Speaker 1: This is Bloomberg Law with June Grosso from Bloomberg Radio.
Speaker 2: Welcome to Bloomberg Law. I'm June Grosso. Ahead. In this hour,
Speaker 2: the prosecution is wrapping up its case against Sam Bankman Freed,
Speaker 2: leaving him with a critical decision to make. Inside the
Speaker 2: Supreme Court's second decision allowing Biden's ghost gun regulations, Jack
Speaker 2: Smith tells Trump to put up or shut up, and
Speaker 2: another judge imposes a gag order on Trump res to
Speaker 2: Suard that this committee will not stop until we uncover
Speaker 2: the full truth behind the collapse of FTX. Last December,
Speaker 2: at the House Financial Services Committee hearing on the collapse
Speaker 2: of cryptocurrency firm FTX, John Ray, who was appointed to
Speaker 2: pick up the pieces, testified about what was uncovered during
Speaker 2: an internal investigation.
Speaker 3: The FTX groups collapse appears the time from absolute concentration
Speaker 3: of control in the hands of a small group of
Speaker 3: grossly inexperienced, unsophisticated individuals who failed to implement virtually any
Speaker 3: of the systems or controls that are necessary for a
Speaker 3: company entrusted with other people's money or assets.
Speaker 2: And it's with three of those inexperienced and unsophisticated individuals
Speaker 2: that the prosecution has built its criminal fraud case against
Speaker 2: Sam Bankman Freed, accusing him of using billions of customer
Speaker 2: funds from FTX to spend lavishly and engage in speculative
Speaker 2: trading through its sister hedge fund. The prosecution is expected
Speaker 2: to wrap up its case next week, leaving the defense
Speaker 2: with the critical question of whether Bankment Freed will take
Speaker 2: the stand in his own defense, and any answer is
Speaker 2: fraught with uncertainty. Joining me is former federal prosecutor Michael
Speaker 2: Weinstein of Coal Shots. Michael. In week three, it seems
Speaker 2: like the prosecution has built an almost insurmountable case against
Speaker 2: Bankman Freed.
Speaker 4: It's an extremely strong case for three reasons. Number one,
Speaker 4: because they have first hand individuals who were in the
Speaker 4: room at the table discussing certain acts those being criminal,
Speaker 4: which present a problem for Sam Bacon Freed. They also
Speaker 4: have documents and slack messages and text messages which are
Speaker 4: problematic as well, which supports the improper discussions that were
Speaker 4: being held. And then number three, they have the industry
Speaker 4: itself is fraught with problems and the representations that were
Speaker 4: made to investors and things of that nature, which he
Speaker 4: has said publicly prior to the criminal charges being brought.
Speaker 4: So that's a trifecta of problems for mister Freed, and
Speaker 4: I think his defense lawyers are having a difficult time
Speaker 4: chipping away at some of the things that are being
Speaker 4: said through testimony, notwithstanding the great efforts that they are
Speaker 4: trying to make.
Speaker 2: And I've raised this before that even pre trial, the
Speaker 2: most important rulings seem to go again against the defense,
Speaker 2: and during the trial on cross examination, Judge Caplan seems
Speaker 2: to be keeping the defense lawyers very much in check.
Speaker 4: Yeah, so that's correct. So not only is the defense
Speaker 4: up against testimony and documents, they're up against the judge
Speaker 4: and the structure of the proceeding, and the judge prior
Speaker 4: to trial, for example, you know, prohibited certain of the
Speaker 4: defense witnesses that they wanted to bring in. Example number
Speaker 4: one is the expert from Britain that they wanted to
Speaker 4: bring in to talk about the terms and conditions. So
Speaker 4: their hands were tied from the start of this case,
Speaker 4: and that's really playing out now. In reality, those.
Speaker 2: Will be appealed. But how much are issues like that
Speaker 2: left to the discretion of the judge. I mean, we
Speaker 2: all know it's very difficult to get a conviction, assuming
Speaker 2: he's convicted overturned. How much is that in the discretion
Speaker 2: of the judge.
Speaker 4: A tremendous amount. The judge is the referee essentially, and
Speaker 4: he is able to call balls and strike when necessary.
Speaker 4: And there is guidance through the appellate courts, through the
Speaker 4: Second Circuit, for example, or through other rulings that the
Speaker 4: courts have made, or for instance, the Federal rules of
Speaker 4: criminal procedure guide the court in making those decisions. But
Speaker 4: the judge has given great latitude in determining the type
Speaker 4: of evidence, the relevance of that evidence, how it comes in,
Speaker 4: whether it comes in, whether it can be challenged, things
Speaker 4: of that nature.
Speaker 2: So you had these three witnesses who decided to cooperate
Speaker 2: with the state to our longtime friends of his ones
Speaker 2: a former girlfriend. Does that make their testimony more believable?
