Adult-film actress Stormy Daniels and attorney Michael Avenatti arrive at Federal Court in New York, U.S. (Photographer: Victor J. Blue/Bloomberg)

Trump Hush Money Revelations: What's at Stake for the President

(Bloomberg) -- President Donald Trump and his lawyers face a new set of legal challenges after revelations that he reimbursed one of his attorneys for a $130,000 hush money payment to an adult film actress.

The president acknowledged the reimbursement on Thursday while defending the initial payment made by his personal lawyer Michael Cohen to the woman, Stormy Daniels. Trump and his attorney, Rudy Giuliani, asserted that the payments were legal and had nothing to do with the campaign.

Trump Hush Money Revelations: What's at Stake for the President

Their declarations were the latest in a torrent of conflicting statements from Cohen, Giuliani and the president himself. Their shifting accounts regarding the payout and reimbursement are drawing fresh scrutiny to the arrangements with Daniels.

Legal and ethical analysts have seized on those statements to highlight a series of potential violations. The White House has declined several opportunities to elaborate or answer questions about why Trump shifted his story about the hush money, after originally saying he didn’t know where the $130,000 came from.

Here’s a look at some of of the potential legal hazards Trump could face:

Campaign Finance Requirements

Campaigns face tight rules on how much money they can accept. Individuals who give or accept funds above donation limits, currently set at $2,700 per election, can face jail time of as much as five years.

But candidates can spend as much as they want on their own campaign as long as they disclose it. Trump, for example, spent $66.1 million of his own money on his election. All of that was disclosed.

Where Trump might be in trouble now, is that at least $130,000 was spent in an effort to silence Daniels in the closing days of the 2016 race. That payment was never disclosed.

Initially, Cohen argued it was not a campaign contribution and therefore wouldn’t need to be disclosed. But Giuliani undercut that argument Thursday by saying that the attempt to silence Daniels was directly related to Trump’s electoral fortunes.

Trump Hush Money Revelations: What's at Stake for the President

“Imagine if that came out on October 15, 2016 in the middle of the, you know, last debate with Hillary Clinton,” Giuliani said on Fox News. “Cohen didn’t even ask. Cohen made it go away. He did his job.”

Trevor Potter, president of the Campaign Legal Center, a money-in-politics watchdog, said the motive for the payment means it should have been reported to the Federal Election Commission. "That is an admission that the confidentiality agreement and the timing of the payments influenced the 2016 elections," Potter, a former FEC commissioner, said, calling for an investigation.

George Conway, husband of senior White House aide Kellyanne Conway and a lawyer at the New York firm Wachtell, Lipton, Rosen & Katz, posted a tweet Thursday drawing attention to a section of campaign finance regulations that Trump and Cohen may have violated with their reimbursement arrangement.

“If any person, including a relative or friend of the candidate, gives or loans the candidate money ‘for the purpose of influencing any election for federal office,’ the funds are not considered personal funds of the candidate even if they are given to the candidate directly,” according to the FEC. “Instead, the gift or loan is considered a contribution from the donor to the campaign, subject to the per-election limit and reportable by the campaign.”

Possible Penalties

Normally, failure to report a campaign contribution carries a fine, though it’s typically a fraction of the amount at issue. However, if it’s determined that the person willfully hid the contribution, then he could face up to five years in jail.

The FEC, which can impose fines, could investigate the possible infraction. But a majority of the agencies six commissioners must vote to impose penalties, and no more than three can belong to the same political party. That’s left the FEC deadlocked and toothless for years.

The Justice Department’s Public Integrity Section can also impose fines and even criminal charges. Prosecutors would have to prove a donor, candidate or campaign official knowingly broke the law.

Tyler Harber, who managed a congressional campaign in 2012, received a two-year prison sentence for illegally coordinating $325,000 of independent expenditures on behalf of his candidate.

Potential Financial Disclosure Violation

Even if Trump can prove the payment to Daniels was not related to the campaign, he also could face questions over his failure to report the transactions on his financial disclosure forms.

Giuliani told the Washington Post on Wednesday that Trump was paying Cohen a retainer of $35,000 per month even though Cohen was doing no legal work. The total, about $460,000, was used to reimburse the Daniels payment and cover other things, he said.

Such an arrangement would appear to be a liability that would normally be reported on a federal financial disclosure report by a new president.

Walter Shaub, former director of the U.S. Office of Government Ethics who resigned last year after clashing with the Trump administration, said that all of Trump’s payments to Cohen may have violated laws governing financial disclosure. “Trump and his attorney, Rudy Giuliani, now admit that he had a $460,000 liability that he omitted from his financial disclosure report,” Shaub said on Twitter.

Under the section of U.S. law cited by Shaub, the attorney general could bring civil action against anyone who “knowingly and willfully” files false or incomplete financial disclosure reports. The penalty could reach $50,000 and as much as one year in jail.

Defamation Lawsuit From Daniels

Trump is also facing a fresh defamation lawsuit from Daniels, who sued the president last week over his tweet referring to her claims as “a total con job.”

Daniels, whose real name is Stephanie Clifford, is already embroiled in litigation with Trump and Cohen, over the hush money payment, and is seeking to be released from the non-disclosure agreement she signed.

She claimed in interviews that in 2011, after she agreed to cooperate with a magazine for an article, she was threatened in a Las Vegas parking lot by a man to keep quiet about her tryst with Trump. Daniels’s lawyer released a composite sketch of the man on April 17.

Trump dismissed the claim in an April 18 Twitter posting: “A sketch years later about a nonexistent man. A total con job, playing the Fake News Media for Fools (but they know it)!”

Trump dialed up his attacks on Daniels in a tweet this morning. He accused Daniels, whose real name is Stephanie Clifford, of making “false and extortionist accusations.”

Michael Avenatti, the lawyer representing Daniels, said Thursday that statements from Giuliani and Trump were helping his client build a case.

“Mr. Trump used his national and international audience of millions of people to make a false factual statement to denigrate and attack Ms. Clifford,” according to her claim, filed last week.

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