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 the first
Speaker 1: week of Paul Maniforts tax and bank fraud trial comes
Speaker 1: to an end, federal prosecutors are shifting away from highlighting
Speaker 1: the excesses of President Trump's former campaign chairman's lifestyle and
Speaker 1: are now concentrating on the core of their fraud accusations
Speaker 1: against him, joining us as Brad Moss, a partner at
Speaker 1: Mark Zade Brad, So, the prosecutors are turning away from
Speaker 1: the lavish lifestyle into the nitty gritty with the bookkeeper
Speaker 1: or the accountant and all the documents. What's your take
Speaker 1: on how the prosecution is putting on its case. Yes,
Speaker 1: so looks the way they're doing this is they set
Speaker 1: the stage initially to give the jury as sense of
Speaker 1: just how high on the hog Paul Manifold was living.
Speaker 1: All the fancy clothes, the ridiculous Ostrich jacket and the
Speaker 1: python jack and all these different things and they give
Speaker 1: them a sense of just how lavish of a lifestyle.
Speaker 1: Now they're explaining how he paid for and how he
Speaker 1: committed tax fraud and bank fraud and wire fraud in
Speaker 1: order to live like that. He was hiding for bank
Speaker 1: accounts and defrauding the I R s when he could
Speaker 1: submit his tax returns. He was submitting fraudulent invoices to
Speaker 1: banks in order to get loan, bank frauds, wire fraud.
Speaker 1: So all these things where they set up the initial piece,
Speaker 1: and now they're showing the jury how he broke the
Speaker 1: law in order to live like that. What's your assessment
Speaker 1: of how the government is is prosecuting the case, particularly
Speaker 1: this latest part with the accountant and the bookkeeper. Yeah,
Speaker 1: So these types of process like color crimes, the very
Speaker 1: document heavy, and they're candidly generally pretty boring. This isn't
Speaker 1: this isn't matt lock, this isn't law order. There's not
Speaker 1: going to be anything, you know, really thrilling about this.
Speaker 1: This is all about documents and the details of who
Speaker 1: provided invoices and how it was provided falsely. They're doing
Speaker 1: a simple standard paper case they do for all these
Speaker 1: type of white collar crimes, and by and large, they
Speaker 1: kind of fell in love with the bit of some
Speaker 1: of their evidence, and the judge rained him in and
Speaker 1: that's fine, um, But they're largely setting out a pretty lot,
Speaker 1: you know, lockdown case. I don't really know where manaforts
Speaker 1: defense is going to come in here to really beat
Speaker 1: back most of this. The idea that Richard Gates was
Speaker 1: doing all of this on his own and that Maniford
Speaker 1: didn't know just is belied by the testaments coming out
Speaker 1: from the account they seem to be preparing for that
Speaker 1: defense cross of their star witness, Rick Gates. How does
Speaker 1: Manifort get past tax returns where he answered none to
Speaker 1: the question of whether he had foreign accounts? I mean,
Speaker 1: how do you get past that kind of evidence? Now,
Speaker 1: your guess is as good as mine. Where they're going
Speaker 1: to go with that, and the interesting to see how
Speaker 1: they present their case when the testimony is coming out
Speaker 1: from the accounts from the cp a's the tax prepares
Speaker 1: laid it out pretty thickly that Gates was not the one,
Speaker 1: by and large who was controlling all this, even if
Speaker 1: when he did ford information. They testified that Manafort was
Speaker 1: well aware of the details, that he was very involved.
Speaker 1: So I don't know if the Manafort team has some
Speaker 1: other trick up their sleeve and they're preparing and waiting
Speaker 1: for once they start their case, or if they're just
Speaker 1: banking on one of two things, One Aparton from the
Speaker 1: President who's clearly not happy with this whole thing going
Speaker 1: down because it implicates this campaign. Or two they're hoping
Speaker 1: there's one juror just one who maybe thinks this is
Speaker 1: a little heavy handed, maybe you know, secretly thinks it's
Speaker 1: just the deep state coming out to go after Trump
Speaker 1: through Manafort and won't budge. So, Brad, what are the
Speaker 1: chances that mana Fort might actually take the stands in
Speaker 1: his own defense? Zero to none or yes, I say,
Speaker 1: I say, slim the Nune if he would be completely
Speaker 1: against the advice of his law hears, if he goes
Speaker 1: understand there's no reason for him to go up there.
