WEBVTT - NYC Mayor Indicted & Government Sues Visa

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<v Speaker 1>This is Bloomberg Law with June Brusso from Bloomberg Radio.

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<v Speaker 2>Today, we are announcing campaign finance, bribery and conspiracy charges

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<v Speaker 2>against Eric Adams, the mayor of New York City. As

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<v Speaker 2>the indictment alleges Mayor Adams engaged in a long running

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<v Speaker 2>conspiracy in which he solicited and knowingly accepted illegal campaign

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<v Speaker 2>contributions from foreign donors and corporations. As we allege Mayor

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<v Speaker 2>Adams took these contributions even though he knew they were illegal.

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<v Speaker 3>Manhattan US Attorney Damian Williams announced the first federal charges

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<v Speaker 3>ever against a sitting mayor of New York City. The

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<v Speaker 3>indictment charges Eric Adams with engaging in years of sustained

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<v Speaker 3>corruption and accepting more than one hundred thousand dollars in

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<v Speaker 3>lavish bribes from foreign nationals. Williams said that Adams repeatedly

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<v Speaker 3>crossed bright red lines, leading to the charges of bribery, conspiracy,

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<v Speaker 3>and breaking campaign finance laws.

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<v Speaker 2>The conduct alleged in the indictment, the foreign money, the

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<v Speaker 2>corporate money, the bribery, the years of concealment, is a

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<v Speaker 2>grave breach of the public's trust.

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<v Speaker 1>Public office is a privilege.

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<v Speaker 2>We allege that Mayor Adams abused that privilege and broke

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<v Speaker 2>the law flaws that are designed to ensure that officials

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<v Speaker 2>like him serve the people, not the highest bidder, not

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<v Speaker 2>a foreign bidder, and certainly not a foreign power.

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<v Speaker 1>These are bright red lines, and we.

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<v Speaker 2>Allege that the Mayor crossed them again and again for years.

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<v Speaker 1>That is the only reason we are here today.

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<v Speaker 3>Adams denied wrongdoing and struck a defiant tone in a

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<v Speaker 3>press conference, vowing to remain in office.

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<v Speaker 4>My day to day will not change. I will continue

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<v Speaker 4>to do the job for eight point three million New

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<v Speaker 4>Yorkers that I was elected to do.

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<v Speaker 3>Joining me is Richard purflt. A professor at Columbia Law School.

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<v Speaker 3>Rich this was a really detailed indictment. What struck you most?

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<v Speaker 5>Good question? I think the level of fact that the

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<v Speaker 5>government has put in the indictment means that at least

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<v Speaker 5>some of the counts there are five counts, my sense

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<v Speaker 5>is that at least four of them are pretty straightforward,

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<v Speaker 5>and if the government is able to prove in court

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<v Speaker 5>the facts that they're alleging in the indictment, it would

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<v Speaker 5>be very hard to defend against them.

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<v Speaker 3>What are the four that seemed straightforward.

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<v Speaker 5>So they are the two that are about foreign campaign contributions,

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<v Speaker 5>and that's one for the twenty twenty one campaign and

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<v Speaker 5>one for the twenty twenty five campaign. That is flat

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<v Speaker 5>out illegal. I mean in fact when you actually get

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<v Speaker 5>to the count I mean, obviously there's a long factual backdrop,

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<v Speaker 5>but those counts are like two paragraphs long. It's extremely

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<v Speaker 5>shortened to the point. And if they can show that

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<v Speaker 5>he kind of intentionally and with his team his associates

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<v Speaker 5>worked with foreign donors knowing they were foreign donors to

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<v Speaker 5>get them to contribute to his campaign, that's pretty close

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<v Speaker 5>to open and shut if the facts prove out. And

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<v Speaker 5>the other the other two that are pretty close those

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<v Speaker 5>two just served very powerful is the federal funds ribery ones,

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<v Speaker 5>which is the ones that basically charge him with kind

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<v Speaker 5>of bilking the New York City Matching Funds program through

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<v Speaker 5>various ways, again getting the foreign donations, but also other

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<v Speaker 5>donations where they broke them down and then persuaded the

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<v Speaker 5>donors to use straw donors so that larger donations were

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<v Speaker 5>funneled through smaller donors so that they were matchable under

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<v Speaker 5>the New York City Matching Funds program. That also is again,

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<v Speaker 5>if they can prove that, that does seem like a

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<v Speaker 5>straightforward effort on the part of the mayor to the

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<v Speaker 5>City of New York. And you know that's what the

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<v Speaker 5>federal funds bribery thing is. You know, is he in

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<v Speaker 5>effect using this for his own benefit?

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<v Speaker 3>Since this is an indictment of the first indictment of

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<v Speaker 3>a New York City mayor on federal charges, and you

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<v Speaker 3>know that this has been cleared all the way to

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<v Speaker 3>the top of the Justice Department. I mean, are you

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<v Speaker 3>pretty confident that they have the evidence to back up

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<v Speaker 3>what they allege?

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<v Speaker 5>No? I mean, I don't know enough, but certainly the

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<v Speaker 5>indictment is very, very detailed, So they certainly have laid

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<v Speaker 5>out a set of facts that if they can prove them,

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<v Speaker 5>you know, are pretty strong. They've laid out a lot

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<v Speaker 5>of facts. There are no gold bars in this one

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<v Speaker 5>like Menendez, but they've laid out a lot and a

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<v Speaker 5>lot of detail.

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<v Speaker 3>So the US Attorney a big focus of his press

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<v Speaker 3>conference was that Adams accepted luxury travel. And they had

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<v Speaker 3>a poster board.

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<v Speaker 5>Right showing pictures of the fancy hotels and.

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<v Speaker 3>Things, right and showing the undisclosed travel benefits which are

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<v Speaker 3>also listed. It was almost a duplicate of what's in

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<v Speaker 3>the indictment. Is that because it catches the public's eye

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<v Speaker 3>or is that a very important part of this.

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<v Speaker 5>I'm sure they use of the photographs are designed to

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<v Speaker 5>catch the public eye, just like in the Menendez case

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<v Speaker 5>when they were showing off the gold bars or pictures

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<v Speaker 5>of the gold bars. Obviously it's playing them the court

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<v Speaker 5>of public opinion. All was on the court of law.

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<v Speaker 5>It's not clear that having pictures of fancy hotel rooms

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<v Speaker 5>in istan bulas that the pictures of the fancy hotel

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<v Speaker 5>rooms are crucial. The fact that the rooms were renting

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<v Speaker 5>for a certain rate and night that he wasn't paying.

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<v Speaker 5>That's actually enough.

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<v Speaker 3>And it might be surprising to many that this goes

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<v Speaker 3>back nearly ten years. I mean they went to the

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<v Speaker 3>time before.

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<v Speaker 5>He was mayor, right, well, I mean his initial interactions

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<v Speaker 5>with the Turkish representatives go back to time he's borough president.

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<v Speaker 5>Of course, he was beginning to organize his campaign to

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<v Speaker 5>become mayor, so a lot of the fundraising, you know,

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<v Speaker 5>goes back two years before the election. But he knew

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<v Speaker 5>he was running and he was borough president, so he

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<v Speaker 5>did have an official position and had some prestige that's

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<v Speaker 5>connected to that. Some official powers, powers that borrow president

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<v Speaker 5>are not great. But you know, the one official thing

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<v Speaker 5>that he's accused of doing is actually kind of borderline

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<v Speaker 5>because it's pressuring the Fire Department to accelerate the approval

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<v Speaker 5>of the opening of the new Turkish building. He actually

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<v Speaker 5>wasn't mayor yet and he had no formal power over

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<v Speaker 5>the Fire department. On the other hand, and he was

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<v Speaker 5>just in the process of winning the election, and he

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<v Speaker 5>was a city official, and the looral presidents have some

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<v Speaker 5>role in city government. But I think in some sense there,

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<v Speaker 5>I think the issues goes more to the fact that

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<v Speaker 5>at that point he was on the verge of becoming mayor,

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<v Speaker 5>So you know, at that point he didn't have any

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<v Speaker 5>formal leverage over the Fire Department, but he would soon.

