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Speaker 1: This is Bloomberg Law with June Grosso from Bloomberg Radio. Hi, everyone,

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Speaker 1: the show here. As you may have heard, Congress passed

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Speaker 1: the bill that the presidents signed in the law that

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Speaker 1: is designed to ban TikTok in the United States. That

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Speaker 1: will take TikTok away from you and one hundred and

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Speaker 1: seventy million Americans who find community and connection on all

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Speaker 1: platform TikTok.

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Speaker 2: Ceo show too, wasted no time in telling the app's

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Speaker 2: users that the company was going to fight in the

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Speaker 2: courts to challenge a new law requiring it to sell

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Speaker 2: the popular video sharing app or face a band rest assured.

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Speaker 1: We aren't going anywhere. We are confident and we will

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Speaker 1: keep fighting for your rights in the courts. The facts

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Speaker 1: and the Constitution are on our side, and we expect

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Speaker 1: to prevail again.

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Speaker 2: Again because TikTok has been successful in block attempts to

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Speaker 2: ban it. But this legal battle pitting free speech rights

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Speaker 2: against national security interests will be prolonged and will likely

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Speaker 2: end up at the Supreme Court. Joining me is Professor

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Speaker 2: Eric Golman, co director of the High Tech Law Institute

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Speaker 2: at Santa Clara University School of Law. So TikTok ensuing said,

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Speaker 2: for the first time in history, Congress has enacted a

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Speaker 2: law that subjects a single name speech platform to a

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Speaker 2: permanent national ban and bars every American from participating. That's true,

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Speaker 2: is and it this is unprecedented to my knowledge.

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Speaker 3: It is. And it's really important for your listeners to

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Speaker 3: understand that the legislation specifically names TikTok as a company

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Speaker 3: and says this company cannot exist in its current format,

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Speaker 3: and that's a pretty rare thing for a legislature to do.

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Speaker 2: Tell us about the complaint, you know, the main causes

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Speaker 2: of action, the main reasons why TikTok says this is

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Speaker 2: on constitution.

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Speaker 3: TikTok claims that the divestiture requirement parallel being banned violates

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Speaker 3: the Constitution, violates its First Amendment rights, is an unconstitutional

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Speaker 3: bill of a tainder, and it violates its equal protection rights.

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Speaker 3: But the real payload is about the First Amendment. That's

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Speaker 3: where everyone expects the action to be that Congress is

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Speaker 3: shutting down TikTok speech.

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Speaker 2: As far as Congress shutting down TikTok speech, which seems

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Speaker 2: pretty obvious, what are the defenses that the government can

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Speaker 2: use to defend against that?

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Speaker 3: The primary rebuttal will be that Congress active based on

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Speaker 3: national security concerns, that there are serious concerns about the

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Speaker 3: ways of which TikTok operates that jeopardize national interests here

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Speaker 3: in the United States. The problem with that argument is

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Speaker 3: that we as the public haven't seen that data. To

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Speaker 3: extent that the data has been made available to Congress,

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Speaker 3: it was done so in large part under Seal, which

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Speaker 3: means that Congress sencing information in the public hasn't It's

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Speaker 3: possible that we would agree that the evidence is significant

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Speaker 3: and troubling. It's also possible that it's completely fictional, and

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Speaker 3: so we don't know how to evaluate this national security

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Speaker 3: justification for the band I mean part because we don't

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Speaker 3: have the evidence that Congress has been relied upon.

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Speaker 2: That's something that the complaint alleges that the government has

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Speaker 2: yet to provide evidence of the Chinese government misusing TikTok,

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Speaker 2: and they also say that the concern is just about

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Speaker 2: a hypothetical possibility that TikTok could be misused in the future.

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Speaker 2: I mean, has there been any evidence at all in

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Speaker 2: the public that TikTok has been misused or that the

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Speaker 2: Chinese government is using it.

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Speaker 3: There have been some whistleblower type complaints that have provided

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Speaker 3: some evidence suggesting that those complaints have been subject to

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Speaker 3: their own critical scrutiny, so a little hard to know

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Speaker 3: how reliable they are. But I think that it's important

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Speaker 3: to reinforce the hypothetical nature of this that the evidence

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Speaker 3: showing that the Chinese government is actually undermining our national

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Speaker 3: security using TikTok is vanishingly thin, if not non existent,

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Speaker 3: And so it's uncomfortable and perhaps in permission one to

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Speaker 3: the First Amendment for Congress to ban an app on

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Speaker 3: the potential that it might cause some future harm. If

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Speaker 3: that's the grounds for banning speech, then of course legislators

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Speaker 3: can always manufacture those types of hypothetical concerns.

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Speaker 2: So if this goes to trial, what a court, or

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Speaker 2: even before trial, would a court ask the government to

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Speaker 2: provide evidence that their concerns are real and not just speculation.

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Speaker 3: Yeah, there will be no doubt that in order for

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Speaker 3: the government to prevail, they're going to have to show

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Speaker 3: some of the evidence that was shown to Congress, and

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Speaker 3: they'll likely do that under steal and I believe in

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Speaker 3: fact that's why this case is being litigated in the

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Speaker 3: particular venue is being litigated in because I think that

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Speaker 3: court regularly deals with national security concerns, so they may

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Speaker 3: have the clearance of necessary in order for the government

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Speaker 3: to even.

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Speaker 1: Share the evidence the DC Circuit correct.

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Speaker 3: That's an unusual thing, is you know, normally litigation starts

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Speaker 3: at a district court with a single judge, but instead

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Speaker 3: this is going to an appellate court, which is likely

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Speaker 3: to have multiple judges on the panel. And that's a

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Speaker 3: weird place for a case like this to start because

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Speaker 3: the appellate court's not in the business normally of doing

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Speaker 3: evidence gathering in review, and they're going to have to

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Speaker 3: do that in this case.

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Speaker 2: Content based restrictions have to meet a higher level of scrutiny,

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Speaker 2: So will the government have to explain why it didn't

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Speaker 2: pursue less speech restrictive alternatives to address its concerns.

