Speaker 1: Welcome to the Bloomberg Law Podcast. I'm June Grosso. Every
Speaker 1: day we bring you insight and analysis into the most
Speaker 1: important legal news of the day. You can find more
Speaker 1: episodes of the Bloomberg Law Podcast on Apple Podcasts, SoundCloud
Speaker 1: and on Bloomberg dot com Slash podcasts. The bank and
Speaker 1: tax fraud trial of former Trump campaign chairman Paul Manafort
Speaker 1: is in its second day as prosecutors start bringing in
Speaker 1: a steady stream of witnesses. President Trump tried to distance
Speaker 1: himself from Manafort in tweets today, as he has for months.
Speaker 1: Here he is speaking at the White House in June
Speaker 1: like Manafort has nothing to do with our campaign. But
Speaker 1: I feel so. I tell you, I feel a little
Speaker 1: badly better. They went back twelve years to get things
Speaker 1: that he did twelve years ago. Joining me in our
Speaker 1: New York studios is former federal prosecutor Eli Hoenicki's special
Speaker 1: counsel at Loewenstein Sandler and executive director of the Rutgers
Speaker 1: Institute on Secure Communities. Before we get to the trial itself,
Speaker 1: what's going on with the Manafort tweet storm references to
Speaker 1: al capone. It's hard to follow. The President has been
Speaker 1: all over the map in his relationship with Paul Manafort.
Speaker 1: Of course, when Manafort was the campaign manager, they were
Speaker 1: close in The President vouched for him and supported him.
Speaker 1: When Manafort got remanded a month or so ago on
Speaker 1: witness tampering, the President said he got a raw deal.
Speaker 1: The last week or so, you saw the President doing
Speaker 1: what a lot of people do when someone's closing in
Speaker 1: on them, when someone's in trouble, and say, I don't
Speaker 1: I barely know this guy. He only worked for me
Speaker 1: for some short time. Who is he? But then today
Speaker 1: he seems to the President seems to have bounced back
Speaker 1: to the original position of Oh, this poor guy's getting
Speaker 1: getting such a raw deal. So, uh, he's all over
Speaker 1: the map. That that is true about about these tweets
Speaker 1: and other tweets today too. So now let's talk about
Speaker 1: the Manafort trout. Now we know the defense. It's blame
Speaker 1: it on the witness who's cooperating with the government. Manafort
Speaker 1: claims his right hand man, Rick Gates, did the crime.
Speaker 1: It's not a very original defense, but might it work.
Speaker 1: It's quite standard. Uh, you know, blame the cooperator. It's
Speaker 1: really the everyone did it but me defense, which is
Speaker 1: hard to swallow when the butt me is the boss,
Speaker 1: the top guy. And so I think I think they're
Speaker 1: gonna have an evidence problem and they're gonna have a
Speaker 1: common sense problem with the jury. Um, who's the guy
Speaker 1: who built the company it was manap Who's the guy
Speaker 1: who opened thirty bank accounts all around the world. You know,
Speaker 1: who's the guy who had the relationships with oligarchs. Who's
Speaker 1: the guy, most importantly who made the most money. Who's
Speaker 1: wearing you know, the now infamous Ostrich jacket. The emphasis
Speaker 1: on that Ostrich jacket is amazing. I think a lot
Speaker 1: of people google the term Ostrich jacket yesterday for the
Speaker 1: first time. But it's a hard sell. Um. And and
Speaker 1: you know, to to say my number two did it
Speaker 1: all is gonna be tough, and the evidence looks like
Speaker 1: it's just not going to support it. And obviously Gates
Speaker 1: will implicate Manipor, but it sounds like others will to
Speaker 1: take take the first witness from yesterday, who seems like
Speaker 1: a pretty down the middle witness. UM. He said, he said.
Speaker 1: The one quote that I took out of his testimony
Speaker 1: was he said Paul was in charge. Paul meaning Manafort
Speaker 1: was in charge. UM, and beyond that, you have financial
Speaker 1: documents showing the money going to Manafort, you have emails.
Speaker 1: You know. One of the key allegations here is that
Speaker 1: Manafort knew he had these foreign bank accounts and light
Speaker 1: it light on it and his tax returns. Um, there's
Speaker 1: information the indictment saying we have communications from his accountant
Speaker 1: asking Paul do you have foreign bank accounts? And Manafort
Speaker 1: said no. So I don't know how they get around that. Now.
Speaker 1: The judge is moving this very quickly. He today Apparently
Speaker 1: the prosecution had trouble getting the some uh photographs in
Speaker 1: or having the jury look at them that he they
Speaker 1: he said that he wants he doesn't want to term oligarchus.
