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Speaker 1: Welcome to the Bloomberg Law Podcast. I'm June Grosso. Every

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Speaker 1: day we bring you insight and analysis into the most

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Speaker 1: important legal news of the day. You can find more

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Speaker 1: episodes of the Bloomberg Law Podcast on Apple Podcasts, SoundCloud

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Speaker 1: and on Bloomberg dot com, Slash Podcasts, and FBI rate

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Speaker 1: on his personal lawyer's office. Cut close to home for

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Speaker 1: Donald Trump, prompting an angry reaction from the President at

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Speaker 1: the White House last night at a meeting with military officials.

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Speaker 1: Why don't I just fire mother? Well, I think it's

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Speaker 1: a disgrace what's going on. We'll see what happens, but

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Speaker 1: I think it's really a sad situation when you look

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Speaker 1: at what happened that many people have said you should

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Speaker 1: fire him. Joining me is Jimmy Garoula, a professor at

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Speaker 1: Notre Dame Law School. Jimmy, how big an escalation was

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Speaker 1: this raid for the Justice Department? Well, it's significant, there,

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Speaker 1: there's no question about it. And first of all, it's

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Speaker 1: very rare. It's quite unusual for the Department of Justice

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Speaker 1: to authorize the search warrant of an attorney who is

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Speaker 1: the legal representative of someone who is under investigation by

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Speaker 1: the Department of Justice. So again it's it's very rare.

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Speaker 1: It's rare, but this was done from what we know

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Speaker 1: by the book. Absolutely, there's no question about it. You know, first,

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Speaker 1: I think it speaks well of UH Special Counsel Mueller

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Speaker 1: because he apparently came across evidence of of a potential

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Speaker 1: crime and he believed that that and for that evidence

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Speaker 1: was outside of the scope of his mandate with respect

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Speaker 1: to investigating the Russia meddling in the two thousand and

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Speaker 1: sixteen election, and rather than investigating it himself, he brought

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Speaker 1: it to the attention of the Deputy Attorney General, Rod Rosenstein,

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Speaker 1: and it was Rod Rosenstein that referred the matter to

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Speaker 1: the U. S. Attorney's Office in in in Manhattan. So

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Speaker 1: it was actually the the federal prosecutors in Manhattan that

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Speaker 1: conducted the search warrant. Does this say anything about Mueller

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Speaker 1: making strategic moves to help preserve his investigation even if

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Speaker 1: Trump removes him. Might the U. S. Attorney in Manhattan

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Speaker 1: be involved? Now? Well, I think he's certainly very cognizant

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Speaker 1: of his credibility and preserving his credibility, and that whatever

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Speaker 1: he ultimately concludes, whether he decides that crimes have been

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Speaker 1: committed or crimes have not been committed. The public is

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Speaker 1: going to have to buy in on this, and that's

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Speaker 1: gonna turn in large part on whether or not he

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Speaker 1: has credibility with respect to the way that he's conducted

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Speaker 1: his his investigation. And I think this actually weighs in

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Speaker 1: favor of Mueller because it shows again that he's adhering

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Speaker 1: very closely to to his mandate, the formal authority that

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Speaker 1: he's been given, and he's not exceeding exceeding the bounds

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Speaker 1: of that authority. What does it tell you that Rod Rosenstein,

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Speaker 1: who has been under so much pressure for so long

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Speaker 1: from President Trump, and it seems as if, you know,

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Speaker 1: we talk about Mueller being dismissed, and in that we

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Speaker 1: always talk about Rod Rosenstein being dismissed. What does it

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Speaker 1: tell you that he said, Okay, we're gonna take this

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Speaker 1: and we're gonna send this to the Southern District. Well,

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Speaker 1: what it tells me is that is that he's a prosecutor,

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Speaker 1: that's that's adhering to the rule of law, and that

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Speaker 1: he's not he's not capitulating to political pressure. So, despite

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Speaker 1: the harsh criticisms by President Trump of Rosenstein, in in

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Speaker 1: in in the public forum, uh air publicly. Uh. He's

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Speaker 1: doing his job. And so if he believes that there's

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Speaker 1: evidence of a crime, then then he's investigating uh, that evidence,

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Speaker 1: rather than than cow towing to political pressure by the president,

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Speaker 1: and he shouldn't do that. So it seems as if,

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Speaker 1: as from everything we've said and learned, that this is

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Speaker 1: a separate investigation. But could there be information that is

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Speaker 1: found in the attorney's office that helps Moller. There's there's