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Speaker 3: One of the ways that the government can justify the

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Speaker 3: interventions that made this the best or ban is by

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Speaker 3: saying that there were no better other options that would

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Speaker 3: have preserved speech and still accomplish the government's goals. So

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Speaker 3: we used the phraseology were there less restrictive alternatives to

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Speaker 3: the government. If so, then the method that they chose

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Speaker 3: impacted speech too greatly. There was a way of doing

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Speaker 3: it without impacting speech quite as much, and the constitution

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Speaker 3: would require that lesser alternative.

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Speaker 2: The complaint argues that a sale from ByteDance is impossible

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Speaker 2: and that the law would force a shutdown. Is that

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Speaker 2: because of the Chinese government's restrictions on the sale of

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Speaker 2: certain technologies like algorithms.

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Speaker 3: The complaint makes a number of arguments about why it

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Speaker 3: would be impossible to divest. There are some concerns about

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Speaker 3: transferring the algorithm, and there may be limits from the

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Speaker 3: Chinese government on the transference of the algorithm. And also

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Speaker 3: the complaint describes how the overall platform has this massive

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Speaker 3: code base that can't easily be carved off or segregated

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Speaker 3: to a new buyer, that the buyer could then just

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Speaker 3: stay in and start running, that it needs a lot

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Speaker 3: of attention from developers who understand the code in order

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Speaker 3: to keep it running and to keep improving on it,

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Speaker 3: and so there are arguments that it would take a

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Speaker 3: long time for a buyer to get up to speed

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Speaker 3: sufficient enough to be able to take on the codebase,

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Speaker 3: and so the codebase is a practical limitation on the sale.

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Speaker 3: In addition to whatever technical or legal restrictions are Steve.

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Speaker 2: Amminution, the former US Treasury Secretary, told Bloomberg that he's

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Speaker 2: still interested in buying TikTok's US operations.

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Speaker 4: I've actually started through a lot of tech companies.

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Speaker 2: I'm working about rebuilding this.

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Speaker 4: I do believe the algorithms could be rebuilt.

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Speaker 2: I mean, is that doable to replicate their algorithm?

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Speaker 3: I guess the theory is possible that US ingenuity could

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Speaker 3: catch up to and maybe even surpass the existing technology.

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Speaker 3: The reality is that the US competitors to TikTok have

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Speaker 3: not been able to crack that nut, despite the fact

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Speaker 3: that they are extremely well financed and highly motivated. It

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Speaker 3: turns out that TikTok's secret sauce has worked really, really

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Speaker 3: well and isn't easily replicated. So any buyer who thinks

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Speaker 3: that they can step in and with a snap of

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Speaker 3: a finger keep doing what TikTok is doing is not

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Speaker 3: reading the lessons from the existing competitors, and is.

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Speaker 2: That secret sauce. It's sort of uncanny ability to learn

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Speaker 2: about your interests based on how long you stay on

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Speaker 2: a video and then deliver items of interest you. I mean,

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Speaker 2: is that the secret Sauce.

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Speaker 3: I think that's the main secret, Sauce. I'm sure there

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Speaker 3: are others, but it's the four you options on TikTok

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Speaker 3: where they're able to deliver videos that are customized for

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Speaker 3: each user, that the users really respond to and then

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Speaker 3: it actually speaks to them. And it turns out that's

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Speaker 3: a really hard thing to do. Lots and lots of

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Speaker 3: people who tried that over the years, and TikTok has

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Speaker 3: found to being able to do that for its users.

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Speaker 2: TikTok said any divestiture would disconnect Americans from the rest

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Speaker 2: of the global community on a platform devoted to shared content,

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Speaker 2: so TikTok would go on in the rest of the world,

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Speaker 2: but America would be shut off from it.

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Speaker 3: I didn't really understand exactly what that meant. There certainly

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Speaker 3: could be ways of sharing videos across services. There could

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Speaker 3: be some kind of technological connection with proper licensing that

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Speaker 3: allows the videos to show up. DAME still might not

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Speaker 3: be the same if the algorithms delivering them are different.

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Speaker 3: So even if the contents the same, if the algorithms

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Speaker 3: lead to different results, it's still not quite a seamless

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Speaker 3: integrated global solution. So I'm not exactly sure how that

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Speaker 3: would work, and I wasn't quite following exactly what TikTok

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Speaker 3: was saying.

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Speaker 2: There could Americans if they wanted to flout the law?

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Speaker 2: Could they even if kikchok is banned here? Could they

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Speaker 2: just go on TikTok anyway in Siory?

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Speaker 3: If they could find a way to get the app installed,

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Speaker 3: then the ban would not prevent them from doing so. However,

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Speaker 3: there are other laws that have been acted to the

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Speaker 3: United States that have banned users from installing TikTok, especially

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Speaker 3: those who are in, for example, government positions, and to

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Speaker 3: date those laws have been upheld, so it's possible that

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Speaker 3: there would be other reasons why users would not be

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Speaker 3: legally permitted to do so. Having said that, as a

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Speaker 3: practical matter, if everyone is trying to get on TikTok

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Speaker 3: by getting around some relatively effective ban, over time, TikTok's

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Speaker 3: just not going to have the same kind of investment

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Speaker 3: and enthusiasm that it has today. So it might be

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Speaker 3: technically possible to do it, but it wouldn't be the

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Speaker 3: same TikTok. It would lose a lot of its creative force.

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Speaker 2: Coming up next on The Bloomberg Lawn Show, I'll continue

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Speaker 2: this conversation with Professor Eric Goleman of Santa Clara University

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Speaker 2: Law School. We'll talk about the chances that TikTok's lawsuit

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Speaker 2: will succeed. Jim Grosso and you're listening to Bloomberg. China

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Speaker 2: based Byedance has made clear it won't comply with a

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Speaker 2: new US law requiring it to sell its popular TikTok

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Speaker 2: video sharing app. The company has filed a legal challenge

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Speaker 2: to the law. I've been talking to Professor Eric Goldman

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Speaker 2: of a Santa Clara University School of Law. TikTok also

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Speaker 2: argues that a band would devastate seven million businesses and

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Speaker 2: shutter a platform that contributes twenty four billion annually to

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Speaker 2: the US economy. Do you think those figures are accurate?

