1 00:00:02,759 --> 00:00:07,000 Speaker 1: This is Bloomberg Law with June Grossel from Bloomberg Radio. 2 00:00:08,680 --> 00:00:12,000 Speaker 1: President Trump is turning to the Supreme Court over and 3 00:00:12,039 --> 00:00:16,200 Speaker 1: over again as lower court judges reign in his efforts 4 00:00:16,239 --> 00:00:19,479 Speaker 1: to push the limits of executive power, and the court's 5 00:00:19,520 --> 00:00:24,439 Speaker 1: conservative majority seems to be accommodating him with consecutive but 6 00:00:24,680 --> 00:00:28,920 Speaker 1: narrow wins, even as the liberal minority dissents, led by 7 00:00:29,160 --> 00:00:33,280 Speaker 1: Justice Sonya Soto Mayor, who expressed concerns for the rule 8 00:00:33,320 --> 00:00:36,800 Speaker 1: of law at a Georgetown University forum last week. 9 00:00:37,280 --> 00:00:40,520 Speaker 2: One of the things that's troubling so many right now 10 00:00:40,800 --> 00:00:45,159 Speaker 2: is many of the standards that are being changed right 11 00:00:45,200 --> 00:00:51,960 Speaker 2: now were norms that government that governed officials into what 12 00:00:52,280 --> 00:00:56,120 Speaker 2: was right and wrong. Once norms are broken, then you're 13 00:00:56,160 --> 00:00:58,840 Speaker 2: shaking some of the foundation of the rule of law. 14 00:00:59,400 --> 00:01:03,840 Speaker 1: My guest is constitutional law expert David super, a professor 15 00:01:03,880 --> 00:01:09,840 Speaker 1: at Georgetown Law. David, if my calculations are correct, the 16 00:01:09,840 --> 00:01:14,080 Speaker 1: Trump administration has made eight emergency applications to the Supreme 17 00:01:14,120 --> 00:01:18,200 Speaker 1: Court in less than three months. I'm sure that's a record, 18 00:01:18,640 --> 00:01:21,760 Speaker 1: But why is the Supreme Court addressing so many of 19 00:01:21,800 --> 00:01:22,679 Speaker 1: these issues? 20 00:01:23,240 --> 00:01:30,160 Speaker 3: Well, the Trump administration is making sweeping changes in our 21 00:01:30,240 --> 00:01:34,720 Speaker 3: system of government changing things that have been understood at 22 00:01:34,840 --> 00:01:37,680 Speaker 3: least since the New Deal, in many of them since 23 00:01:37,760 --> 00:01:41,800 Speaker 3: the founding. So these are important enough issues to merit 24 00:01:42,000 --> 00:01:46,120 Speaker 3: the Supreme Court's attention when they are enjoyed for being unlawful. 25 00:01:46,959 --> 00:01:51,280 Speaker 1: So last Friday, the Supreme Court allowed the Education Department 26 00:01:51,360 --> 00:01:55,440 Speaker 1: to withhold money for teacher training projects in eight states. 27 00:01:55,760 --> 00:01:59,160 Speaker 1: It was a five to four decision. Chief Justice John 28 00:01:59,240 --> 00:02:02,600 Speaker 1: Roberts side with the court's three liberals, indicating they would 29 00:02:02,640 --> 00:02:05,400 Speaker 1: have denied the government's request. Do you see why he 30 00:02:05,560 --> 00:02:08,400 Speaker 1: was with the Court's liberals in that particular case. 31 00:02:08,880 --> 00:02:11,880 Speaker 3: Well, he didn't write an opinion and he didn't sign 32 00:02:11,919 --> 00:02:16,080 Speaker 3: the opinions written by the liberal justices. So my sense 33 00:02:16,200 --> 00:02:19,480 Speaker 3: is that he simply didn't feel that the administration had 34 00:02:19,520 --> 00:02:23,760 Speaker 3: made a sufficiently compelling case and he wasn't entirely persuaded 35 00:02:24,120 --> 00:02:27,800 Speaker 3: by what the conservative majority wrote in their opinion. 36 00:02:28,120 --> 00:02:30,800 Speaker 1: So did the conservative majority basically go off on a 37 00:02:30,840 --> 00:02:32,640 Speaker 1: procedural point. 38 00:02:33,639 --> 00:02:39,160 Speaker 3: Yeah, many of these cases are procedural. The majority is 39 00:02:39,720 --> 00:02:46,799 Speaker 3: looking with a very powerful magnifying glass at the procedure 40 00:02:47,160 --> 00:02:51,160 Speaker 3: and in particular about which court something is filed in, 41 00:02:51,760 --> 00:02:55,639 Speaker 3: and are in three of the most significant cases, finding 42 00:02:55,680 --> 00:02:58,200 Speaker 3: that they don't believe it was in the right court. 43 00:02:58,639 --> 00:03:01,720 Speaker 3: That says nothing about the parents. If the cases get 44 00:03:01,720 --> 00:03:05,920 Speaker 3: refiled in the court that the Supreme Court prefers, which 45 00:03:05,960 --> 00:03:08,560 Speaker 3: some of them already have then, So I don't think 46 00:03:08,560 --> 00:03:11,359 Speaker 3: we can read very much into it other than that 47 00:03:11,440 --> 00:03:14,919 Speaker 3: this Court is hoping against hope that if they give 48 00:03:14,960 --> 00:03:18,200 Speaker 3: the administration a little more time, that it will come 49 00:03:18,240 --> 00:03:19,520 Speaker 3: into compliance with the law. 50 00:03:20,240 --> 00:03:23,040 Speaker 1: Justice Katanji Brown Jackson, in a dissense, said it was 51 00:03:23,120 --> 00:03:27,000 Speaker 1: beyond puzzling that a majority of justices conceive of the 52 00:03:27,040 --> 00:03:31,080 Speaker 1: government's application as an emergency. I mean, it doesn't appear 53 00:03:31,120 --> 00:03:35,520 Speaker 1: that there's a real emergency in most of these applications 54 00:03:35,560 --> 00:03:36,400 Speaker 1: to the Court. 55 00:03:36,560 --> 00:03:41,240 Speaker 3: No, it doesn't. There's no indication that funding these teacher 56 00:03:41,360 --> 00:03:47,480 Speaker 3: training programs would do any devastating harm. But everything the 57 00:03:47,480 --> 00:03:51,920 Speaker 3: administration does these days, it claims is an emergency. And 58 00:03:52,080 --> 00:03:56,840 Speaker 3: their basic theme is that they get to define what 59 00:03:56,880 --> 00:04:00,960 Speaker 3: an emergency is, no matter how absurd that claim is. 60 00:04:01,400 --> 00:04:04,680 Speaker 3: And for the moment, the Supreme Court is humoring them 61 00:04:04,720 --> 00:04:08,720 Speaker 3: on this. My sense is that that game will only 62 00:04:08,760 --> 00:04:09,600 Speaker 3: work for so long. 63 00:04:10,160 --> 00:04:14,000 Speaker 1: In probably the most high profile of these emergency petitions, 64 00:04:14,680 --> 00:04:19,520 Speaker 1: on Monday, the court allowed Trump to continue deporting Venezuelan 65 00:04:19,680 --> 00:04:24,039 Speaker 1: migrants to prison in L Salvador under the Alien Enemies Act, 66 00:04:24,480 --> 00:04:27,239 Speaker 1: granting an emergency request on a five to four vote, 67 00:04:27,279 --> 00:04:31,560 Speaker 1: without deciding if he was using that law lawfully. 68 00:04:31,800 --> 00:04:34,360 Speaker 3: Yes, they said that that case should not have been 69 00:04:34,560 --> 00:04:36,960 Speaker 3: in the district of the District of Columbia, should have 70 00:04:37,000 --> 00:04:41,599 Speaker 3: been in the Southern District of Texas, and the reasons 71 00:04:41,640 --> 00:04:47,760 Speaker 3: for that are not silly, but not very compelling either. 72 00:04:48,320 --> 00:04:51,360 Speaker 3: There certainly were plausible reasons to have file the case 73 00:04:51,400 --> 00:04:54,640 Speaker 3: where they did, but I think they're hoping that if 74 00:04:55,000 --> 00:04:58,039 Speaker 3: they make the case start all over again in the 75 00:04:58,080 --> 00:05:01,880 Speaker 3: Southern District of Texas, is the illustration will chalk that 76 00:05:02,000 --> 00:05:04,800 Speaker 3: up as a whin and back off from its absurd policy. 