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Speaker 1: no question about it. And so I think that President

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Speaker 1: Trump is vulnerable in two important ways. I mean, first

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Speaker 1: with respect to the the the now ongoing investigation out

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Speaker 1: of the Manhattan Prosecutor's office regarding Michael Cohen. Certainly, during

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Speaker 1: that investigation, they could uncover evidence that implicates that is

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Speaker 1: incriminating of the president. And that's not far fetched considering

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Speaker 1: the fact that that Cohen portrays himself, he's very proud

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Speaker 1: of the fact that he's the so called fixer for

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Speaker 1: the president in terms of fixing any problems that that

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Speaker 1: confront President Trump. And so certainly there could be information

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Speaker 1: discovered during that investigation that implicates the president. But perhaps

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Speaker 1: even more more dangerous in terms of exposing the president

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Speaker 1: even graver legal jeopardy. And that is the president's reaction

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Speaker 1: to all of this, because if he overreacts and he

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Speaker 1: fires Rosenstein, if he overreacts and he fires Mueller, and

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Speaker 1: then we've got the Saturday Night massacre situation being replayed

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Speaker 1: UH today and that could result potentially in impeachment efforts

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Speaker 1: against the president. Let's just discuss briefly a Saturday Night

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Speaker 1: masker situation. How many people would he have to fire?

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Speaker 1: Would you also have to fire the head of the FBI? Well,

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Speaker 1: he would start if he wants to get rid of Mueller. Again,

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Speaker 1: the Special Council Statute authorizes the Deputy Attorney General to

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Speaker 1: fire the Special Council forecause, and so that would be Rosenstein,

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Speaker 1: that would They would have that that authority. So if

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Speaker 1: Rosenstein refuses to do that, and then the president could

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Speaker 1: fire Rosenstein and then he would have to replace him.

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Speaker 1: And so the question would be who who would Rosenstein

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Speaker 1: be replaced? Rosenstein be replaced with and then he would

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Speaker 1: order the president would order that person to fire Mueller.

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Speaker 1: What if that person refuses to do so, and then

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Speaker 1: it could continue down the chain of command and in

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Speaker 1: that fashion, or maybe the other option would be for

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Speaker 1: the President to fire Sessions and then place uh, try

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Speaker 1: to get a new attorney general in place that wouldn't

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Speaker 1: be refused from the Russia investigation. But the problem with

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Speaker 1: that is is that it's going to be very difficult

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Speaker 1: I think if that occurs, if Sessions is fired, to

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Speaker 1: get a new to get the Senate to confirm a

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Speaker 1: new attorney general. And he did criticize Sessions yesterday as well,

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Speaker 1: and this his his feelings about Sessions seemed to seesaw

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Speaker 1: back and forth. But we're out of time. Jimmy, I

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Speaker 1: thank you so much for being on. That's Jimmy Garoule,

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Speaker 1: a professor at Notre Dame Law School. Buyer is inching

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Speaker 1: closer to completing a sixty six billion dollar acquisition of Monsanto.

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Speaker 1: The last major hurdle is approval from US anti trust regulators,

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Speaker 1: and Buyer is close to getting that. According to a

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Speaker 1: person familiar with the matter, Buyer has the green light

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Speaker 1: from almost two thirds of the jurisdictions it needs to

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Speaker 1: sign off on the biggest transaction yet and the seeds

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Speaker 1: and crop chemicals industry joining me. Is Bloomberg Intelligence, Your

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Speaker 1: litigation analyst Jennifer Read jen. This deal has been about

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Speaker 1: two years in the making. What have the Justice Department's

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Speaker 1: concerns been to slow it down? You know, first of all,

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Speaker 1: a lot of that time is just in the investigation

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Speaker 1: of these deals, because this is a really complex industry,

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Speaker 1: and they entered into this deal at a time when

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Speaker 1: there was a lot of consolidation. If you remember now

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Speaker 1: and do Pomp we're emerging in KEMP China and cent

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Speaker 1: Genta were emerging. So it really takes a lot of

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Speaker 1: time to weed through the issues. And these companies, in particular,

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Speaker 1: one Buyer is stronger in chemicals, agricultural chemicals, and Monsanto

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Speaker 1: stronger in agricultural seeds, and there are ways in which

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Speaker 1: these products work together and can be actually even tied

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Speaker 1: together in certain ways that I think that the Department

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Speaker 1: of Justice needed to ensure that whatever they did here

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Speaker 1: and whatever the remedy might be, would would fix any