Speaker 4: I think it does. And the reason is because they're
Speaker 4: not nuanceto the scene. It's not as though for six months,
Speaker 4: you know, they dropped in out of the sky, and
Speaker 4: then in that six month period there were some criminal acts.
Speaker 4: They gave a little bit of the longer history that
Speaker 4: they had with Sam Bank and Free both the run
Speaker 4: up to him starting the business, their involvement, their role
Speaker 4: in the company, and then ultimately it's spiraling out of control.
Speaker 4: And I think that gives them a little bit of
Speaker 4: credibility in the jury's eyes, because you know, they can
Speaker 4: give a little bit more context, and when they speak
Speaker 4: to things like what Sam bank Unfried was saying at
Speaker 4: some of those meetings and some of the decisions he
Speaker 4: was making, they can give some context to that because
Speaker 4: they've known him so long and so from my perspective,
Speaker 4: when you've got that longtime relationship, that favors the government.
Speaker 4: Insofar as the testimony coming out and really hurting the defendant, by.
Speaker 2: All accounts, the defense didn't make much headway in the
Speaker 2: cross examination of those three Inner Circle witnesses. They did
Speaker 2: poke some holes in the testimony here and there. Does
Speaker 2: that really help.
Speaker 4: In the end? I think the answers probably know it's
Speaker 4: like chopping down an oak tree. You can take a
Speaker 4: couple of swings with an ax, but that's not going
Speaker 4: to take down the tree.
Speaker 2: What about the fact that all three of the Inner
Speaker 2: Circle witnesses, the cooperating witnesses, testified, Yeah, I took part
Speaker 2: in this, but he directed me to do it, and
Speaker 2: when things fell apart, it was mea culpa, maya culpa.
Speaker 2: And now they're testifying to get a better deal, maybe
Speaker 2: even to avoid jail time.
Speaker 4: Well, that certainly is how the defense wants to frame it.
Speaker 4: I think the difficulty with that is they're not getting off.
Speaker 4: They've pled guilty to very significant and very material criminal
Speaker 4: charges which will carry with its significant penalties. And that's
Speaker 4: the response to when the defense says to them during
Speaker 4: a cross examination and did say to them, well, aren't
Speaker 4: you getting a sweetheart deal now? And that's always the
Speaker 4: push and pull when you have a cooperating witness on
Speaker 4: the witness stand, is you know, are they getting really
Speaker 4: a sweetheart deal? And that's where the jury to assess
Speaker 4: their credibility to a jury to assess are they testifying
Speaker 4: only to get a better deal here? It doesn't look
Speaker 4: like they got a great deal here. They knew that
Speaker 4: they were kind of dead in their tracks and wanted
Speaker 4: to save some semblance of the remainder of their life
Speaker 4: by fleading guilty and then moving on with their life.
Speaker 4: But as a consequence to that, they had to testify
Speaker 4: against their former friend.
Speaker 2: Do you think they'll actually serve jail time.
Speaker 4: I think they have real exposure. Yes, there's a lot
Speaker 4: of money here. I think a lot of eyes are
Speaker 4: going to be looking at all of these pleas and
Speaker 4: I think they have some real problems here.
Speaker 2: What do you think of the prosecution's portrayal of bankman
Speaker 2: Freed as this evil puppet master pulling everyone's strings.
Speaker 4: Look, I mean, I think that's somewhat of the narrative
Speaker 4: that the government has to tell. They don't want to
Speaker 4: suggest that he was this ninety twenty year old kid
Speaker 4: just you know, playing with house money. I think they
Speaker 4: have to make him out to be a little bit
Speaker 4: more sinister, a little more systematic. I'm a little bit
Speaker 4: more conniving. That is just part of their narrative. I mean,
Speaker 4: when I look at all of these guys, the three
Speaker 4: cooperating witnesses who played guilty and standbank and free, it
Speaker 4: just reminds me of when I sit in the room
Speaker 4: and I look at my nieces and nephews who were
Speaker 4: in their twenties, and I look and I think to myself,
Speaker 4: could they be entrusted with ten twenty thirty billion dollars?
Speaker 4: And the answer is no, you know, And it's remarkable
Speaker 4: to me that very sophisticated investors gave so much money
Speaker 4: repeatedly to a group of people that were in their
Speaker 4: mid twenties, and we're, you know, waving a shiny object,
Speaker 4: which was cryptocurrency. So that's a larger takeaway from this situation.
Speaker 4: I think all four of them have some real exposure here.
Speaker 2: The big question is at every criminal trial is whether
Speaker 2: the defendant will take the stand in his own defense.