77 00:05:05,080 --> 00:05:10,960 Speaker 1: They also didn't address the fact that hundreds of Venezuelan 78 00:05:11,080 --> 00:05:15,680 Speaker 1: migrants have been shipped to L Salvador already and are 79 00:05:15,680 --> 00:05:19,320 Speaker 1: in prison there a harsh prison, and a Bloomberg News 80 00:05:19,360 --> 00:05:23,320 Speaker 1: review found that just seven out of the two hundred 81 00:05:23,320 --> 00:05:27,400 Speaker 1: and thirty eight migrants have been found guilty of serious crimes. 82 00:05:27,440 --> 00:05:30,279 Speaker 1: I mean, they're sending people there based on tattoos and 83 00:05:30,320 --> 00:05:33,120 Speaker 1: the kind of clothes they're wearing and the court just 84 00:05:33,680 --> 00:05:34,640 Speaker 1: let that go by. 85 00:05:35,440 --> 00:05:39,039 Speaker 3: Well, the Court said that there wasn't jurisdiction in the 86 00:05:39,080 --> 00:05:43,240 Speaker 3: district of Columbia, so they haven't said this is okay. 87 00:05:43,640 --> 00:05:47,520 Speaker 3: They have instead insisted that all that he's be crossed 88 00:05:47,520 --> 00:05:51,159 Speaker 3: and all the eyes be dotted before a court takes 89 00:05:51,200 --> 00:05:56,320 Speaker 3: action on this. Jurisdiction is one of the fundamental attributes 90 00:05:56,360 --> 00:05:59,600 Speaker 3: of courts, and they do need to attend to their jurisdiction. 91 00:06:00,160 --> 00:06:04,360 Speaker 3: On the other hand, past court have been willing to 92 00:06:05,200 --> 00:06:09,440 Speaker 3: resolve close questions on jurisdiction in favor of getting justice done, 93 00:06:10,040 --> 00:06:12,919 Speaker 3: and here five members of the Court were not willing 94 00:06:12,920 --> 00:06:13,279 Speaker 3: to do that. 95 00:06:14,160 --> 00:06:16,279 Speaker 1: Again, it was a five to four, but this time 96 00:06:16,520 --> 00:06:21,039 Speaker 1: Justice amy Cony Barrett joined the liberal justices. Any accounting 97 00:06:21,160 --> 00:06:24,279 Speaker 1: for the sort of the Chief and Justice Barrett switching 98 00:06:24,400 --> 00:06:28,120 Speaker 1: positions in these two cases, do you see a reason 99 00:06:28,520 --> 00:06:28,840 Speaker 1: for that? 100 00:06:29,720 --> 00:06:35,920 Speaker 3: I think that both cases, the majority's argument was tenuous 101 00:06:36,360 --> 00:06:40,000 Speaker 3: and it wasn't enough to persuade the Chief in the 102 00:06:40,040 --> 00:06:44,600 Speaker 3: first instance, and it wasn't enough to persuade Justice Barrett 103 00:06:44,600 --> 00:06:48,480 Speaker 3: in the second instance. Both of us are signaling that 104 00:06:48,560 --> 00:06:52,279 Speaker 3: they are not rubber stamps for the administration. But both 105 00:06:52,279 --> 00:06:55,800 Speaker 3: of them, I think, are also signaling that they would 106 00:06:56,200 --> 00:06:59,560 Speaker 3: like to give the administration a chance to come into 107 00:06:59,600 --> 00:07:03,520 Speaker 3: comply on its own. How long their patients will last 108 00:07:03,560 --> 00:07:04,520 Speaker 3: remains to be seen. 109 00:07:05,120 --> 00:07:08,440 Speaker 1: Then on Tuesday, in the first mass firing case to 110 00:07:08,520 --> 00:07:13,400 Speaker 1: reach the court, the justices bolstered Trump's campaign to fire 111 00:07:13,680 --> 00:07:17,400 Speaker 1: federal workers, blocking a judge's order that required the administration 112 00:07:17,520 --> 00:07:21,040 Speaker 1: to reinstate employees. So this was seven to two, with 113 00:07:21,440 --> 00:07:25,960 Speaker 1: Justices Sonya Sotomayor and Katanji Brown Jackson dissenting again based on. 114 00:07:26,000 --> 00:07:32,040 Speaker 3: Procedure Yes, The argument was that these cases should have 115 00:07:32,080 --> 00:07:37,160 Speaker 3: been brought initially through the merit system's civil service process 116 00:07:37,760 --> 00:07:41,080 Speaker 3: and resolved there rather than in federal court. If there 117 00:07:41,080 --> 00:07:46,080 Speaker 3: have been one individual person fired based on a quibble 118 00:07:46,200 --> 00:07:49,840 Speaker 3: over whether they were taking too much sickly, absolutely, the 119 00:07:49,880 --> 00:07:53,920 Speaker 3: merit system's process would be the right place. When it's 120 00:07:53,960 --> 00:07:57,000 Speaker 3: being done as a matter of policy on a mass basis, 121 00:07:57,000 --> 00:08:03,160 Speaker 3: without any consideration of individual circumstances, an injunction seems more appropriate. 122 00:08:03,560 --> 00:08:09,720 Speaker 3: But here the court decided to again insist on jurisdictional perfection. 123 00:08:10,240 --> 00:08:12,720 Speaker 1: Is the majority sort of checking the easy way out 124 00:08:12,720 --> 00:08:16,560 Speaker 1: in these cases by making it more about procedure than 125 00:08:16,600 --> 00:08:20,080 Speaker 1: about the merits or the administration's policies. 126 00:08:20,840 --> 00:08:25,520 Speaker 3: Oh, yes, very much. So you're not seeing opinions endorsing 127 00:08:25,560 --> 00:08:28,400 Speaker 3: what the administration has done. That would be very easy 128 00:08:28,440 --> 00:08:30,920 Speaker 3: for them to write either as an opinion of the 129 00:08:31,000 --> 00:08:35,720 Speaker 3: Court or as a concurring opinion from Justice Alito or whomever. 130 00:08:36,280 --> 00:08:40,559 Speaker 3: And you're just not seeing that. You're seeing nitpicking on jurisdiction. 131 00:08:41,240 --> 00:08:44,520 Speaker 3: So no one is sending the administration signs that what 132 00:08:44,640 --> 00:08:49,120 Speaker 3: it's doing is okay. And I think if the administration's 133 00:08:49,160 --> 00:08:51,920 Speaker 3: lawyers are paying the least bit of attention, they will 134 00:08:51,920 --> 00:08:55,800 Speaker 3: recognize that they're being given time but absolutely no encouragement 135 00:08:55,840 --> 00:08:59,000 Speaker 3: on the merits. And once the plain is iss follow 136 00:08:59,160 --> 00:09:02,880 Speaker 3: the instruction to the court as to how to obtain jurisdiction. 137 00:09:03,640 --> 00:09:07,160 Speaker 3: The court is giving the administration no encouragement that it 138 00:09:07,200 --> 00:09:08,680 Speaker 3: will get support on the merits. 139 00:09:09,120 --> 00:09:12,920 Speaker 1: Yesterday, after a decision by the entire DC Circuit to 140 00:09:13,040 --> 00:09:17,560 Speaker 1: reinstate to independent agency officials fired by Trump without cause, 141 00:09:18,120 --> 00:09:21,080 Speaker 1: Trump went to the Supreme Court and the Chief Justice 142 00:09:21,160 --> 00:09:25,160 Speaker 1: issued in order putting the federal appeals court decision on hold, 143 00:09:25,600 --> 00:09:30,400 Speaker 1: so the fired workers remain fired. Does Robert's action indicate 144 00:09:30,480 --> 00:09:35,040 Speaker 1: support for Trump's efforts to remove any limits on his 145 00:09:35,080 --> 00:09:36,440 Speaker 1: power to hire and fire. 146 00:09:37,120 --> 00:09:42,479 Speaker 3: That's not clear. The Chief Justice has previously daid actions 147 00:09:42,520 --> 00:09:46,559 Speaker 3: of lower courts and then turned around and voted against 148 00:09:46,640 --> 00:09:50,480 Speaker 3: the administration on the merits. So at the moment, all 149 00:09:50,520 --> 00:09:54,040 Speaker 3: we could assume is that this stay is an indication 150 00:09:54,160 --> 00:09:56,200 Speaker 3: that he thinks that all the justices ought to be 151 00:09:56,240 --> 00:09:58,840 Speaker 3: able to weigh in, which is sensible enough on an 152 00:09:58,880 --> 00:10:01,599 Speaker 3: issue of this scale. I. On the other hand, the 153 00:10:01,679 --> 00:10:05,880 Speaker 3: question of independent agencies may be a more complicated one 154 00:10:05,880 --> 00:10:09,120 Speaker 3: in the court because several justices have indicated that they 155 00:10:09,160 --> 00:10:13,959 Speaker 3: don't like independent agencies or don't believe that their independence 156 00:10:14,040 --> 00:10:17,920 Speaker 3: is appropriate. So on this one, it certainly is possible 157 00:10:17,920 --> 00:10:20,800 Speaker 3: that one all is said, in time, the administration will 158 00:10:20,840 --> 00:10:24,480 Speaker 3: succeed in changing constitutional law. I don't like the administration's 159 00:10:24,559 --> 00:10:26,920 Speaker 3: chances on most of the others, really, So you. 160 00:10:26,920 --> 00:10:32,160 Speaker 1: Think that in this one the justices will expand presidential 161 00:10:32,200 --> 00:10:33,000 Speaker 1: power even further. 