Speaker 1: So their witness ended up saying a very wealthy person
Speaker 1: or a person of wealth. They seem to be taken
Speaker 1: aback a little bit. The prosecutors by the speed at
Speaker 1: which the judge is moving it. Yeah, so so two things.
Speaker 1: Speed generally is the prosecutor's friend at a trial, you do,
Speaker 1: I don't want a jury there through trial that's getting
Speaker 1: dragged out over weeks months, you start to lose them.
Speaker 1: You know, memory is just inherently not that long. So
Speaker 1: when I was prosecuting cases. I wanted the case to move.
Speaker 1: Now this case is moving at lightning speed, and I
Speaker 1: think what we see the judge trying to do. By
Speaker 1: by all accounts, Judge Ellis is a very strong, hands
Speaker 1: on judge, and I think that by barring certain terms
Speaker 1: that maybe would be inflammatory, oligarch that kind of thing. Um,
Speaker 1: it's frustrating as a prosecutor, But I think what the
Speaker 1: judge is trying to do is keep the focus as
Speaker 1: narrowly as possible on the bank fraud, on the tax fraud.
Speaker 1: He doesn't want any He wants as little as possible
Speaker 1: of the Russian peace, you know, elections Trump. He wants
Speaker 1: to keep all of that stuff out so we have
Speaker 1: a clean right down to mental trial. He also, of course,
Speaker 1: the prosecutors want to paint this lifestyle that Paul Manaford had,
Speaker 1: which was really over the top. They spent about a
Speaker 1: million and a half dollars on clothes and our antiques
Speaker 1: and the houses. But he he also said something about, um,
Speaker 1: you know, move this forward, he said, or when are
Speaker 1: you going to start telling us about you know, I
Speaker 1: wonder how you're going to time manifort to these moneys
Speaker 1: after they talked about all the money, money, money, But
Speaker 1: what's their point in talking about the money's more than
Speaker 1: just tying him to the money's what's the kind of
Speaker 1: picture they want to paint of him for the jury. Yeah,
Speaker 1: so there's two things. When you come across a piece
Speaker 1: of evidence like that as a prosecutor that you know,
Speaker 1: of course the ostrich check at the watch your first reactions.
Speaker 1: You smile and you circle it and you make a
Speaker 1: little happy face because he goes, Wow, the jury's gonna
Speaker 1: hate this guy. It's obnoxious. It's offensive. They're all you know,
Speaker 1: you assume your jurory or sort of working people. Um,
Speaker 1: but you can't overdo it because at a certain point
Speaker 1: it seems like you're just trying to slander the guy.
Speaker 1: There's no there's no crime to being rich. But I
Speaker 1: think there's a little more here to that argument. I
Speaker 1: think what what the prosecution is trying to establish is
Speaker 1: this is a guy who cared a lot about his money, right,
Speaker 1: A guy who spends like that cares about his money.
Speaker 1: There's some people who are sloppy with money or don't
Speaker 1: really care, aren't focused on money. This guy was laser
Speaker 1: focused on money, and I think it makes it that
Speaker 1: much less likely that he had no idea what was
Speaker 1: going on and his number two, Rick Gates, was sort
Speaker 1: of stealing at all and he didn't follow the books
Speaker 1: that closely. How much so with all the other evidence
Speaker 1: of prosecutors have five pieces of evidence were listed, exhibits
Speaker 1: were listed. How much is going to depend on the
Speaker 1: credibility of Rick Gates? I mean if the if the
Speaker 1: defense does a really good job on cross examination, how
Speaker 1: much will that hurt the case? Yeah, Rick Gates is
Speaker 1: going to be the most important witness in this case.
