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. They've been branded
Speaker 1: as hipsters by their critics, but it has nothing to
Speaker 1: do with what they wear or the music they listen to.
Speaker 1: It has to do with their views on antitrust. They're
Speaker 1: a small group of policy wonks critical of the increasing
Speaker 1: consolidation of corporation. You can probably name many of those
Speaker 1: corporate giants. They not only want a toughen antitrust enforcement,
Speaker 1: but also to return antitrust policy to its early twentieth
Speaker 1: century roots. Bloomberg News legal reporter David McLaughlin has written
Speaker 1: about their mission in this week's Bloomberg Business Week, and
Speaker 1: he joins us now, David, tell us about these competition
Speaker 1: policy wonks as you describe them in your story. Yeah, So,
Speaker 1: there are a group of folks here in Washington, mostly UM,
Speaker 1: that have been speaking out a lot about UM big
Speaker 1: companies UM, warning about the threat from UH monopolies, especially
Speaker 1: in in in technology and UM they were basically spun
Speaker 1: out of a think tank uh here in in DC
Speaker 1: called New America, and they they formed this uh new
Speaker 1: organization called Open Markets and they've been gaining a lot
Speaker 1: of attention because UM, you know, there's been a long
Speaker 1: debate in the world of any trust about UM how
Speaker 1: tough to be on mergers and in big companies for
Speaker 1: many years and and and the pendulum is sort of
Speaker 1: swung back and forth on that during different administrations. But
Speaker 1: you know, essentially, the the basic playbook for how to
Speaker 1: evaluate mergers and monopolies has always been the same. And
Speaker 1: these guys are saying that whole playbook just needs to
Speaker 1: be thrown out. So tell us about the old playbook,
Speaker 1: which is based on the notion of consumer welfare. Right.
Speaker 1: So that was a notion that UM came to be
Speaker 1: really in the early nineteen eighties. UM. It was Uh.
Speaker 1: It was brought up by Robert Bourke UM in a
Speaker 1: in a book he called in a book he wrote
Speaker 1: called the antitrust paradox. UM. Essentially, the ideas that when
Speaker 1: we think about whether a merger should be should be
Speaker 1: blocked or should be allowed, and when we think about
Speaker 1: dominant companies in their in their market power. That the
Speaker 1: question is are you know, is the deal or is
Speaker 1: the company harming consumers? And and and for the most
Speaker 1: part that has meant has meant price. So in anti
Speaker 1: trust enforcers um investigate a merger, they're primarily focused on
Speaker 1: on price and will the combined company gain the power
Speaker 1: from from combining to be able to raise prices on
Speaker 1: you know, their their customers, um and UM. That's been
Speaker 1: basically the framework and so UM the but there's been
Speaker 1: these these swings. So like you know, typically, like you know,
Speaker 1: in the Embroment administration, they were seen as somewhat more
Speaker 1: aggressive on merger enforcements. During the Bush administration the sort
Speaker 1: of conventional thinking as they were slightly more hands off.
Speaker 1: But but the kind of the way to evaluate the
Speaker 1: deals is thinking about consumer welfare. That's always been sort
Speaker 1: of the the agreed upon framework. So what is the
Speaker 1: main criticism of the theories of these competition policy walks.
Speaker 1: What's the opposition saying about them? Yeah, so they say
Speaker 1: that that this this whole notion is sort of um,
Speaker 1: you know, corrupted. UM the uh, the the reason for
Speaker 1: the reason why any trust laws were um brought into
Speaker 1: place A hundred years ago. UM. This was the time
Speaker 1: of you know, standard oil, et cetera, in the in
Speaker 1: the in the the trusts, so a hundred years ago UM.
Speaker 1: And so they say that basically this, you know, pursuing
Speaker 1: this framework has got us not has basically harm consumers
Speaker 1: because it's led to these gigantic companies UM like technology
Speaker 1: like in technology or very consolidated UM airline industry, UH,
Speaker 1: A very consolidated banking industry. So you can look at
Speaker 1: a number of different industries that UM that have consolidated
Speaker 1: over the years, UH, and they say this has UM.