162 00:10:33,440 --> 00:10:36,280 Speaker 3: I think it's possible. There are justices who have said 163 00:10:36,640 --> 00:10:40,400 Speaker 3: that the old Humphrey's Executor case, that is the foundation 164 00:10:40,559 --> 00:10:45,240 Speaker 3: for independent agencies, was badly decided and should be rejected. 165 00:10:45,559 --> 00:10:48,560 Speaker 3: We don't know how most of the Court will rule. 166 00:10:48,720 --> 00:10:51,960 Speaker 3: I think it's very possible that some of the justices 167 00:10:52,559 --> 00:10:54,880 Speaker 3: will feel that this is not the time to do 168 00:10:55,040 --> 00:10:58,800 Speaker 3: away with agencies independence when you have a president who 169 00:10:58,920 --> 00:11:03,680 Speaker 3: is hyper power artisan and pursuing an agenda with apparently 170 00:11:03,760 --> 00:11:06,960 Speaker 3: very little consultation with lawyers. But it may be that 171 00:11:07,000 --> 00:11:10,400 Speaker 3: they will take this as an occasion to make the 172 00:11:10,480 --> 00:11:12,960 Speaker 3: ruling that they've hinted at and get rid of the 173 00:11:13,000 --> 00:11:14,480 Speaker 3: independence of these agencies. 174 00:11:14,960 --> 00:11:18,280 Speaker 1: Does it seem like there are four solid votes to 175 00:11:18,360 --> 00:11:20,360 Speaker 1: allow Trump to do whatever he wants. 176 00:11:20,960 --> 00:11:24,840 Speaker 3: No, I don't think there are. I think if there were, 177 00:11:25,440 --> 00:11:31,520 Speaker 3: you would see them writing concurrences endorsing what the administration 178 00:11:31,679 --> 00:11:36,480 Speaker 3: is doing on the merits. I think the justices sitting 179 00:11:36,520 --> 00:11:40,800 Speaker 3: now are all serious people. They're people who I disagree 180 00:11:40,840 --> 00:11:44,240 Speaker 3: with on a great many issues, but I think that 181 00:11:44,320 --> 00:11:47,160 Speaker 3: they have to be concerned with the threat to the 182 00:11:47,240 --> 00:11:51,559 Speaker 3: rule of law here, and their silence on the merits 183 00:11:51,600 --> 00:11:56,000 Speaker 3: could indicate that they're hoping the administration will understand it 184 00:11:56,040 --> 00:11:57,200 Speaker 3: can't overplay its hand. 185 00:11:59,679 --> 00:12:03,320 Speaker 1: Administration keeps taking bows saying it's winning. It's you know, 186 00:12:03,400 --> 00:12:04,839 Speaker 1: it's winning at the Supreme Court. 187 00:12:06,400 --> 00:12:09,400 Speaker 3: So even though their lawyers are any good, they're telling 188 00:12:09,440 --> 00:12:14,600 Speaker 3: them behind the scenes that you're dodging a bullet here 189 00:12:14,640 --> 00:12:18,480 Speaker 3: and dodging a bullet there, but that the silence of 190 00:12:18,920 --> 00:12:21,839 Speaker 3: even the most conservative justices on the merit of your 191 00:12:21,880 --> 00:12:23,280 Speaker 3: action is quite deafening. 192 00:12:24,920 --> 00:12:29,600 Speaker 1: Even if these wins are temporary and procedural, aren't they 193 00:12:30,600 --> 00:12:35,720 Speaker 1: backing the backing Trump's actions to transform the federal government, 194 00:12:35,880 --> 00:12:38,320 Speaker 1: you know, allowing him to go forward? You know, at 195 00:12:38,400 --> 00:12:40,400 Speaker 1: least in the public's mind, that's what they're seeing. 196 00:12:40,840 --> 00:12:45,080 Speaker 3: Oh, certainly the public's perception, this looks like Trump is winning. 197 00:12:45,800 --> 00:12:49,400 Speaker 3: And until we get a case that doesn't have the 198 00:12:49,440 --> 00:12:53,480 Speaker 3: procedural glitches that the case is getting to the court 199 00:12:53,559 --> 00:12:56,600 Speaker 3: so far I've had, we won't know for sure how 200 00:12:56,640 --> 00:13:00,320 Speaker 3: the justices will break out on the merits of this. 201 00:13:00,960 --> 00:13:04,120 Speaker 3: The fact that they can't hold a consistent five should 202 00:13:04,200 --> 00:13:07,640 Speaker 3: be a warning side for the administration, but we won't 203 00:13:07,679 --> 00:13:12,720 Speaker 3: know until we get actual decisions. When the administration shows 204 00:13:12,760 --> 00:13:17,480 Speaker 3: that it is utterly unwilling to listen to these hints 205 00:13:17,520 --> 00:13:21,000 Speaker 3: from the Supreme Court and polity orders from the lower court, 206 00:13:21,440 --> 00:13:24,360 Speaker 3: we will get a much clearer decision where the justice 207 00:13:24,400 --> 00:13:27,800 Speaker 3: is all right on the merits of some important issue, 208 00:13:27,880 --> 00:13:30,280 Speaker 3: and we find that where it all stands, we'll see. 209 00:13:30,120 --> 00:13:33,000 Speaker 1: How long it actually takes them to get to the 210 00:13:33,040 --> 00:13:35,760 Speaker 1: merits of a case. Great having you on, David, Thanks 211 00:13:35,800 --> 00:13:40,040 Speaker 1: so much. That's Professor David super of Georgetown Law Coming 212 00:13:40,120 --> 00:13:44,719 Speaker 1: up next. Crypto enforcement is dying down. This is Bloomberg. 213 00:13:46,440 --> 00:13:51,080 Speaker 1: The Justice Department is disbanding its crypto enforcement team and 214 00:13:51,160 --> 00:13:55,240 Speaker 1: scaling back on enforcement in line with President Trump's directives. 215 00:13:55,720 --> 00:13:59,960 Speaker 1: Joining me is an expert in financial market regulation, Yasha Yadiv, Upper, 216 00:14:00,000 --> 00:14:04,600 Speaker 1: professor at Vanderbilt University Law School. The Justice Department has 217 00:14:04,840 --> 00:14:11,280 Speaker 1: shut down this unit that investigates cryptocurrency fraud effective immediately. 218 00:14:11,960 --> 00:14:16,120 Speaker 1: In a memo, Deputy Attorney General Todd Blanche said, quote, 219 00:14:16,160 --> 00:14:19,760 Speaker 1: the prior administration used the Justice Department to pursue a 220 00:14:19,800 --> 00:14:25,120 Speaker 1: reckless strategy of regulation by prosecution, which was ill conceived 221 00:14:25,200 --> 00:14:29,360 Speaker 1: and poorly executed. Why are they doing this really. 