Speaker 4: What do you think? I think that's a great question,
Speaker 4: and someone in Vegas is probably betting on that. I
Speaker 4: think he may want to do something. His lawyers may
Speaker 4: want to do something very different, although I think they're
Speaker 4: setting it up with the recent argument that he's not
Speaker 4: getting his medication, he's not able to assist in his
Speaker 4: own defense. So you can kind of see the ground
Speaker 4: work being laid where they may not call him because
Speaker 4: he's not getting his medication, and maybe they're setting up
Speaker 4: an appeal issue that he maybe would have testified. But look,
Speaker 4: the reason defendants testify is because they believe that they
Speaker 4: can tell their story better and they can provide an
Speaker 4: explanation and they can justify what they did and how
Speaker 4: they did it. Here, that's very, very difficult because he's
Speaker 4: going to have to counter three people who were in
Speaker 4: the room during these discussions, who all gave pretty consistent testimony.
Speaker 4: And for him to testify, of course, he's opening himself
Speaker 4: up and risking a pretty ferocious cross examination, and that
Speaker 4: is a real problem for him in all.
Speaker 2: The prior statements he's made. But well, I want to
Speaker 2: say it's his only hope, his only chance to convince
Speaker 2: perhaps one or two jurors.
Speaker 4: Correct. I mean, he may feel, and his defense lawyers
Speaker 4: may feel, what have I got to lose? We're deep
Speaker 4: in the hole here, and this may be the only
Speaker 4: ladder out is to have him testify and to humanize
Speaker 4: the situation and to talk about how he really tried
Speaker 4: to do all the right things, and he wasn't misleading anyone,
Speaker 4: and he really tried to make, you know, good decisions,
Speaker 4: and he relied upon other people. He relied upon Miss Ellison,
Speaker 4: he relied upon mister Gary Wong, things of that nature.
Speaker 4: But again, as good as he thinks his testimony is
Speaker 4: going to come off, the prosecution is salivating, waiting in
Speaker 4: the wings to cross examine him and to use a
Speaker 4: multitude of statements he's made previously in their examination and
Speaker 4: that's going to be quite fascinating.
Speaker 2: Well, if he does take this, and there's one thing
Speaker 2: that's certain, the courtroom will be packed, and we may
Speaker 2: find out as early as next Thursday. Thanks so much, Michael.
Speaker 2: That's former federal prosecutor Michael Weinstein of Cole Shots. Coming
Speaker 2: up next on the Bloomberg Law Show. It's a Supreme
Speaker 2: Court decision about regulations on ghost guns. But the justices
Speaker 2: seem to be sending a strong message to the Fifth
Speaker 2: Circuit and a Texas judge. I'm June Grosso and you're
Speaker 2: listening to Bloomberg. Last month, New York City Mayor Eric
Speaker 2: Adams announced that in a search of a private daycare
Speaker 2: in Harlem, police recovered drugs, ghost guns, and the three
Speaker 2: D printer used to make them. Who would have thought
Speaker 2: that we must add to our list of inspections of
Speaker 2: do we have three D printers that.
Speaker 4: Can print guns?
Speaker 2: The Biden administration has issued regulations on these ghost guns,
Speaker 2: which are assembled from kits without the usual serial numbers
Speaker 2: and background checks on purchasers, making them attractive to teenagers
Speaker 2: and those with criminal records. And this week, for the
Speaker 2: second time in three months, the Supreme Court has reinstated
Speaker 2: those regulations, blocking a second nationwide injunction issued by Texas
Speaker 2: Federal Judge Rite O'Connor and okayed by the Fifth Circuit.
Speaker 2: Does this mean the Supreme Court is telling the judge
Speaker 2: and the Fifth Circuit no, means no? Or does it
Speaker 2: mean something more substantive about ghost gun regulations joining me
Speaker 2: is Heidi Lee Feldman, a professor at Georgetown Law. So
Speaker 2: let's go back to the August decision where the Supreme
Speaker 2: Court blocked a nationwide injunction by Judge rite O'Connor and
Speaker 2: allowed the government to keep enforcing the regulations on ghost guns.
Speaker 2: Should that have been the end of this until the
Speaker 2: case was fully litigated.
Speaker 1: One would have thought so. And that's certainly ultimately the
Speaker 1: position the government took. It was very peculiar that they
Speaker 1: sought an injunction pending appeal. That is, an alteration in
Speaker 1: the procedural posture of the case. They didn't give any
Speaker 1: new reason for seeking an injunction while the case was pending,
Speaker 1: and that was I think the really controversial thing. Nothing
Speaker 1: had changed in the facts or the law that would
Speaker 1: be relevant to granting an injunction. So ordinarily, if a
Speaker 1: party did that the judge would just deny it because
Speaker 1: they had just had an injunction overturned by the Supreme Court.
Speaker 1: Of course, in this case, Judge O'Connor granted the injunction
Speaker 1: and didn't give any new reasons, and the Court really
Speaker 1: just put the kebash on that and said no, no.
Speaker 2: Also, the Fifth Circuit upheld his order.