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Speaker 3: They're obviously self interested calculation, so I don't know if

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Speaker 3: they're right, but they don't have to be right to

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Speaker 3: still be helpful. The bottom line is that there's a

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Speaker 3: lot of economic activity taking place here in the United

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Speaker 3: States that's been driven by TikTok, and in theory, Congress

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Speaker 3: has said, we want all of that to shut down. Now,

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Speaker 3: some of them might migrate to other services, so it's

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Speaker 3: not like it would be completely lost, but in a

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Speaker 3: time time when we're concerned about employment and we're concerned

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Speaker 3: about the economy, the idea that we would take a

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Speaker 3: major step back it's a huge opportunity cost, and it

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Speaker 3: really makes me wonder if the people who voted for

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Speaker 3: the band really understood who they might be benefiting and

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Speaker 3: who they might be hurting. Chances are that people who

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Speaker 3: voted for the band are going to be hurting their

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Speaker 3: own constituents.

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Speaker 2: I believe the last time we spoke, you said you

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Speaker 2: thought the reason for the ban was because lawmakers have

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Speaker 2: a target on China.

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Speaker 3: It's impossible to talk about the TikTok band without talking

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Speaker 3: about the fact that China is one of the regulatory

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Speaker 3: bogey men. It's a constant target for politicians to keep

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Speaker 3: going back and saying we're being tough on China, so

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Speaker 3: you should continue to support our efforts. So from that perspective,

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Speaker 3: if TikTok was in the hands of some other government

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Speaker 3: or in the hands of a coming base in some

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Speaker 3: other country, almost certainly we wouldn't see the kind of

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Speaker 3: regulatory blowback we're seeing here. This is part of a

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Speaker 3: long term, broad based anti China effort in the United States.

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Speaker 2: So the lawsuit indicates that Biteedance doesn't have any intention

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Speaker 2: of trying to find a buyer for TikTok. The deadline

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Speaker 2: is January. Do you think that the DC Court will

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Speaker 2: speed up the case or does January seem like too

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Speaker 2: soon to settle this.

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Speaker 3: I think one of the reasons why the Congress specified

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Speaker 3: that the Challenges law would go through this DC Circuit

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Speaker 3: review was to accelerate the answers to try and speed

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Speaker 3: up getting a resolution to whether or not the band

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Speaker 3: was permissible. So there's no guarantee that the DC Circuit

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Speaker 3: will respond that pass, but I'm sure they get the point.

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Speaker 3: They know the deadline, and I would expect them to

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Speaker 3: do everything they could to try and get an answer

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Speaker 3: before then.

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Speaker 2: But this might end up at the Supreme Court.

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Speaker 3: Seems inevitable that it will end up with the Supreme Court.

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Speaker 3: But if we get the initial court ruling in favor

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Speaker 3: of TikTok, there will be a staying of the law

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Speaker 3: until there's appellate review, and even if the government wins,

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Speaker 3: there might it will be a statement law where the

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Speaker 3: DC Circuit request to preserve the status quo until the

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Speaker 3: Supreme court can wigin. But there's no question that this ban,

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Speaker 3: whichever way it is ruled on, is going to go

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Speaker 3: to the Supreme Court. Now they have the discrestion whether

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Speaker 3: or not to take it. They might not take the case,

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Speaker 3: but it seems likely that this band's going to end

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Speaker 3: up at the Supreme Court and get a ruling non end.

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Speaker 2: Bloomberg Intelligence an analyst gives TikTok a thirty percent chance

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Speaker 2: to win. Do you give TikTok a more than thirty

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Speaker 2: percent chance to win?

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Speaker 3: I would assigned TikTok's probability of success in the cases

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Speaker 3: much greater than thirty percent, And I do that in

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Speaker 3: part because this is not a new question. This question

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Speaker 3: has been litigated several times in the last few years,

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Speaker 3: and the course is universally held in favor of TikTok.

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Speaker 3: So it's possible that this ban is better than all

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Speaker 3: the other ones have been challenged, But more likely the

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Speaker 3: same problem that doom those other bands are going to

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Speaker 3: also doom this one as well. So yeah, if I

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Speaker 3: were betting man, I would be putting my money on

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Speaker 3: tik Talk, not on the government.

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Speaker 2: And remind us what happened when former President Trump used

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Speaker 2: an executive order to try to force the sale of

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Speaker 2: TikTok to an American company or face a ban.

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Speaker 3: So there were several attempts to ban TikTok and in

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Speaker 3: some cases a similar app we chat that came out

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Speaker 3: of the Trump era, and those failed onto a variety

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Speaker 3: of grounds. Some of them failed on the presence authority

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Speaker 3: to ban an app, and some of them failed on

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Speaker 3: First Amendment grounds. So it was like a panoply of problems.

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Speaker 3: It wasn't like there was just one problem with the

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Speaker 3: prior effort. And then there have also been state efforts

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Speaker 3: to ban TikTok, and so there was a state effort

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Speaker 3: in Montana that was also subject to a con social

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Speaker 3: review with the court said there was a panopley of

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Speaker 3: problems with that law as well, including the First Amendment.

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Speaker 3: So the fact that executive orders by the president and

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Speaker 3: state bans by state legislators is different from a congressional law.

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Speaker 3: There's a reason why could be distinguished. But the core

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Speaker 3: concerns about the First Amendment have shown up in all

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Speaker 3: of the challenges, and that's the thing that Congress can't

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Speaker 3: get around.

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Speaker 2: And are there other governments that are taking action or

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Speaker 2: have taken action against TikTok.

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Speaker 3: Yes, and in particular the most noteworthy one is India,

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Speaker 3: where TikTok was also banned. And that might give some

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Speaker 3: comfort to people who say that we're not the first

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Speaker 3: to do it. And it might also give some concern

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Speaker 3: to people because India has routinely shut down conversations that

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Speaker 3: the government feels our threat to its power, and so

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Speaker 3: we shouldn't be taking playbooks out of India's efforts to

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Speaker 3: regulate speech. They approach it very differently than we do.