222 00:14:29,640 --> 00:14:34,680 Speaker 4: Well, Jane, It's a very interesting question, because what we 223 00:14:34,800 --> 00:14:39,240 Speaker 4: have here is a cryptocurrency enforcement team that I think 224 00:14:39,400 --> 00:14:41,600 Speaker 4: was really the envy of the world in many ways. 225 00:14:41,920 --> 00:14:45,160 Speaker 4: What this team brought together was a deep amount of 226 00:14:45,200 --> 00:14:50,320 Speaker 4: interdisciplinary expertise and intelligence across the Justice Department, which had 227 00:14:50,400 --> 00:14:56,480 Speaker 4: proven itself as being extremely effective at marshaling technical expertise, 228 00:14:56,800 --> 00:15:02,440 Speaker 4: at coordinating amongst different groups, at developing a strategy for 229 00:15:02,560 --> 00:15:07,120 Speaker 4: pursuing some of the most aggressive bad actors in the 230 00:15:07,240 --> 00:15:11,040 Speaker 4: crypto currency economy, most particularly like for example, the North 231 00:15:11,120 --> 00:15:15,360 Speaker 4: Koreans or Relentless Hackers. One of the most successful cases 232 00:15:15,400 --> 00:15:17,880 Speaker 4: of this team was really the Bits the Next Hack, 233 00:15:18,040 --> 00:15:22,400 Speaker 4: in which they prosecuted Iliah Liechtenstein and the famous rapper 234 00:15:22,560 --> 00:15:26,160 Speaker 4: Razzl Khan infamous rapper in some ways and collected a 235 00:15:26,200 --> 00:15:29,200 Speaker 4: great deal of stolen crypto. As a result of this, 236 00:15:29,360 --> 00:15:32,400 Speaker 4: they pursued dark markets and what that has shown is 237 00:15:32,440 --> 00:15:34,880 Speaker 4: that the Justice Department, through this team, as well as 238 00:15:34,880 --> 00:15:38,280 Speaker 4: of the personnel obviously, are extremely adept at keeping up 239 00:15:38,320 --> 00:15:42,800 Speaker 4: with some of the technical innovations, the creativity, the cat 240 00:15:42,840 --> 00:15:46,520 Speaker 4: and mouth chase that the technology enables, and this team 241 00:15:46,640 --> 00:15:49,400 Speaker 4: was bringing that expertise together to do that. You know, 242 00:15:49,640 --> 00:15:52,720 Speaker 4: what this enabled was making sure that the prosecutions that 243 00:15:52,760 --> 00:15:57,160 Speaker 4: were coming up to hold bad actors accountable had the 244 00:15:57,240 --> 00:16:00,240 Speaker 4: evidence that they needed to back them up, had the 245 00:16:00,280 --> 00:16:03,880 Speaker 4: technical know how to ensure that the standards of liability 246 00:16:03,920 --> 00:16:07,320 Speaker 4: would be met through the evidence of what was really happening. 247 00:16:07,360 --> 00:16:10,120 Speaker 4: And so this team did a lot from that perspective, 248 00:16:10,160 --> 00:16:12,320 Speaker 4: and so it'll be interesting to see what happens next 249 00:16:12,720 --> 00:16:16,120 Speaker 4: in terms of how that expertise as it diffuses across 250 00:16:16,160 --> 00:16:19,480 Speaker 4: the Justice Department can be marshaled still to prosecute the 251 00:16:19,520 --> 00:16:21,880 Speaker 4: bad actors in the crypto economy. 252 00:16:21,760 --> 00:16:24,440 Speaker 1: I mean, are they interested in pursuing the bad actors? 253 00:16:25,040 --> 00:16:30,280 Speaker 1: The Security Exchange Commission has also dismissed lawsuits and pending 254 00:16:30,360 --> 00:16:33,520 Speaker 1: investigations involving crypto firms. 255 00:16:33,960 --> 00:16:37,000 Speaker 4: The memo. What it said was essentially that the financial 256 00:16:37,040 --> 00:16:41,480 Speaker 4: regulators would play the lead role in taking into account 257 00:16:41,720 --> 00:16:45,040 Speaker 4: the regulatory failures that are happening in the cryptoeconomy, and 258 00:16:45,080 --> 00:16:48,560 Speaker 4: that the Justice Department would be less aggressive in this regard. 259 00:16:48,800 --> 00:16:51,440 Speaker 4: You know, what's interesting at this point is that the 260 00:16:51,480 --> 00:16:54,840 Speaker 4: regulatory framework for crypto is still being built. For example, 261 00:16:54,880 --> 00:16:57,440 Speaker 4: Congress is working on a number of pieces of legislation 262 00:16:57,640 --> 00:17:01,720 Speaker 4: to create that regulation perimeter, to find exactly who gets 263 00:17:01,760 --> 00:17:05,040 Speaker 4: to regulate particular kinds of assets, how they're going to 264 00:17:05,080 --> 00:17:07,360 Speaker 4: do it, what kind of particular provisions need to be 265 00:17:07,720 --> 00:17:10,240 Speaker 4: put in place. So, for example, right now, you know, 266 00:17:10,280 --> 00:17:13,280 Speaker 4: one of the major pieces of legislation involves stable coins. 267 00:17:13,840 --> 00:17:15,720 Speaker 4: This is the kind of crypto asset that is very, 268 00:17:15,800 --> 00:17:19,720 Speaker 4: very popular and impactful for payments. And what that means 269 00:17:19,720 --> 00:17:21,760 Speaker 4: when is you know, for something like payments, is that 270 00:17:22,119 --> 00:17:25,560 Speaker 4: aspects like money laundering, aspects like you know, knowing people's 271 00:17:25,600 --> 00:17:28,280 Speaker 4: identity and how to make sure that bad actors are 272 00:17:28,320 --> 00:17:32,040 Speaker 4: not implicated. You know, these things become involved. But at present, 273 00:17:32,119 --> 00:17:35,600 Speaker 4: these plainworks are really not there to the same extent, 274 00:17:35,960 --> 00:17:38,280 Speaker 4: and so the financial regulator is for example, as you know, 275 00:17:38,520 --> 00:17:41,600 Speaker 4: the SEC has said, for example, they won't regulate mean coins. 276 00:17:41,880 --> 00:17:43,880 Speaker 4: This is an area of the crypto economy that has 277 00:17:43,960 --> 00:17:49,000 Speaker 4: been perceived as being quite cd where allegations of pump 278 00:17:49,040 --> 00:17:51,919 Speaker 4: and dumps have been rife, and so the SEC at 279 00:17:51,920 --> 00:17:55,120 Speaker 4: that point says this is not their jurisdiction. Other regulators, 280 00:17:55,160 --> 00:17:58,639 Speaker 4: that the CFP be, the Consumer Financial Protection Bureau, have 281 00:17:58,800 --> 00:18:02,280 Speaker 4: seen a grade to the sort of legal dismantling about 282 00:18:02,280 --> 00:18:05,080 Speaker 4: their apparatus. And so the question really is who's going 283 00:18:05,160 --> 00:18:08,439 Speaker 4: to police the bad actors here? And you know, in 284 00:18:08,480 --> 00:18:11,320 Speaker 4: the case of the justice departments, they have not been 285 00:18:11,359 --> 00:18:14,200 Speaker 4: bringing claims with respect to, for example, whether or not 286 00:18:14,240 --> 00:18:17,600 Speaker 4: crypto assets or securities, whether there's certain kinds of commodities, 287 00:18:17,800 --> 00:18:20,480 Speaker 4: that's not the Justice Department's business. That's not what they're doing. 288 00:18:20,840 --> 00:18:24,680 Speaker 4: What they've been doing is prosecuting cases that involve criminal 289 00:18:24,720 --> 00:18:27,840 Speaker 4: activity very much on their beats, such as money laundering, 290 00:18:28,040 --> 00:18:32,680 Speaker 4: terrorist financing, fraud, and so the question becomes, really, how 291 00:18:32,720 --> 00:18:36,439 Speaker 4: are these kinds of bad, you know, illicit activity is 292 00:18:36,440 --> 00:18:38,920 Speaker 4: going to be dealt with going forward. One last thing 293 00:18:39,000 --> 00:18:41,760 Speaker 4: just to say on this is that the need to 294 00:18:41,840 --> 00:18:44,919 Speaker 4: protect the crypto market, the need to ensure it's clean, 295 00:18:45,359 --> 00:18:47,879 Speaker 4: the need to make sure that it's perceived as being 296 00:18:48,400 --> 00:18:52,080 Speaker 4: immaculate and trustworthy, is something that many in the industry 297 00:18:52,160 --> 00:18:55,960 Speaker 4: wants themselves. They want to see this industry as being 298 00:18:56,080 --> 00:19:01,399 Speaker 4: one that people can trust, particularly after dream cooins scams, STX, 299 00:19:01,520 --> 00:19:04,040 Speaker 4: sam Backmin Freed and you know Celsius and other, you know, 300 00:19:04,160 --> 00:19:07,000 Speaker 4: various hacks that have