Speaker 1: Welcome to the Bloomberg Law Podcast. I'm June Grosso. Every
Speaker 1: day we bring you insight and analysis into the most
Speaker 1: important legal news of the day. You can find more
Speaker 1: episodes of the Bloomberg Law Podcast on Apple Podcasts, SoundCloud,
Speaker 1: and on Bloomberg dot com slash podcasts. As Paul manaforts
Speaker 1: trial is scheduled to begin Monday after a week delay.
Speaker 1: Here's President Trump speaking about his former campaign manager with
Speaker 1: Fox News is Sean Hannity last week. Paul Manafort, Who's
Speaker 1: who really is a nice man? You look at what's
Speaker 1: going on with him. It's like al Capone two thousand
Speaker 1: and five tax case on a case that I guess
Speaker 1: it's just a sad thing. It's a very sad thing
Speaker 1: for our country to say this joining us. He as
Speaker 1: former federal prosecutor Robert Mintz, head of the criminal investigations
Speaker 1: in White Color Practice at McCarter and English. Bob, I
Speaker 1: don't know whether comparing someone to a gangster evokes much sympathy,
Speaker 1: but it is the case against Manafort for tax and
Speaker 1: bank fraud, similar to the case against Capone for tax evasion. Well, June,
Speaker 1: I think it's more complicated than that. In this case.
Speaker 1: Manafort is accused of making tens of millions of dollars
Speaker 1: while working for former pro Russia Ukrainian President of Victor
Speaker 1: Yana Kovic and his party, and then concealing those earnings
Speaker 1: and the offshore bank accounts that held them from U
Speaker 1: S authorities. He's also charged with misleading lenders about his
Speaker 1: finances to induce them to make twenty million dollars in
Speaker 1: loans to him. So I think what we're going to
Speaker 1: see in this case is a is a case that
Speaker 1: is very heavy in terms of documents, and it's really
Speaker 1: going to be a follow the documents, follow the money
Speaker 1: type of prosecution. The prosecutors have listed more than four
Speaker 1: exhibits for trial, but they appear to be trying to
Speaker 1: ensure that it's not just going to be a boring
Speaker 1: trial of bank records and business contract and tax returns.
Speaker 1: Tell us about some of the things they have in mind. Well,
Speaker 1: any good prosecution has to involve a narrative. It's not
Speaker 1: simply getting up there and reeling off a series of
Speaker 1: documents and asking the jurors to connect the dots themselves.
Speaker 1: So I think what we can expect here is that
Speaker 1: prosecutors are going to paint this tale of Mantifort making
Speaker 1: tens of millions of dollars as this unregistered agent for Ukraine,
Speaker 1: than steering the money into these offshore accounts in countries
Speaker 1: around the globe, than using that money to buy houses, cars,
Speaker 1: expensive clothing and jewelry, and ultimately lying to US authorities
Speaker 1: and to banks about what he earned with his wealth.
Speaker 1: It's basically a case that involves tax evasion and bank fraud.
