Crowdfunding raises transparency questions
Stormy Daniels has raised nearly a half-million dollars to fund her lawsuit against President Donald Trump, relying on contributions from a crowdfunding site. Her lawyer has repeatedly pointed to the public site as evidence that he and his client aren’t bankrolled by Trump’s political foes.
But the truth is, no one knows precisely who is funding the effort.
The more than 14,000 donations have been made mostly anonymously in amounts ranging from $10 to $5,000. Through Monday, Daniels, whose real name is Stephanie Clifford, and her attorney, Michael Avenatti, raised more than $490,000 on CrowdJustice.com, a crowdfunding site dedicated to helping people raise money for legal fees. About $100,000 arrived in the last week after Avenatti released documents about payments Trump’s personal lawyer, Michael Cohen, received from private companies seeking information about the president’s beliefs on various issues.
The target for donations is $850,000, which Avenatti called a “realistic and reasonable target based on what we know right now.”
Jessica Levinson, a professor at Loyola Law School, said it’s unusual but “not totally unheard of” for a lawyer to seek online donations to cover legal costs.
“It does bring up some ethical concerns in terms of who is actually giving this money and whether they will try to exert influence,” said Levinson, who also is president of the Los Angeles City Ethics Commission.
Crowdjustice.com donors can choose whether to share their names with the person seeking funds. The site displays donations with either a first name or as anonymous donor.
Kathleen Clark, a professor of ethics law at Washington University, echoed Levinson’s concern.
The anonymous donations can be “fodder for public debate on who is actually backing this lawsuit,” Clark said.
“Of course when the third party is actually 14,000 different people, it seems actually less of a danger than it would be in an ordinary case where a single third party would be paying,” she said.
Levinson said as long as Avenatti doesn’t change his legal strategy because of the payments, there isn’t an inherent ethical issue.
“People can have partisan affiliations and I don’t think anyone thought Michael Avenatti was a Trump supporter,” Levinson said.
Avenatti has bristled at claims from some Trump supporters that his pay for work on the case comes from an organized effort to oust Trump.
“We have no ethical concerns whatsoever,” Avenatti told The Associated Press. “I find this fascination with who is paying my client’s legal bills to have passed the line of absurdity at this point. We have been very, very clear when answering these questions. Who is paying Mr. Trump’s and Mr. Cohen’s legal bills? Do we know?”
Among those raising questions: Fox News Channel host Laura Ingraham, who dedicated a segment to the issue last week, and the Daily Caller, a conservative website that Avenatti has threatened to sue. A column in The Hill that questioned who is financing the lawsuit prompted Avenatti to release a statement last week that “ALL fees and expenses of this case have either been funded by our client, Ms. Stephanie Clifford, or by donations from our crowdjustice.com page.”
While federal election law limits the amount of money individuals can donate to campaigns, political action committees and national political party committees, no such rules apply for donations for legal cases, such as the Daniels case.