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Speaker 2: And you know when the Trump administration press for TikTok sale,

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Speaker 2: China's foreign ministry said the president of acquiring a company

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Speaker 2: under the pre chance of protecting national security could lead

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Speaker 2: to foreign countries targeting US companies, calling it the opening

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Speaker 2: of a Pandora's box. Do you think that's just a

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Speaker 2: threat or as possible, No.

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Speaker 3: That's a bonafide concern. I would view Congress's ban on

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Speaker 3: TikTok as the latest salvo in the ongoing digital trade

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Speaker 3: war that basically Country A blocks Country b's companies from

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Speaker 3: having access to markets. A country be retaliates against Country

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Speaker 3: a's technology, and then they just keep going. And China

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Speaker 3: has already played that game multiple ways. For example, China

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Speaker 3: has banned multiple services from having access to Chinese market,

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Speaker 3: including I can't even keep them all straight, so in

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Speaker 3: Google and LinkedIn, and then most recently, just while Congress

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Speaker 3: is contemplating, has banned China banned WhatsApp, a US based asset,

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Speaker 3: from having access to Chinese market. So we retally against

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Speaker 3: China bypassing TikTok band, China retaliate against us with some

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Speaker 3: further bands, and we get locked in the digital trade ward.

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Speaker 3: And the number one thing that everyone should know by

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Speaker 3: this point is that no one wins trade wars. Everyone

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Speaker 3: loses an equations. So the fact that we're playing it

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Speaker 3: the trade wark game is actually to our detriment.

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Speaker 2: Eric, we haven't talked about TikTok's complaint that it's being

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Speaker 2: treated differently from certain other platforms. It's a little complicated,

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Speaker 2: so take us through it.

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Speaker 3: Satch expressly says that review websites are not governed by

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Speaker 3: the divest or be banned law, so it sets up

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Speaker 3: a weird game that potentially regulable companies could play where

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Speaker 3: they could have an app that is worse than TikTok

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Speaker 3: in whatever way people want to imagine, but they would

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Speaker 3: still be categorically immune from this law if that same

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Speaker 3: company offered a review website that took the company out

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Speaker 3: of the scope of the law. Now TikTok doesn't even

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Speaker 3: have a chance to play that game, because TikTok is

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Speaker 3: expressly named in the bill. They're not given the option

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Speaker 3: of being included whatsoever. And so they say that it's

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Speaker 3: unfair that you could have a review website and avoid

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Speaker 3: the law, but TikTok doesn't given that choice. But it

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Speaker 3: also raises the logic, why would we say that social

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Speaker 3: media services under a government operation are danger to our

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Speaker 3: country but review websites aren't. And it's really hard to

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Speaker 3: justify that distinction. And the reason, of course, is because

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Speaker 3: review websites are fluted based on specific lobbying by companies

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Speaker 3: who would benefit from that, and so it's not really

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Speaker 3: a defensible distinction. But it creates a constitutional problem by

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Speaker 3: making that distinction.

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Speaker 2: And what about the TikTok users. Are we going to

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Speaker 2: see a lawsuit from them as well?

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Speaker 3: It's likely that there will be a separate lawsua viobe

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Speaker 3: by TikTok users, who will independently advance their free speech claims.

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Speaker 3: Because their ability to talk to each other is being

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Speaker 3: affected by this ban, and so they ought to have

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Speaker 3: standing to complain about the censorship of their content and

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Speaker 3: to make the case that in fact, any of the

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Speaker 3: other justifications like national security are not sufficient to override

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Speaker 3: their free speech.

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Speaker 2: Another interesting aspect of this is that TikTok also complained

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Speaker 2: that Congress ignored its work to protect US data from

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Speaker 2: foreign government influence.

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Speaker 3: TikTok has undertaken extensive efforts to try to please the

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Speaker 3: US government, and they were negotiating a very lengthy document

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Speaker 3: that would allow the government to have oversight into the

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Speaker 3: ability of the Chinese government to influence TikTok's operation and

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Speaker 3: to base all the content here in the United States.

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Speaker 3: TikTok has said that it's going to implement the number

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Speaker 3: of those pieces irrespective of the law and whatever the

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Speaker 3: court holdings are. But the bottom line is TikTok is

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Speaker 3: saying that they're comfortable with having the government monitor their

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Speaker 3: behavior and oversee their behavior. They just don't want to

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Speaker 3: be regulated in this other way. And it's weird for me,

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Speaker 3: as someone who's interested in the free speech rights that

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Speaker 3: TikTok and its users for TikTok to say it's not

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Speaker 3: like we are opposed to regulation, just do it in

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Speaker 3: a way that we can live with, as opposed to

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Speaker 3: saying there really should be no reason why the government

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Speaker 3: gets this oversight at all. The First Amendment prohibits it.

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Speaker 3: So it's really an interesting position by TikTok to be

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Speaker 3: a pro regulation but only if it meets a standards,

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Speaker 3: not free speech and oppose all regulation.

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Speaker 2: Well, I'm sure we'll have many, many opportunities to talk

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Speaker 2: about this lawsuit as it winds its way, probably after

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Speaker 2: the Supreme Court. Thanks so much, Eric, that's Professor Eric Goleman,

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Speaker 2: co director of the High Tech Law Institute at Santa

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Speaker 2: Clara University School of Law. Coming up next on the

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Speaker 2: Bloomberg Law Show, we'll get a first hand account of

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Speaker 2: what happened when Stormy Daniels took the stand to testify

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Speaker 2: against Donald Trump. I'm June Grosso and this is Bloomberg.

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Speaker 2: The testimony was by far the most awaited spectacle in

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Speaker 2: a trial that has moved between tabloid esque elements and

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Speaker 2: dry record keeping details. A courtroom appearance by a porn

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Speaker 2: star who says she had an intimate encounter with a

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Speaker 2: former American President, with Donald Trump sitting just feet away.