Speaker 1: And part of that case will allow prosecutors to show
Speaker 1: photographs of houses and jewelry, expensive renovations that were done
Speaker 1: on various properties that Mantifort owned out in the Hampton's
Speaker 1: and in Brooklyn and in other locations, and so he
Speaker 1: they're going to show not only how he earned his money,
Speaker 1: how he concealed the money, but then ultimately that he
Speaker 1: used that money for his own personal benefit, to show
Speaker 1: that he in fact owned the money, that he controlled it,
Speaker 1: and he should have reported on his taxes but failed
Speaker 1: to do so. Lifestyles of the Rich and Famous. Well,
Speaker 1: in light of all the evidence that prosecutors seem to have,
Speaker 1: what kind of defense might Manafort put up. Well, Manaford
Speaker 1: has an experienced legal team, and he apparently has the
Speaker 1: financial wherewithal to attack the government's case because he's done
Speaker 1: so very aggressively so far, so I think we can
Speaker 1: expect to see prosecutors, I'm sorry, I expect that we
Speaker 1: can expect to see his defense lawyers going after the
Speaker 1: government's case in a in a very aggressive way of
Speaker 1: continuing on the path that they've already started here, which
Speaker 1: will mean really attacking the key points in the government's case,
Speaker 1: which is manafort state of mind, the government's requirement that
Speaker 1: they show that he controlled those offshore accounts, and the
Speaker 1: history of off short income. Part of the government's case
Speaker 1: is going to be a reliance on his one time
Speaker 1: right hand man, Rick Gates, and some of those accounts
Speaker 1: were set up by Gates. The government's going to argue
Speaker 1: that Manafort was aware that those accounts were set up
Speaker 1: and that he'd benefited from those accounts. But clearly the
Speaker 1: defense is going to attack Gates's credibility, and the defense
Speaker 1: has at least something to work with because Gates, in
Speaker 1: pleading guilty, acknowledged that he failed to report uh income,
Speaker 1: that he used three million dollars from offshore accounts for
Speaker 1: his own mortgages, and his children's tuition and interior decorating,
Speaker 1: and Gates was without or without any doubt central to
Speaker 1: this case. He opened up fifty five accounts allegedly with
Speaker 1: thirteen financial institutions over a dozen years. So the defense
Speaker 1: is going to have some opportunity to attack Gates his
Speaker 1: credibility and in doing so try to distance their client
Speaker 1: from these crimes and show that he did not have
Speaker 1: the state of mind to conceal these assets from the
Speaker 1: government and was not guilty of the charges that the
Speaker 1: government has brought against him. But when I asked you
Speaker 1: about one thing, which is the prosecutors gave Manaforts lawyers
Speaker 1: twenty thousand documents this month, and that's why the judge
Speaker 1: granted the defense request to push back the trial a week.
Speaker 1: The prosecutors had the late handover of documents wouldn't affect
Speaker 1: Manaforts defense because the only new material was photographs and images.
Speaker 1: Is that late timing suspicious in any way as sort
Speaker 1: of game playing, Well, I don't really think it's suspicious,
Speaker 1: because it's not unusual for the government to continue to
Speaker 1: be investigating right up to the day of trial. But
Speaker 1: I also think that it was quite predictable that the
Speaker 1: judge is going to give some additional time because merely
Speaker 1: because prosecutors are saying that this evidence is not relevant,
Speaker 1: um doesn't mean that it might not be relevant to
Speaker 1: the defense. Like the defense really doesn't have to take
Speaker 1: prosecutors words for it that there could not be some
Speaker 1: exculpatory information in those documents. And a good defense lawyer
Speaker 1: is going to be familiar with all the documents that
Speaker 1: they have in their possession through discovery. So what the
Speaker 1: judge did here is split the baby in a sense.
Speaker 1: Because the defense had asked for a longer adjournment, trying
Speaker 1: to push this trial back beyond the other trial that's
Speaker 1: scheduled in September. The judge refused to do that, but
Speaker 1: he did give them an extra week to go through
Speaker 1: these documents that they just received within the last month.
Speaker 1: Only about a minute, your Bob. But this will be
Speaker 1: the first court test for the Special Council's team. So
Speaker 1: even though it's on bank fraud and tax charges, how
Speaker 1: important is the result here to the Special Council? It's
Speaker 1: enormously important. I can't imagine a case where the stakes
Speaker 1: are higher. Obviously, the credibility of this investigation has been
Speaker 1: attacked by the president has been attacked by other people
Speaker 1: in Congress and other interest groups. Um, Robert Mueller has
Speaker 1: to show that he is doing his job, that this
Speaker 1: is not uh, simply a phishing expedition, and so uh
Speaker 1: it's absolutely critically important for the credibility of this special
Speaker 1: helpful investigation that they make some of these charges stick.
Speaker 1: And it's going to be the defense's job to try
Speaker 1: to make sure that doesn't happen. All Right, Bob, thanks
Speaker 1: so much. That's Robert Mint's partner at McCarter in English.
