Cohen’s Slush Fund is Not Business as Usual—But Business as Usual Needs to Change

President Donald Trump’s personal lawyer, Michael Cohen, sold his access to the president to multinational corporations, including one reportedly controlled by a Russian oligarch, and deposited the proceeds into a secret slush fund—the same slush fund he used to pay Stephanie Clifford (a.k.a. Stormy Daniels) to keep silent about an alleged affair with Trump.

Some commentators have said that at least part of this—the “selling access” part—is business as usual in the nation’s capital. (One D.C. morning newsletter introduced the Cohen story with the sensational heading “WELCOME TO THE REALITY OF WASHINGTON.”) And until more is known about how the money was solicited and used, it is also difficult to determine which aspects, if any, of Cohen’s activities actually constitute criminal behavior.

However, Cohen’s blatant influence-peddling is not “normal.” It is part of an unusually corrupt pattern of behavior by Trump’s circle of advisers that brings to mind political operators in former Soviet states, where there is little separation between business and politics. It is a mistake for anyone to shrug their shoulders and concede that this is just the way things work in today’s Washington. As it was recently put by Larry Noble, senior director of the Campaign Legal Center, “We shouldn’t normalize each new ethical low.”

Instead, we should acknowledge two concurrent realities. The first is that the Trump administration has had more incidents of blatant corruption in one year than most presidents experience in four or eight. And the second reality is that this corruption has been enabled by Congress, which has for years failed to curb pay-to-play politics and watched with indifference as the Supreme Court empowers wealthy special interests at the expense of citizens.

One reason the Trump administration has invited so much scandal is an unprecedented willingness to advocate for private interests while in public office. Consider Jared Kushner’s meeting with the head of a sanctioned Russian bank, at a time when he was a leading member of Trump’s transition team and his family business was desperate to refinance a Manhattan building; or former Trump Campaign Chairman Paul Manafort’s offer of special access to a Russian oligarch to whom he reportedly owed millions; or former National Security Advisor Michael Flynn’s efforts to clear the way for the building of Russian nuclear power plants in the Middle East, a proposal he had been paid to advocate for in the private sector, and that was contingent on the lifting of sanctions against Russia.

Perhaps not coincidentally, Trump and his associates have a wealth of connections to former Soviet states, where bribery and self-dealing is routine. In places like Kazakhstan and Ukraine, the presidents and parliamentarians are often oligarchs who manipulate the rules in their favor. Just this year, The New York Times reported that the Ukrainian military purchased ambulances from a private corporation owned by a senior official in charge of military procurement. There was no bid process—and the ambulances had already broken down. If that episode seems unrelated, recall that one of the foreign companies that paid Cohen for access to Trump was at the time bidding for a $16 billion contract from the U.S. Air Force.

However, such activities, though they follow the example set by the president, are not simply the product of a group of individual wrongdoers. Years of inaction by Congress and by agencies like the Federal Election Commission have laid the groundwork for this type of conduct, and for a broad culture of pay-to-play.

Take lobbying as an example. In 1995, Congress passed the Lobbying Disclosure Act (LDA), which requires lobbyists to register and file reports on their clients and their activity. However, in the more than 20 years since, would-be lobbyists have been increasingly bold about exploiting loopholes in the law to engage in unregistered “shadow lobbying.”

Congress has taken no significant steps to fix the problem. And it is likely because of that unfettered shadow lobbying that Cohen thought he could keep his activity hidden from the public, failing to register as a lobbyist despite promising corporate clients “access” to the White House.

Fortunately, there are numerous, commonsense reforms that Congress can enact to fix many of the problems associated with the current era of corruption. A good first step would be to increase transparency—for contributions, corporate LLCs, lobbyists, and foreign agents.

Several bills pending in Congress would help to expose the owners of shadowy corporations like Cohen’s “Essential Consultants, LLC,” and make it harder for them to obscure illegal or unethical activity. Other pending proposals would close gaping loopholes in laws that require lobbyists and foreign agents to file public reports, and that require campaign-related spending to be disclosed.

Moreover, Congress should take steps to prevent conflicts of interest in government, including by applying conflict of interest laws to the president, and strengthening enforcement of federal ethics rules.

Finally, Congress should take aggressive action to fix the broken campaign finance system and to get its own house in order. A couple weeks ago, former Congressman Mick Mulvaney, now in charge of both the White House’s budget office and the Consumer Financial Protection Bureau, stated that, as a congressman, he only met with lobbyists who contributed to his campaign. He essentially endorsed the same pay-to-play politics that his more self-aware colleagues are doing their best to conceal.

However, an increasing number of members of Congress are taking a stand. Earlier this week, Democrats in Congress announced “A Better Deal for Our Democracy,” a far-reaching package of voting, ethics, and campaign finance reforms that would represent the biggest crackdown on corruption in over a generation—and includes a proposal to curb shadow lobbying.

If ever there was a moment to rethink the role of money and influence in politics, and how it corrupts our institutions, this is it. So far, Congress has failed to act. But as the daily costs of inaction continue to be exposed, hopefully they will be watching. The rest of us certainly are.

Photo by Drew Angerer/Getty Images

 

About the Author(s)

Alex Tausanovitch

Associate Director of Democracy and Government Reform at the Center for American Progress; previously served for four years as counsel to commissioners on the Federal Election Commission. Follow him on Twitter @atausanovitch.

Diana Pilipenko

Associate Director for anti-corruption and illicit finance at the Center for American Progress; previously managed corporate investigations and analysis at Deloitte.