Speaker 1: Yeah, look, there's several very contested matters that are driving
Speaker 1: this litigation. Ghost gun manufacturers come in and say, we
Speaker 1: object to this ATF rule making, which seems to require
Speaker 1: us to take all sorts of steps that people who
Speaker 1: make firearms have to take. We're arguing we're not firearms manufacturers,
Speaker 1: we're parts suppliers. So that whole dynamic introduces guns into
Speaker 1: the mix. Then we have a federal agency ATF, which
Speaker 1: has its own long complicated history. Then we have a judiciary,
Speaker 1: certainly O'Connor and the Fifth Circuit, that's very keen to
Speaker 1: invalidate agency rulemaking. So I think the Fifth Circuit as
Speaker 1: a whole was very moved by that agenda, and so
Speaker 1: they do uphold O'Connor's order, And so ultimately, of course,
Speaker 1: the Supreme Court is rejecting the Fifth Circuits position as
Speaker 1: well as O'Connor's position on the injunction. But the fact
Speaker 1: that the Supreme Court took that position isn't an indication
Speaker 1: of how they would ultimately rule on the merits as
Speaker 1: much as I think it was a rejection of the
Speaker 1: challenge to the authority of their earlier ruling.
Speaker 2: So the Court's August order was a five to four
Speaker 2: decision where Chief Justice John Roberts and Justice Amy Cony
Speaker 2: Barrett joined the Court's three liberals. So there were four
Speaker 2: descents in August, but no justice publicly dissented from this
Speaker 2: order that was handed down on Monday. Does that mean
Speaker 2: the justices are telling the judge in the Fifth Circuit
Speaker 2: no means no? Or does it mean something more substantive
Speaker 2: about ghost gun regulations.
Speaker 1: It's very hard to read tea leaves from these orders
Speaker 1: that are issued without opinions, and these are orders that
Speaker 1: relate to not the final merits on the case. So
Speaker 1: I want to sound a note of caution. I think
Speaker 1: that there are justices on the Court who may be
Speaker 1: very unsympathetic to the ATF rulemaking related to ghost guns,
Speaker 1: who realize that you simply cannot operate our system of
Speaker 1: litigating ca case by case and letting different courts reach
Speaker 1: different conclusions if they disagree, and seeing what emerges up
Speaker 1: through the process and what rit O'Connor and the Fifth
Speaker 1: Circuit wanted to do absolutely disrupts that process. It also
Speaker 1: wastes the Supreme Court's time. I mean, they do not
Speaker 1: want to have to keep issuing redundant interlocutory orders. That's
Speaker 1: just completely inefficient for them. So I think you could
Speaker 1: have justices who may be less sympathetic to the idea
Speaker 1: of letting the ATF rule making stand or more sympathetic
Speaker 1: to relatively unfettered sales of ghost guns, who nevertheless see
Speaker 1: procedural chaos from what the Fifth Circuit and Judge O'Connor did.
Speaker 2: The Fifth Circuit last term lost I think seven out
Speaker 2: of a cases at the Supreme Court, and they have
Speaker 2: a lot of cases before the court this year, and
Speaker 2: many of them are from judges in Texas like rit
Speaker 2: O'Connor that seem to have novel shall we say, novel
Speaker 2: legal reasoning and their decisions.
Speaker 1: I mean, do you think we have to I think
Speaker 1: we have to be as a stronger word than novel.
Speaker 1: Look in sophisticated litigation in federal courts, advocates, and courts
Speaker 1: are advancing the law, So there's often something novel in
Speaker 1: what they argue, in what courts hold. That's neither unexpected
Speaker 1: nor unusual. What is problematic is when you have a
Speaker 1: court and the federal judiciary in Texas, the district court
Speaker 1: level is like this, and the Fifth Circuit is like this,
Speaker 1: that is receptive to extreme arguments. They're not just creative novel,
Speaker 1: they are highly contentious. Now, if you have a court
Speaker 1: that is receptive to that, maybe some of those highly
Speaker 1: contentious and highly extreme arguments well ultimately be vindicated. But
Speaker 1: the more extreme the substance is of a position that's
Speaker 1: being taken, the more cautious general courts are in composing
Speaker 1: big procedural consequences until those big arguments and positions go
Speaker 1: through the appellate process of review. So I think that
Speaker 1: the Fifth Circuit and the Texas district courts in general
Speaker 1: generate a lot of extreme positions. What we saw here
Speaker 1: was this intersection of extreme positions and willingness first to
Speaker 1: issue a very sweeping injunction on the basis of the
Speaker 1: extreme position nationwide injunction, and then to sort of double
Speaker 1: down on that after the Supreme Court said it wasn't appropriate.