Speaker 1: This may be in some cases led to lower prices
Speaker 1: for consumers, but there have been other harms that the
Speaker 1: framework or the consumer welfare standard has has sore, have missed,
Speaker 1: and that those are harms that have affected UM workers
Speaker 1: and other elements of supply chains in different industries. So, David,
Speaker 1: are we seeing some shift in antitrust enforcement policies? For
Speaker 1: example with the Justice Department going to court to stop
Speaker 1: the merger of A T and T and Time Warner,
Speaker 1: where they're not just looking at vertical versus horizontal. UM.
Speaker 1: You know that that deal in particular was definitely a
Speaker 1: shift UM. I don't think though, that it was because
Speaker 1: of this hipster any trust movement, although they certainly supported
Speaker 1: the challenge UM that that was certainly a shift in
Speaker 1: that um because it was not a horizontal deal as
Speaker 1: a vertical deal. Vertical deals had tended to be tended
Speaker 1: to be approved with with conditions on how companies operated,
Speaker 1: and that surprised a lot that the A T and
Speaker 1: T lawsuit surprised a lot of people because, uh, um,
Speaker 1: the government is going to court to block it and
Speaker 1: basically saying there are no behavioral or conduct conditions that
Speaker 1: that can fix um, that can fix the deal. So,
Speaker 1: you know, I think it's still kind of early in
Speaker 1: this administration to know whether their approach is going to
Speaker 1: be significantly different UM or whether the you know, the
Speaker 1: A T and T cases is sort of a one off,
Speaker 1: but it has certainly that that case certainly has a
Speaker 1: lot of people asking that question. Let's turn for a
Speaker 1: few moments to Broadcom, which is one of the world's
Speaker 1: largest chip makers through a string of acquisitions over the
Speaker 1: past few years. It said it's under investigation by US
Speaker 1: anti trust officials for potentially anti competitive conduct. Can you
Speaker 1: explain what's happening with Broadcom. So the Broadcom Broadcom said
Speaker 1: yesterday they put out a statement saying that the UM
Speaker 1: at the Federal Trade Commission UM, which is the other
Speaker 1: anti trust enforcement agency in the US, is investigating anti
Speaker 1: competiti of conduct by the company. It didn't elaborate on
Speaker 1: exactly what conduct that is, although it said that it's
Speaker 1: not UM it's not related to their wireless business. This
Speaker 1: is about I think UM. If it's not their wireless,
Speaker 1: would be a sort of network UM network business UM.
Speaker 1: So we don't know exactly what the FTC is concerned
Speaker 1: about UM. I think the news of that investigation spooked
Speaker 1: the market briefly because Broadcom is in the process of
Speaker 1: trying to buy its rival, rival shipmaker call Calm, So
Speaker 1: I think some investors were concerned that, well, if the
Speaker 1: FDC is worried about broad coons con Broadcom's conduct, then
Speaker 1: that might affect the merger review UM with the Call
Speaker 1: Calm merger of view. So we'll have to see, we will,
Speaker 1: and I'm sure there's a lot more antitrust at coming up.
Speaker 1: Thanks so much. That's Bloomberg News legal reporter David mclauch Bucklin,
Speaker 1: and you can read his article in the latest Bloomberg
Speaker 1: Business Week. It's entitled Hipsters Versus Chicago, The Fight to
Speaker 1: rewrite the Antitrust Playbook. Claims of executive privilege during Steve
Speaker 1: Bannon's testimony at the House Intelligence Panel have thrown a
Speaker 1: glaring spotlight on the potential conflicts of interest of White
Speaker 1: House counsel Don McGan McGann has not only been interviewed
Speaker 1: by investigators for the Special Counsel in the Russia probe,
Speaker 1: Bannon's lawyer is also his lawyer, and McGann's office was
Speaker 1: involved in instructing ban and on which questions from the
Speaker 1: House panel he should answer he shouldn't answer, according to
Speaker 1: a person familiar with the matter. Walter Shab, former director
Speaker 1: of the Department of Government Ethics, spoke about McGann's position
Speaker 1: with CNN earlier this month. He can try to hide
Speaker 1: behind the I was only following orders. But that didn't
Speaker 1: work at Nuremberg and it's not going to work here
Speaker 1: because as an attorney, the president is not his client.