Speaker 1: This is all about documentation and whether or not they
Speaker 1: can just under ride as our undermine the credibility of
Speaker 1: the prosecution witnesses, particularly someone like Gates. If it gets
Speaker 1: to the idea of Manaphort testifying, that's a hail Mary
Speaker 1: and there's no reason why he should be going up there.
Speaker 1: The prosecution is already putting in evidence of some of
Speaker 1: the illegal things that Gates did in this sort of
Speaker 1: the alteration of documents. So what are they trying to
Speaker 1: do to prepare for gates testimony? Look, I mean, they're
Speaker 1: not going to try to point our story portray Gates
Speaker 1: is some kind of you know, white Knight. He was
Speaker 1: part of the conspiracy. He's now cooperating witness outlining how
Speaker 1: he helped perpetrate or and perpetuate this fraud and explain
Speaker 1: how he did it in coordination with Manaphor. It wasn't
Speaker 1: that Gates was doing it all alone and Manaphort was
Speaker 1: this completely unaware individual. They're gonna outline how every piece
Speaker 1: of this was a coordinated conspiracy involving both of these individuals.
Speaker 1: And what do you make Brad of that one slip
Speaker 1: on on Tuesday, I think it was or Wednesday where
Speaker 1: the prosecution said, well we may not call Gates. I
Speaker 1: mean that that seemed like it was something that even
Speaker 1: the judge didn't believe at the time. Yeah, I don't
Speaker 1: know if that was just a little bit of you know,
Speaker 1: psychological warfare or up the up the drama. There was
Speaker 1: no way as far as at least as far as
Speaker 1: I was concerned that they weren't going to be bringing
Speaker 1: on Gates. He's the star witness. They could probably make
Speaker 1: their case without them. They certainly planned the idea of
Speaker 1: prosecuting both of these individuals without having the other one,
Speaker 1: so they have enough. But it's just I think they've
Speaker 1: done a pretty good job through the initial witnesses of
Speaker 1: demonstrating that Manafort knew what he was doing. Manafort was
Speaker 1: the one setting of the invoices, Manafort was the one
Speaker 1: using wire transfers. The idea that this was all Rick
Speaker 1: Gates and Maniport was unaware. Just isn't Ben a fly?
Speaker 1: What do you mean? We had a Bloomberg News story
Speaker 1: out today about what the deep roots of Trump's hostility
Speaker 1: toward Mueller might be, even before the the initial you know,
Speaker 1: the investigation um where he he he interviewed him to
Speaker 1: be the FBI director. What do you make of that
Speaker 1: as a possible sort of motive. Yeah, I saw that.
Speaker 1: I think if if the fact that's where the President's
Speaker 1: thinking is, I think he's just you know, pulling it
Speaker 1: whatever strand and straw he can to try to claim
Speaker 1: to some type of bias, some type of conflict. I'm
Speaker 1: sorry that what they're pointing to, what Rudy gian Giuliani
Speaker 1: keeps referencing with the President's referencing, that's just a way
Speaker 1: too thin of a read on which to hang this hat.
Speaker 1: The idea that there was a dispute over the golf
Speaker 1: fees seven years ago. That's not going to be enough
Speaker 1: to can flick Mueller out. Nor is the fact that
Speaker 1: he was interviewed for the job that he had once
Speaker 1: held for twelve years. So what this is why the
Speaker 1: d O j f S people looked at Mueller and
Speaker 1: screened him before he took over the role of special counsel.