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Speaker 1: issues that might allow these companies to sort of unlaw

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Speaker 1: off league tie these products together. So the Wall Street

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Speaker 1: Journal first reported on the possibility or the likelihood of

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Speaker 1: approval from the US antitrust regulators. What are some of

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Speaker 1: the agreements that seemed to be in place to move

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Speaker 1: the antitrust regulators to approve it. You know, there's a

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Speaker 1: lot happening here because the European regulators had already required

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Speaker 1: almost all of buyer's seed business to be divested, so

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Speaker 1: you know, pretty much practically eliminating that overlap. And I

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Speaker 1: believe there was also um some of their chemicals had

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Speaker 1: to get chemical agricultural chemicals needed to be divested too.

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Speaker 1: Now what the US said is look perhaps and down DuPont.

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Speaker 1: What European regulators required was also good enough for US

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Speaker 1: because this tends to be a global market. But in

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Speaker 1: this case, the competitive dynamic is a little different in

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Speaker 1: the US because we do allow genetically modified seeds, whereas

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Speaker 1: in a lot of countries in Europe these are not allowed.

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Speaker 1: So you've got a different dynamic there. And they needed

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Speaker 1: to ensure that they had everything covered. And it looks

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Speaker 1: like they are requiring the companies to sell more seed

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Speaker 1: and chemical assets, as well as possibly either sell or

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Speaker 1: licensed digital farming assets. The Justice Department, we know, as

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Speaker 1: we've talked about, the Justice Department is challenging the A

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Speaker 1: T and T time Warner merger and there's currently a

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Speaker 1: trial before a judge in d C. Can you tell

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Speaker 1: about the Trump administration's approach to antitrust From looking at

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Speaker 1: these two deals, you know, we're beginning to a little

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Speaker 1: bit and I think it's still early. But the thing

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Speaker 1: that's really interesting is that when UM President Trump was

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Speaker 1: elected and started thinking about who he might put in

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Speaker 1: place the Department of Justice, and the guy he put in,

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Speaker 1: Makondel Rahim to head up anti trust, was kind of

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Speaker 1: considered a Republican and a traditional Republican, and I think

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Speaker 1: a lot of people thought it might bring back a

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Speaker 1: time when it was a little bit more like what

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Speaker 1: enforcement was from mergers under George Bush, a little easier,

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Speaker 1: letting some of these deals go through UM where where

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Speaker 1: maybe the Democrats might not have And what we're seeing

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Speaker 1: is that that's not really the case. We're seeing tough

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Speaker 1: enforcement year with the obviously with respect to A T

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Speaker 1: and T they're suing to block, and with respect to

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Speaker 1: Buyern Monsanto, they're looking for some really major remedies here.

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Speaker 1: So what does that tell you about other mergers that

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Speaker 1: are currently pending. You mentioned Sinclair Tribune, Etna, CVS, Signa,

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Speaker 1: Express Scripts, Disney Fox. Well, I think that they're all

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Speaker 1: going to need to expect the same that they're not

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Speaker 1: just going to escape through um, you know on this

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Speaker 1: sort of uh you know less a fair attitude. That's

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Speaker 1: not going to be that. They're going to get scrutinized carefully.

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Speaker 1: They're going to have to and they're going to have

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Speaker 1: to remedy any possible harms and and it's not necessarily

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Speaker 1: going to be easy and it's not going to be behavioral. Well,

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Speaker 1: that's what it seems like now if they're in front

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Speaker 1: of the Department of Justice, it seems fairly clear the

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Speaker 1: behavioral remedies aren't going to be accepted. This was one

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Speaker 1: of the problems in the A T and T deal

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Speaker 1: and what they'll require something structural. However, that's not necessarily

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Speaker 1: the case, at least we don't know yet. Before the FTC,

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Speaker 1: the FTC has always preferred a structural remedy over behavioral remedy,

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Speaker 1: but they have accepted purely behavioral remedies in the past.

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Speaker 1: Now we're going to soon have an entirely new crop

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Speaker 1: of FTC commissioners coming in five actually that will come

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Speaker 1: in and the existing two will leave, and we'll see

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Speaker 1: what they have to say about this and what they'll

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Speaker 1: do going forward. You know, as you mentioned there's been

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Speaker 1: this wave of consolidation in seed and crop chemical firms

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Speaker 1: in the past three years. So why and farmers are concerned,

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Speaker 1: they've expressed concern. Why allow even more consolidation. Well, you know,

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Speaker 1: the thing is, that's what the remedy is meant to do.