Speaker 1: There's no question. There are some cases where you will
Speaker 1: rise or fall on your cooperator. If the co operator
Speaker 1: is credited, you'll win, get a conviction. I'm talking from
Speaker 1: a prosecutor's perspective, and if the jury discredits him, you'll
Speaker 1: have an acquittal. I actually don't think this is one
Speaker 1: of those cases. I think there's enough other evidence, enough
Speaker 1: documentary evidence, enough circumstantial evidence that even if the jury
Speaker 1: is a little if he on Gates um, they can
Speaker 1: still convict. Now, you want to make that argument in
Speaker 1: closing as a prosecutor, but it's tricky because you don't
Speaker 1: even want to raise the possibility they wouldn't fully credit Gates,
Speaker 1: But but I do think even if the jury doesn't
Speaker 1: completely by Rick gates testimony, there's still room for conviction here. Now,
Speaker 1: the prosecution, as we know, has to get twelve out
Speaker 1: of twelve. The defense only has to get one to
Speaker 1: get a hung jury. What might the repercussions of a
Speaker 1: hung jury b for the Muller investigation as a whole. Yeah,
Speaker 1: hung jury would be devastating, It really would. Um, I've
Speaker 1: had hung. Jerry's right. Technically, hung jury's a tie and
Speaker 1: almost always you redo it, you retry the person. But
Speaker 1: it would hurt here. Um, you know, you can see
Speaker 1: what would happen if it's eleven to one. Eleven want
Speaker 1: to convict and one doesn't. You know, the president and
Speaker 1: everyone else who believes this is a rigged witch hunt
Speaker 1: are going to declare victory and say shows what a
Speaker 1: sham the Muller team is. And they couldn't even convict
Speaker 1: and the jury rejected their theory. So uh, hung jury
Speaker 1: is not going to be a tie. It's going to
Speaker 1: be a win for Manaph and Trump and a loss
Speaker 1: for Muller. Just to have about fifty seconds here, do
Speaker 1: you know the prosecutor I know some of the prosecutors,
Speaker 1: like some of them in action, But I don't know
Speaker 1: these these pros I don't I know Greg Andres, who
Speaker 1: I think is the lead in the case. Um, he
Speaker 1: was doing organized crime cases in Brooklyn when I was
Speaker 1: doing them in Manhattan. Look, he's the best there is. Um.
Speaker 1: He's tenacious, he's extremely talented. He's on the short list
Speaker 1: of guys i'd ever want prosecute me if I did
Speaker 1: something wrong. It's great to have you here. It's always
Speaker 1: great to have you on. That's Ellie Hoenig of Lowenstein
Speaker 1: Sandler and executive director of the Rutgers Institute on Site
Speaker 1: a community. Andrew Wheeler has only been leading the e
Speaker 1: p A for three weeks, but in that time he's
Speaker 1: made it clear that he'll be adopting much of his
Speaker 1: predecessors Scott Pruitt's agenda, but not his headline grabbing habits.
Speaker 1: During his first congressional testimony today, Wheeler said President Trump
Speaker 1: gave him three tasks when he was appointed Acting Administrator.
Speaker 1: Clean up the air, clean up the water, and provide
Speaker 1: regulatory relief to help the economy thrive and create more
Speaker 1: jobs for American workers. I believe we're accomplished all three
Speaker 1: at the time. In fact, we have already made progress
Speaker 1: on all three fronts in just the past few weeks.
Speaker 1: Joining us is Jennifer de Loie, Bloomberg News Environment and
Speaker 1: Energy Regulation reporter. Jennifer, you were at the hearings today
Speaker 1: and did he explain how he's going to deregulate at
Speaker 1: the same time as cleaning up the air and water. Well,
Speaker 1: he talked a lot about regulatory certainty, the idea that
Speaker 1: you can process permits more quickly um and and gives
Speaker 1: answers to the you know, businesses that are and the
Speaker 1: developers that are seeking permits involving water or land. So
Speaker 1: that's really where I think the rubber meets the road,
Speaker 1: where you have this flash, and where he is hoping
Speaker 1: to bridge the divide. Any big headlines from him on
Speaker 1: any important issues that you're following, absolutely, So what was
Speaker 1: really interesting today is is, of course how heavily the
Speaker 1: hearing focused on policy, A little bit of a change
Speaker 1: from hearings we saw with his predecessor, Scott Krewett that
Speaker 1: were dominated by concerns about ethics and spending. Today, uh
Speaker 1: Andrew Wheeler indicated that he wants to reach some kind
Speaker 1: of compromise with California, Fornia over vehicle emission standards. UH.