happened. You know, the industry itself 301 00:19:07,040 --> 00:19:08,720 Speaker 4: wants to be seen as, you know, it's one that's 302 00:19:08,760 --> 00:19:11,160 Speaker 4: worthy of trust. And so the Justice Department has played 303 00:19:11,359 --> 00:19:13,960 Speaker 4: a big role in that. Certainly not perfect. There have 304 00:19:14,000 --> 00:19:17,440 Speaker 4: been lots of instances where it's been criticized for certain cases, 305 00:19:17,560 --> 00:19:20,800 Speaker 4: but broadly, by and large, they've shown themselves as being 306 00:19:20,840 --> 00:19:24,600 Speaker 4: extremely intelligent and adept at doing the job that they've done. 307 00:19:24,760 --> 00:19:27,960 Speaker 1: So you mentioned Sam Bankman freed, would a case like 308 00:19:28,119 --> 00:19:32,760 Speaker 1: his go under the radar without this unit in place 309 00:19:32,800 --> 00:19:36,480 Speaker 1: and with the new emphasis at the Justice Department, Well, the. 310 00:19:36,480 --> 00:19:39,200 Speaker 4: Memo did say that they would be pursuing hacks, that 311 00:19:39,240 --> 00:19:44,160 Speaker 4: they'd be pursuing illicit activities connected with crypto, for example, 312 00:19:44,240 --> 00:19:47,639 Speaker 4: things like human trafficking. The memo also mentioned, you know, 313 00:19:47,720 --> 00:19:50,520 Speaker 4: the potential for kind of defive protocols that may be 314 00:19:50,840 --> 00:19:54,760 Speaker 4: facilitating cleaning post a kind of hack, that these would 315 00:19:54,800 --> 00:19:59,120 Speaker 4: also be pursued. So it's certainly not ruling out prosecutions 316 00:19:59,200 --> 00:20:04,080 Speaker 4: for crypto so currency related criminal activity. What the dismantling 317 00:20:04,080 --> 00:20:08,400 Speaker 4: of this unit, however, potentially could lead to is difficulties 318 00:20:08,400 --> 00:20:13,160 Speaker 4: in creating the evidentiary trails and keeping track of where 319 00:20:13,200 --> 00:20:17,760 Speaker 4: the vulnerabilities are with respect to the hackers having a 320 00:20:17,920 --> 00:20:21,560 Speaker 4: leg up in terms of technical advantage and speed and 321 00:20:21,600 --> 00:20:24,359 Speaker 4: the capacity to innovate, and the government not having the 322 00:20:24,400 --> 00:20:27,639 Speaker 4: ability then to keep up with these developments and so, 323 00:20:28,000 --> 00:20:29,800 Speaker 4: you know, one of the things that was interesting in 324 00:20:29,840 --> 00:20:32,840 Speaker 4: the bits the Next Hack for example, and the prosecutions 325 00:20:32,840 --> 00:20:36,160 Speaker 4: of Ilia Liechtenstein and Rassal Khan, was that the government 326 00:20:36,200 --> 00:20:39,920 Speaker 4: Saffa David showed that they were incredibly good at following 327 00:20:40,080 --> 00:20:44,120 Speaker 4: really complicated transaction trails where money was being filtered through 328 00:20:44,200 --> 00:20:48,080 Speaker 4: numerous blockchains and using you know, various kinds of different 329 00:20:48,480 --> 00:20:51,879 Speaker 4: marketplaces darkness that kind of clean the cash. And so 330 00:20:52,040 --> 00:20:56,560 Speaker 4: these are evidentiary intelligence that this unit was able to create. 331 00:20:56,960 --> 00:20:59,800 Speaker 4: And similarly for sambagmuin Freed and other sort of major 332 00:21:00,320 --> 00:21:06,120 Speaker 4: large scale wrongdoers that are very sophisticated potentially at moving crypto, 333 00:21:06,280 --> 00:21:10,480 Speaker 4: at hiding their evidence of their transactions. Even though the 334 00:21:10,520 --> 00:21:13,320 Speaker 4: blockchain is transparent, one can use all sorts of different 335 00:21:13,320 --> 00:21:15,919 Speaker 4: protocols to try and you know, maybe clean the money 336 00:21:16,000 --> 00:21:18,879 Speaker 4: very quickly, as it happened with respect the North Korean 337 00:21:18,920 --> 00:21:21,639 Speaker 4: bibit hack. And so you know, these are things that 338 00:21:21,680 --> 00:21:24,239 Speaker 4: this unit was good at. And so it's not that 339 00:21:24,320 --> 00:21:27,160 Speaker 4: the prosecutions are not likely to happen. I'm sure that 340 00:21:27,440 --> 00:21:29,520 Speaker 4: you know, the Justice Department will do what the Justice 341 00:21:29,520 --> 00:21:32,720 Speaker 4: Department does. But at the same time, it's about being 342 00:21:32,720 --> 00:21:36,360 Speaker 4: able to collate that evidence, to be able to get 343 00:21:36,359 --> 00:21:39,400 Speaker 4: ahead of the technology, to be able to predict where 344 00:21:39,400 --> 00:21:41,560 Speaker 4: some of the bad actors might go next, and then 345 00:21:41,640 --> 00:21:44,359 Speaker 4: prepare the government to make those prosecutions really stick. 346 00:21:44,680 --> 00:21:47,920 Speaker 1: Do you think there'll be an increase in state regulatory activity? 347 00:21:48,200 --> 00:21:53,040 Speaker 1: Last month, California's AG said it would continue protecting consumers 348 00:21:53,080 --> 00:21:58,480 Speaker 1: from crypto confidence scams and ags in New York, Massachusetts 349 00:21:58,480 --> 00:22:01,320 Speaker 1: and Illinois said similar things things. You think we'll see 350 00:22:01,320 --> 00:22:03,040 Speaker 1: more enforcement on the state level. 351 00:22:03,359 --> 00:22:07,560 Speaker 4: Absolutely, so. I think the states are definitely revving up 352 00:22:07,640 --> 00:22:10,119 Speaker 4: to step into some of the gaps that may be 353 00:22:10,240 --> 00:22:13,840 Speaker 4: left here. One has seen states in general over the 354 00:22:13,880 --> 00:22:16,360 Speaker 4: last couple of years is you know, crypto has been 355 00:22:16,359 --> 00:22:19,520 Speaker 4: gaining a foothold in the mainstream, states have stepped up 356 00:22:19,560 --> 00:22:22,879 Speaker 4: in any event to try and regulate this marketplace. So 357 00:22:23,119 --> 00:22:26,960 Speaker 4: some notable examples here include New York and Wyoming, for example, 358 00:22:27,280 --> 00:22:31,200 Speaker 4: that have put you know, perimeters in place for cryptoactivities. 359 00:22:31,600 --> 00:22:34,600 Speaker 4: And so with respect to just general wrongdoing in crypto, 360 00:22:34,720 --> 00:22:36,679 Speaker 4: certainly one is going to see the states step up, 361 00:22:36,920 --> 00:22:39,639 Speaker 4: you know, as you mentioned California, New York and others. 362 00:22:39,720 --> 00:22:44,119 Speaker 4: I'm sure we'll be paying close attention. In addition, of course, 363 00:22:44,720 --> 00:22:47,480 Speaker 4: you know, one aspect that does need to be addressed 364 00:22:47,480 --> 00:22:50,679 Speaker 4: here is that certain crimes are federal crimes which do 365 00:22:50,800 --> 00:22:55,000 Speaker 4: require federal intervention. So when one thinks of money laundering, 366 00:22:55,600 --> 00:22:59,400 Speaker 4: terrorist financing, why are fraud these are cases that are 367 00:22:59,400 --> 00:23:03,320 Speaker 4: being brought federally as federal crimes. Often these can carry 368 00:23:03,400 --> 00:23:07,440 Speaker 4: higher penalties and therefore potentially have you know, a steeper 369 00:23:08,119 --> 00:23:11,840 Speaker 4: the terrance effect? And so the question really becomes, does 370 00:23:11,880 --> 00:23:14,720 Speaker 4: the lack of federal emphasis here? I mean, there's certain 371 00:23:14,800 --> 00:23:18,439 Speaker 4: kinds offenses such as money laundering, terrorists, financing, fail to 372 00:23:18,520 --> 00:23:22,479 Speaker 4: get the intensity or prosecution that they have currently and 373 00:23:22,520 --> 00:23:24,919 Speaker 4: what will be the effect of that on you know, 374 00:23:25,000 --> 00:23:29,040 Speaker 4: bad actors in this economy potentially taking advantage off the US, 375 00:23:29,080 --> 00:23:31,800 Speaker 4: which has been the kop on the block worldwide, not 376 00:23:31,920 --> 00:23:34,880 Speaker 4: just here in the US, of the Justice Department, potentially 377 00:23:35,160 --> 00:23:37,760 Speaker 4: taking its foot off the pedal with respect to the 378 00:23:37,800 --> 00:23:40,040 Speaker 4: aggressiveness of which it pursues these claimed. 