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<v Speaker 3>Williams also spoke about how Adams failed to disclose this

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<v Speaker 3>free and discounted travel. Where does that fit in.

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<v Speaker 5>That's a good question, because I think a lot of

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<v Speaker 5>what they described in course are violations of New York

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<v Speaker 5>City conflict of interest law, which is not a violation

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<v Speaker 5>of federal law. I mean, the failure to disclose all

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<v Speaker 5>of these things violated city law. They're giving that as

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<v Speaker 5>all background, but they're not charging him per se for

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<v Speaker 5>not disclosing, because that's not a federal violation. I think

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<v Speaker 5>it goes to the idea that he was hiding it,

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<v Speaker 5>that he knew that he was getting these benefits, and

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<v Speaker 5>that there was something improper about the benefits that he

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<v Speaker 5>was getting, and that he was getting them in order

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<v Speaker 5>to subsequently influences official actions. So to me, it's more

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<v Speaker 5>a sense of maybe guilty conscience, but that he was

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<v Speaker 5>covering his tracks. Because even receiving benefits from these Turkish

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<v Speaker 5>interests don't necessarily violate federal law. They might have violate

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<v Speaker 5>at New York City conflicts law, but it was ultimately

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<v Speaker 5>the connection between getting the benefits and then using them

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<v Speaker 5>either for his own personal benefit or to get people

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<v Speaker 5>to support his campaign. That's where I think the connection

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<v Speaker 5>comes in. There's not a federal crime to violate New

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<v Speaker 5>York City conflicts laws, but I think they were using

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<v Speaker 5>it to show that this is part of a broader

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<v Speaker 5>scheme to get money from these Turkish interests, either just

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<v Speaker 5>support his campaign and or in exchange for him ultimately

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<v Speaker 5>doing them favors official favors.

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<v Speaker 3>There's also allegations that he created a fake paper trail

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<v Speaker 3>to suggest that he had paid for this. It's the

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<v Speaker 3>cover up, of.

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<v Speaker 5>Course, the idea that it wasn't just sloppy, it wasn't

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<v Speaker 5>just unintentional, that this was all part of a conscious plan.

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<v Speaker 3>The business is circumventing the city's ban on corporate contributions.

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<v Speaker 3>How has that been to a federal.

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<v Speaker 5>Again, so I think part of this idea that he

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<v Speaker 5>was using the wires, because they says all technically wire

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<v Speaker 5>fraud to defraud New York City. Because again he was

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<v Speaker 5>taking those corporate contributions, turning them into individual contributions and

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<v Speaker 5>matching them. So in effect, this was again part of

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<v Speaker 5>a scheme to use the wires to defraud New York City.

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<v Speaker 5>And New York City received federal funds. That's why it's

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<v Speaker 5>federal program bribery aten US Code six sixty six. I mean,

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<v Speaker 5>the foreign donations are clearly illegal under federal law. The

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<v Speaker 5>domestic corporate ones, no. But what they're saying is that

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<v Speaker 5>he was engaged in a scheme to defraud New York City.

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<v Speaker 5>Because it's not so much that he got the donations,

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<v Speaker 5>as he was leveraging the donations to get matching fund money,

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<v Speaker 5>and that's taxpayer dollars.

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<v Speaker 3>They mentioned a lot of techs. Most of the texts, though,

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<v Speaker 3>that are long and outlined, are with a businessman, a

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<v Speaker 3>Turkish official, a staffer, not Adams himself. There are a

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<v Speaker 3>few references to Addam, but it's mostly other people and.

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<v Speaker 5>Right, they're going to have to show that he was

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<v Speaker 5>part of this, that his staff was doing it on

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<v Speaker 5>his behalf, and that he knew what they were doing.

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<v Speaker 3>So the indictment doesn't name names, but there's an unnamed

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<v Speaker 3>Adam's staffer, and airline manager and several businessmen. Do you

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<v Speaker 3>think they're already cooperating with prosecutors.

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<v Speaker 5>I can't speak to that. I mean they've obviously interviewed

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<v Speaker 5>them and gotten this information from them. Whether they have

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<v Speaker 5>arrangements with them or not, I don't know, but they

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<v Speaker 5>wouldn't be going forward and I think unless they felt

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<v Speaker 5>they had the evidence that they could bring it to court.

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<v Speaker 3>Do you see any defenses?

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<v Speaker 5>I didn't know, you know one of the I didn't know.

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<v Speaker 5>I mean that somewhere along the lines that where you

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<v Speaker 5>were just hinting, which is these are my staff. I

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<v Speaker 5>didn't know what they were doing. It's hard to say

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<v Speaker 5>I didn't know this was illegal, and it could be

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<v Speaker 5>a I didn't know this was happening, And certainly I

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<v Speaker 5>think it's probably the strongest defenses if they're already would

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<v Speaker 5>be in some sense that taking all of these Turkish

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<v Speaker 5>benefits really, you know, didn't violate the federal law. The

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<v Speaker 5>government isn't going to have to link up of all

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<v Speaker 5>the benefits he got to the fact that he took

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<v Speaker 5>them knowing they were intending to influence him in official actions.

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<v Speaker 5>That's the bribery standard, that he knew that he was

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<v Speaker 5>being influenced, that he took them knowing they were intended

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<v Speaker 5>to influence his official actions. That may be frankly, that

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<v Speaker 5>may be a challenge for the last count. I haven't

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<v Speaker 5>really spoken about the last count until now. And that's

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<v Speaker 5>the straightforward bribery that he took these things. He took

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<v Speaker 5>all these benefits in exchange for basically pressuring the fire

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<v Speaker 5>department to accelerate the approval of that building. The challenge

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<v Speaker 5>there is that he was taking benefits for years and

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<v Speaker 5>years before, so I think the government is going to

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<v Speaker 5>have to kind of link up all of the free

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<v Speaker 5>travel and the free hotel rooms that he got and

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<v Speaker 5>connect that to the fact that he then did this

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<v Speaker 5>favor for the Turkish government.

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<v Speaker 3>Yeah, that's what struck me is that it just seemed

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<v Speaker 3>like there was one thing that he did after he'd

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<v Speaker 3>been you know, graegidly taking these trips, etc.

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<v Speaker 5>That's going to be the hardest count because you've got

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<v Speaker 5>the quid and you've got the quote, but do you

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<v Speaker 5>have the pro you have the linkage, Whereas I think

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<v Speaker 5>the easiest counts for the foreign funds because to me,

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<v Speaker 5>if they made the payments and he knew about it

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<v Speaker 5>or was involved in making that happen, that's all you

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<v Speaker 5>need to show for the foreign funds, and for the

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<v Speaker 5>matching funds, it's pretty close. If he knew him he

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<v Speaker 5>was directing his team to work with these donors to

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<v Speaker 5>break up their donations into smaller ones and funnel them

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<v Speaker 5>through employees so that they were all matchable. That's also,

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<v Speaker 5>you know, a violation of the city law. It connects

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<v Speaker 5>up with the federal law that makes it a crime

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<v Speaker 5>basically to defraud a government that's receiving federal funds.

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<v Speaker 3>Coming up next, I'll continue this conversation with Columbia Law

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<v Speaker 3>school professor Richard Brefalt, could Adams be removed from his

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<v Speaker 3>position as Mayor of New York. I'm June Grosso and

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<v Speaker 3>you're listening to Bloomberg. Manhattan. US Attorney Damian Williams announced

0:11:56.120 --> 0:12:00.400
<v Speaker 3>the first criminal charges ever filed against a citty of

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<v Speaker 3>New York. Today, Eric Adams was indicted on charges of bribery, conspiracy,

0:12:05.800 --> 0:12:11.440
<v Speaker 3>and breaking campaign finance laws, and Williams promised, or rather warned,

0:12:11.720 --> 0:12:12.720
<v Speaker 3>there's more to come.