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Speaker 2: Stormy Daniels testified Tuesday at his hush money trial about

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Speaker 2: a sexual encounter she says they had in two thousand

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Speaker 2: and six that resulted in her being paid to keep

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Speaker 2: silent during the presidential race ten years later. Joining me

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Speaker 2: is Bloomberg Legal reporter Patricia Hurtado, who was in the

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Speaker 2: courtroom for the testimony. Pat tell us a little about

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Speaker 2: her appearance.

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Speaker 4: What was extraordinary is I know I have heard and

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Speaker 4: seen Stormy Daniels describe her interlude with Donald Trump, but

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Speaker 4: to actually walk into that courtroom was a moment where

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Speaker 4: it made everything seem like, you know, this is really

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Speaker 4: the moment for this case, because you know her story

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Speaker 4: is at the center of the hush money payment. She

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Speaker 4: walt one of my colleagues that sash shaded into the courtroom.

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Speaker 4: She was wearing black coalosso pants, a long black tunic,

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Speaker 4: a black hoodie, and she had her hair, you know,

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Speaker 4: pinned up like when you go to the gym and

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Speaker 4: you tied it in the loose tonytail with pieces falling out,

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Speaker 4: and she had glasses pops on the top of her head.

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Speaker 2: Didn't go for the business suit thing.

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Speaker 4: Right, no business suit, And I was joking that she

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Speaker 4: was kind of the antithesis of Hope Hicks, who is

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Speaker 4: a former model and beautifully dressed in a business black

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Speaker 4: pants suit. But these are two in and Donald Trump's life.

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Speaker 4: You want to believe what the prosecutors alleged, this is

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Speaker 4: the woman he had an encounter with, a sexual encounter

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Speaker 4: that Theda says is at the heart of their hush

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Speaker 4: money case. She spoke so quickly, she was basically rattling off,

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Speaker 4: spinning out her story and just with filling out into

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Speaker 4: the courtroom. It's very hard to keep up with her testimony.

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Speaker 4: She was speaking so quickly.

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Speaker 2: From the transcripts, it seemed like she really seemed to

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Speaker 2: be putting Trump down in both the encounter she had

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Speaker 2: with him and in describing the encounter well.

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Speaker 4: She describes the encounter as something she didn't expect. She

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Speaker 4: was invited by Trumps. She meets Trump at a celebrity

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Speaker 4: golf tournament and Lake Tahoe in Nevada, and Trump is

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Speaker 4: there as one of the celebrities. He's on a celebrity apprentice,

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Speaker 4: and she says she gets approached by Trump's bodyguard. She

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Speaker 4: gets takes a photo with Trump and he chaps her up.

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Speaker 4: Other women from her company that make pornographic adult films

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Speaker 4: called Wicked Incorporated, we're there, and she was introduced as

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Speaker 4: one of the people that not only was an actor

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Speaker 4: in the adult films, but also a director and producer.

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Speaker 4: So he said, oh, you're the smart one. And then

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Speaker 4: later on she was invited to Trump's room for which

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Speaker 4: he thought was dinner, and she described meeting Trump there.

438
00:25:13,800 --> 00:25:17,879
Speaker 4: So she says that when she meets Trump, he says

439
00:25:17,960 --> 00:25:23,200
Speaker 4: he reminds her of his daughter, blonde, beautiful and taken

440
00:25:23,280 --> 00:25:27,640
Speaker 4: for granted, that people underestimate how smart they are. And

441
00:25:28,119 --> 00:25:32,320
Speaker 4: they started talking about the industry, and Trump expressed a

442
00:25:32,320 --> 00:25:35,199
Speaker 4: lot of business interest in the inner workings of the

443
00:25:35,359 --> 00:25:39,000
Speaker 4: adult film industry and how movies are made and what

444
00:25:39,080 --> 00:25:43,359
Speaker 4: kind of precautions are taken for sexually transmitted diseases and

445
00:25:43,440 --> 00:25:46,320
Speaker 4: whether there's testing. So there was a lot of detail

446
00:25:46,359 --> 00:25:49,719
Speaker 4: about that, and she said that whenever she talked to Trump,

447
00:25:50,200 --> 00:25:53,520
Speaker 4: he was won upping her. And she said when she

448
00:25:53,600 --> 00:25:57,200
Speaker 4: met him, he greeted her at the hotel room dressed

449
00:25:57,320 --> 00:26:00,679
Speaker 4: in silk pajamas, and she said, does he haspener know

450
00:26:00,920 --> 00:26:04,439
Speaker 4: he's taken his pajamas, which was a joke reference to

451
00:26:05,080 --> 00:26:08,119
Speaker 4: Hugh Hefner, who'll always liked to wear silk pajamas twenty

452
00:26:08,160 --> 00:26:10,200
Speaker 4: four to seven, The Playboy Publisher.

453
00:26:10,560 --> 00:26:16,040
Speaker 2: She added some graphic and salacious details when talking about

454
00:26:16,160 --> 00:26:19,919
Speaker 2: the alleged one night stand. Did the prosecution bring that

455
00:26:20,119 --> 00:26:23,400
Speaker 2: out or did it just come out as she was talking?

456
00:26:24,080 --> 00:26:30,240
Speaker 4: It seemed the prosecutor, Susan Hoffinger, was trying to control her,

457
00:26:30,560 --> 00:26:32,439
Speaker 4: but and the judge had to take a couple of

458
00:26:32,480 --> 00:26:37,280
Speaker 4: breaks and try to get Hopfinger to bring the stormy

459
00:26:37,359 --> 00:26:41,640
Speaker 4: in because she was talking so fast and filling out

460
00:26:41,680 --> 00:26:44,760
Speaker 4: with all these details. So we heard about the black

461
00:26:44,800 --> 00:26:48,080
Speaker 4: and white Kyle floor and Donald's From's hotel room, and

462
00:26:48,119 --> 00:26:51,080
Speaker 4: he heard about the bed being unmade in his bedroom

463
00:26:51,840 --> 00:26:55,560
Speaker 4: and lots of details. It seemed extraineous, But at some

464
00:26:55,680 --> 00:26:58,880
Speaker 4: point it seemed that the prosecutor was trying to provide

