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Speaker 1: Welcome to the Bloomberg Law Podcast. I'm June Grosso. Every

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Speaker 1: day we bring you insight and analysis into the most

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Speaker 1: important legal news of the day. You can find more

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Speaker 1: episodes of the Bloomberg Law Podcast on Apple Podcasts, SoundCloud,

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Speaker 1: and on Bloomberg dot com slash podcasts. The Trump administration

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Speaker 1: is escalating its war over California's immigrant protection laws, taking

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Speaker 1: the state to court. The Justice Department sued California, alleging

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Speaker 1: that three state laws interfere with federal immigration enforcement and

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Speaker 1: violate the Constitution. Joining me is David Beer, immigration policy

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Speaker 1: analyst at the Cato Institute. David tell us about these

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Speaker 1: sanctuary laws the Trump administration is challenging. Yeah, so they're

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Speaker 1: challenging three different statutes that are that are pretty distinct

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Speaker 1: from one another, UM and probably have, you know, varying

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Speaker 1: levels of legal authority for the state to do what

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Speaker 1: they're trying to do. And the first one prohibits private

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Speaker 1: employers from giving federal immigration officers access to their workplaces

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Speaker 1: or documents uh for enforcement without a court order m

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Speaker 1: a search warrant in other words, UM. The second law

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Speaker 1: that's being challenged would create a state inspection system for

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Speaker 1: immigration detention facilities, and these are where uh illegal aliens

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Speaker 1: and and other immigrants who may be deported by the

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Speaker 1: federal government are being held uh in semi prison like conditions.

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Speaker 1: And then the third uh you know bill or law

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Speaker 1: that's being challenged, would limit state and local law enforcements

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Speaker 1: authority to uh communicate with the federal government about uh

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Speaker 1: certain people that they may have in their custody or

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Speaker 1: they may have information about um in order to help

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Speaker 1: the federal or in order to prevent the federal government

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Speaker 1: from deporting them. Essentially, David, what's the Justice Department's argument

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Speaker 1: about these laws? Well, they argue that the laws are

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Speaker 1: preempted by uh the federal federal law and thus violate

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Speaker 1: the Constitution, that the federal government has authority over immigration matters,

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Speaker 1: and the California laws are intruding in a domain reserved

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Speaker 1: for the federal government. And does California have a good

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Speaker 1: response to that, Well, they argue that, you know, well,

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Speaker 1: first of all, they have not officially responded to the

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Speaker 1: the specific legal arguments being made so far, UM, but

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Speaker 1: what we have heard them say in the past is

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Speaker 1: that they do have authority under state law to regulate

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Speaker 1: private employers and to um, you know, make inspections of

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Speaker 1: of facilities in their state and uh as far as

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Speaker 1: you know, local law enforcement goes. Uh. Their argument is

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Speaker 1: that under our federalist system of government, UM, the state

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Speaker 1: has total authority over how it spends its resources, um

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Speaker 1: when it comes to law enforcement. UM. So those are

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Speaker 1: those are the arguments that they're going to try to make.

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Speaker 1: So David, looking at it now, does it seem as

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Speaker 1: if one side has a stronger case than the other. Uh, Well,

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Speaker 1: you know, we've seen a lot of different immigration cases

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Speaker 1: come up under the Trump administration, and they've been uh,

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Speaker 1: you know, the courts are really working through them in

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Speaker 1: a variety of different ways, and UM, you know, uh

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Speaker 1: a lot of winds have been achieved by immigrant rights groups, UM,

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Speaker 1: especially in the Ninth Circuit, which would be hearing this case.

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Speaker 1: So I'm not sure if the Department of Justice expects

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Speaker 1: to get wins early on in the litigation, but I

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Speaker 1: think maybe they're they're hoping that the Supreme Court would

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Speaker 1: weigh in. I think probably the strongest argument that California

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Speaker 1: has is when it comes to the local law enforcement

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Speaker 1: authorities UM and control over them. The the Supreme Court

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Speaker 1: has ruled in the past that states and localities really

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Speaker 1: have unfettered authority over what their local uh, you know,

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Speaker 1: sheriffs and and police departments do. So it's going to

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Speaker 1: be an uphill battle for the Justice Apartment on the

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Speaker 1: most important of the argument that that's uh that are

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Speaker 1: being put forward. So David, today, a war of words

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Speaker 1: seems to have broken out between Attorney General Jeff Sessions,

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Speaker 1: who gave a speech in California, and California Governor Jerry

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Speaker 1: Brown and Attorney a General of California Javier Bassrah. What

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Speaker 1: do you make of this? Are they? Is it too

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Speaker 1: emotional an issue? What's happening here? Well, it's certainly an

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Speaker 1: emotional issue. If you look at the state of California.

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Speaker 1: I mean, it's thirty foreign born, so you're talking about

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Speaker 1: an enormous part of their state is feels that they

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Speaker 1: are under threat by actions at the Obama administer I'm sorry,

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Speaker 1: the Trump administration um is rolling out here, and I

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Speaker 1: think the fact that you're you're seeing these very vigorous responses,

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Speaker 1: very public responses, um goes to the heart of how

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Speaker 1: import in this issue is in the state of California.