Speaker 1: Last karate, MGM Resorts sued the victims of the shooting
Speaker 1: at its Mandalay Bay hotel in Las Vegas in October,
Speaker 1: using an anti terrorism law that could wipe out its
Speaker 1: liability for what was the worst mass shooting in US history.
Speaker 1: It didn't take long for the hashtag boycott MGM Resorts
Speaker 1: to appear on Twitter. Katherine Lombardo, a lawyer for some
Speaker 1: of the shooting victims, says, the lawsuit is a trick.
Speaker 1: This was not a terrorist attack. This was negligence on
Speaker 1: the on behalf of MGM. They're trying to hide behind
Speaker 1: the Safety Act. Joining me is Thomas Russell, a professor
Speaker 1: at the Strum College and of Law at the University
Speaker 1: of Denver, Thomas Many tell us about the law MGM
Speaker 1: is basing its laws Sudan called the Support Anti Terrorism
Speaker 1: by Fostering Technologies Act or the Safety Act. UM. First,
Speaker 1: thanks for having me on, and I do have to
Speaker 1: correct you. It's Sturm College of Law and not Strum
Speaker 1: and we get that all the time, but I just
Speaker 1: I'm monitor bound to make that correction. UM. So this
Speaker 1: act is an act and that you know, put in
Speaker 1: place by Congress about fifteen years ago. UM. It bears
Speaker 1: sort of elements of anti terrorism and also elements of
Speaker 1: Torque reform and kind of combines both of those together
Speaker 1: and makes it more difficult to sue someone who has
Speaker 1: UM hired somebody who's deployed a technology that is supposed
Speaker 1: to be an anti terrorism technology. UM. And so the
Speaker 1: claim UM by MGM is that they should be able
Speaker 1: to shift liability from themselves or more likely from their
Speaker 1: insurers to the insurance company for Contemporary Services Corporation, which
Speaker 1: did the security work on the ground below the Mandalais
Speaker 1: Bay Hotel. So this is the first time I believe
Speaker 1: that this law is being used. So there's no pressing
Speaker 1: to follow, but there do seem to be some hurdles,
Speaker 1: one being that perhaps a security company was protected under
Speaker 1: the law, but MGM hasn't gone through the process that
Speaker 1: the firm did to get certification under the Act. Well,
Speaker 1: I actually think that my reading again, as you say,
Speaker 1: it's correct that there hasn't been adjudication under this statute.
Speaker 1: So in fact, we don't really know what it means,
Speaker 1: and it will take some some time before we figure
Speaker 1: that out. Um. My reading of the statute and the
Speaker 1: related regulations are that the company creates a technology which
Speaker 1: can include maybe a service to that is the designed
Speaker 1: to prevent some form of mass attack, and then when
Speaker 1: another entity hires that company, the liability should something go
Speaker 1: wrong shifts to the to the entity providing the technology,
Speaker 1: the anti anti terrorism technology. So there are a set
Speaker 1: of steps of approval through the Department of Homeland Security
Speaker 1: that the that the security company would have gone through. Um,
Speaker 1: it's a little less clear to me exactly what MGM
Speaker 1: would have gone through that. An important thing to note
Speaker 1: here is that there's a lot of loss, of course,
Speaker 1: from injuries, death, from emotional harm, everything else. One of
Speaker 1: the things that the statute does is narrows the think
Speaker 1: the amount of money that can be recovered for a
Speaker 1: variety of things. This the act eliminates punitive damages, for example,
Speaker 1: it narrows the recovery of economic harm for emotional loss. Um,
Speaker 1: it narrows eliminates something related to health insurance essentially is
Speaker 1: what it does. Um. And And at the same time,
Speaker 1: the Act limits the recovery to the total amount of
Speaker 1: insurance that the security contractor has. So it's significant goal. Yeah,
Speaker 1: go ahead. So UM, now they're asking for the court
Speaker 1: to declare the company isn't liable at all. Um. Is