465
00:26:58,920 --> 00:27:03,240
Speaker 4: some details to show that she remains loyal to her

466
00:27:03,760 --> 00:27:07,240
Speaker 4: recounting of this incident, there are elements that are She's

467
00:27:07,320 --> 00:27:11,600
Speaker 4: always maintained are the same, including the details of going

468
00:27:11,640 --> 00:27:14,280
Speaker 4: into the bathroom. At one point, she said they had

469
00:27:14,280 --> 00:27:18,320
Speaker 4: the long discussion that when Trump showed her a copy

470
00:27:18,640 --> 00:27:21,439
Speaker 4: of I guess it was Fordes magazine that he was

471
00:27:21,480 --> 00:27:24,960
Speaker 4: on the cover of, and she basically said to him

472
00:27:24,960 --> 00:27:28,240
Speaker 4: something about, you know, you're constantly interrupting me and one

473
00:27:28,359 --> 00:27:30,399
Speaker 4: upping me. And he said, oh, like you think I

474
00:27:30,480 --> 00:27:33,840
Speaker 4: need a banking and she said. He gave her the

475
00:27:33,880 --> 00:27:36,600
Speaker 4: magazine and she rolled it up and patted him on

476
00:27:36,640 --> 00:27:40,320
Speaker 4: the behind with it, which caused mister Trumps to get angry.

477
00:27:40,600 --> 00:27:44,000
Speaker 4: Yesterday and some of my colleagues I was sitting too

478
00:27:44,040 --> 00:27:46,840
Speaker 4: far away, but they could have warned. They saw him

479
00:27:46,880 --> 00:27:50,960
Speaker 4: now the word of BS, the full word for BS.

480
00:27:51,320 --> 00:27:56,240
Speaker 4: The judge heard something and basically remonstrated his lawyer, Todd

481
00:27:56,280 --> 00:27:59,720
Speaker 4: Blance to speak to his clients, and he later in

482
00:27:59,720 --> 00:28:02,080
Speaker 4: the bar. We could see that. The judge said that,

483
00:28:02,240 --> 00:28:05,480
Speaker 4: you know, it was contemptible what Trump was doing. He

484
00:28:05,520 --> 00:28:08,199
Speaker 4: could hear him muttering, and he knows his client is

485
00:28:08,240 --> 00:28:11,399
Speaker 4: not happy with her testimony, but he could have to

486
00:28:11,440 --> 00:28:15,080
Speaker 4: control him because it could be seen as intimidating the witness,

487
00:28:15,119 --> 00:28:16,359
Speaker 4: and the jury was catching it.

488
00:28:16,760 --> 00:28:20,600
Speaker 2: When she talked about, you know, the act itself, she

489
00:28:20,720 --> 00:28:24,120
Speaker 2: didn't say it was involuntary, but she did say that,

490
00:28:24,240 --> 00:28:26,119
Speaker 2: you know, she she didn't know how she ended up

491
00:28:26,160 --> 00:28:29,200
Speaker 2: on the bed. Has she claimed that before.

492
00:28:29,920 --> 00:28:32,960
Speaker 4: She basically also said that she had blacked out, which

493
00:28:33,119 --> 00:28:36,080
Speaker 4: is the first time she's said this version of it,

494
00:28:36,440 --> 00:28:39,800
Speaker 4: which prompted the defense to ask for missus trial. Right

495
00:28:39,920 --> 00:28:42,840
Speaker 4: after the lunch break, the judge pointed out that the

496
00:28:42,880 --> 00:28:46,760
Speaker 4: defense had been sitting down and not objecting throughout her testimony,

497
00:28:47,200 --> 00:28:49,440
Speaker 4: so he sort of tied at them for not being

498
00:28:49,440 --> 00:28:52,080
Speaker 4: more aggressive and standing up, and the judge pointed out,

499
00:28:52,240 --> 00:28:56,320
Speaker 4: which was rightly. So many times the judge interrupted and said,

500
00:28:56,360 --> 00:28:58,360
Speaker 4: we're not going to hear any more of this, you know.

501
00:28:58,560 --> 00:29:01,280
Speaker 4: So when there was discussions whether or not Trump used

502
00:29:01,280 --> 00:29:05,800
Speaker 4: a condom during the interload, judge, that's enough, you know,

503
00:29:06,200 --> 00:29:08,800
Speaker 4: he stopped it. So the judge's pointing out many times

504
00:29:08,880 --> 00:29:11,760
Speaker 4: I objected without you asking me to, So you know,

505
00:29:12,000 --> 00:29:14,520
Speaker 4: it's your job to object on behalf to spend it,

506
00:29:14,640 --> 00:29:18,120
Speaker 4: not my job. But he also said that he wanted

507
00:29:18,240 --> 00:29:22,280
Speaker 4: the prosecutor to try to control Daniels more. I don't

508
00:29:22,320 --> 00:29:24,520
Speaker 4: know whether it was nervousness or what, but she did

509
00:29:24,840 --> 00:29:25,680
Speaker 4: bill out.

510
00:29:25,520 --> 00:29:28,680
Speaker 2: Her story, so the jury was paying attention.

511
00:29:28,800 --> 00:29:31,280
Speaker 4: I take it, yes, And in fact, in the middle

512
00:29:31,320 --> 00:29:35,800
Speaker 4: of her testimony, during a break. At least two jurors

513
00:29:36,280 --> 00:29:41,800
Speaker 4: asked the court officer for more notebook, which I thought

514
00:29:41,840 --> 00:29:43,160
Speaker 4: of something interesting to know.

515
00:29:43,880 --> 00:29:47,000
Speaker 2: There's a point at which this is sort of cringe

516
00:29:47,040 --> 00:29:50,000
Speaker 2: worthy testimony. Did she come across as believable?

517
00:29:50,160 --> 00:29:52,760
Speaker 4: And there's a debate. Some reporter say the jury has

518
00:29:52,800 --> 00:29:56,360
Speaker 4: to believe that this happened or else Trump won't get convicted.

