I commented on my understanding of the situation on reddit a while ago. Copy/pasting here:
He paid off Stormy Daniels to keep her from talking about their relationship. Paying her to stay silent is 100% legal, there is absolutely no issue with an NDA like that. The illegal part isn't the what, it's the how.
Political campaigning laws set a limited budget for how much money you can spend on campaigning, which is defined as "any payment made by any person for the purpose of influencing any election for Federal office". Daniels talking about her relationship with Trump is something that could have had a significant impact on Trump's presidential campaign, so paying her to stay quiet is considered a campaign expense. Paying your lawyer for legal advice/representation is not a campaign expense, though, so what happened was that Cohen himself paid Daniels (there's no law against that), and the campaign paid Cohen for "legal expenses" (which aren't considered campaign expenses).
The problem here is that, of course, this was just a way to make Cohen an intermediary for the process of the campaign paying Daniels. This is problem in two ways. First, it goes against the campaign spending limits, so goes against campaign laws. Second, it's a form of falsifying business records.
He paid off Stormy Daniels to keep her from talking about their relationship. Paying her to stay silent is 100% legal, there is absolutely no issue with an NDA like that. The illegal part isn't the what, it's the how.
Political campaigning laws set a limited budget for how much money you can spend on campaigning, which is defined as "any payment made by any person for the purpose of influencing any election for Federal office". Daniels talking about her relationship with Trump is something that could have had a significant impact on Trump's presidential campaign, so paying her to stay quiet is considered a campaign expense. Paying your lawyer for legal advice/representation is not a campaign expense, though, so what happened was that Cohen himself paid Daniels (there's no law against that), and the campaign paid Cohen for "legal expenses" (which aren't considered campaign expenses).
The problem here is that, of course, this was just a way to make Cohen an intermediary for the process of the campaign paying Daniels. This is problem in two ways. First, it goes against the campaign spending limits, so goes against campaign laws. Second, it's a form of falsifying business records.