0:12:13.960 --> 0:12:15.439
<v Speaker 1>This investigation continues.

0:12:15.920 --> 0:12:19.680
<v Speaker 2>We continue to dig and we will hold more people accountable,

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<v Speaker 2>and I encourage anyone with information.

0:12:22.640 --> 0:12:24.400
<v Speaker 1>To come forward and to do so before it is

0:12:24.440 --> 0:12:24.840
<v Speaker 1>too late.

0:12:26.400 --> 0:12:30.840
<v Speaker 3>The charges were made public hours after FBI agents entered

0:12:30.880 --> 0:12:35.240
<v Speaker 3>the mayor's official residence, Gracie Mansion, and seized his phone

0:12:35.280 --> 0:12:40.040
<v Speaker 3>and electronic devices. It caps an extraordinary few weeks in

0:12:40.120 --> 0:12:44.200
<v Speaker 3>New York City that have seen a drumbeat of raids, subpoenas,

0:12:44.320 --> 0:12:48.400
<v Speaker 3>and high level resignations of members of Adam's inner circle.

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<v Speaker 3>Adams said the indictment didn't come as a surprise.

0:12:52.000 --> 0:12:57.160
<v Speaker 4>The actions that have unfolded over the last ten months. Yeah,

0:12:58.400 --> 0:13:06.319
<v Speaker 4>the leaks, the commentary, the demonizes, This did not surprise

0:13:06.440 --> 0:13:08.640
<v Speaker 4>us that we reached this day.

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<v Speaker 3>The mayor vowed to stay in office. I've been talking

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<v Speaker 3>to Richard Brfalt, a professor of Columbia Law School. Rich

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<v Speaker 3>the Supreme Court has been narrowing the scope of anti

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<v Speaker 3>corruption laws for more than a decade.

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<v Speaker 5>Yeah, I mean, I think that's a legitimate point. So

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<v Speaker 5>one thing, those will not affect the foreign campaign contributions, Well,

0:13:30.200 --> 0:13:31.599
<v Speaker 5>I think those are the ones that's going to be

0:13:31.640 --> 0:13:33.920
<v Speaker 5>the hardest term to fight. That should not affect the

0:13:33.960 --> 0:13:38.480
<v Speaker 5>foreign campaign contributions. For the others, they do require either

0:13:38.600 --> 0:13:42.600
<v Speaker 5>the showing of an official action. And you know, that's

0:13:42.880 --> 0:13:45.559
<v Speaker 5>the question of whether or not pressuring the fire department

0:13:45.640 --> 0:13:48.440
<v Speaker 5>was an official action. It may be in that it

0:13:48.600 --> 0:13:51.600
<v Speaker 5>was trying to affect a government decision and he was

0:13:51.679 --> 0:13:53.840
<v Speaker 5>making phone calls or whatever he was doing to do that,

0:13:54.240 --> 0:13:56.400
<v Speaker 5>but that's going to be the issue. The issue there

0:13:56.440 --> 0:13:59.240
<v Speaker 5>will be did he take an official action and was

0:13:59.280 --> 0:14:02.760
<v Speaker 5>it sufficially tightly linked up to the benefits he received.

0:14:02.880 --> 0:14:04.600
<v Speaker 5>That one, I think is going to be tricky. And

0:14:04.679 --> 0:14:08.000
<v Speaker 5>even the first one about the scheming to get the

0:14:08.040 --> 0:14:11.280
<v Speaker 5>matching funds again is going to have to show that

0:14:11.520 --> 0:14:13.960
<v Speaker 5>he was kind of showing that he would be influence

0:14:14.000 --> 0:14:17.920
<v Speaker 5>in some way by these supportive people, So that's what

0:14:17.960 --> 0:14:22.000
<v Speaker 5>I'm saying. I think the most straightforward is the accepting

0:14:22.240 --> 0:14:25.640
<v Speaker 5>of foreign funds. First campaign, the foreign campaign contributions.

0:14:26.120 --> 0:14:28.160
<v Speaker 3>Is that against campaign finance laws?

0:14:28.320 --> 0:14:32.400
<v Speaker 5>Yes, yes, absolutely. The federal ban on foreign campaign contributions

0:14:32.440 --> 0:14:34.440
<v Speaker 5>applies to federal, state and local elections.

0:14:35.000 --> 0:14:36.720
<v Speaker 3>And I think it was on the last day of

0:14:36.800 --> 0:14:39.440
<v Speaker 3>the term that the Supreme Court came down with that

0:14:40.120 --> 0:14:44.960
<v Speaker 3>controversial opinion six to three, with the conservatives of course

0:14:44.960 --> 0:14:48.200
<v Speaker 3>and the majority basically finding that the federal law that

0:14:48.320 --> 0:14:53.200
<v Speaker 3>prescribes bribes to state and local officials doesn't make it

0:14:53.240 --> 0:14:57.280
<v Speaker 3>a crime for those officials to accept gratuities for their

0:14:57.360 --> 0:14:58.120
<v Speaker 3>past acts.

0:14:58.640 --> 0:15:02.920
<v Speaker 5>Snider, yes, so on about right illegal gratuities, but that

0:15:03.120 --> 0:15:05.720
<v Speaker 5>he hadn't been charged with taking a bribe, so that's

0:15:05.800 --> 0:15:08.840
<v Speaker 5>not the same thing. They are charging bribery here. The

0:15:08.880 --> 0:15:11.080
<v Speaker 5>problem in that case is the way the government framed

0:15:11.600 --> 0:15:14.520
<v Speaker 5>what the man did is first he did the favors

0:15:15.320 --> 0:15:18.360
<v Speaker 5>for of the private companies, and then he went to

0:15:18.400 --> 0:15:20.320
<v Speaker 5>them and said, you know, give me a no show

0:15:20.360 --> 0:15:23.960
<v Speaker 5>job or something like that. The government didn't charge bribery.

0:15:24.320 --> 0:15:28.040
<v Speaker 5>The government basically charged accepting an illegal gift. Here they're

0:15:28.120 --> 0:15:28.880
<v Speaker 5>charging bribery.

0:15:29.320 --> 0:15:32.040
<v Speaker 3>And I'm wondering if the fact that they in the

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<v Speaker 3>indictment keep repeating that he solicited it, you know, Adam solicited,

0:15:36.560 --> 0:15:39.560
<v Speaker 3>whether that's just to be sure that they don't end

0:15:39.640 --> 0:15:40.960
<v Speaker 3>up with a Snyder situation.

0:15:41.280 --> 0:15:44.640
<v Speaker 5>Right, the language is corruptly solicit anything of value.

0:15:44.800 --> 0:15:46.480
<v Speaker 3>You never know what the Supreme Court would do. He

0:15:46.520 --> 0:15:49.160
<v Speaker 3>could get convicted below and the Supreme Court could say.

0:15:49.040 --> 0:15:51.760
<v Speaker 5>Wait a second, yeah, And the Supreme Court has rejected

0:15:51.920 --> 0:15:53.720
<v Speaker 5>many many corruption convictions.

0:15:53.920 --> 0:15:55.000
<v Speaker 3>Is there a reason why?