Speaker 1: The Administrations is on the verge of releasing its proposal
Speaker 1: UH to ease Obama era standards that aim to increase
Speaker 1: fuel economy requirements and UM and greenhop gas emission requirements
Speaker 1: for cars over the coming years, and they're going to
Speaker 1: freeze those in the proposal. UH. The proposal also is
Speaker 1: going to take aim at California's unique ability to regulate
Speaker 1: emission in its own turf and UH. And what Wheeler
Speaker 1: said today is he'd like to see a fifty states solution, UM,
Speaker 1: some kind of compromise that that California can be on
Speaker 1: board with and that wouldn't require him to go after
Speaker 1: California's authority. So but jen In in the statement or
Speaker 1: the report that's going to be unveiled, is it going
Speaker 1: to still talk about trying to take back California's the
Speaker 1: special power it has over emissions. Right. Our reporting indicates
Speaker 1: that indeed, this proposal tomorrow won't UH, We'll still have
Speaker 1: that very strong language and in it UM that it
Speaker 1: will asserts that California's own emission rules are preempted. UM
Speaker 1: that California shouldn't have a wave or allowing them to
Speaker 1: regulate emissions uh in this special way, and that it
Speaker 1: will of course take this harder approach to freezing the
Speaker 1: Obama air standards that said wheel Are made UH pains
Speaker 1: today to say this is just a proposal, and of
Speaker 1: course it's the proposal that involves not just his agency,
Speaker 1: the e p A, but is also being written with
Speaker 1: the Department of Transportation, where you have some uh political
Speaker 1: appointees that are pushing this harder stance, so that that
Speaker 1: we're going to see these tensions I think play out
Speaker 1: overcoming months. But he took pains today to stress that
Speaker 1: this is just an opening bid and his goal as
Speaker 1: a compromise. Is it fair to say that will Are
Speaker 1: is auditioning for the job full time? Is it his
Speaker 1: to lose? Oh? Absolutely, This is an audition and on
Speaker 1: the job and on the job audition as it were. Uh.
Speaker 1: Senator Barosso the chairman of the Environment and Public Works
Speaker 1: Committee today so that he'd like to see Wheeler get
Speaker 1: the job full time. Uh, it doesn't. We don't have
Speaker 1: any indications that the President is prepared to nominate him
Speaker 1: any time before the November elections, and this issue will
Speaker 1: probably Linker for a while, but no question, everyone is
Speaker 1: watching his performance from the White House to the Senate.
Speaker 1: Jen You've written about how you know, some people might
Speaker 1: read some of his actions as being backing off of
Speaker 1: prue It's agenda, but they would be wrong. Explain what
Speaker 1: his aim seems to be right. What we see with
Speaker 1: Wheeler is really a continuation of Prue's agenda. He still
Speaker 1: aims to ease many of the same regulations that Pruitt
Speaker 1: targeted for revision or appeal. Uh. That includes Obama air
Speaker 1: regulations governing greenhouse gas emissions from oil wells and from
Speaker 1: power plants, and of course the car proposal we just
Speaker 1: talked about. Uh. What what is different is that even
Speaker 1: though the agenda is going to be continuing, and it
Speaker 1: is clearly continuing in similar fashion, Wheeler is taking a
Speaker 1: slower approach. He's a little bit more cautious. He might
Speaker 1: be a little less aggressive in leaning into some of
Speaker 1: these um policy changes. Uh. Some folks think that will
Speaker 1: that he's more interested in doing a lot of the
Speaker 1: dotting of eyes and crossing of cheese that's necessary to
Speaker 1: ensure these rollbacks are supported and can withstand legal scrutiny. Uh.
Speaker 1: That's a question we'll see answered later on how well
Speaker 1: he does at that UM. But certainly he's taking a
Speaker 1: slower and more cautious approach in enacting some of the
Speaker 1: same reforms. Now, Willer is a former lobbyist, and he
Speaker 1: did get a question about his ethics. What was that?
Speaker 1: Right at the very top of the hearing, he was
Speaker 1: asked about his willingness to recuse himself from past clients.
Speaker 1: He's he's indicated that he will not um interact with
Speaker 1: or be involved in decisions that directly involved past clients,
Speaker 1: including notably um uh the coal miner Bob Murray, the
Speaker 1: head of Murray Energy Corporation. Uh. But that really was
Speaker 1: remarkably the only ethics question in this uh this hearing
Speaker 1: where Franklin Previous hearings involving Prue it were dominated by
Speaker 1: inquiries about ethics. So in general, Jen about thirty seconds
Speaker 1: here did it see less? Did it seem less confrontational
Speaker 1: than the hearings with Pruitt Night and Day? Absolutely less confrontational.
Speaker 1: He was given a warm welcome, relatively speaking, by both
Speaker 1: Democrats and Republicans, including some of Prue expiercist critics. All right,
Speaker 1: thanks so much for that report. That's Jennifer de Loowe,
Speaker 1: Bloomberg News Environment and Energy regulation reporter. Will have more
Speaker 1: on those Is Wheeler hearings throughout the day. Thanks for
Speaker 1: listening to the Bloomberg Law Podcast. You can subscribe and
Speaker 1: listen to the show on Apple Podcasts, SoundCloud, and on
Speaker 1: bloomberg dot com slash podcast. I'm June Brosso. This is
Speaker 1: Bloomberg