Michael Cohen plea deal: How were campaign finance laws broken?

President Donald Trump's former attorney, Michael Cohen, pleaded guilty in federal court on Tuesday to charges that under the president's "direction," he paid off two women to keep them quiet in the run-up to the 2016 presidential election.

Cohen said the payments to an adult film actress and a former Playboy Playmate were made "in order to influence the 2016 presidential election." Those payments, prosecutors say, violated federal campaign finance laws.

What did Cohen do and why was it illegal? Here’s a look at what happened on Tuesday.

What did Cohen plead to?

Cohen pleaded guilty to eight charges on Tuesday;  two concerned federal campaign finance laws, and six dealt with income tax and bank fraud.

The two campaign finance law violations included:

• Cohen's negotiation of an agreement with American Media Inc., which publishes the National Enquirer, to pay Playboy Playmate Karen McDougal $150,000 to keep quiet about an alleged 10-month relationship with Trump. According to the plea, McDougal transferred the rights to her story to the Enquirer, which did not publish the story, and Cohen paid American Media to compensate the company for payments made to McDougal.
• Cohen's $130,000 payment to adult film actress Stormy Daniels, also over an alleged affair with Trump, that was made with funds drawn on a home equity line of credit Cohen took out. The plea said Cohen paid Daniels "by making and causing to be made an expenditure, in cooperation, consultation, and concert with, and at the request and suggestion of one or more members of the campaign … to ensure that she not publicize damaging allegation before the 2016 presidential election and thereby influence that election." Cohen said during the plea that he "participated in this conduct for the principal purpose" of influencing an election and did it at the "direction of a candidate for federal office."

Cohen was later reimbursed for the payments.

“I used a company under my control to make the payment (to Daniels)” Cohen told the judge, adding that “the monies used were later repaid by the candidate.”

What’s wrong with paying the women? How did it violate the law?

Under federal campaign finance law, individual campaign contributions are limited to $2,700 per individual, or $5,400 for a couple, for each election cycle – that includes primary elections and the general election.

Federal law bars direct corporate contributions to federal candidates. The money paid to Daniels – $130,000 – was moved through a limited-liability company called Essential Consultants. Cohen created the company a few weeks before the election. The payment to Daniels was a campaign contribution, according to Cohen, who said in court on Tuesday that when he paid Daniels off, he was acting on behalf of the campaign with the aim of helping Trump win the presidency.

In other words, Cohen was making a campaign-related expenditure on behalf of the campaign.

There would have been no problem, legally, with making such a payment to Daniels if the Trump campaign had paid the $130,000 with donated contributions and reported it to the Federal Election Commission.

Prosecutors made it clear that the payment was a campaign contribution because Cohen was repaid by the Trump Organization after he submitted “sham” invoices for legal work.

Originally, after the deal came to light, Cohen said he acted on his own and had not been reimbursed by the Trump Organization, or by the campaign. He recanted that statement on Tuesday.

What does the law say about this case?

• The Federal Election Campaign Act states, in part, that while individuals are limited to making donations of $2,700 to presidential candidates, businesses may not make direct contributions to candidates for president.
• When candidates use or loan their personal funds for campaign use, they are making contributions to their campaigns, but contributions by candidates are not subject to limits. In other words, they may spend whatever they want on their campaigns.
• It is a felony offense to conspire to make a campaign contribution that exceeds $25,000.

How does this affect Trump?

If what Cohen says is true, Trump conspired to violate campaign finance laws by directing payments to keep the women quiet so as to boost his election prospects.

Trump claimed Wednesday in a tweet that Cohen made up a story to get a plea deal.