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Speaker 1: And just about thirty seconds here. Why do you believe

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Speaker 1: Jeff Sessions went to California and made this rather inflammatory speech. Uh,

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Speaker 1: you know, this is a political issue, um, and I

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Speaker 1: think that's why you're seeing sort of a political statements

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Speaker 1: being made on on both sides, and um, you know,

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Speaker 1: I think it's going to continue to be a major

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Speaker 1: part of the political debate going forward and into the

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Speaker 1: elections in November. Alright. Always a pleasure to have you on, David.

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Speaker 1: That's David Beer, immigration policy analyst at the Cato Institute.

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Speaker 1: Joining us now is Olga Careif of Bloomberg News reporter

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Speaker 1: who has has done some of these stories on initial

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Speaker 1: coin offerings and bitcoin. Olga explain the new Treasury letter

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Speaker 1: or the letter that was recently released in which the

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Speaker 1: participants in the initial coin offering are going to be

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Speaker 1: considered money transmitters and that means they have to comply

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Speaker 1: with these know your customers and bank secrecy rules. That's right.

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Speaker 1: So Uh. In the past, a lot of lawyers suspected

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Speaker 1: that startups issuing their own coins may have needed to

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Speaker 1: comply with the rules, but this wasn't stated and and

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Speaker 1: most companies that issued their own tokens did not try

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Speaker 1: and collect information about people who signed up to buy

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Speaker 1: the tokens from them. And now in this letter, um

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Speaker 1: uh sense and basically is saying that, you know, a

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Speaker 1: lot of the startups issuing their own UH coins UH

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Speaker 1: in exchange for digital or fiat currencies will UH sort

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Speaker 1: of qualify as money transmitters, which means that they must

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Speaker 1: be in compliance with a sort of know your customer guidelines.

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Speaker 1: So the I c O market has been red hot,

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Speaker 1: firms raising about eight point seven billion according to coin Desk,

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Speaker 1: which tracks the offerings. And as Peter and I were saying,

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Speaker 1: the Securing and Exchange Commission has been concerned for months

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Speaker 1: that some I c O s are raising money for

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Speaker 1: businesses that don't even exist, and has issued a string

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Speaker 1: of subpoenas. How much do you know about that investigation?

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Speaker 1: You know, there's so much going on in the I

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Speaker 1: feel market, Like you said, so many startups trying to

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Speaker 1: raise funds, and I think the SEC and a lot

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Speaker 1: of UH state agencies and other federal agencies are just

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Speaker 1: kind of trying to UH sort of find a group

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Speaker 1: on this huge problem because a lot of UH startups

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Speaker 1: that are trying to raise money out there, I mean,

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Speaker 1: they don't have products, they maybe have a y paper,

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Speaker 1: but in some cases the white paper explaining their plans

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Speaker 1: has been simply basically copied somebody else's white paper, and

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Speaker 1: they're still able to raise funds. So there are so

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Speaker 1: many issues with I c O s right now that, uh,

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Speaker 1: you know, there are a lot of investigations under way,

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Speaker 1: and I think we've only seen the tip of the

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Speaker 1: iceberg of kind of investigations that they write me another

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Speaker 1: agency launch UM. So now we have the how do

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Speaker 1: the know your customers and bank secrecy rules that Treasury

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Speaker 1: says they're now going to have to comply with. One

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Speaker 1: of the other things that was said is that a

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Speaker 1: lot of these you know, I c O s um

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Speaker 1: are not based in the United States and so it's

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Speaker 1: it's hard to even get to them. That's exactly right.

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Speaker 1: A lot of them are based outside of the U S.

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Speaker 1: And it's not clear exactly how it would be possible

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Speaker 1: to enforce any sort of rules of the companies. And uh,

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Speaker 1: a lot of i CEOs are also launched by very

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Speaker 1: small crews. I mean, an individual can launch an i

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Speaker 1: ce O within half an hour if they wanted to, So, uh,

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Speaker 1: you know, it's it's gonna be really hard to contain

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Speaker 1: this problem. It really is. And so in your view,

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Speaker 1: is this and we just about thirty seconds here, is it?

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Speaker 1: So Treasury just jumping jumping on board the ship with

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Speaker 1: the SEC and the Commodities and Futures Exchange Commission and saying, oh,

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Speaker 1: let's try this. That's exactly right. And uh, the experts

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Speaker 1: that I've spoken with, I believe that this is not enough,

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Speaker 1: that a lot more needs to be done. But I

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Speaker 1: think a lot of people just aren't even sure exactly

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Speaker 1: what measures need to be taken. So it's such a

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Speaker 1: it's such an interesting but very difficult areas. Thank you

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Speaker 1: so much, Alga. That's Olga Carey, Bloomberg News reporter. And

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Speaker 1: all right, you're on the bitcoint. Thanks for listening to

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Speaker 1: the Bloomberg Law Podcast. You can subscribe and listen to

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Speaker 1: the show on Apple Podcasts, SoundCloud and on Bloomberg dot

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Speaker 1: com slash podcast. I'm June Grosso. This is Bloomberg