Speaker 1: He was already cleared for that. Nothing else is come
Speaker 1: up and that's simply not how to COMPLI The interest
Speaker 1: will work, all right, Thanks so much, Brad. As always,
Speaker 1: that's Brad Moss. He's a partner at Mark Zaid. And
Speaker 1: of course the trial will continue tomorrow. It's expected to
Speaker 1: be about three weeks, but at the pace it's going,
Speaker 1: who knows, it could be even shorter. Coming up on Bloomberg, Politics, policy,
Speaker 1: power and law. Rick Scott blankets Florida with campaign ads
Speaker 1: as he tries to unsee Democratic senator Bill Nelson. We'll
Speaker 1: look at the numbers and the latest polls to see
Speaker 1: what's happening in Florida with that important seat. This is Bloomberg. Yesterday,
Speaker 1: the Trump administration took another step in its efforts to
Speaker 1: chip away at President Obama's environmental policies. It proposed suspending
Speaker 1: required increases in vehicle vehicle fuel efficiency standards after and
Speaker 1: to limit California's ability to limit greenhouse gas emissions. Speaking yesterday, yesterday,
Speaker 1: excuse me, White House Press Secretary Sarah Sanders defended the actions.
Speaker 1: What the e p A released yesterday was a notice
Speaker 1: of proposed rule making, not a final rule. The notice
Speaker 1: lays out a series of options for how to go
Speaker 1: forward with CAFE standards, and the notice asked for comments
Speaker 1: on the range of options. We're simply opening it up
Speaker 1: for a comment period, and we'll make a final decision
Speaker 1: at the end of that. Jennifer Deloe is Bloomberg News
Speaker 1: environmental and energy regulation reporters. She joins us Now for
Speaker 1: more on this story in our Bloomberg One Studios. So, Jen,
Speaker 1: what is the process now? Well, right now, we're looking
Speaker 1: at a public comment period, frankly, for the next sixty days.
Speaker 1: At which point stakeholders, you know, environmentalists, automakers, the general
Speaker 1: public will weigh in, give their ideas and feedback back
Speaker 1: to the administration, and then it will be many months
Speaker 1: that we'll see the administration negotiating with automakers, with California
Speaker 1: regulators and others, trying to get to a final proposal.
Speaker 1: We could see at the very end of this year
Speaker 1: or more likely early next year. Does that trouble car makers?
Speaker 1: I mean, that is a long process and they have
Speaker 1: to plan as to how they build these cars and
Speaker 1: what sort of standards they need to meet. Our reporting
Speaker 1: indicates that, you know, automakers are concerned about uncertainty generally. UH.
Speaker 1: It's important to to look at how we got to
Speaker 1: this point. Automakers, frankly, UH to some degree, started this process.
Speaker 1: They asked the Trump administration to revisit the issue and UH,
Speaker 1: and now that Trump administration has UH, they are most
Speaker 1: concerned about a prolonged legal battle with California and other
Speaker 1: states over the aggressiveness and the stringency of these standards.
Speaker 1: That could delay, you know, a final plan next year
Speaker 1: from really taking effect and really extends the uncertainty around
Speaker 1: this for years. As they really need to be making
Speaker 1: cars to meet these standards now, and doesn't this get
Speaker 1: to the fact that they don't. They can't build two
Speaker 1: separate types of cars, one for California and states that
Speaker 1: similarly are tough on emission standards, and then one model
Speaker 1: for the rest of the country. Exactly. So, for years,
Speaker 1: actually decades, California has had the authority and the ability
Speaker 1: to set its own rules on air pollution and UH,
Speaker 1: and that, frankly, as the most populous state, that has
Speaker 1: meant that it's effectively been in the driver's seat. It's
Speaker 1: standards tend to encourage the federal government to follow along.