0:15:55.480 --> 0:15:57.960
<v Speaker 5>It's hard to say? I mean, one argument is the

0:15:57.960 --> 0:16:00.360
<v Speaker 5>Supreme Court. These are all involved state and localists, and

0:16:00.360 --> 0:16:03.640
<v Speaker 5>maybe the Supreme Court is a little nervous about federalizing

0:16:04.440 --> 0:16:06.760
<v Speaker 5>the state and local misconduct. Maybe they think it should

0:16:06.760 --> 0:16:09.360
<v Speaker 5>be better handled by local DA's. I don't know. And

0:16:09.440 --> 0:16:12.160
<v Speaker 5>sometimes there's sort of a First Amendment element that which

0:16:12.160 --> 0:16:14.840
<v Speaker 5>I think is pretty thin about. You know, people are

0:16:14.840 --> 0:16:16.880
<v Speaker 5>trying to influence government all the time, and we don't

0:16:16.920 --> 0:16:19.040
<v Speaker 5>want to make it a crime to try and to

0:16:19.080 --> 0:16:21.480
<v Speaker 5>be a lobbyist, for example. But I think a lot

0:16:21.480 --> 0:16:23.840
<v Speaker 5>of the concerns of federalism concerned and almost all those

0:16:23.880 --> 0:16:27.720
<v Speaker 5>cases have involved the Snyder case involved a small city, Indiana.

0:16:28.120 --> 0:16:31.200
<v Speaker 5>I mean McDonald, he's a governor, you know, Kelly was

0:16:31.720 --> 0:16:36.200
<v Speaker 5>port authority, the Buffalo billions or state officials one of them.

0:16:36.200 --> 0:16:39.200
<v Speaker 5>One of the early cases did involve a pecharive agriculture.

0:16:39.240 --> 0:16:41.040
<v Speaker 5>So it's not like they're they're always going to support

0:16:41.080 --> 0:16:43.440
<v Speaker 5>the federal and addictments of federal officials, but most of

0:16:43.440 --> 0:16:45.920
<v Speaker 5>the cases have involved state and local officials.

0:16:46.280 --> 0:16:50.360
<v Speaker 3>Now he vows he's going to continue in his role

0:16:50.400 --> 0:16:54.360
<v Speaker 3>as mayor, right, explain how he could be removed?

0:16:55.280 --> 0:16:58.720
<v Speaker 5>Okay, Well, so obviously the metre of factive indictment doesn't

0:16:58.760 --> 0:17:01.400
<v Speaker 5>mean anything in terms of his eligibly to hold office.

0:17:01.520 --> 0:17:03.960
<v Speaker 5>I actually have to don't know what happens if he's convicted.

0:17:03.960 --> 0:17:05.920
<v Speaker 5>So let's hold off on that. The city law city

0:17:05.960 --> 0:17:08.840
<v Speaker 5>charter does not have any provision for impeachment. It does

0:17:08.960 --> 0:17:12.560
<v Speaker 5>have a provision for removal of the mayor for either

0:17:12.640 --> 0:17:16.959
<v Speaker 5>temporary inability or permanent inability, but it creates a committee

0:17:16.960 --> 0:17:20.199
<v Speaker 5>on Inability that does this. That committee is supposed to

0:17:20.200 --> 0:17:22.680
<v Speaker 5>have five members, actually right now it only has four

0:17:22.720 --> 0:17:24.840
<v Speaker 5>if there's a vacancy and when the positions the Corporation

0:17:24.960 --> 0:17:27.920
<v Speaker 5>Council and require the votes of four out of the five.

0:17:27.960 --> 0:17:30.399
<v Speaker 5>Are now require four out of the four. One of

0:17:30.400 --> 0:17:32.719
<v Speaker 5>them is a deputy mayor, who is, of course an

0:17:32.760 --> 0:17:36.480
<v Speaker 5>appointee of the mayor. At the moment, I'm skeptical that

0:17:36.640 --> 0:17:39.240
<v Speaker 5>the deputy mayor who is his appointee, and I think

0:17:39.240 --> 0:17:41.880
<v Speaker 5>the deputy may is Sheena Wright, who is also connected

0:17:41.880 --> 0:17:44.960
<v Speaker 5>with some of these other scandals, would actually be part

0:17:44.960 --> 0:17:47.600
<v Speaker 5>of a group that would vote to declare him unable

0:17:47.840 --> 0:17:50.959
<v Speaker 5>to continue in office. There's no impeachment. There is this

0:17:51.040 --> 0:17:55.919
<v Speaker 5>procedure to have the mayor declared unable, either temporarily or permanently.

0:17:56.359 --> 0:17:59.359
<v Speaker 5>But the first step in the process requires the action

0:17:59.520 --> 0:18:02.240
<v Speaker 5>by this committee, and the way the committee is set

0:18:02.320 --> 0:18:06.200
<v Speaker 5>up that would currently require the agreement of the deputy mayor.

0:18:06.520 --> 0:18:09.119
<v Speaker 3>I've been reading that the governor could remove him.

0:18:09.240 --> 0:18:11.760
<v Speaker 5>The governor can remove him. The governor has authority under

0:18:11.800 --> 0:18:14.280
<v Speaker 5>state law to remove the mayor, and I think Sdr

0:18:14.359 --> 0:18:17.119
<v Speaker 5>when he was governor, came very close to removing Mayor Walker,

0:18:17.119 --> 0:18:20.680
<v Speaker 5>who resigned while he was subject to the procedure for removal.

0:18:20.920 --> 0:18:24.320
<v Speaker 5>The state law says very little about the grounds for removal.

0:18:24.800 --> 0:18:27.119
<v Speaker 5>It gives a little bit more on the process. The

0:18:27.240 --> 0:18:29.240
<v Speaker 5>kinds of the little bit of due process that the

0:18:29.280 --> 0:18:32.400
<v Speaker 5>governor would have to afford the mayor in terms of

0:18:32.440 --> 0:18:34.280
<v Speaker 5>being able to you know, the charges against him and

0:18:34.320 --> 0:18:37.639
<v Speaker 5>being able to present a defense. But yes, state law

0:18:37.880 --> 0:18:43.720
<v Speaker 5>most definitely, very vaguely, but definitely does authorize the governor

0:18:43.760 --> 0:18:44.560
<v Speaker 5>to remove the mayor.

0:18:44.640 --> 0:18:46.879
<v Speaker 3>Who would be the next mayor? Is it the barble?

0:18:47.520 --> 0:18:48.719
<v Speaker 5>I think then it we'd go back to the New

0:18:48.760 --> 0:18:51.160
<v Speaker 5>York City Charter for filling vacancies, so then it would

0:18:51.200 --> 0:18:52.680
<v Speaker 5>become again the public advocate.

0:18:53.119 --> 0:18:56.679
<v Speaker 3>Is there any case in history that compares with this

0:18:56.960 --> 0:18:59.199
<v Speaker 3>or they say that no New York City mayor has

0:18:59.240 --> 0:19:01.560
<v Speaker 3>been into on federal charges. I don't know if there

0:19:01.640 --> 0:19:04.040
<v Speaker 3>was any mayor that's been indicted on SI.

0:19:04.240 --> 0:19:06.159
<v Speaker 5>I don't know that they were ever indicted, and I

0:19:06.240 --> 0:19:08.600
<v Speaker 5>you know, my sense is, of course, thinking about Greater

0:19:08.680 --> 0:19:10.919
<v Speaker 5>New York, Greater New York only goes back to eighteen

0:19:11.000 --> 0:19:12.919
<v Speaker 5>ninety eight, so I'm I'm not quite sure in the

0:19:12.920 --> 0:19:17.119
<v Speaker 5>Tammany era whether anybody was ever indicted. But there were

0:19:17.200 --> 0:19:21.040
<v Speaker 5>some scandals involving mayors. I mean, obviously I mentioned Mayor Walker,

0:19:21.080 --> 0:19:24.679
<v Speaker 5>and then there's also Mayor O'Dwyer who resigned from office.