379 00:23:40,920 --> 00:23:43,920 Speaker 1: I mean, do you think this sort of led up 380 00:23:44,320 --> 00:23:49,280 Speaker 1: in crypto enforcement is because Trump wants to make this 381 00:23:49,440 --> 00:23:53,320 Speaker 1: the crypto capital of the planet. Do they see less 382 00:23:53,400 --> 00:23:55,600 Speaker 1: enforcement as part of that goal? 383 00:23:56,520 --> 00:23:58,399 Speaker 4: I think one of the you know, one of the 384 00:23:58,600 --> 00:24:01,720 Speaker 4: aspects here that was indicated in the memo itself is 385 00:24:01,760 --> 00:24:06,200 Speaker 4: a reaction to the perception of the last administration was 386 00:24:06,320 --> 00:24:10,760 Speaker 4: very aggressive in using litigation as a strategy for creating 387 00:24:10,760 --> 00:24:13,879 Speaker 4: a regulated perimeter for crypto. So, in general, there has 388 00:24:13,960 --> 00:24:17,919 Speaker 4: been a lot of criticism of regulation by enforcements trying 389 00:24:17,960 --> 00:24:23,840 Speaker 4: to make cryptocurrency fit existing rules through litigation, through bringing 390 00:24:23,920 --> 00:24:28,720 Speaker 4: lawsuits rather than creating rules, and creating a perimeter through 391 00:24:28,720 --> 00:24:31,480 Speaker 4: a conversation with the industry rather than mis litigating against 392 00:24:31,480 --> 00:24:34,679 Speaker 4: the industry. So, you know, it feels like this memo 393 00:24:35,200 --> 00:24:38,520 Speaker 4: seems to be kind of reflecting a backlash to that approach. 394 00:24:39,000 --> 00:24:42,520 Speaker 4: One of the aspects that the memo sort of singles 395 00:24:42,520 --> 00:24:46,439 Speaker 4: out is that it speaks to the perception that some 396 00:24:46,480 --> 00:24:48,600 Speaker 4: of the cases that were brought by the Justice Department, 397 00:24:48,680 --> 00:24:52,760 Speaker 4: for example against Tornado Cash, against developers in this space 398 00:24:53,200 --> 00:24:56,560 Speaker 4: were ones that were overly aggressive, were ones that you 399 00:24:56,800 --> 00:24:59,920 Speaker 4: overstep the balance of what the Justice Department should be doing. 400 00:25:00,240 --> 00:25:02,880 Speaker 4: And particularly, just to give you some background, the Justice 401 00:25:02,880 --> 00:25:05,760 Speaker 4: Department brought a case against a number of developers, those 402 00:25:05,760 --> 00:25:08,600 Speaker 4: who write the code. You know, they were bringing cases 403 00:25:08,640 --> 00:25:13,480 Speaker 4: against developers of mixers. These were codes that can potentially 404 00:25:13,920 --> 00:25:17,040 Speaker 4: create a greater degree of obfuscation between who owns the 405 00:25:17,040 --> 00:25:20,639 Speaker 4: crypto and the kind of transaction trails that might exist there. 406 00:25:20,960 --> 00:25:25,400 Speaker 4: And for the developers, these were privacy enhancing code. There's 407 00:25:25,440 --> 00:25:29,800 Speaker 4: a privacy enhanting tools. And furthermore, you know, writing code, 408 00:25:30,200 --> 00:25:32,639 Speaker 4: they have argued, is a free speech right, and so 409 00:25:32,760 --> 00:25:35,440 Speaker 4: prosecuting it led to a great deal of criticism against 410 00:25:35,440 --> 00:25:38,600 Speaker 4: the Justice Department from the industry, and so part of 411 00:25:38,640 --> 00:25:42,119 Speaker 4: this memoir appears to reflect that feeling that developers, that 412 00:25:42,200 --> 00:25:44,159 Speaker 4: those who are writing code, that those who are creating 413 00:25:44,200 --> 00:25:47,000 Speaker 4: in this space were potentially being targeted in ways that 414 00:25:47,040 --> 00:25:50,360 Speaker 4: were unfair. But you know, equally, the question and becomes 415 00:25:50,520 --> 00:25:54,320 Speaker 4: what happens when you know the entire enforcement approach is 416 00:25:54,359 --> 00:25:57,840 Speaker 4: geared towards scaling back, especially when the industry is now 417 00:25:57,920 --> 00:26:01,760 Speaker 4: becoming mainstream, when every day users are looking to get 418 00:26:01,800 --> 00:26:04,800 Speaker 4: into crypto in a big way, when it's being encouraged 419 00:26:04,840 --> 00:26:08,800 Speaker 4: as a very mainstream activity for Americans, spy an administration 420 00:26:08,920 --> 00:26:11,840 Speaker 4: that's really backing this industry, and the industry is coming 421 00:26:11,840 --> 00:26:12,480 Speaker 4: into its own. 422 00:26:12,640 --> 00:26:16,120 Speaker 1: At this point, it seems like something may fall through 423 00:26:16,160 --> 00:26:18,800 Speaker 1: the cracks. Thanks so much for being on the show. 424 00:26:19,160 --> 00:26:23,640 Speaker 1: That's professor Yasha Yadiv of Vanderbilt University Law School coming 425 00:26:23,720 --> 00:26:27,159 Speaker 1: up next. Trump cuts labor mediators from one hundred and 426 00:26:27,160 --> 00:26:33,159 Speaker 1: forty three down to four. This is Bloomberg. The Federal 427 00:26:33,240 --> 00:26:38,040 Speaker 1: Mediation Conciliation Service is a small labor agency that has 428 00:26:38,080 --> 00:26:41,720 Speaker 1: played an outsized role in some of the nation's largest 429 00:26:41,760 --> 00:26:47,679 Speaker 1: workplace negotiations over the last several years, including those at Starbucks, Boeing, 430 00:26:47,760 --> 00:26:51,560 Speaker 1: and Apple. But now the Trump administration has gutted the 431 00:26:51,880 --> 00:26:57,120 Speaker 1: FMCS of nearly all its labor mediators, endangering a key 432 00:26:57,200 --> 00:27:02,359 Speaker 1: means of resolving employer union conflicts, driving up negotiation costs 433 00:27:02,600 --> 00:27:07,040 Speaker 1: and potentially leading to more strikes and lockouts. Joining me 434 00:27:07,080 --> 00:27:11,040 Speaker 1: is Bloomberg Law reporter Parker Purifoid. Parker tell us about 435 00:27:11,119 --> 00:27:14,800 Speaker 1: the Federal Mediation and Conciliation Service. 436 00:27:14,920 --> 00:27:18,240 Speaker 5: It was, you know, kind of a small agency and 437 00:27:18,320 --> 00:27:25,320 Speaker 5: its main role was to provide mediators to employers and unions. 438 00:27:25,359 --> 00:27:29,160 Speaker 5: They do both public sector and private sector work, so 439 00:27:29,440 --> 00:27:33,200 Speaker 5: they send mediators in when there's some kind of dispute 440 00:27:33,240 --> 00:27:37,920 Speaker 5: over a contract or grievance or something like that. They'll 441 00:27:38,080 --> 00:27:41,480 Speaker 5: try to get the parties both on the same page. 442 00:27:41,880 --> 00:27:45,040 Speaker 1: There are one hundred and forty three mediators before Trump 443 00:27:45,080 --> 00:27:47,640 Speaker 1: took office. How many are there now? 444 00:27:48,560 --> 00:27:51,760 Speaker 5: There are four lefts now, from what we can tell 445 00:27:51,840 --> 00:27:57,280 Speaker 5: from speaking to employees there, The administration gave various offers 446 00:27:57,520 --> 00:28:02,000 Speaker 5: for early retirement and sent to or other like more 447 00:28:02,240 --> 00:28:05,480 Speaker 5: buy out structured incentives to leave. So we know that 448 00:28:05,560 --> 00:28:09,960 Speaker 5: some of the mediators took those incentives to leave the 449 00:28:09,960 --> 00:28:14,440 Speaker 5: administration and then the rest after that were laid off. 450 00:28:14,640 --> 00:28:18,680 Speaker 5: So they're on administrative leave right now, and then they'll 451 00:28:18,720 --> 00:28:22,920 Speaker 5: be kind of rolled into the reduction enforce procedures and 452 00:28:23,200 --> 00:28:23,720 Speaker 5: laid off. 453 00:28:24,119 --> 00:28:29,200 Speaker 1: Explain how the mediation service has been crucial in preventing 454 00:28:29,520 --> 00:28:33,919 Speaker 1: and ending strikes in recent years. Tell us about some instances. 