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"Bribes are not Deductible"
Talking Points Memo:‘An MO For Other More Serious Crimes’
As we already know, Michael Cohen is the prototypical fixer or bagman. In Mexico, as discussed in glorious detail in this NY Times expose on Wal-Mart’s massive corruption scandal in Mexico , a lawyer-fixer like Cohen would be known as a “gestore.” The bagman’s job is to get bribe money to people while insulating and giving deniability to the ultimate payor of the bribe. Having a dirty lawyer as a bagman provides a number of advantages.
First, bribe money can be laundered from the “client” through the lawyer as fictitious legal services. The lawyer can issue bogus invoices to the client in amounts sufficient to cover bribe payments, a commission to the lawyer, and a gross-up for any taxes the lawyer would have to pay on the fee income (bagmen, after all, don’t want to be stuck paying taxes on amounts they pay out as bribes). Sound familiar?
Second, by disguising the bribes as payments for legal fees, businesses can try to write them off as expenses (bribes are not deductible). This is tax evasion, of course, but it is common practice for the corrupt. Third, the lawyer-client relationship can be an impediment to law enforcement. It can be very difficult for prosecutors to pierce what appears on the surface to be a legitimate attorney-client relationship.
So now we have Giuliani confirming that this is exactly how Trump and Cohen operated. Hush money to Stormy Daniels is one thing and certainly raises potential serious campaign finance violations, but she is not a public official. What I find most significant about Rudy’s admission is what it says about the nature of the relationship between Trump and Cohen and how it suggests an M.O. for other more serious crimes.
As we already know, Michael Cohen is the prototypical fixer or bagman. In Mexico, as discussed in glorious detail in this NY Times expose on Wal-Mart’s massive corruption scandal in Mexico , a lawyer-fixer like Cohen would be known as a “gestore.” The bagman’s job is to get bribe money to people while insulating and giving deniability to the ultimate payor of the bribe. Having a dirty lawyer as a bagman provides a number of advantages.
First, bribe money can be laundered from the “client” through the lawyer as fictitious legal services. The lawyer can issue bogus invoices to the client in amounts sufficient to cover bribe payments, a commission to the lawyer, and a gross-up for any taxes the lawyer would have to pay on the fee income (bagmen, after all, don’t want to be stuck paying taxes on amounts they pay out as bribes). Sound familiar?
Second, by disguising the bribes as payments for legal fees, businesses can try to write them off as expenses (bribes are not deductible). This is tax evasion, of course, but it is common practice for the corrupt. Third, the lawyer-client relationship can be an impediment to law enforcement. It can be very difficult for prosecutors to pierce what appears on the surface to be a legitimate attorney-client relationship.
So now we have Giuliani confirming that this is exactly how Trump and Cohen operated. Hush money to Stormy Daniels is one thing and certainly raises potential serious campaign finance violations, but she is not a public official. What I find most significant about Rudy’s admission is what it says about the nature of the relationship between Trump and Cohen and how it suggests an M.O. for other more serious crimes.
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