Speaker 1: The Office of the President is is his client, and
Speaker 1: he's ultimately answerable to the American people. Joining me is
Speaker 1: Tom Schoenberg, Bloomberg News Financial Crime reporter Tom describe what
Speaker 1: happened when these areas of concern to the White House
Speaker 1: came up during Bannon's testimony. Sure, so, over the course
Speaker 1: of about uh you know, about nine hours or so
Speaker 1: that Steve Bannon was on the on Capitol Hill. Um,
Speaker 1: a question would be asked, they would pause while his attorney,
Speaker 1: Bill Burke would uh place a phone call to the
Speaker 1: White House to get an answer as to whether or
Speaker 1: not he can answer the question. And this went on,
Speaker 1: and uh, you know they uh he refused then to
Speaker 1: answer a number of questions about his time both in
Speaker 1: the White House and even uh during the transition. Uh,
Speaker 1: you know, the given the advice from the White House
Speaker 1: being that they may want to assert executive privilege. So
Speaker 1: McGann is supposed to defend the office of the president,
Speaker 1: not the president himself. But he's also a witness to
Speaker 1: controversial events under investigation by Muller and Congress and reportedly
Speaker 1: took part in some of them. So he could be
Speaker 1: a witness or possibly a defendant. What kind of potential
Speaker 1: conflicts do you see there? Well, here, you know, at
Speaker 1: the moment, it's it's kind of this, uh, this appearance
Speaker 1: of possible conflict as far as we know Don McGann
Speaker 1: hasn't recused himself from decisions on whether to assert executive privilege,
Speaker 1: uh in questioning over the Russia the Russia matter, and um,
Speaker 1: you know he's been someone who also has had this
Speaker 1: front row seat. So uh, you know, it's it's sort
Speaker 1: of looks a little strange when you potentially have kind
Speaker 1: of one witness calling another witness, you know, for advice
Speaker 1: on how to answer questions. And with lawyers, it is
Speaker 1: the appearance of improprietor a that is also supposed to
Speaker 1: be avoided. What is the line? Do we know what
Speaker 1: the line is between defending the office and defending the
Speaker 1: man in the office. Right, Well, well, defending the office,
Speaker 1: I mean asserting executive privilege, um is kind of one
Speaker 1: of your one of your jobs assessing whether that needs
Speaker 1: to happen, because again, as White House counsel, you do
Speaker 1: not necessarily want Congress, um and others to be able
Speaker 1: to kind of pull in and get into the sort
Speaker 1: of business and decision making of the White House. It's
Speaker 1: one of the protections for the you know, for the
Speaker 1: White House to be able to do its job. It
Speaker 1: gets a little tricky in situations where you have investigations
Speaker 1: that reach into the White House and reach into that
Speaker 1: sort of role of the White House counsel where the
Speaker 1: person's a potential witness, and this has come up, Uh,
Speaker 1: you know, questions about that role has come up in
Speaker 1: past administrations Nixon, Clinton, Uh, and those investigations, court rulings
Speaker 1: that kind of came out of their kind of really
Speaker 1: sort of limited, Uh, the protections of that sort of
Speaker 1: that White House Council really asserted that they're there not
Speaker 1: to protect the person in the office, but the office
Speaker 1: of the presidency itself. Mcgan's lawyer not only represents Bannon,
Speaker 1: but also Ryan's previous and there's nothing ethically wrong with
Speaker 1: that at this point. But you spoke to Nicholas Allardin
Speaker 1: of brook And Law School. Tell us what he said
Speaker 1: about the difficulty of representing three people in the same matter. Sure, Um,
Speaker 1: you know again you have three you have three sort
Speaker 1: of key players here in this in this investigation, and um,
Speaker 1: to just try and get your arms around what each
Speaker 1: each one of those knows and their various sort of
Speaker 1: rights and uh, you know, how they're gonna, how they're
Speaker 1: answering questions or where they are and you know where
Speaker 1: they kind of fit into the probe is a is
Speaker 1: a pretty big job. You know. Bill Burke, the lawyer
Speaker 1: for all three UM, He's a prominent defense lawyer in Washington.