Speaker 1: The combination of extreme positions and aggressiveness about imposing consequences
Speaker 1: before the appellate process has played out thoroughly is a
Speaker 1: way of really throwing a spanner in the gears of adjudication,
Speaker 1: as the Federal Court understands it, and they're just not
Speaker 1: going to tolerate that.
Speaker 2: So frame for us the message the Supreme Court is
Speaker 2: sending to the Fifth Circuit and Judge O'Connor.
Speaker 1: They're saying, don't play games with us about procedure. If
Speaker 1: you have very good reason to believe that we've taken
Speaker 1: a given position, don't pretend we haven't taken that position
Speaker 1: and act contrary to what we already said. I mean,
Speaker 1: in some ways, what they're saying is you cannot pretend
Speaker 1: that we haven't spoken. I mean, in some sense, it
Speaker 1: sounds so simple. When you have a judicial system that's
Speaker 1: founded on the idea of appellate review, lower courts are
Speaker 1: answerable to higher courts in that system. So in some sense,
Speaker 1: it's very bizarre for the High Court to have to
Speaker 1: issue an order that I think is basically saying you're
Speaker 1: totally acting way outside of your job.
Speaker 5: You are flouting your role.
Speaker 1: That's what I think they were saying.
Speaker 2: And we'll see if the Fifth Circuit and Judge O'Connor
Speaker 2: have gotten that message. Thanks so much. That's Professor Heidi
Speaker 2: Lee Feldman of Georgetown Law. A note. Michael Bloomberg, the
Speaker 2: founder and majority owner of Bloomberg LP, the parent company
Speaker 2: of Bloomberg Radio, is a donor to groups that support
Speaker 2: gun control, including every Town for Gun Safety. Coming up
Speaker 2: next on the Bloomberg Law Show, special counsel Jack Smith
Speaker 2: tells Donald Trump to put up or shut up. I'm
Speaker 2: June Grosso and you're listening to Bloomberg.
Speaker 6: I made it clear I did not agree with the
Speaker 6: idea of saying the election was stolen and putting out
Speaker 6: this stuff, which I told the President was both, and
Speaker 6: you know, I didn't want to be a part of it,
Speaker 6: and that's one of the reasons that went into me
Speaker 6: deciding to leave when I did.
Speaker 2: Former Attorney General William Barr is just one of a
Speaker 2: number of lawyers from the Justice Department, the White House,
Speaker 2: and his own campaign who advised Donald Trump that the
Speaker 2: twenty twenty election was not fraudulent. But the former president
Speaker 2: rejected that advice and looked for outside lawyers who would
Speaker 2: tell him what he wanted to hear, like John Eastman,
Speaker 2: Sidney Powell, and Rudy Giuliani. Trump and his attorney John
Speaker 2: Laurrow have repeatedly said publicly that they're going to use
Speaker 2: the advice of those outside lawyers as a defense at
Speaker 2: his trial on charges of attempting to overthrow the election.
Speaker 7: Mister Trump had the advice of counsel mister Eastman, who
Speaker 7: was one of the most respected constitutional scholars in the
Speaker 7: United States, giving him advice and guidance.
Speaker 2: But the Trump defense team hasn't told the trial judge
Speaker 2: whether they're going to use that blame the lawyer's strategy.
Speaker 2: So now special counsel Jack Smith is telling Trump in
Speaker 2: non legal terms to put up or shut up. Joining
Speaker 2: me is Barbara McQuaid, a professor at the University of
Speaker 2: Michigan Law School and the former US Attorney for the
Speaker 2: Eastern District of Mission Again. She's written a column for
Speaker 2: MSNBC on the consequences of Trump using this defense. Jack Smith,
Speaker 2: as you write in your column, is asking former President
Speaker 2: Donald Trump to put his money where his mouth is,
Speaker 2: or at least of what his documents there tell us.
Speaker 2: What it's about well.
Speaker 5: Donald Trump has very publicly hinted that his defense in
Speaker 5: the case is going to be advice of counsel, that
Speaker 5: he relied on lawyers like John Eastman and others to
Speaker 5: tell him what he could do to challenge the election results,
Speaker 5: and therefore he acted me faith and that makes it
Speaker 5: impossible for the prosecution to prove his guilt. That's fine
Speaker 5: if he wants to rely on that, but first he
Speaker 5: has to show he had a legitimate attorney client privilege
Speaker 5: with the people he's talking with. So far, twenty five
Speaker 5: different people have asserted attorney client privilege in the case,
Speaker 5: So that is not a foregone conclusion that he will
Speaker 5: be able to establish that he had that relationship with
Speaker 5: all twenty five of them, that he relied on their
Speaker 5: advice and good faith. And if he wants to use
Speaker 5: this defense, he must waive the attorney client privilege and
Speaker 5: turn over all the documents memorializing any conversation he had
Speaker 5: then he relied on, as well as anything that might
Speaker 5: tend to negate that defense. And so he gets to
Speaker 5: make a choice. Does he want to preserve his attorney
Speaker 5: client privilege, that's fine, But if he does, and he
Speaker 5: can't use this advice of council defense. And on the contrary,
Speaker 5: if he wants to use the advice of council defense,
Speaker 5: then he can't continue to safeguard the attorney client privilege
Speaker 5: of these documents. And so the court has given a
Speaker 5: discovery cut off date of December, and Special Counsel Jacksmith
Speaker 5: is said, that's the time.