0:19:24.960 --> 0:19:28.040
<v Speaker 5>And I'm not quite sure to what extent they grew

0:19:28.080 --> 0:19:30.119
<v Speaker 5>out of a kind of a police corruption scandal or

0:19:30.160 --> 0:19:33.160
<v Speaker 5>around nineteen fifty and I think there were hints of

0:19:33.160 --> 0:19:35.639
<v Speaker 5>some corruption, but he was never charged with anything. I

0:19:35.640 --> 0:19:38.159
<v Speaker 5>think even in the Tammany era, a lot of the

0:19:38.359 --> 0:19:41.400
<v Speaker 5>corruption was all around the mayors, but I'm not sure

0:19:41.440 --> 0:19:43.480
<v Speaker 5>of any of the mayor's.

0:19:43.560 --> 0:19:47.920
<v Speaker 3>William said there's more to come. I mean, federal investigators

0:19:47.960 --> 0:19:54.000
<v Speaker 3>have been pursuing several corruption investigations involving Adams, his senior

0:19:54.080 --> 0:19:57.560
<v Speaker 3>aides and some of their relatives. And in the last

0:19:57.560 --> 0:20:01.679
<v Speaker 3>two weeks alone, the police commission and the school's chancellor

0:20:01.960 --> 0:20:04.879
<v Speaker 3>have resigned. Neither has been charged with a crime or

0:20:04.880 --> 0:20:08.240
<v Speaker 3>even publicly accused of wrongdoing, right, And.

0:20:08.200 --> 0:20:10.640
<v Speaker 5>You know, based on the news so far only, it's

0:20:10.720 --> 0:20:14.000
<v Speaker 5>not clear how those really, if at all, to these

0:20:14.560 --> 0:20:16.720
<v Speaker 5>The police commissioner who resigned, it sounds like he was

0:20:16.720 --> 0:20:19.760
<v Speaker 5>caught up in some misconduct involving his brother, some kind

0:20:19.800 --> 0:20:21.600
<v Speaker 5>of corruption, so I don't know if that relates to this.

0:20:22.320 --> 0:20:24.320
<v Speaker 5>I have no idea what was what was going on

0:20:24.400 --> 0:20:27.400
<v Speaker 5>with the school's chancellor, but the bank's brothers, I think,

0:20:27.520 --> 0:20:30.800
<v Speaker 5>based on the media accounts, the issues I think more

0:20:30.840 --> 0:20:34.040
<v Speaker 5>involved the one of the bank's brothers who wasn't in government,

0:20:34.240 --> 0:20:36.320
<v Speaker 5>But I don't know about the ties of the ones

0:20:36.320 --> 0:20:37.159
<v Speaker 5>who were in government.

0:20:37.359 --> 0:20:40.679
<v Speaker 3>With the mayor under indictment and all these investigations and

0:20:40.760 --> 0:20:45.520
<v Speaker 3>city officials resigning, how is he going to run a

0:20:45.680 --> 0:20:48.000
<v Speaker 3>challenging city like New York.

0:20:48.680 --> 0:20:51.359
<v Speaker 5>I mean the challenge is really there's the time distraction,

0:20:51.920 --> 0:20:54.719
<v Speaker 5>and he's got to spend time on his legal defense.

0:20:54.840 --> 0:20:57.800
<v Speaker 5>And I think also, you know, how effective can he

0:20:57.880 --> 0:21:01.720
<v Speaker 5>be in kind of dealing with people and either making

0:21:01.760 --> 0:21:05.960
<v Speaker 5>promises about things he can do or making threats against

0:21:05.960 --> 0:21:07.640
<v Speaker 5>people who don't go along with him when he wants

0:21:07.680 --> 0:21:11.679
<v Speaker 5>to adopt certain policies or propose certain laws, And you know,

0:21:11.760 --> 0:21:15.320
<v Speaker 5>I just think he's likely to be less effective. I mean,

0:21:15.720 --> 0:21:18.080
<v Speaker 5>it's true that much of the day to day of

0:21:18.119 --> 0:21:20.119
<v Speaker 5>New York City will keep going. You know, there are

0:21:20.119 --> 0:21:21.879
<v Speaker 5>many commissioners who have jobs to do, and they'll be

0:21:21.880 --> 0:21:24.760
<v Speaker 5>doing their jobs. And obviously the vast majority of New

0:21:24.840 --> 0:21:27.119
<v Speaker 5>York City public employees are going to continue to do

0:21:27.160 --> 0:21:30.359
<v Speaker 5>whatever they do. But I do think you know, whether

0:21:30.400 --> 0:21:33.679
<v Speaker 5>it's for can neew initiatives or even you know, at

0:21:33.680 --> 0:21:35.199
<v Speaker 5>some point they've got to make a budget for the

0:21:35.240 --> 0:21:36.840
<v Speaker 5>next year. We have a budget for this year, but

0:21:37.040 --> 0:21:39.240
<v Speaker 5>some point they'll be a budget for next year. You know,

0:21:39.480 --> 0:21:41.679
<v Speaker 5>at some point it's going to interfere with the ability

0:21:41.720 --> 0:21:42.639
<v Speaker 5>to move the city forward.

0:21:43.080 --> 0:21:46.240
<v Speaker 3>It's really a terrible day for the City of New York,

0:21:46.720 --> 0:21:50.120
<v Speaker 3>no matter which way you look at it. And Adams

0:21:50.160 --> 0:21:54.800
<v Speaker 3>will be in court tomorrow to be arraigned on corruption charges.

0:21:55.160 --> 0:21:58.440
<v Speaker 3>Thanks so much, Rich for your insights. That's Columbia law

0:21:58.440 --> 0:22:01.920
<v Speaker 3>professor Richard Ruffault coming up next on the Bloomberg Law Show.

0:22:02.359 --> 0:22:06.240
<v Speaker 3>The Biden administration is turning its anti trust attention to

0:22:06.359 --> 0:22:11.720
<v Speaker 3>the financial services industry, suing Visa. I'm June Grosso and

0:22:11.760 --> 0:22:16.960
<v Speaker 3>you're listening to Bloomberg. The Biden administration is turning its

0:22:16.960 --> 0:22:20.959
<v Speaker 3>attention to the financial services industry with its latest anti

0:22:20.960 --> 0:22:25.480
<v Speaker 3>trust suit. The Justice Department sued Visa on Tuesday, alleging

0:22:25.520 --> 0:22:29.800
<v Speaker 3>the global payments giant illegally monopolized the debit card market.

0:22:30.200 --> 0:22:34.520
<v Speaker 3>Antitrust enforcers alleged that Visa, which handles more than sixty

0:22:34.560 --> 0:22:38.200
<v Speaker 3>percent of the more than four trillion dollars in US

0:22:38.200 --> 0:22:42.400
<v Speaker 3>debit transactions each year, entered into a series of agreements

0:22:42.480 --> 0:22:47.399
<v Speaker 3>penalizing merchants who sought to use alternatives and paid potential

0:22:47.560 --> 0:22:50.359
<v Speaker 3>rivals to stay out of the market. Joining me is

0:22:50.440 --> 0:22:54.960
<v Speaker 3>Ronald Mann, a professor Columbia Law School, explain the charges

0:22:55.520 --> 0:22:59.000
<v Speaker 3>against Visa. It's about the debit card market. Tell us

0:22:59.000 --> 0:23:01.480
<v Speaker 3>about the allegations by the government.