519
00:29:57,800 --> 00:30:02,680
Speaker 4: We have heard other testimony corroborating this this happened and

520
00:30:03,000 --> 00:30:06,320
Speaker 4: what Trump did about it, So you could argue that

521
00:30:06,880 --> 00:30:10,400
Speaker 4: the prosecution case rests whether or not he paid the

522
00:30:10,480 --> 00:30:14,280
Speaker 4: hush money payment because of this embarrassing episode. And we

523
00:30:14,400 --> 00:30:17,840
Speaker 4: do see evidence. I mean, David Pecker talked about it happening,

524
00:30:18,280 --> 00:30:21,160
Speaker 4: and none of these people had first hand knowledge of it.

525
00:30:21,200 --> 00:30:24,120
Speaker 4: But they put into evidence two photos, including one of

526
00:30:24,160 --> 00:30:27,400
Speaker 4: Trump at the same golf tournament and then another photo

527
00:30:27,440 --> 00:30:31,280
Speaker 4: of him with Stormy wear the exact same polo shirt

528
00:30:31,600 --> 00:30:35,920
Speaker 4: and pants and baseball cap, smiling and hugging her, and

529
00:30:36,000 --> 00:30:39,680
Speaker 4: she said that was taken the same day of this interlude.

530
00:30:40,000 --> 00:30:43,240
Speaker 4: Whether or not the jury believes that the hush money

531
00:30:43,240 --> 00:30:46,959
Speaker 4: payments were paid to keep this tawdry story quiet, I

532
00:30:46,960 --> 00:30:49,440
Speaker 4: think is going to be the fundamental question for this jury,

533
00:30:49,920 --> 00:30:53,160
Speaker 4: and I guess we now see. I mean, this is

534
00:30:53,240 --> 00:30:57,480
Speaker 4: this young woman's version of growing up poor in Louisiana,

535
00:30:58,000 --> 00:31:02,640
Speaker 4: working loving horses, shoveling manure out of stables, and in

536
00:31:02,640 --> 00:31:05,600
Speaker 4: her spare time to put herself through college, and then

537
00:31:05,680 --> 00:31:10,480
Speaker 4: finally finding out that as an adult film actress and dancer,

538
00:31:10,560 --> 00:31:13,160
Speaker 4: a stripper, she could make more money to put herself

539
00:31:13,200 --> 00:31:14,760
Speaker 4: through school. And she said she wanted to go to

540
00:31:14,840 --> 00:31:17,400
Speaker 4: Vent Mary's School, and she was going to Texas A

541
00:31:17,440 --> 00:31:20,080
Speaker 4: and M. So she had a story to be told

542
00:31:20,720 --> 00:31:24,960
Speaker 4: about how this woman ended up being a stripper slash

543
00:31:25,040 --> 00:31:27,760
Speaker 4: porn star, ended up being with Donald Trump, would end

544
00:31:27,840 --> 00:31:30,000
Speaker 4: up being part of this hush money case.

545
00:31:30,560 --> 00:31:34,600
Speaker 2: A female defense attorney cross examined her. Hasn't a male

546
00:31:34,920 --> 00:31:38,400
Speaker 2: defense attorney been doing the cross examinations up to this point?

547
00:31:38,760 --> 00:31:42,080
Speaker 4: Yeah, you could argue your debt. Susan Nichols, Donald Trump's

548
00:31:42,480 --> 00:31:45,440
Speaker 4: one of the members of his team, is probably the

549
00:31:45,520 --> 00:31:49,320
Speaker 4: most experienced lawyer of the group. She's got decades of

550
00:31:49,400 --> 00:31:51,880
Speaker 4: experience as a criminal defense lawyer, and I've seen her

551
00:31:51,920 --> 00:31:55,840
Speaker 4: in action in federal court. She's very smart, but they

552
00:31:55,840 --> 00:31:58,440
Speaker 4: have kept her on the sidelines, and I wonder if

553
00:31:58,440 --> 00:32:01,880
Speaker 4: they just kept her for being able to cross examine

554
00:32:01,920 --> 00:32:04,480
Speaker 4: a woman, because it looks less like a woman is

555
00:32:04,560 --> 00:32:07,360
Speaker 4: beating up another woman as opposed to a man. Susan

556
00:32:07,520 --> 00:32:11,320
Speaker 4: was tough with her at some point, basically suggesting that

557
00:32:11,480 --> 00:32:15,920
Speaker 4: Daniels had concocted this story and basically embroidered her version

558
00:32:15,960 --> 00:32:19,640
Speaker 4: of events, and initially it didn't tell anybody that she'd

559
00:32:19,640 --> 00:32:22,239
Speaker 4: had sex with Trump, and only added that later to

560
00:32:22,400 --> 00:32:25,400
Speaker 4: help embellish her story and maybe get her some money.

561
00:32:25,680 --> 00:32:28,720
Speaker 4: Stormy sometimes she kind of heard herself and sometimes she

562
00:32:28,760 --> 00:32:32,000
Speaker 4: helped herself. A couple of times she gave back retorts

563
00:32:32,040 --> 00:32:35,640
Speaker 4: to a knchles like you hate President Trump, don't you?

564
00:32:35,720 --> 00:32:39,440
Speaker 4: And then Stormy said, yes, I hate him. You know.

565
00:32:39,600 --> 00:32:41,880
Speaker 4: So this is the kind of thing where the jury

566
00:32:41,880 --> 00:32:44,120
Speaker 4: could say she has animus against Trump and this is

567
00:32:44,120 --> 00:32:45,920
Speaker 4: why she's just doing it to make up the story.

568
00:32:46,160 --> 00:32:49,840
Speaker 2: Wait till Michael Cohene takes this in. So now, one

569
00:32:49,880 --> 00:32:54,720
Speaker 2: thing she said that seems hard to believe. She denied

570
00:32:54,760 --> 00:32:57,080
Speaker 2: that this was for money, that she was asking for

571
00:32:57,120 --> 00:32:59,880
Speaker 2: this hush money payment for monetary reasons.

572
00:33:01,240 --> 00:33:04,840
Speaker 4: Yeah, I mean, she said she was doing very well.