Speaker 4: Which is it.
Speaker 5: Are you going to use this defense or are you
Speaker 5: going to turn over all of the material you previously
Speaker 5: has said is privilege.
Speaker 2: Is the special counsel contending that Trump can't use this defense,
Speaker 2: doesn't meet the qualifications to use it.
Speaker 5: He says, we are not making that argument yet, but
Speaker 5: I will. I'm not waving that argument. I can test
Speaker 5: his ability to use it. But if he uses it
Speaker 5: in the court says he can use it, then he
Speaker 5: must turn over all of those privileged materials materials to
Speaker 5: Achu's claiming privilege. You can't have it both ways, and
Speaker 5: so he's got to at some point make a decision.
Speaker 2: Is the Special Council estimating that this is you know,
Speaker 2: ten documents, twenty hundreds, I mean, is it a vast
Speaker 2: volume of documents?
Speaker 5: Perhaps no one really knows. It could be zero and
Speaker 5: maybe that there's nothing. But there're twenty five people who
Speaker 5: declined to testify or produce documents when subpoena to do
Speaker 5: so by asserting attorney client privilege. And so I think
Speaker 5: the time has come to litigate that to find out
Speaker 5: whether any of them really has an attorney client privilege.
Speaker 5: And if he's going to say I relied on the
Speaker 5: advice of my attorneys, well.
Speaker 4: Let's see it.
Speaker 5: What was the advice. We need to see it, We
Speaker 5: need to hear it so that prosecutors can rebut that defense.
Speaker 2: I know in the Sam Bankman Freed trial, the judge
Speaker 2: there ruled that the defense couldn't refer to advice of
Speaker 2: counsel in the opening statements, that it would cause too
Speaker 2: much confusion for the jury, and that if they wanted
Speaker 2: to raise it later on and introduce evidence about it,
Speaker 2: they would have to consult him. So does the judge
Speaker 2: make the decision as to whether or not Trump can
Speaker 2: use the affirmative defense of adviceive counsel.
Speaker 5: Yes, it's sort of a threshold affirmative defense, and so
Speaker 5: if he can show that he's got a basis for it,
Speaker 5: he'd have to reveal this privileged material and then the
Speaker 5: parties would argue it and litigate it, and the judge
Speaker 5: would decide whether he gets to tell the jury about this. Now,
Speaker 5: the jury might still say, I don't think it was
Speaker 5: reasonable when you got this advice. No one would have
Speaker 5: relied on this advice as any legitimate thing. But before
Speaker 5: it even gets to the jury, the judge has to
Speaker 5: make that heat keeper decision about whether it's going to
Speaker 5: come in, and that is based on whether it meets
Speaker 5: kind of the legal definition that it was privileged, that
Speaker 5: a privileged relationship was developed, and that Donald Trump relied
Speaker 5: on it in good faith. You have to make a
Speaker 5: prima facie showing you know some evidence to suggest that
Speaker 5: this is true before it'll go to the jury. And
Speaker 5: the concern is if it is not a legitimate, then
Speaker 5: you don't want to confuse the jury by letting them
Speaker 5: hear about it without the judge first making that gatekeeper's call.
Speaker 2: As you mentioned in your column, Trump rejected the advice
Speaker 2: of White House lawyers, Justice Department lawyers, campaign lawyers in
Speaker 2: favor of these outside council and three of them have
Speaker 2: been indicted with him. In Georgia and Justice Week two,
Speaker 2: Sidney Powell and Kenneth Cheeseborough have pleaded guilty to charges
Speaker 2: in that case. Can Trump just pick and choose which
Speaker 2: attorney's advice he wants to follow?
Speaker 5: Well, the question for a jury if he gets past
Speaker 5: that threshold stage would be to decide whether his reliance
Speaker 5: on the Advisive Council was reasonable, And so I think
Speaker 5: this would be evidence that cuts against a finding that
Speaker 5: it was reasonable. I think William Barr has said this,
Speaker 5: as has Mark Short, who was counseled to Mike Pence
Speaker 5: to say, the Justice Department, the White House, his campaign
Speaker 5: lawyers all said you cannot do this, and he went
Speaker 5: looking for another opinion that would satisfy him that he
Speaker 5: still had a route to victory. And it was sort
Speaker 5: of a Kakameimi wild theory that he looked for until
Speaker 5: he found the one that he liked. And so I
Speaker 5: think the prosecutors would argue that to the extent he
Speaker 5: relied on that advice who was not in good faith.