0:23:02.400 --> 0:23:04.800
<v Speaker 6>So the way that the debit card market works is

0:23:05.520 --> 0:23:09.639
<v Speaker 6>individual consumers obtain debit cards from the banks which they

0:23:09.640 --> 0:23:11.960
<v Speaker 6>have accounts, and then they can use these debit cards

0:23:12.000 --> 0:23:14.720
<v Speaker 6>to make purchases at merchants that take Visa cards, which

0:23:14.760 --> 0:23:17.680
<v Speaker 6>in the United States is as a practical matter, substantially

0:23:17.720 --> 0:23:23.240
<v Speaker 6>all retail locations and many online locations. When a merchant

0:23:23.280 --> 0:23:26.000
<v Speaker 6>accepts it the Visa card for a payment, there's a

0:23:26.080 --> 0:23:28.159
<v Speaker 6>fee that they pay to Visa for the service of

0:23:28.280 --> 0:23:30.800
<v Speaker 6>this mulitating the payment. And so if the merchant sells

0:23:30.800 --> 0:23:32.919
<v Speaker 6>something for one hundred dollars, they don't get to keep

0:23:32.920 --> 0:23:35.040
<v Speaker 6>one hundred dollars. They get, you know, less than hundred

0:23:35.040 --> 0:23:37.080
<v Speaker 6>dollars to take a fee. The comb out of the

0:23:37.080 --> 0:23:40.120
<v Speaker 6>amounts of the consumer since in their bank account through

0:23:40.119 --> 0:23:43.280
<v Speaker 6>the Visa networked the merchants for decades, is not like

0:23:43.320 --> 0:23:46.160
<v Speaker 6>the fees they wish the fees will lower. These thinks

0:23:46.160 --> 0:23:48.600
<v Speaker 6>the fees are the proper amount. The merchants are unhappy.

0:23:48.920 --> 0:23:51.760
<v Speaker 6>Often consumers are inhappy to be class action litigation. Both

0:23:51.800 --> 0:23:54.960
<v Speaker 6>consumers believe that prices would be lower if the fees

0:23:55.000 --> 0:23:57.360
<v Speaker 6>were lower. At this point's happened as the JUST Department

0:23:57.359 --> 0:24:01.560
<v Speaker 6>has entered into litigation by buying a lawsuit against Visa,

0:24:01.640 --> 0:24:05.440
<v Speaker 6>and the Just format claims that Visa has acted improperly,

0:24:05.920 --> 0:24:09.320
<v Speaker 6>violating the any Trust laws by taking steps that make

0:24:09.359 --> 0:24:12.199
<v Speaker 6>it difficult for people to compete with them. So the

0:24:12.240 --> 0:24:16.080
<v Speaker 6>things that they challenge are things like provisions in contracts

0:24:16.119 --> 0:24:18.680
<v Speaker 6>with merchants that make it difficult for competitors to get.

0:24:18.680 --> 0:24:21.359
<v Speaker 6>In provisions with other people in the industry like Apple,

0:24:21.600 --> 0:24:23.479
<v Speaker 6>they might make it difficult for other people to get.

0:24:23.640 --> 0:24:26.399
<v Speaker 6>But it's an any trust lawsuit brought by the Department

0:24:26.480 --> 0:24:29.199
<v Speaker 6>of Justice suing Visa under the any trust laws, and

0:24:29.400 --> 0:24:31.680
<v Speaker 6>the merchants are very happy about this course.

0:24:31.960 --> 0:24:36.679
<v Speaker 3>The Attorney General Merrick Garland said that this conduct affects

0:24:37.040 --> 0:24:39.760
<v Speaker 3>the price of not one thing, but the price of everything.

0:24:40.000 --> 0:24:42.919
<v Speaker 3>Do they say how much money is involved? You're like,

0:24:42.960 --> 0:24:45.479
<v Speaker 3>how much extra consumers are paying?

0:24:46.320 --> 0:24:49.080
<v Speaker 6>Well, I think reasona lines can differ on the extent

0:24:49.119 --> 0:24:51.960
<v Speaker 6>to which consumers are paying extra, because that depends on

0:24:52.080 --> 0:24:54.800
<v Speaker 6>the extent to which the prices are elevated by the

0:24:54.840 --> 0:24:57.280
<v Speaker 6>paying of the fee, and it's hard to know what

0:24:57.280 --> 0:25:00.880
<v Speaker 6>the caunterfactual is. So, from Visa's perspective, is the only

0:25:00.920 --> 0:25:03.480
<v Speaker 6>reason merchants are agreeing to take decent pay the speed

0:25:04.000 --> 0:25:06.720
<v Speaker 6>is because the costs of competing payment systems are much

0:25:06.800 --> 0:25:09.800
<v Speaker 6>higher than the fee they're charging. So if merchants instead

0:25:09.840 --> 0:25:12.639
<v Speaker 6>took cash, it'd be much more expensive for merchants to

0:25:12.720 --> 0:25:14.720
<v Speaker 6>accept cash, and it would be to accept debit cards,

0:25:14.720 --> 0:25:17.440
<v Speaker 6>the cost of keeping the cash safe and transporting into

0:25:17.440 --> 0:25:19.520
<v Speaker 6>the bank, to say nothing in the fact that many

0:25:19.520 --> 0:25:23.159
<v Speaker 6>people like me don't really carry cash, and so I

0:25:23.280 --> 0:25:25.359
<v Speaker 6>can't really buy things that stores that only took cash.

0:25:25.640 --> 0:25:28.200
<v Speaker 6>If they took personal checks, the cost of processing personal

0:25:28.280 --> 0:25:30.280
<v Speaker 6>checks dwarfs the amount of the interchange piece, so it's

0:25:30.280 --> 0:25:33.840
<v Speaker 6>hard to know what the counterfactual is. I think economists

0:25:33.840 --> 0:25:35.800
<v Speaker 6>on both sides could have started that the prices are

0:25:36.080 --> 0:25:38.520
<v Speaker 6>higher because the level of these fees, but economists would

0:25:38.520 --> 0:25:40.159
<v Speaker 6>also say that some comest so they're not And I

0:25:40.800 --> 0:25:43.680
<v Speaker 6>tend to be skeptical these fees are raising prices because

0:25:43.680 --> 0:25:46.640
<v Speaker 6>they're lower than the cost of competing payment systems by

0:25:46.680 --> 0:25:46.920
<v Speaker 6>a lot.

0:25:47.520 --> 0:25:51.280
<v Speaker 3>How important is it to the Justice Department's case that

0:25:52.359 --> 0:25:55.120
<v Speaker 3>consumers are being hurt by higher prices? I mean, if

0:25:55.119 --> 0:25:58.760
<v Speaker 3>no one's being hurt by this, someone might say, what's

0:25:58.760 --> 0:25:59.560
<v Speaker 3>the harm.

0:26:00.160 --> 0:26:03.520
<v Speaker 6>The merchants feelings as the consumers, as they do believe

0:26:03.600 --> 0:26:05.439
<v Speaker 6>that the prices are higher, and that the consumers are

0:26:05.480 --> 0:26:08.119
<v Speaker 6>being hurt. I'm just saying, as a matter of economics,

0:26:08.200 --> 0:26:11.040
<v Speaker 6>it's not easy to tell that they're being heard of

0:26:11.080 --> 0:26:13.720
<v Speaker 6>what the amount is. What I'll say in this case

0:26:13.880 --> 0:26:17.680
<v Speaker 6>is the government isn't saying, because the price is too high,

0:26:17.720 --> 0:26:20.120
<v Speaker 6>you need to lower the price. The government is saying,

0:26:20.480 --> 0:26:22.879
<v Speaker 6>you have these contracts that keep out competitors, and we

0:26:23.040 --> 0:26:25.440
<v Speaker 6>think that these competitors are in the pressure from the

0:26:25.480 --> 0:26:28.600
<v Speaker 6>competitors would force the price down. So that's somewhat different,

0:26:28.840 --> 0:26:32.560
<v Speaker 6>and so it's not as necessarily dependent on proving up

0:26:32.600 --> 0:26:34.680
<v Speaker 6>the amount by which consumers are harmed as it is

0:26:35.160 --> 0:26:39.000
<v Speaker 6>necessary to prove that these contracts every strained trade by

0:26:39.520 --> 0:26:41.159
<v Speaker 6>improperly keeping out competitors.

