Money-for-silence deal exposes Los Angeles soundalike bank to official scrutiny while public attention reopens old industry pain points. The porn star and the president are only the tip of the iceberg.
In this industry, we follow the money, so when the Wall Street Journal broke the news that then-candidate Trump’s personal lawyer paid a porn star $130,000, we had to check the transaction.
Naturally the money was routed through City National Bank, a fixture of the Los Angeles entertainment industry for decades. But if you don’t have Hollywood connections, it would be easy to report — as some have — that “Citi” was the bank that made the deal happen.
Ordinarily that wouldn’t be more than a nuisance. In this case, however, the stakes are high enough that even a little confusion gets contagious fast.
His lawyer, her lawyer
Flat denials that Trump had anything to do with the woman who goes professionally under the name Stormy Daniels fail to convincingly explain why any financial transaction took place.
She showed up at several events at Trump properties about a decade ago. Her signed statement insists that they didn’t have an affair and she didn’t receive hush money.
But she also apparently signed a non-disclosure agreement late in the election cycle, when rumors about the candidate’s infidelity were reaching fever pitch.
The only way to know for sure that any relationship truly exists is to check the banking records. Unfortunately, people with subpoena powers are investigating transactions linked to the campaign even as we speak.
If that reported $130,000 payout happened, Bob Mueller and company are going to spot it and ask follow-up questions about the circumstances. Maybe there are straightforward answers.
Either way, a transfer that large is going to leave a clear electronic trail in the form of routine currency transaction reports and probably a suspicious activity referral as well. It’s either in the system or it never happened.
And if it did happen, it doesn’t really matter if the money went straight to the porn star or was routed via her lawyer’s client trust account. Questions breed questions.
Sending an adult entertainer a lot of money isn’t illegal even if you’re simply trying to buy her silence to smooth an election-year news cycle. But it’s the kind of maneuver that works out a whole lot better when nobody finds out.
Her lawyer reportedly handled the negotiations and received the payout. If he passed it on, the records will show.
Doesn’t porn money raise red flags?
City National has a well-earned reputation for working well with people throughout the entertainment industry — from Hollywood to Nashville — but when those entertainers are adult-only, its fraud detection systems can get extremely sensitive.
At least one porn star claims the bank shut her account down in 2013 because the pattern of deposits raised too many questions. Other institutions have also kicked out customers in the business for forcing them to accept what looked like laundered money.
It was never formal policy, but it helped them make their risk metrics. And with that in mind, if Stormy Daniels had accepted a $130,000 lump sum on her own, odds are good that it would’ve tripped all the alarms.
When your entire operation is built around keeping a secret and not making waves, that’s a problem. Meanwhile, City National does business with a lot of entertainment lawyers and managers all the time, so moving a lump sum through the lawyer was the way to go.
We don’t even know where Stormy Daniels actually does her banking. If the process had run 100% smoothly, we wouldn’t even be asking.
The awkward confusion
Banking with porn stars, their lawyers or politicians isn’t even remotely illegal. As long as the right forms were filed, City National is in the clear.
But all the moving parts of the 2016 election still expose the institutions to a lot of scrutiny as investigators follow all the money they can find.
Deutsche Bank is apparently fielding subpoenas over loans to a lot of peripheral and principal players in the Trump campaign. It may be a fishing expedition, but the hooks are definitely out.
And if City National doesn’t relish the spotlight, gigantic rival Citi probably isn’t pleased to have a name that sounds like the institution in question.
Citi has sued other financial companies that trade on a variation on the phrase “City Bank” in the past. Those complaints were thrown out because it was too hard to prove infringement.
While that makes it possible for various “City Banks” to operate under names that sound a lot like “Citibank,” that’s a competitive issue. This is more about contagion.
City National routinely styles itself “City National” in order to eliminate confusion with the behemoth that’s roughly 40 times its size by assets. People on the West Coast know the difference and that’s usually all it takes.
Now that people around the country are learning about it for the first time, I can confidently say “Citibank” is the first institution a lot of them naturally think of being implicated in this story.
Citi isn’t implicated, of course. It’s really just the luck of the draw, but at least on Stormy Daniels’ side the lawyers simply didn’t bank there. Unless the Trump lawyers transferred money from a Citi account to a City National account, there’s no substantive problem.
That said, the similarity isn’t pleasant for anyone. And I think as the story unfolds, they’ll need to do more explaining for another bank’s bad luck.