Speaker 2: This is a really tough decision for the defense, isn't it,
Speaker 2: Because you have all this material that they have to
Speaker 2: turn over or we assume all this material. But then
Speaker 2: on the other side, you have a defense that might
Speaker 2: not work, and the judge might not even allow yes.
Speaker 5: And I think, you know, this is some of the
Speaker 5: strategy that occurs pre trial in cases that are usually
Speaker 5: kind of outside of public view but are really interesting
Speaker 5: questions that lawyers have to decide tactically. I imagine one of
Speaker 5: the things you'd want to look at is what is
Speaker 5: the material, how much is there and how damaging is
Speaker 5: it to the defense. But this really has been, at
Speaker 5: least in the court of public opinion, the defense raised
Speaker 5: most frequently. That Donald Trump genuinely believed he could do
Speaker 5: this because he has lawyers telling him he could, and
Speaker 5: so it seems that he almost has to go with
Speaker 5: that defense. And if he's going to, he needs to
Speaker 5: turn over these documents. Now, I suppose he could change
Speaker 5: his tech and decide that's not his strategy. After all,
Speaker 5: he's got some other defense he's going to use, or
Speaker 5: you know, he's not going to raise an affirmative defense
Speaker 5: at all and put the government to its proofs. But
Speaker 5: he can't have it both ways.
Speaker 8: And that's the point that jacksm is making it his please.
Speaker 2: Sometimes he changes strategies in mid sentence. I don't know so, Barbara,
Speaker 2: from reading the papers, it seems the prosecution is admitting
Speaker 2: that there's nothing in the federal Rules of Criminal Procedure
Speaker 2: that says a judge can require a defendant to reveal
Speaker 2: this advice of council defense before trial, which is what
Speaker 2: the Special Council is asking here. So where do the
Speaker 2: courts stand on that? Will it be up to the
Speaker 2: judge to decide yes.
Speaker 5: So there's nothing that really answers this question either way.
Speaker 5: This is not a defense that gets raised with enough regularity.
Speaker 5: I imagine that there's a specific rule on it. So,
Speaker 5: for example, the Rules of Criminal Procedure do say you
Speaker 5: must give advanced notice for an alibi defense or an
Speaker 5: insanity defense or public authority defense, And that's because it
Speaker 5: takes some time for the prosecution to sort of run
Speaker 5: down those defenses to make sure they've got evidence to
Speaker 5: rebut them. If you just allow the defendant to assert
Speaker 5: it in the middle of a trial, it could encourage
Speaker 5: people to raise it without any real basis, and the
Speaker 5: government would lack the ability to investigate to try to
Speaker 5: disprove those defenses. For adviceive counsel. The rules are really
Speaker 5: silent on whether there needs to be advanced notice or not.
Speaker 5: But what Jacksmith is arguing is this is very much
Speaker 5: like those kinds of defenses, like an alibi defense or
Speaker 5: an insanity defense, where if you spring it in the
Speaker 5: middle of trial, it's going to be very difficult for
Speaker 5: us to investigate this in a way that is thorough
Speaker 5: and accurate, and so he should be forced to show
Speaker 5: his hand before trial. They suggest December on this discovery
Speaker 5: cutoff date, so that if he's going to use this defense,
Speaker 5: they are going to get all of that allegedly privileged material,
Speaker 5: and if it gets dumped on them in the middle
Speaker 5: of trial, it would either causeous delay or an inability
Speaker 5: to review it all at that stage.
Speaker 2: When the defense responds to the Special Counsel's motion, it'll
Speaker 2: be interesting to see whether there are any hints about
Speaker 2: Trump's intention to use that advice of council defense. Thanks
Speaker 2: so much, Barbara. That's Professor Barbara McQuaid of the University
Speaker 2: of Michigan Law School. Coming up next on the Bloomberg
Speaker 2: Law Show, we'll tell you about the partial gag or
Speaker 2: the judge in the case issued against Donald Trump. I'm
Speaker 2: June Grosso and you're listening to Bloomberg. My speech has.
Speaker 4: Been taken away from me.
Speaker 2: I'm a candidate that's running for office, and I'm not
Speaker 2: allowed to stay. This is a real road. It's all
Speaker 2: coming out of the Deparment of Justice.
Speaker 4: Is all set up by bike and his thuffs that.
Speaker 1: He's surrounded with.
Speaker 2: Of course, contrary to his assertions, Donald Trump was in
Speaker 2: fact still speaking to the media about his trial even
Speaker 2: after federal Judge Tanya Chutkin imposed a partial gagg order
Speaker 2: on him. The order bars the former president from publicly
Speaker 2: criticizing witnesses, prosecutors, and court staff involved in the Special
Speaker 2: Council's case charging him with plotting to overturn the twenty
Speaker 2: twenty presidential election. Remarks like this, and.