455 00:28:34,800 --> 00:28:38,000 Speaker 5: Yeah, I always say that they kind of fly under 456 00:28:38,040 --> 00:28:42,800 Speaker 5: the radar because no one really talks about them. Reporters 457 00:28:42,840 --> 00:28:45,400 Speaker 5: don't talk to them, like they're not quoted in any 458 00:28:45,440 --> 00:28:48,680 Speaker 5: of these big stories. But they are on hand a 459 00:28:48,680 --> 00:28:52,680 Speaker 5: lot in these, you know, really big labor disputes. So 460 00:28:52,760 --> 00:28:58,120 Speaker 5: one example was the strike between Boeing and their machinists 461 00:28:58,240 --> 00:29:01,959 Speaker 5: last year. The fm CS mediators were on hand for that, 462 00:29:02,480 --> 00:29:05,480 Speaker 5: and also, as I'm sure you can recall, there's been 463 00:29:06,080 --> 00:29:10,400 Speaker 5: some contract disputes with the dock workers in East and 464 00:29:10,440 --> 00:29:13,400 Speaker 5: West Coast ports over the last couple of years, and 465 00:29:13,720 --> 00:29:17,560 Speaker 5: the mediators were also on hand during that. Another examples 466 00:29:17,640 --> 00:29:22,520 Speaker 5: that they helped facilitate a first contract between Apple and 467 00:29:22,600 --> 00:29:26,840 Speaker 5: some of its retail workers up in Thousand, Maryland last 468 00:29:26,880 --> 00:29:30,040 Speaker 5: year as well in twenty twenty three, they helped negotiate 469 00:29:30,480 --> 00:29:35,920 Speaker 5: almost twenty five hundred collective bargaining negotiations, so they're involved 470 00:29:36,120 --> 00:29:37,160 Speaker 5: in quite a lot of them. 471 00:29:37,720 --> 00:29:43,720 Speaker 1: Jefferson Diedrich and FMCS commissioner said in March twenty sixth 472 00:29:43,800 --> 00:29:47,479 Speaker 1: post that it saved the economy over five hundred million 473 00:29:47,600 --> 00:29:50,680 Speaker 1: annually with less than one hundred and fifty mediators and 474 00:29:51,080 --> 00:29:55,240 Speaker 1: point zero zero one four percent of the federal budget. 475 00:29:55,360 --> 00:29:59,240 Speaker 1: So this was a tiny agency comparatively, right. 476 00:29:59,320 --> 00:30:02,080 Speaker 5: I think it's budget was somewhere in the ballpark of 477 00:30:02,280 --> 00:30:06,040 Speaker 5: fifty to seventy million dollars, so really tiny compared to, 478 00:30:07,120 --> 00:30:10,280 Speaker 5: you know, most of the other agencies. But yeah, as 479 00:30:10,320 --> 00:30:13,360 Speaker 5: Jefferson said in his post, they certainly have kind of 480 00:30:13,360 --> 00:30:16,520 Speaker 5: an outsized impact on the economy when you think about 481 00:30:17,200 --> 00:30:20,440 Speaker 5: all of the work that they do to prevent strikes 482 00:30:20,480 --> 00:30:23,520 Speaker 5: that could be you know, crippling to the economy. 483 00:30:23,880 --> 00:30:26,880 Speaker 1: Has the effect of this been felt yet. 484 00:30:27,120 --> 00:30:32,680 Speaker 5: Yeah, definitely. I actually spoke to a number of attorneys, 485 00:30:32,880 --> 00:30:35,440 Speaker 5: mostly in the in the private sector, who said that 486 00:30:36,000 --> 00:30:39,760 Speaker 5: they found out about the layoffs because the mediators that 487 00:30:39,800 --> 00:30:43,760 Speaker 5: they were working with in their you know, current negotiations 488 00:30:44,320 --> 00:30:47,240 Speaker 5: had to leave the bargaining table because they were told 489 00:30:47,240 --> 00:30:51,120 Speaker 5: that they were laid off. One concrete example is Starbucks 490 00:30:51,200 --> 00:30:55,600 Speaker 5: and Starbucks Workers United has been involved in kind of 491 00:30:55,640 --> 00:31:00,280 Speaker 5: a month long negotiation process to try to come up 492 00:31:00,280 --> 00:31:05,040 Speaker 5: with a framework for bargaining their contracts, and their negotiations 493 00:31:05,040 --> 00:31:09,280 Speaker 5: were being mediated by FMCS mediators, and one of the 494 00:31:09,280 --> 00:31:12,520 Speaker 5: two of their mediators were laid off and pulled off 495 00:31:12,560 --> 00:31:15,440 Speaker 5: of the table. But I think that more than that, 496 00:31:15,560 --> 00:31:21,160 Speaker 5: I have heard a lot of anxiety amongst attorneys in 497 00:31:21,200 --> 00:31:23,720 Speaker 5: the last couple of weeks who say that now they're 498 00:31:23,720 --> 00:31:27,600 Speaker 5: going to have to look to getting private mediators, and 499 00:31:27,600 --> 00:31:29,960 Speaker 5: they're going to have to split the costs, you know, 500 00:31:30,000 --> 00:31:31,600 Speaker 5: the employer in the union are going to have to 501 00:31:31,600 --> 00:31:34,680 Speaker 5: split the cost of the mediators, and so all of 502 00:31:34,720 --> 00:31:37,560 Speaker 5: this is just going to drive up the cost of 503 00:31:37,720 --> 00:31:43,440 Speaker 5: negotiations and also bring in more potential for strikes or 504 00:31:44,040 --> 00:31:46,800 Speaker 5: lockouts or other eventualities like that. 505 00:31:47,320 --> 00:31:51,080 Speaker 1: What happens in the public sector where some federal and 506 00:31:51,120 --> 00:31:57,120 Speaker 1: state agencies are contractually required to mediate through fmcs, So 507 00:31:57,200 --> 00:31:58,240 Speaker 1: what would happen there? 508 00:31:59,400 --> 00:32:03,400 Speaker 5: Yeah, I think it's pretty fact specific, but like you said, 509 00:32:03,440 --> 00:32:08,960 Speaker 5: a lot of state and federal agencies have to involve 510 00:32:09,280 --> 00:32:13,920 Speaker 5: an FMCS mediator somewhere in their process before they can 511 00:32:13,960 --> 00:32:18,800 Speaker 5: go to either like arbitration over a dispute, or in 512 00:32:18,800 --> 00:32:23,200 Speaker 5: the federal sector, when a union is trying to negotiate 513 00:32:23,240 --> 00:32:26,560 Speaker 5: a contract and they're having a difficult time reaching an 514 00:32:26,560 --> 00:32:30,440 Speaker 5: agreement with the government, the mediator will step in try 515 00:32:30,480 --> 00:32:34,200 Speaker 5: to mediate that dispute. If the mediator can't you help 516 00:32:34,240 --> 00:32:37,960 Speaker 5: them reach an agreement, then the mediator needs to sign 517 00:32:38,000 --> 00:32:41,880 Speaker 5: off in order for the dispute to go before a 518 00:32:41,960 --> 00:32:45,720 Speaker 5: panel who will ultimately decide what the terms of the 519 00:32:45,760 --> 00:32:49,080 Speaker 5: agreement are. So this is kind of just placing, i 520 00:32:49,080 --> 00:32:53,280 Speaker 5: would say, even more significant roadblocks for the public sector 521 00:32:53,960 --> 00:32:59,120 Speaker 5: because they are contractually obligated to seek the approval of 522 00:32:59,320 --> 00:33:04,240 Speaker 5: FMCS mediators and now that you could potentially take months 523 00:33:04,360 --> 00:33:06,640 Speaker 5: or years to do that. Now that there are only 524 00:33:06,680 --> 00:33:09,560 Speaker 5: four mediators available for the whole country. 