The world is asking whether Donald Trump has committed a crime that could trigger impeachment or even jail — and he's gone into meltdown.

His astonishing response overnight included a barrage of confusing and angry tweets as well as a bizarre appearance on Fox News.

Trump lashed out at his former lawyer Michael Cohen, who said he had covered up the "dirty deeds" of his ex-boss by making hush payments to two women who alleged they had affairs with the real estate mogul.

The key question is whether Trump broke campaign finance laws by using funds intended for his 2016 presidential campaign to pay off porn star Stormy Daniels and Playboy model Karen Douglas.


Did Trump break a law?

Cohen was on Wednesday sentenced to three years in jail for crimes including tax evasion, bank fraud and lying to Congress.

He pleaded guilty to a series of charges including two campaign finance violations.

Donald Trump is fighting claims he broke laws on campaign finance in the lead up to the 2016 presidential election. Photo / AP
Donald Trump is fighting claims he broke laws on campaign finance in the lead up to the 2016 presidential election. Photo / AP

But the US President insisted Cohen's crimes did not involve campaign finance, and the payments to Daniels and Douglas were "simple private transactions".

A related question is whether he knew about the payments. Cohen and federal prosecutors alleged he did.

The President had previously denied knowledge of the payments, but overnight tweeted only that he "never directed Michael Cohen to break the law".

He did not deny directing Cohen to make the payments, instead suggesting his lawyer was responsible if it was an illegal act.

"It is called 'advice of counsel,' and a lawyer has great liability if a mistake is made," tweeted Trump. "That is why they get paid."

But — protecting himself on another front — he also claimed Cohen "probably was not guilty" of criminal or even civil violations in making the payments to the women.

"Cohen was guilty on many charges unrelated to me," Mr Trump wrote. "But he plead to two campaign charges which were not criminal and of which he probably was not guilty even on a civil basis.

"Those charges were just agreed to by him in order to embarrass the president and get a much reduced prison sentence."

Trump's former lawyer Michael Cohen claimed Trump knew about the payments, but the President insisted he
Trump's former lawyer Michael Cohen claimed Trump knew about the payments, but the President insisted he "never directed Michael Cohen to break the law". Photo / AP

The President added that "many campaign finance lawyers have strongly stated that I did nothing wrong with respect to campaign finance laws, if they even apply, because this was not campaign finance."

In fact, many legal experts say it does appear he may have broken the law.

Trump and the tabloid

Cohen's $200,000 payment to McDougal was funnelled through the National Enquirer.

On Wednesday, it emerged the parent company of the tabloid had admitted to making the payments "in concert" with the Trump campaign to "ensure that the woman did not publicise damaging allegations" before the 2016 election.

American Media Inc said it paid McDougal in the run-up to the vote for exclusive rights to her story that she allegedly had an affair with Trump 10 years earlier.

AMI confessed it made the payment "to suppress the woman's story so as to prevent it from influencing the election."

This would make the sum an in-kind contribution to the campaign — and therefore a violation of campaign finance law.

OnFox Newsovernight, Trump said: "I don't think — and I have to go check — I don't think they even paid any money to that tabloid. I don't think we made a payment to that tabloid."

But CNN in July obtained a secret tape in which he is heard discussing the payment to AMI.

What's this got to do with Russia?

It is Special Counsel Robert Mueller's investigation into alleged Russia collusion by the Trump campaign that has uncovered Cohen's crimes and those committed by aides Michael Flynn and Paul Manafort.

Trump again attacked the "witch hunt" Russia probe overnight, tweeting: "They want to scare everybody into making up stories that are not true by catching them in the smallest of misstatements. Sad!"

But the allegations are stacking up, as Mr Mueller methodically uncovers instances in which people linked to the President's 2016 campaign interacted with Russia.

Trump previously denied making business deals with the country while he was the presumed presidential nominee — but his associates now say he was closely involved in plans such as a later abandoned Trump Tower Moscow project.

Trump now says it wouldn't matter even he had been doing business with Russia.

At the time of the election, Trump was supportive of Russian denials it meddled in the 2016 election by hacking Democrat emails, despite the CIA contradicting the claim.

There is evidence some Trump associates discussed the upcoming WikiLeaks dump of the hacked emails. If Trump knew about it, that would mean he colluded with Russia as it tried to influence the election. But so far, Mueller has not indicated that he could prove this.

In a separate case on Thursday, Russian Maria Butina admitted she conspired to infiltrate US conservative groups during the 2016 presidential campaign and surreptitiously influence policy.

There are also other ways Trump could have broken the law by trying to hinder government investigations.

The President was accused of "witness tampering" when he called Cohen "weak" and former campaign adviser Roger Stone someone who would "never testify against him" and had "guts".

He told Fox News overnight that his former national security adviser Michael Flynn, who is also awaiting sentencing, was "a tougher kind of a guy than Cohen".

Investigators are also looking at possible obstructions of justice, including Mr Trump's firing of former FBI Director James Comey and his furious response when former Attorney General Jeff Sessions recused himself from the probe.