Payment of hush money common


Giving "hush money" certainly sounds shady, but attorneys say it's not illegal to give someone cash to keep quiet about an affair.

"It's very common, and not just for sexual things but anything embarrassing," said Robert Langford, a criminal defense attorney and former prosecutor.

Confidentiality agreements are common, involving anything from medical malpractice cases to adultery, he noted.

It could be a crime, however, if someone paid a witness to withhold testimony or tried to influence their testimony in an official proceeding.

In a high-profile case Langford was involved in, singer Celine Dion's husband, Rene Angelil, paid a woman who had accused him of sexual misconduct $2 million. As part of a settlement, the accuser and her husband agreed to keep quiet in exchange for the money.

The couple later was charged with extortion because authorities said they demanded more money and threatened to go public if they weren't paid.

In Sen. John Ensign's case, the April 2008 payments from each of his parents were intended as four $12,000 gifts to Cindy Hampton, her husband Doug and two of their children, who were described as long-time family friends going through a tough time.

But giving money to the Hamptons isn't a crime even if it was intended to silence them, lawyers said.

"It's never illegal to resolve things, in a civil sense, by paying money. That happens all the time," said Lisa Rasmussen, another criminal defense attorney involved in the Angelil case. "You can always go to someone and say 'I'll give you a thousand dollars if you don't say anything about it.' "

Richard Treanor, a former IRS tax attorney, said the recipients would not have had to report the gift as income or pay taxes on it. As for the donors, the gifts fell within a $12,000 threshold that allows them to avoid paying any tax.

According to a statement Thursday by Ensign attorney Paul Coggins "the payments were made as gifts, accepted as gifts and complied with tax rules governing gifts."

But several lawyers said the tax-free gifts might raise eyebrows at the Internal Revenue Service if they were made near or at the end of the Hampton's employment.

"This might go beyond the income tax code," said Treanor. The circumstances could trigger an inquiry, he said.

Charles Cate, a tax lawyer in Washington, said the IRS might inquire into the gift in the context of past gift-giving by Ensign's parents.

The donors "may have complied with the numbers but the question remains whether there was a relationship between the parents and these people. Did they even know them? The IRS would ask those questions," Cate said.

But if Ensign's parents gave cash gifts to the Hamptons in the past, he said, that might satisfy the agency.

Nevertheless, Cate said, "If the IRS audited this, they would be extremely suspicious."

Coggins said the gifts were "consistent with a pattern of generosity by the Ensign family to the Hamptons and others."

Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington, said the Senate Ethics Committee has the authority to look beyond the legalities and determine whether Ensign's actions reflected poorly on the Senate in a larger sense.

"If we didn't know Ensign was despicable before now, we know he drafted his parents to clean up his mess," Sloan said.

Contact reporter David Kihara at dkihara @reviewjournal.com or 702-380-1039. Contact Stephens Media Bureau Chief Steve Tetreault at stetreault@stephens media.com or 202-783-1760.

 

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