic elections, we should prefer that every campaign understands and complies with them, which is undermined if even the lawyers who advise campaigns aren’t sure what the law is. At present, those laws are enforced by a single federal sovereign, acting through two entities (the Federal Election Commission and the Department of Justice) and subjecting their interpretations to the judgment of the federal courts. Occasionally, as happened in the John Edwards case — construing much the same questions of federal rules that are at issue here — those two federal, executive-branch entities will reach opposing conclusions about what the law is, an outcome that is itself a reason to doubt the propriety of the FEC’s independence from the Article II chain of command. Still, for the most part, the federal government can speak with one voice.
If the federal campaign-finance laws are instead to be enforced by the more than 3,000 county prosecutors in the country, and interpreted by the courts of all 50 states, none of them steeped in the intricate arcana of campaign-finance regulation, the task of keeping up on what the law is and advising candidates on how to comply with it becomes vastly more difficult and complex, and the whole concept of fair notice of written law collapses — and buries in the rubble of that collapse the very beating heart of democracy, campaigns for public office.
Should that enforcement power be implied wherever the law is silent? Some federal statutes, such as provisions of the commodities laws, explicitly empower state attorneys general to investigate and enforce violations of federal law. Some New York state statutes, such as Executive Law § 63(12), explicitly empower the state attorney general to pursue certain violations of federal law. But nothing in federal or state law explicitly gives every local district attorney in the state the power to pursue prosecutions grounded in the DA’s interpretation of federal campaign-finance law. To the contrary, 52 U.S.C. § 30143 provides that “the provisions of this Act, and of rules prescribed under this Act, supersede and preempt any provision of State law with respect to election to Federal office,” and the FEC has, pursuant to this authority, enacted a regulation (11 C.F.R. § 108.7) under which:
The provisions of the Federal Election Campaign Act of 1971, as amended, and rules and regulations issued thereunder, supersede and preempt any provision of State law with respect to election to Federal office. . . . Federal law supersedes State law concerning the —
(1) Organization and registration of political committees supporting Federal candidates;
(2) Disclosure of receipts and expenditures by Federal candidates and political committees; and
(3) Limitation on contributions and expenditures regarding Federal candidates and political committees.
That only preempts conflicting state rules, not state enforcement — but it does illustrate a federal intention to limit state interference with the comprehensive federal scheme in these areas (the regulation exempts other types of state rules). Courts have typically found preemption of state law in this area when states tried to directly regulate campaign finance, rather than when they applied rules of general applicability that only collaterally involved campaign-finance law. But here, Bragg’s prosecution rises and falls on whether he has correctly interpreted federal campaign-finance laws. Under the New York felony false-statement law, he has to show that Trump tried to cover up an actual crime, whether or not it was completed; if it wasn’t a crime at all, Trump can’t be guilty.
The other weighty reason for finding federal preemption of Bragg’s power to decide what campaign offenses to pursue is evenhanded enforcement of the law. No other area of American law raises the same threat of partisan enforcement as the law governing partisan politics itself. Congress, in designing the FEC, went out of its way to craft a bipartisan structure of staggered appointments of the commissioners by both parties. That structure often acts as a hindrance to vigorous enforcement, but erring on the side of restraint is an intended feature of its design. There were few higher objectives for Congress in writing the campaign-finance laws than promoting public confidence that those laws would be enforced evenhandedly between the two major parties. True, a criminal prosecution by the Justice Department has no such guardrails, but DOJ is accountable to the president, who in turn is accountable to the national electorate.
As with the immigration laws that the Supreme Court found to be the federal government’s alone to enforce in Arizona v. United States (2012), the rules for financing of federal and particularly presidential elections are matters of national concern — as evidenced by the national attention to this case. If the federal government completely loses control over the enforcement of federal campaign-finance laws, it also loses the ability to demonstrate that those laws are being enforced in a fair and evenhanded fashion. It loses the power to decide — as the federal prosecutors did in this case — to defer prosecution of AMI, reach a plea deal with Cohen, and decline to prosecute Trump. That power is not just important for enforcement of the law that is fair, and looks fair; it is also important where the federal regulators decide not to push a questionable legal interpretation too far, lest it be struck down in court.
Upsetting the capacity of federal regulators to strike the right balance is one of the major factors courts consider in deciding when state enforcement actions conflict with the congressional design. For example, as the New York Court of Appeals explained in Guice v. Charles Schwab (1996), in barring common-law lawsuits that claimed to enforce the same goals as an SEC regulation but would in practice require more than the federal authorities were prepared to do:
We reject plaintiffs’ contention that there is no preemption here because compliance with State common-law disclosure standards under agency doctrine would not prevent compliance with SEC regulatory disclosure requirements, and because greater disclosure promotes the same investor-protection purposes of the federal regulations. Even if the goals of federal and state law are the same, a state law also is preempted if it interferes with the methods by which the federal statute was designed to reach this goal. . . . Unquestionably, . . . state common-law standards for disclosure . . . are set generally, and would be applied . . . without engaging in the policy choices and balancing of the competing legitimate interests of investors, exchange and nonexchange markets and other participants in the securities industry, that the SEC was charged by Congress to perform and that are involved in regulation of order flow payments. Thus, although both state common-law actions and federal regulations may promote broker-dealers’ disclosure to customers, state enforcement of agency law standards of disclosure cannot help but upset the policy-based delicate balance Congress directed the SEC to achieve in the regulatory regime envisaged under the 1975 amendments to the Securities Exchange Act.
It’s bad news for the federal government’s control over its own laws to let local prosecutors in highly partisan and unrepresentative parts of the country decide what federal law is, and how it is to be interpreted and enforced. Article II did not vest the executive power of the United States in the district attorney of New York County.
In Part Four, I will return to the question of what sort of fraud this indictment alleges — or, rather, doesn’t allege.