573
00:33:05,000 --> 00:33:08,920
Speaker 4: But then basically she was reached out to by these people,

574
00:33:09,680 --> 00:33:13,640
Speaker 4: and Donald Trump was now in the front burner because

575
00:33:13,640 --> 00:33:17,240
Speaker 4: he was doing very well politically. This is in twenty sixteen,

576
00:33:17,720 --> 00:33:20,920
Speaker 4: so earlier in twenty sixteen, there wasn't that much interest

577
00:33:20,920 --> 00:33:23,640
Speaker 4: in it. She had said that originally her life was

578
00:33:23,680 --> 00:33:26,640
Speaker 4: going really, really well, and then she decided that for

579
00:33:26,760 --> 00:33:28,920
Speaker 4: money she could do and she could sell the story

580
00:33:29,240 --> 00:33:32,520
Speaker 4: and it would be private. She had told her story too,

581
00:33:32,680 --> 00:33:36,320
Speaker 4: in some iterations to like in Touch magazine, which is

582
00:33:36,360 --> 00:33:39,160
Speaker 4: a gossip magazine, and it was just about Donald Trump's

583
00:33:39,240 --> 00:33:42,680
Speaker 4: reality start, and that never went anywhere. It seems like

584
00:33:42,720 --> 00:33:45,920
Speaker 4: in twenty sixteen, when Trump is running, she decides that

585
00:33:46,000 --> 00:33:49,160
Speaker 4: she's going to sell her story, but to keep it quiet,

586
00:33:49,240 --> 00:33:51,680
Speaker 4: which is why she takes the hush money payment to

587
00:33:51,800 --> 00:33:55,360
Speaker 4: keep the story from coming out. And then she says,

588
00:33:55,400 --> 00:33:58,640
Speaker 4: when Trump starts doing well, they were not paying her.

589
00:33:58,680 --> 00:34:02,320
Speaker 4: If we can remember rollback the tape to testimony from

590
00:34:02,600 --> 00:34:07,600
Speaker 4: Keith Davidson, her lawyer Michael Cohen was playing them along

591
00:34:07,840 --> 00:34:11,000
Speaker 4: and basically stringing him out of not paying the money

592
00:34:11,120 --> 00:34:13,480
Speaker 4: and not wiring the money, and they would ask and

593
00:34:13,520 --> 00:34:15,720
Speaker 4: they would ask, and they would ask, and he wasn't

594
00:34:15,719 --> 00:34:19,120
Speaker 4: paying it. And then basically Stormy was like, okay, I'll

595
00:34:19,160 --> 00:34:21,360
Speaker 4: just go ahead. The deal's off, and I'll tell my

596
00:34:21,440 --> 00:34:24,839
Speaker 4: story and then Michael Cohen and the way the story goes.

597
00:34:24,880 --> 00:34:27,719
Speaker 4: According to prosecutors, they said, the Trump campaign is in

598
00:34:27,880 --> 00:34:30,960
Speaker 4: such a digger over the acts of Hollywood tape. They

599
00:34:31,000 --> 00:34:34,880
Speaker 4: basically just want to put this fire out of Stormy

600
00:34:35,120 --> 00:34:38,120
Speaker 4: and let's get this off the front burner. So that's

601
00:34:38,160 --> 00:34:40,920
Speaker 4: when Michael Cohen is willing to pay, but then the

602
00:34:40,960 --> 00:34:43,879
Speaker 4: money he doesn't get the money from Trump, and they

603
00:34:43,920 --> 00:34:47,000
Speaker 4: start streaming Stormy and her lawyer along, so then she

604
00:34:47,080 --> 00:34:51,279
Speaker 4: starts talking to other people, and then she gets paid off,

605
00:34:51,920 --> 00:34:55,080
Speaker 4: and then she's quiet, and then she sees that Donald

606
00:34:55,080 --> 00:34:57,840
Speaker 4: Trump is doing well. And there was an interesting quote

607
00:34:57,880 --> 00:35:01,160
Speaker 4: she said yesterday which was, you saw the opportunity to

608
00:35:01,200 --> 00:35:03,520
Speaker 4: make money, getn't you to try to sell your story?

609
00:35:03,800 --> 00:35:06,480
Speaker 4: And she said, I saw my opportunity to get the

610
00:35:06,600 --> 00:35:09,160
Speaker 4: story out. I didn't put a price tag on it.

611
00:35:09,280 --> 00:35:12,279
Speaker 4: That's why I did every interview for free. And then

612
00:35:12,360 --> 00:35:18,240
Speaker 4: she said basically that the status changes because suddenly Trump

613
00:35:18,320 --> 00:35:21,120
Speaker 4: is a presidential candidate. She said, I had to do

614
00:35:21,280 --> 00:35:23,920
Speaker 4: a check in my strategies. Originally I was dealing with

615
00:35:23,960 --> 00:35:26,880
Speaker 4: a reality TV start that it's a whole different game

616
00:35:27,200 --> 00:35:30,720
Speaker 4: when it's a candidate for office. The defense is built

617
00:35:31,080 --> 00:35:33,920
Speaker 4: cross examining her. And I think that Susan Nichols has

618
00:35:34,000 --> 00:35:39,600
Speaker 4: at least several more hours on cross tomorrow when courts and.

619
00:35:39,560 --> 00:35:42,279
Speaker 2: We'll see how tough the cross examination gets when it

620
00:35:42,320 --> 00:35:46,520
Speaker 2: resumes tomorrow. Thanks so much, Pat. That's Bloomberg Legal reporter

621
00:35:46,600 --> 00:35:49,759
Speaker 2: Patricia Hurtado, And that's it for this edition of the

622
00:35:49,760 --> 00:35:53,080
Speaker 2: Bloomberg Law Podcast. Remember you've can always get the latest

623
00:35:53,160 --> 00:35:56,040
Speaker 2: legal news by subscribing and listening to the show on

624
00:35:56,120 --> 00:36:01,359
Speaker 2: Apple Podcasts, Spotify, and at Bloomberg dot com podcast Slash Law.

625
00:36:01,719 --> 00:36:04,400
Speaker 2: I'm June Grosso and this is Bloomberg