0:26:41.400 --> 0:26:44.760
<v Speaker 3>According to the complaint, these have viewed Apple pay as

0:26:44.800 --> 0:26:49.960
<v Speaker 3>an existential threat, and there was also PayPal and Block.

0:26:50.040 --> 0:26:54.359
<v Speaker 3>Can you explain what happened with these other companies that

0:26:55.080 --> 0:26:56.200
<v Speaker 3>Visa saw is a threat?

0:26:57.000 --> 0:26:59.439
<v Speaker 6>Well, PayPal is an needs example to see. You can

0:26:59.480 --> 0:27:02.280
<v Speaker 6>imagine a world in which PayPal would have developed as

0:27:02.359 --> 0:27:04.639
<v Speaker 6>a system where people use it without putting credit or

0:27:04.640 --> 0:27:07.520
<v Speaker 6>debit cards into it, and they kept money loaded at PayPal,

0:27:07.600 --> 0:27:11.280
<v Speaker 6>and so they could actually process payment transactions without using

0:27:11.320 --> 0:27:14.159
<v Speaker 6>a credit card or a debit card. And if they

0:27:14.200 --> 0:27:17.399
<v Speaker 6>did that, those transactions would have been transactions that went

0:27:17.480 --> 0:27:19.879
<v Speaker 6>off of Visa and MasterCards platforms somewhere else, and that

0:27:19.920 --> 0:27:22.280
<v Speaker 6>would have been really bad for them. I think historically

0:27:22.320 --> 0:27:24.960
<v Speaker 6>the way its developed, the overalling majority by size and

0:27:25.040 --> 0:27:28.400
<v Speaker 6>volume of transactions that are cleared with PayPal, the money

0:27:28.480 --> 0:27:31.320
<v Speaker 6>comes from a branded credit card debit card, and so

0:27:31.440 --> 0:27:33.879
<v Speaker 6>that hasn't happened. In theory, the same thing could have

0:27:33.920 --> 0:27:36.679
<v Speaker 6>happened with Apple Pay. I don't think at this point though,

0:27:36.720 --> 0:27:39.119
<v Speaker 6>there are any large umber transactions that are made on

0:27:39.160 --> 0:27:42.840
<v Speaker 6>Apple Pay that don't use a branded credit card or

0:27:42.880 --> 0:27:45.240
<v Speaker 6>debit card so that don't pay an interchange fee.

0:27:45.720 --> 0:27:50.480
<v Speaker 3>The complaint alleges that Visa pays Apple hundreds of millions

0:27:50.520 --> 0:27:54.560
<v Speaker 3>of dollars each year do we know what their agreement is.

0:27:55.640 --> 0:27:58.119
<v Speaker 6>I actually don't know anything about the arrangement with Apple

0:27:58.160 --> 0:28:01.919
<v Speaker 6>to discuss there, and the complaint lays it out as

0:28:01.960 --> 0:28:05.200
<v Speaker 6>if Visa has agreed that it will pay Apple money

0:28:05.359 --> 0:28:07.400
<v Speaker 6>so that Apple won't compete with it. I think it's

0:28:07.480 --> 0:28:09.760
<v Speaker 6>highly unlikely there's a contract between Visa and Apple that

0:28:09.880 --> 0:28:11.840
<v Speaker 6>says we're paying you this money so you won't compete

0:28:11.880 --> 0:28:14.240
<v Speaker 6>with us. I think Visa thinks it's paying the money

0:28:14.240 --> 0:28:16.080
<v Speaker 6>for a different reason, would be my guess.

0:28:16.680 --> 0:28:21.280
<v Speaker 3>The lawsuit is asking the court to order Visa to

0:28:21.480 --> 0:28:25.760
<v Speaker 3>stop these anti competitive practices, but it's not asking that

0:28:26.119 --> 0:28:27.280
<v Speaker 3>Visa be broken up.

0:28:27.920 --> 0:28:32.040
<v Speaker 6>It is not. It's not obvious from the outside how

0:28:32.200 --> 0:28:35.199
<v Speaker 6>you could break Visa up in irrelevant way. I mean,

0:28:35.240 --> 0:28:37.040
<v Speaker 6>you could say they can do credit cards in that

0:28:37.160 --> 0:28:38.920
<v Speaker 6>debit cards, but I mean the problem is there an

0:28:38.920 --> 0:28:43.160
<v Speaker 6>association of banks essentially that issues payment cards, and the

0:28:43.240 --> 0:28:46.920
<v Speaker 6>functional difference this decade between debit cards and credit cards

0:28:47.040 --> 0:28:49.080
<v Speaker 6>is pretty thin. It's it's just not obviously what you

0:28:49.120 --> 0:28:51.920
<v Speaker 6>would make them still off to break up the company,

0:28:52.120 --> 0:28:54.280
<v Speaker 6>but anything, I think that's not the motive litigation. The

0:28:54.320 --> 0:28:57.720
<v Speaker 6>motive litigation I think is actually pretty smart because I

0:28:57.720 --> 0:29:00.600
<v Speaker 6>think if they were saying, your practicing very process, we

0:29:00.720 --> 0:29:03.240
<v Speaker 6>want you to lower interchange rates by fifty percent, I

0:29:03.360 --> 0:29:05.800
<v Speaker 6>think that would be a case that Visa just couldn't settle.

0:29:06.240 --> 0:29:08.000
<v Speaker 6>It would be impossible Visa sell in the case it

0:29:08.080 --> 0:29:09.920
<v Speaker 6>has to go to trial, and just because they just

0:29:09.920 --> 0:29:13.200
<v Speaker 6>couldn't be inflexibility about that. The case that says we

0:29:13.360 --> 0:29:15.280
<v Speaker 6>want you to change to Visit your contracts. So I

0:29:15.360 --> 0:29:18.560
<v Speaker 6>can imagine them getting some relief that Visa could agree

0:29:18.600 --> 0:29:21.400
<v Speaker 6>to voluntarily and Visa might change them to the contracts

0:29:21.520 --> 0:29:23.800
<v Speaker 6>rather than have a trial. I mean, I mean, that's

0:29:23.840 --> 0:29:26.520
<v Speaker 6>a lawsuit that could go somewhere, I think successfully, as

0:29:26.560 --> 0:29:28.240
<v Speaker 6>compared to one just trying to lower the price.

0:29:29.120 --> 0:29:34.560
<v Speaker 3>So Visa's general counsel Julie Rottenberg said the lawsuit ignores

0:29:34.600 --> 0:29:37.920
<v Speaker 3>the reality that Visa is just one of many competitors

0:29:38.160 --> 0:29:41.760
<v Speaker 3>in a debit space that is growing with entrants who

0:29:41.840 --> 0:29:45.920
<v Speaker 3>are thriving. Is it the debit space growing It seems

0:29:45.960 --> 0:29:46.160
<v Speaker 3>to be.

0:29:46.400 --> 0:29:49.080
<v Speaker 6>But I haven't looked at the day of the last

0:29:49.160 --> 0:29:52.600
<v Speaker 6>year or so, but the share of payment transactions that

0:29:52.760 --> 0:29:55.960
<v Speaker 6>use debit cards as opposed to other payment devices, it's

0:29:56.040 --> 0:29:58.280
<v Speaker 6>much harder now than it was twenty years ago, in

0:29:58.400 --> 0:30:00.800
<v Speaker 6>part because people that are younger, we're more likely to

0:30:00.840 --> 0:30:02.640
<v Speaker 6>pay with debit cards, and people that are older more

0:30:02.760 --> 0:30:05.440
<v Speaker 6>likely to pay with credit cards. So the debit cards

0:30:05.480 --> 0:30:09.160
<v Speaker 6>share is growing now. I think from Visa's perspectives, the

0:30:09.240 --> 0:30:16.160
<v Speaker 6>competition is between Visa, MasterCard, Discover, and offshore issues like

0:30:16.600 --> 0:30:18.760
<v Speaker 6>Union paying jay Shub, and there's probably some other ones

0:30:18.800 --> 0:30:23.040
<v Speaker 6>that I'm not directly familiar with. From the just farmer's perspective,

0:30:23.280 --> 0:30:25.880
<v Speaker 6>the competition is between Visa because they're the largest debit

0:30:25.920 --> 0:30:30.160
<v Speaker 6>card person and these what you might call fintech companies

0:30:30.200 --> 0:30:33.560
<v Speaker 6>that aren't really card networks, that are providing some kind

0:30:33.600 --> 0:30:36.080
<v Speaker 6>of services trying to get around the card network, like

0:30:36.240 --> 0:30:39.000
<v Speaker 6>Square and Flat and these kinds of things. It's just

0:30:39.880 --> 0:30:42.200
<v Speaker 6>a different perspective on what the middle of the competition is.