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Speaker 1: When there is a remedy of one of these deals,

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Speaker 1: it's meant to replace the competition that's been lost by

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Speaker 1: virtue of the deal. And when you think of it

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Speaker 1: that way, it's not really consolidation. And here what has

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Speaker 1: happened is that a company that wasn't in seeds before

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Speaker 1: but wasn't chemicals, that's b a SF is going to

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Speaker 1: be acquiring a lot of these assets, if not all

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Speaker 1: of them, and becomes a vertically integrated large seed and

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Speaker 1: chemical company akin to Dow DuPont and by mon Santo.

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Speaker 1: So so in a way, what they have done with

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Speaker 1: this remedy is preserved the competition that is lost by

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Speaker 1: virtue of the deal. In most cases, is EU approval

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Speaker 1: stricter than US approval or vice versa. You know, I

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Speaker 1: think it's merger dependent, but in general, sort of in

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Speaker 1: a macro sense, I think the European regulators are thought

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Speaker 1: of as more stringent and more difficult and more demanding

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Speaker 1: than the U S regulators um. But it remains to

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Speaker 1: be seen because we are seeing, you know, a tough

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Speaker 1: regulator right now in the Department of Justice with at

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Speaker 1: least a T and T in with this deal. So

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Speaker 1: we'll see what happens going forward. Now, will they be

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Speaker 1: able to close after they get US approval. They're still

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Speaker 1: waiting for some other approvals, but I think those will

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Speaker 1: fall in line. I believe Russia and India, possibly a

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Speaker 1: few others, but those will likely fall in line once

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Speaker 1: this US approval comes through. What happens in the US

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Speaker 1: is the Department of Justice will have to put out

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Speaker 1: a package for public comment for sixty days explaining what

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Speaker 1: their concerns were here and why, what the remedy is

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Speaker 1: and why it'll alleviate these concerns. After sixty days, a

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Speaker 1: judge has to sign off on this, and then it

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Speaker 1: becomes final. Let's jump over to the A, T and

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Speaker 1: T time Warner Merger for a moment. That trial is

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Speaker 1: ongoing in d C and nless. I heard the judge

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Speaker 1: asked both sides to cut down their witness list. He

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Speaker 1: seems to be very interested in moving this along quick

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Speaker 1: more quickly, and it has been very slow, starting with

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Speaker 1: a snow delay in the very first week which sort

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Speaker 1: of put them behind. But he does realize that the

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Speaker 1: parties are running up against a deadline and that they

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Speaker 1: want to get his decision before June, and in order

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Speaker 1: to do that, he's got a lot to get through.

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Speaker 1: And he said thinks his opinion is going to be

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Speaker 1: two hundred pages. Oh, I'm not sure probably, but that's

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Speaker 1: what he says. So in about a minute, what's the

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Speaker 1: highlight of the testimony that you've heard there? You know?

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Speaker 1: I think to me they're two highlights here. One the

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Speaker 1: judge made a comment about this arbitration offer that, um,

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Speaker 1: a T and t's put on the table. It's similar

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Speaker 1: to something that Comcast an NBC you had to do

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Speaker 1: in order to get their deal through. And he was

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Speaker 1: asking the Department of Justice obviously thinks it's insufficient. And

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Speaker 1: he was asking a witness who express express some concerns

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Speaker 1: over that arbitration. Could it be changed? How could it

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Speaker 1: be approved that that you would accept it? So the

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Speaker 1: means he's thinking about that, and I think that's a

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Speaker 1: positive sign for a T and T. And what was

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Speaker 1: the second one. Well, the second one for me was

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Speaker 1: the fact that UM, the judge did allow some documents

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Speaker 1: of UM A, T and T Direct TV employees UM

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Speaker 1: in which they expressed concern about when the Comcast, NBCU

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Speaker 1: behavioral concessions were to expire, and they expressed concern about

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Speaker 1: what those companies might do, which basically support the Department

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Speaker 1: of Justices case. So that was a score for the

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Speaker 1: Department of Justice. Always great to have you here, jenn

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Speaker 1: that's Jennifer E, Senior Litigation Atlas for Bloomberg Intelligence. Thanks

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Speaker 1: for listening to the Bloomberg Law podcast. You can subscribe

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Speaker 1: and listen to the show on Apple Podcasts, un cloud,

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Speaker 1: and on Bloomberg dot com slash podcast. I'm June Brosso.

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Speaker 1: This is Bloomberg m HM.