525 00:33:10,040 --> 00:33:15,000 Speaker 1: Can other agencies within the federal government fill in the gaps, 526 00:33:15,160 --> 00:33:16,640 Speaker 1: like the NLRB. 527 00:33:17,560 --> 00:33:22,600 Speaker 5: So the NLRB legally cannot use any of their money 528 00:33:22,600 --> 00:33:27,480 Speaker 5: that's been appropriated by Congress to pay for mediation services. 529 00:33:28,400 --> 00:33:32,840 Speaker 5: A lot of times, the NLRB will help connect parties 530 00:33:32,920 --> 00:33:37,560 Speaker 5: to fmcs, but the NLRB cannot do that themselves. The 531 00:33:37,640 --> 00:33:42,120 Speaker 5: Labor Department has been involved a little bit. Labor Department 532 00:33:42,120 --> 00:33:45,520 Speaker 5: officials will frequently, I guess, get involved in some of 533 00:33:45,560 --> 00:33:50,680 Speaker 5: these higher profile strikes or contract disputes, like under the 534 00:33:50,680 --> 00:33:55,960 Speaker 5: Biden administration, Acting Labor Secretary Julie Sue would go out 535 00:33:56,000 --> 00:34:01,040 Speaker 5: to negotiations pretty frequently to help negotiate. But you know, 536 00:34:01,560 --> 00:34:05,920 Speaker 5: I think taking up all of the work that FMCS 537 00:34:05,920 --> 00:34:08,960 Speaker 5: and just folding it into the Labor Department. What I've 538 00:34:09,000 --> 00:34:12,200 Speaker 5: heard from sources is that that is not a feasible 539 00:34:12,200 --> 00:34:13,239 Speaker 5: option at this point. 540 00:34:14,120 --> 00:34:17,919 Speaker 1: A coalition of twenty one states sued the Trump administration 541 00:34:18,160 --> 00:34:22,600 Speaker 1: last week over laying off staff and reducing the functions 542 00:34:22,600 --> 00:34:27,040 Speaker 1: of seven federal agencies, including the FMCS. What are the 543 00:34:27,080 --> 00:34:28,920 Speaker 1: grounds for that lawsuit? 544 00:34:29,680 --> 00:34:33,400 Speaker 5: The states are basically alleging that the actions by the 545 00:34:33,400 --> 00:34:38,239 Speaker 5: administration are having adverse impact on the states. So the 546 00:34:38,280 --> 00:34:42,000 Speaker 5: states do mentioned in regard to the fmcs. They mentioned 547 00:34:42,080 --> 00:34:45,560 Speaker 5: that a lot of their state agencies need to go 548 00:34:45,600 --> 00:34:50,240 Speaker 5: through fmcs and if they were to have to engage 549 00:34:50,239 --> 00:34:54,640 Speaker 5: with private mediators that that would place a large financial 550 00:34:54,640 --> 00:34:58,160 Speaker 5: burden on the states to do so. And yeah, they're 551 00:34:58,320 --> 00:35:03,120 Speaker 5: basically alleging that the agencies, not just FMCS, but these 552 00:35:03,160 --> 00:35:07,040 Speaker 5: other small agencies, were created by acts of Congress, and 553 00:35:07,680 --> 00:35:12,000 Speaker 5: they believe that the president can't just unilaterally essentially get 554 00:35:12,040 --> 00:35:13,120 Speaker 5: rid of them. 555 00:35:13,480 --> 00:35:18,319 Speaker 1: Is the FMCS just one agency among many that has 556 00:35:18,360 --> 00:35:22,320 Speaker 1: been targeted or do people say that it's been targeted 557 00:35:22,360 --> 00:35:26,280 Speaker 1: because it has to do with labor and labor unions, 558 00:35:26,320 --> 00:35:29,520 Speaker 1: which the Trump administration has also targeted. 559 00:35:30,560 --> 00:35:33,080 Speaker 5: I mean, I think, you know, the federal government is 560 00:35:33,120 --> 00:35:39,320 Speaker 5: being pretty unprecedented level of layoffs. Certainly, Trump has stated 561 00:35:39,360 --> 00:35:42,920 Speaker 5: and has indicated that he is willing to do everything 562 00:35:42,960 --> 00:35:46,560 Speaker 5: that he can to, you know, reduce what he says 563 00:35:46,680 --> 00:35:52,160 Speaker 5: is administrative blowed and fraud and wasting of taxpayer dollars. 564 00:35:53,000 --> 00:35:57,160 Speaker 5: But certainly FMCS is only one of the labor agencies 565 00:35:57,200 --> 00:36:01,839 Speaker 5: that has been impacted. Trump also fired one of the 566 00:36:02,280 --> 00:36:07,040 Speaker 5: NLRB members right at the beginning of his term, along 567 00:36:07,080 --> 00:36:12,279 Speaker 5: with members of other agencies that resolve disputes within the 568 00:36:12,280 --> 00:36:16,960 Speaker 5: federal government. So certainly, many of the labor side attorneys 569 00:36:16,960 --> 00:36:19,640 Speaker 5: that I talked to say that this is a deliberate 570 00:36:19,680 --> 00:36:23,440 Speaker 5: targeting of the labor agencies in order to kind of 571 00:36:23,600 --> 00:36:28,000 Speaker 5: remove workers' ads towards getting recourse, you know, in any 572 00:36:28,040 --> 00:36:29,640 Speaker 5: of these these actions. 573 00:36:30,040 --> 00:36:34,400 Speaker 1: According to an agency fact sheet, FMCS was involved in 574 00:36:34,440 --> 00:36:39,319 Speaker 1: two thy four hundred sixty seven collective bargaining negotiations, one 575 00:36:39,760 --> 00:36:43,759 Speaker 1: two hundred and sixty five high impact grievance mediations, and 576 00:36:43,880 --> 00:36:48,280 Speaker 1: conducted one thousand, five hundred and sixty six training programs 577 00:36:48,719 --> 00:36:52,960 Speaker 1: in twenty twenty three. Thanks so much, Parker. That's Bloomberg 578 00:36:53,040 --> 00:36:56,400 Speaker 1: Law reporter Parker Purifoy. In other legal news, at the 579 00:36:56,640 --> 00:37:01,799 Speaker 1: Justice Department, we're Attorney General Pam Bondi's has coincided with 580 00:37:01,880 --> 00:37:06,000 Speaker 1: the removal or reassignment of a growing number of career officials. 581 00:37:06,360 --> 00:37:11,160 Speaker 1: According to Bloomberg sources, the Justice Department removed the acting 582 00:37:11,320 --> 00:37:15,799 Speaker 1: National Security head from his post hours after Bondie saw 583 00:37:15,840 --> 00:37:19,839 Speaker 1: a portrait of former President Joe Biden continuing to hang 584 00:37:19,880 --> 00:37:24,239 Speaker 1: in the division's front office. This happened in February, just 585 00:37:24,400 --> 00:37:28,440 Speaker 1: weeks after Devin de Backer was elevated to serve as 586 00:37:28,480 --> 00:37:32,000 Speaker 1: the acting chief of the National Security Division. He's a 587 00:37:32,040 --> 00:37:36,200 Speaker 1: former associate White House counsel during the first Trump administration. 588 00:37:36,840 --> 00:37:40,480 Speaker 1: His devotion came the same day BONDI saw the portraits 589 00:37:40,520 --> 00:37:44,760 Speaker 1: of Biden, former Vice President Kamala Harris, and former Attorney 590 00:37:44,800 --> 00:37:48,360 Speaker 1: General Merrick Garland still on the wall. And that's it 591 00:37:48,400 --> 00:37:50,960 Speaker 1: for this edition of The Bloomberg Law Show. Remember you 592 00:37:51,000 --> 00:37:53,480 Speaker 1: can always get the latest legal news on our Bloomberg 593 00:37:53,560 --> 00:37:57,200 Speaker 1: Law Podcast. You can find them on Apple Podcasts, Spotify, 594 00:37:57,360 --> 00:38:01,480 Speaker 1: and at www dot bloomberg dot com com slash podcast 595 00:38:01,719 --> 00:38:04,600 Speaker 1: slash Law, And remember to tune into The Bloomberg Law 596 00:38:04,680 --> 00:38:08,560 Speaker 1: Show every weeknight at ten pm Wall Street Time. I'm 597 00:38:08,640 --> 00:38:11,080 Speaker 1: June Grosso and you're listening to Bloomberg