Speaker 1: He's handled uh, you know, big political cases in the past.
Speaker 1: He represented UM Virginia Governor Bob McDonald's wife in a
Speaker 1: corruption case there a few years ago. So he's a
Speaker 1: very experienced individual and he knows how to do big
Speaker 1: Also in corporate cases, where it's it's not that unusual
Speaker 1: for a lawyer to handle uh, you know, represent kind
Speaker 1: of multiple employees and a probe. I think the difference is, uh,
Speaker 1: you know, it's it would be unusual for a single
Speaker 1: lawyer to handle representation for a CEO CFO and the
Speaker 1: CEO definitely now. And it comes up in criminal cases
Speaker 1: where sometimes a lawyer at the beginning will represent two defendants,
Speaker 1: but then if their interests diverge at all, the judge
Speaker 1: will tell them that, you know, you need to get
Speaker 1: a separate lawyer to protect your own interests. This hasn't
Speaker 1: reached that point, but if it does, I take it
Speaker 1: that Mueller will be there to say something, because he's
Speaker 1: already challenged some of the lawyers who have uh to
Speaker 1: interest tell me about that. Yeah, he Uh. So with
Speaker 1: regards to the uh, the the cases, the case brought
Speaker 1: against Paul Manafort and UH and Rick Gates. Um in
Speaker 1: that matter, there was you know, a lawyer that Rick
Speaker 1: Gates had had hired who uh, a New York lawyer
Speaker 1: happened to also be involved in a current case that
Speaker 1: Mueller's team felt, uh Gates could possibly be a witness
Speaker 1: in that matter. So you had the lawyer kind of
Speaker 1: representing a defendant in the case in New York as
Speaker 1: well as Rick Gates who could potentially be a witness
Speaker 1: in that case. And so the judge in the in
Speaker 1: the Manafort Gates matter here in Washington, UH, she kind
Speaker 1: of you know, had the party sort of explained to
Speaker 1: her the situation, and at the end of the day,
Speaker 1: you know, Gates was allowed to kind of keep his lawyer,
Speaker 1: I think once all sort of the you know, everything
Speaker 1: was kind of explained in terms of what he would
Speaker 1: be giving up, you know, the the potential for harm there.
Speaker 1: Something that has has come up in the news is
Speaker 1: that though Bannon asserted, well, he kind assert executive PRIs
Speaker 1: but though he refused to answer some questions based on
Speaker 1: the president's claim of executive privilege when he goes to
Speaker 1: talk to Mueller's investigators whenever that time is set up. Um,
Speaker 1: people familiar say that he is not going to assert
Speaker 1: executive privilege at that point. So does that put his
Speaker 1: lawyer in a strange position? Yeah, it's uh, you know,
Speaker 1: in these big investigations like this, He's Washington investigations. Um,
Speaker 1: obviously the Hill, the Hill's probe isn't a criminal probe, right,
Speaker 1: so you want to make sure that you're going to
Speaker 1: be as open as possible when you do talk to
Speaker 1: the sort of criminal investigators. And so you know, if
Speaker 1: they were to assert executive privilege, and then we may
Speaker 1: be in a situation like we have in past investigations
Speaker 1: where uh M, there's team could challenge it next thing
Speaker 1: and nowhere, and you know, we're creating some new uh
Speaker 1: some new precedent um the type of which we haven't
Speaker 1: seen in some years. Could it get any more complicated?
Speaker 1: That's a rhetorical question. It will. Thanks for being here.
Speaker 1: That's Tom Schoenberg, Bloomberg News Financial crime Reporter. 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