Speaker 6: Did you see today that deranged Jack Smith. He's the prosecutor.
Speaker 6: He's a deranged person, wants to take away my rights.
Speaker 2: The judge found that Trump's barrage of verbal attacks on
Speaker 2: those involved in the case posed a significant and immediate
Speaker 2: risk of intimidating witnesses and jeopardizing the safety of the
Speaker 2: public servants involved. Joining me is former prosecutor Rebecca Royfie,
Speaker 2: a professor at New York Law School. Rebecca tell us
Speaker 2: about the competing interests the judge had to weigh in
Speaker 2: making this decision on Monday.
Speaker 8: So judges are in a difficult position because they're weighing
Speaker 8: the importance of the integrity of their proceedings and concern
Speaker 8: for manipulation of witnesses, potential jurors, and any other kind
Speaker 8: of undermining of the fairness of the process, along with
Speaker 8: a extremely important First Amendment right that anyone has to
Speaker 8: speak out, but particularly somebody who's running for president of
Speaker 8: the United States. She has to assert herself as control
Speaker 8: in her courtroom in some manner. I mean, she can't
Speaker 8: just let this go by. And so you know, I
Speaker 8: think this is as good a solution as any. There's
Speaker 8: certain restrictions, and my guess is she's not going to
Speaker 8: police things when he runs right up to the line.
Speaker 8: But you know, there's an outer limit and he can't
Speaker 8: go too far beyond it. And I think, you know,
Speaker 8: threatening particular witnesses, calling people out by name, the kind
Speaker 8: of thing he did in the New York civil case
Speaker 8: where he's posted a picture of a core clip, I mean,
Speaker 8: and that's just making a mockery of the court room.
Speaker 2: She mentioned some options if he violates the gag order,
Speaker 2: including admonishing Trump in court, which I believe has been
Speaker 2: done before by a couple of crimes, imposing financial panel's
Speaker 2: home detention or evoking his pre trial Least, we know
Speaker 2: that Trump has defied these kinds of court orders before.
Speaker 2: What do you think it will take to make her
Speaker 2: act on it.
Speaker 8: I think what she's trying to do is emphasize the
Speaker 8: power of a court order that once it's in place,
Speaker 8: it's easier to enforce than these vague conditions of release
Speaker 8: that may or may not have been violated, and that
Speaker 8: requires some kind of adversary process that she's saying this
Speaker 8: could be very quick and very swift and severe, and
Speaker 8: that is just a way of trying to get him
Speaker 8: not to do it. Whether that's successful, I don't know,
Speaker 8: because he also understands that her hands are tied in
Speaker 8: part by his role. That to put him on home
Speaker 8: arrest or to put him in prison while he's running
Speaker 8: for president, I mean, that would be so extreme and
Speaker 8: there's no chance that she's going to do that, So
Speaker 8: she puts it on the table. Of course, legally she's
Speaker 8: allowed to do it, but she's never going to do it.
Speaker 8: And to what extent is he here to push that?
Speaker 8: And if she does it. It's this great political windfall
Speaker 8: for him because he could say that the Biden administration
Speaker 8: locking me up so I won't win, or he gets
Speaker 8: away with it. And so in a way, it's sort
Speaker 8: of a genius move.
Speaker 4: I mean, this is.
Speaker 8: Trump's particular genius, his ability to do this and his
Speaker 8: willingness to do this.
Speaker 2: A day after the judge issued this order, Trump filed
Speaker 2: notice that he's going to appeal it. Do you think
Speaker 2: that this order will withstand and appeal?
Speaker 8: My guess is it will. It was narrowly drawn, and
Speaker 8: it isn't too far away from what judges do in
Speaker 8: situations like this. I think the untested territory is just
Speaker 8: the stature and the nature of the defendant here, and
Speaker 8: he is running for president, and so the core political
Speaker 8: speech is like at the very core of the very core,
Speaker 8: and so you know, it is possible that an appellate
Speaker 8: court could disagree with her, but there's a lot of
Speaker 8: deference here, and she hasn't done anything wild or extremely
Speaker 8: unusual here. So my guess is that there won't be
Speaker 8: a reversal of the gag order. And he runs right
Speaker 8: up to the line and kind of pushes it, and
Speaker 8: she admonishes, and this is kind of a game that
Speaker 8: goes all the way up until March.
Speaker 2: We'll see what the DC Circuit says. Thanks so much, Rebecca.
Speaker 2: That's Professor Rebecca Royfe of New York Law School. This
Speaker 2: is Bloomberg Law on Bloomberg Radio. I'm June Grosso. Stay
Speaker 2: with us. Today's top stories and global business headlines are
Speaker 2: coming up right now.