Speaker 1: Other states follow California's requirements. UH, they set a benchmark
Speaker 1: and UH. In the Adbomit administration, when these UH rules
Speaker 1: were put into place, the administration worked with California and
Speaker 1: with automakers to develop one harmonized program so that you
Speaker 1: didn't have these dueling standards. The concern here from automakers
Speaker 1: is that because the administration is going after California's ability
Speaker 1: to set its own tail pipe emission standards, that you
Speaker 1: could see two different standards emerging, and that of course
Speaker 1: would be tricky. UH. I mean, in some cases it
Speaker 1: would be a significant economic blow. Yeah, I was gonna
Speaker 1: ask why he was going after California specifically, But there
Speaker 1: are other states too that are kind of following California's lead.
Speaker 1: Are they at risk? Is going to target exactly? So
Speaker 1: we had a pretty clear indication of how they felt
Speaker 1: about it. Yesterday, those states, along with some others uh
Speaker 1: nineteen in total, vowed to challenge the Trump administration's plan
Speaker 1: if it's finalized in in its current form. Uh. You know,
Speaker 1: they have a vested interest in preserving essentially the California
Speaker 1: model and the California standards since they follow them, and
Speaker 1: they've indicated they're going to fight this where it has
Speaker 1: big oil been in all of this. It's interesting you
Speaker 1: wouldn't necessarily hear them talking about it too terribly much
Speaker 1: in public, but they have been working behind the scenes
Speaker 1: in favor of the uh some more so, some companies
Speaker 1: more so than others. Refiners, uh, sometimes more than oil producers. Uh.
Speaker 1: We uh. We have reporting that you know, they've met
Speaker 1: with administration officials. Members of these companies and and their
Speaker 1: leading trade groups have met with administration officials to push
Speaker 1: this and and it's really no surprise, I mean, this
Speaker 1: would increase oil demand domestically. Uh, the government estimates that
Speaker 1: it would be some five hundred thousand additional barrels of
Speaker 1: demand in the early twenty thirties. That's per day that
Speaker 1: would result from this program. So you know that that's
Speaker 1: not chump change. It's it's a small amount in a
Speaker 1: in a global market, but it's not it's not insignificant
Speaker 1: to the oil industry, which is why they're quietly lobbying
Speaker 1: behind the scenes on this. You know, Jennet, it occurs
Speaker 1: to me as this whole other industry that exists now
Speaker 1: because of lower pollution in different standards, electric vehicles are
Speaker 1: not going to go anywhere. There are other h you know,
Speaker 1: parts of the industry as well to that provided a
Speaker 1: traction or pushback against the rollbacks, which is I think
Speaker 1: that's a proper sentence. But as that appropriate type of pushback,
Speaker 1: are they speaking up? You know, electric vehicles, as you noted,
Speaker 1: you know, they're they're here to stay elsewhere in the world.
Speaker 1: I think it's it's unclear you know, their long term
Speaker 1: status in the United States, but you know, around the
Speaker 1: world you have government policies that encourage their development in
Speaker 1: places like China and major cities in Europe um that
Speaker 1: that are contemplating in some cases banning combustion engines altogether.
Speaker 1: So you know that global pressure means that automakers need
Speaker 1: electric vehicles to gain more traction. In the United States
Speaker 1: here they're just one percent of new auto sales right now.
Speaker 1: So what came makers don't want our our unrealistic mandates
Speaker 1: that force them to sell these electrics at a huge
Speaker 1: loss for years, uh in the United States just to
Speaker 1: get more traction. They really would like to see a
Speaker 1: program that rewards them in the United States and encourages
Speaker 1: their development here since they're having to sell them around
Speaker 1: the world intense seconds. What's the administration's official reason for
Speaker 1: making this making these changes? Well, they say that the
Speaker 1: proposal would lower the cost of new cars, and because
Speaker 1: it does that, it gets people buying new cars that
Speaker 1: are safer and not holding onto older, clunky or less
Speaker 1: safe models. Okay, Jennifer Gloway, Bloomberg News Environmental and Energy
Speaker 1: regulation reporter, thanks for listening to the Bloomberg Law Podcast.
Speaker 1: You can subscribe and listen to the show on Apple Podcasts,
Speaker 1: SoundCloud and on Bloomberg dot Com slash podcast. I'm June
Speaker 1: Bolso this is Bloomberg,