Speaker 1: there any problem with the victims claims that MGM was
Speaker 1: negligent and that there were red flags about the shooter
Speaker 1: that the hotel should have picked up on, such as
Speaker 1: piling up weapons in his room where the hotel hired
Speaker 1: the security company for the concert itself. So I'm not
Speaker 1: sure if any of that crosses well. I agree with
Speaker 1: you there, and I'd need to see more of the
Speaker 1: pleadings and some of the lawsuits that were filed and
Speaker 1: then subsequently withdrawn. But to simplify, I can conceive of
Speaker 1: an activity on the ground and there may have been
Speaker 1: negligence in relationship to that and to the music the
Speaker 1: music festival, and then separately negligence in the hotel. And
Speaker 1: I'm not saying it was negligent, but perhaps negligence in
Speaker 1: the hotel in allowing the number of bags to come
Speaker 1: in and that sort of stuff, although frankly, I'm not
Speaker 1: sure I want hotels counting my baggage. So it may
Speaker 1: be that if this act protects MGM, it could be
Speaker 1: that it protects him only on the ground, but not
Speaker 1: for what they did in their hotel. Right, MGM does
Speaker 1: own both the festival and the hotel, but they own
Speaker 1: them separately through a through a complicated corporate structure that
Speaker 1: I don't fully comprehend. Okay um, So many critics are
Speaker 1: calling out this lawsuit as outrageous, disgraceful, and worse. Did
Speaker 1: it shock you that MGM would use this legal maneuver
Speaker 1: so to speak? Now, I'm not shocked, and honestly, I
Speaker 1: mean it maybe seems a little premature to seek a
Speaker 1: declaratory judgment. On the other hand, they've got people who
Speaker 1: either filed suit and then withdrew it or said they're
Speaker 1: going to sue them. It makes sense to consolidate these
Speaker 1: somewhere and I think that what is likely is that
Speaker 1: this is all going to be consolidated within one federal
Speaker 1: courthouse somewhere in the United States, and and who knows
Speaker 1: where that will be. Um, you know, it may feel shocking. Um,
Speaker 1: it's a little bit novel, but it's it shouldn't be
Speaker 1: shocking that an entity that faces a lot of liability
Speaker 1: wants to limit that liability and push that liability to
Speaker 1: others if they can do some And MGM spokeswoman said
Speaker 1: the federal court is an appropriate venue in the best
Speaker 1: and fastest way to resolve the cases. Will you explain
Speaker 1: why MGM and most corporations want cases to be tried
Speaker 1: in federal court and plaintiffs and most victims would rather
Speaker 1: have it in state court. Well, I think the simple
Speaker 1: truth of the matter is, and I should add here
Speaker 1: to that, I'm a law professor, but also practice law
Speaker 1: on the side of plaineiffs, so that's generally where my
Speaker 1: sympathies lie. But in this case, you know, I'm trying
Speaker 1: to give it to you as straight as I can.
Speaker 1: The truth of the matter is, the federal judges in
Speaker 1: our country are the best, are the best judges that
Speaker 1: we have, and the federal courts of the are the
Speaker 1: most efficient and effective courts that we have, and it's
Speaker 1: going to help a party to be able to consolidate
Speaker 1: in one, as I said, in one court or you know,
Speaker 1: one set of courts, rather than to have to litigate
Speaker 1: in a number of different states, between the number of
Speaker 1: different judges in front of whom who are who are
Speaker 1: elected or appointed in a variety of different ways. So um,
Speaker 1: the best judges you can get are in the United
Speaker 1: States District Court. All right, Thanks so much for being
Speaker 1: on the show. That's Thomas Russell. He's a professor at
Speaker 1: the Stern College of Law at the University of Denver.
Speaker 1: Thanks for listening to the Blue Burg Law Podcast. You
Speaker 1: can subscribe and listen to the show on Apple Podcasts, SoundCloud,
Speaker 1: and on bloomberg dot com slash podcast. I'm June Brosso.
Speaker 1: This is Bloomberg