0:30:42.360 --> 0:30:46.280
<v Speaker 6>I mean, Visa clearly has competitors that they are, you know,

0:30:46.800 --> 0:30:52.239
<v Speaker 6>in a next throttling battle with MasterCard and Discover. I mean,

0:30:52.880 --> 0:30:54.520
<v Speaker 6>and you might say they're winning. May mean are those

0:30:54.560 --> 0:30:56.560
<v Speaker 6>are large payment networks?

0:30:56.640 --> 0:30:56.720
<v Speaker 4>Mean?

0:30:56.840 --> 0:31:00.240
<v Speaker 6>I say, to competing against each other robustly. That's not

0:31:00.320 --> 0:31:01.240
<v Speaker 6>what this solicit is about.

0:31:01.240 --> 0:31:05.720
<v Speaker 3>Though, the Justice Department's Anti Trust Division has been bringing

0:31:06.080 --> 0:31:09.920
<v Speaker 3>case after case after case, and it's also been targeting

0:31:10.520 --> 0:31:14.560
<v Speaker 3>middlemen that take a kind of transaction fees like the

0:31:15.040 --> 0:31:19.479
<v Speaker 3>Live Nation suit and part of the case against Apple.

0:31:20.120 --> 0:31:22.320
<v Speaker 3>Is this a new road for the Justice Department?

0:31:22.880 --> 0:31:25.200
<v Speaker 6>I would say that any trust division is not much

0:31:25.280 --> 0:31:28.880
<v Speaker 6>more active under this administration that wasn't in the least administration.

0:31:29.160 --> 0:31:32.560
<v Speaker 6>I mean there's a different assistant ry Jaler used to be,

0:31:32.640 --> 0:31:35.240
<v Speaker 6>and I think that they're more active. I think they

0:31:35.320 --> 0:31:37.560
<v Speaker 6>have a focus on that. I think part is a

0:31:37.640 --> 0:31:39.360
<v Speaker 6>matter of just kind of updating the kinds of people

0:31:39.400 --> 0:31:42.200
<v Speaker 6>that you sue. If you're looking at the modern economy,

0:31:43.120 --> 0:31:44.840
<v Speaker 6>that's what a lot of the biggest people do, is

0:31:44.920 --> 0:31:48.080
<v Speaker 6>they facilitate transactions. Why get into the middle of transactions

0:31:48.120 --> 0:31:51.760
<v Speaker 6>and making it cheaper for one person to get together

0:31:51.800 --> 0:31:54.040
<v Speaker 6>another person in the charge fees for that. It's very

0:31:54.120 --> 0:31:58.680
<v Speaker 6>difficult to know exactly how think any trust laws should

0:31:58.680 --> 0:32:03.200
<v Speaker 6>apply to those relationships. Mean, when I went to law school,

0:32:03.440 --> 0:32:07.240
<v Speaker 6>those kinds of companies didn't really exist, and there aren't

0:32:07.280 --> 0:32:10.960
<v Speaker 6>any Supreme Court cases that really actually tell you exactly

0:32:11.000 --> 0:32:13.720
<v Speaker 6>how to think about it. So I think there's some

0:32:13.800 --> 0:32:15.520
<v Speaker 6>want to be made on exactly what to think about

0:32:15.520 --> 0:32:18.200
<v Speaker 6>those companies and they're a big part of the economy.

0:32:18.280 --> 0:32:20.200
<v Speaker 6>They decided they're going to try and make some of it,

0:32:21.240 --> 0:32:22.720
<v Speaker 6>and some of that they would like to make is

0:32:22.760 --> 0:32:25.360
<v Speaker 6>going to make it harder for those companies to have

0:32:25.440 --> 0:32:28.840
<v Speaker 6>a free handed design in the way their platforms work.

0:32:29.800 --> 0:32:34.200
<v Speaker 3>Last month, a federal judge found that Google violated antitrust laws.

0:32:34.760 --> 0:32:38.680
<v Speaker 3>Do any of the findings in that case apply to

0:32:39.080 --> 0:32:39.600
<v Speaker 3>this case.

0:32:40.280 --> 0:32:42.560
<v Speaker 6>It's not obvious to me that it does. I think

0:32:42.640 --> 0:32:47.080
<v Speaker 6>the relevance of that case really it's more performative. It's

0:32:47.760 --> 0:32:52.160
<v Speaker 6>the just Department showed that they have the stamina to

0:32:52.280 --> 0:32:56.360
<v Speaker 6>take one of these big companies to trial and do

0:32:56.480 --> 0:32:58.920
<v Speaker 6>such a good job at trial that they win. I mean,

0:32:59.200 --> 0:33:02.800
<v Speaker 6>Google has highly paid, highly experienced, highly skilled counsel, and

0:33:02.800 --> 0:33:05.800
<v Speaker 6>they didn't win, and the Justice Department waged them out

0:33:05.920 --> 0:33:07.840
<v Speaker 6>and won that case. And I think that's sort of

0:33:07.880 --> 0:33:11.600
<v Speaker 6>a warning of Visa and Visa can't just assume we'll

0:33:11.640 --> 0:33:14.440
<v Speaker 6>take this to trial and the government will lose patience

0:33:14.520 --> 0:33:16.760
<v Speaker 6>or the governments flawyers won't be very good. The people

0:33:16.760 --> 0:33:19.080
<v Speaker 6>who work in any trust vision who do these cases

0:33:19.400 --> 0:33:22.840
<v Speaker 6>are highly skilled and know what they're doing, as evidenced

0:33:22.840 --> 0:33:24.280
<v Speaker 6>by winning the Google case. I mean, I think that's

0:33:24.320 --> 0:33:27.280
<v Speaker 6>the significant case really, is that this is not twenty

0:33:27.360 --> 0:33:29.520
<v Speaker 6>years ago when the Just Department could just get more

0:33:29.560 --> 0:33:32.640
<v Speaker 6>easily outlawyered by skilled private any trust lawyers.

0:33:33.360 --> 0:33:37.960
<v Speaker 3>Between the Justice Department and the FTC, there are so

0:33:38.320 --> 0:33:41.600
<v Speaker 3>many anti trust cases. Thanks so much for being on

0:33:41.720 --> 0:33:45.360
<v Speaker 3>this show. That's Professor runold Man of Columbia Law School.

0:33:46.200 --> 0:33:48.800
<v Speaker 3>And that's it for this edition of the Bloomberg Law Podcast.

0:33:49.200 --> 0:33:51.560
<v Speaker 3>Remember you can always get the latest legal news by

0:33:51.640 --> 0:33:55.400
<v Speaker 3>subscribing and listening to the show on Apple Podcasts, Spotify,

0:33:55.720 --> 0:33:59.560
<v Speaker 3>and at Bloomberg dot com, slash podcast, slash Law. I'm

0:33:59.640 --> 0:34:02.080
<v Speaker 3>June also, and this is Bloomberg