WEBVTT - Menendez Charges & Baseball Exemption 0:00:03.240 --> 0:00:09.920 This is Bloomberg Law with June Brusso from Bloomberg Radio. 0:00:18.760 --> 0:00:22.599 The sounds of baseball not only the national pastime and 0:00:22.680 --> 0:00:26.360 a more than ten billion dollar industry, but also the 0:00:26.520 --> 0:00:29.920 only sport in the country that's exempt from the anti 0:00:29.920 --> 0:00:33.519 trust laws. And now some minor league teams are asking 0:00:33.560 --> 0:00:38.560 the Supreme Court to eliminate baseball's anti trust exemption. Why, 0:00:38.800 --> 0:00:42.080 as they put it in one brief enough. Already joining 0:00:42.080 --> 0:00:45.120 me is anti trust expert Harry First, a professor at 0:00:45.200 --> 0:00:49.360 NYU Law School. Harry tell us how baseball got this 0:00:49.560 --> 0:00:50.720 anti trust exemption. 0:00:51.640 --> 0:00:55.880 Well, this is one of the most reviled exemptions from 0:00:56.080 --> 0:01:00.560 the point of view of antitrust lawyers unless they represent 0:01:00.840 --> 0:01:04.840 baseball companies or teams or leagues, and even the courts 0:01:04.840 --> 0:01:10.160 don't like it. So it came about originally because of 0:01:10.200 --> 0:01:14.640 a decision in nineteen twenty two by the Supreme Court 0:01:14.800 --> 0:01:19.200 called Federal Baseball. And this is an opinion written by 0:01:19.680 --> 0:01:25.399 Justice Holmes Uliver Wendell Holmes distinguished jurists, and it was 0:01:25.520 --> 0:01:30.240 an effort to actually push out some competing leagues. And 0:01:30.880 --> 0:01:33.959 Holmes said that, well, the any trust laws don't cover this. 0:01:34.319 --> 0:01:40.800 Baseball is neither commerce nor interstate commerce. It's just sport 0:01:41.200 --> 0:01:46.080 and it just takes place locally. So even though players 0:01:46.280 --> 0:01:50.400 even then traveled from state to state and there was 0:01:50.440 --> 0:01:55.600 a lot of money involved, perhaps Justice Holmes as the 0:01:55.680 --> 0:01:59.640 Boston Brahmin disdain baseball. It was sort of like us 0:01:59.680 --> 0:02:03.760 now raised with a certain kind of entertainment reviewing video games. 0:02:03.840 --> 0:02:07.760 What is that? And is there so much money involved? 0:02:07.760 --> 0:02:10.919 Are you serious? So maybe that was a poem's reaction. 0:02:11.080 --> 0:02:13.200 I don't know, But in any event, that was a 0:02:13.280 --> 0:02:17.359 decision any trust laws didn't apply. So that's nineteen twenty two. 0:02:18.280 --> 0:02:23.080 The Supreme Court reaffirmed that decision in a case called 0:02:23.080 --> 0:02:27.560 Toolson in nineteen fifty three involving New York Yankees. My 0:02:27.840 --> 0:02:31.720 memory is correct, and the court said, even though the 0:02:31.840 --> 0:02:35.600 decision was sort of dubious when made, it's now precedent, 0:02:36.160 --> 0:02:40.800 and all aspects of that decision had been undermined. Even 0:02:40.840 --> 0:02:44.080 in the intervening period, the courts had a rather a 0:02:44.160 --> 0:02:48.160 narrow conception of what constituted interstate commerce, perhaps in nineteen 0:02:48.200 --> 0:02:50.720 twenty two, but it had expanded clearly in the New 0:02:50.760 --> 0:02:54.720 Deal era, and any trust cases had gone along. And 0:02:55.120 --> 0:02:57.880 there's no doubt that baseball should have been considered an 0:02:57.840 --> 0:03:02.520 interstate commerce all along point a business, but the Court 0:03:02.560 --> 0:03:06.519 said in business of baseball is exempt from any trust 0:03:06.560 --> 0:03:10.120 laws from the Shermanac. And then the third case in 0:03:10.160 --> 0:03:13.760 this is a case called Flood against Kune. This involved 0:03:13.840 --> 0:03:17.280 Kurt Flood, who didn't want to be bound by what 0:03:17.600 --> 0:03:22.280 was called the reserve clause, which prevented players once they 0:03:22.280 --> 0:03:25.640 were under contract from going to some other team even 0:03:26.000 --> 0:03:29.520 after the contract was over. And this was an opinion 0:03:29.560 --> 0:03:32.800 written by Justice Blackman. This goes beyond it put of 0:03:32.800 --> 0:03:36.600 any trust law. If you teach a course in law 0:03:36.640 --> 0:03:41.840 school about precedent and the need to follow precedent, you 0:03:41.880 --> 0:03:45.160 know you would want to teach this opinion because it's 0:03:45.200 --> 0:03:50.640 a payon to baseball and the greats of baseball and 0:03:50.720 --> 0:03:54.800 how they flourished under this system. I mean, it was 0:03:55.080 --> 0:03:59.440 very clear that Harry Blackman was a great baseball fan 0:04:00.200 --> 0:04:03.400 and loved all these players. And now you come along, 0:04:03.560 --> 0:04:06.760 Kurt Flood, You're going to challenge the system. Give me 0:04:06.840 --> 0:04:11.080 a break. You know, everyone prospered. So on the basis 0:04:11.120 --> 0:04:14.600 of the doctrine of starry decisives, let the decision stand. 0:04:15.480 --> 0:04:20.640 The Supreme Court refused to overrule Tulsen and Federal Baseball 0:04:20.680 --> 0:04:25.000 behind it, saying no, we've had this exemption, this decision 0:04:25.080 --> 0:04:27.239 too long, no matter what we think of it, legally 0:04:27.800 --> 0:04:31.000 were bound. Now there's no one who will stand up 0:04:31.040 --> 0:04:35.920 for this, as I said, except people who represent baseball teams. Now, 0:04:36.040 --> 0:04:39.400 there is one final little bit of a change, which 0:04:39.440 --> 0:04:42.880 is Congress passed the law in nineteen ninety eight called 0:04:42.880 --> 0:04:46.520 the Kirk Flood Act, which took out of the exemption, 0:04:46.640 --> 0:04:51.440 put back into anti trust any contracts involving the employment 0:04:51.480 --> 0:04:55.440 of major league baseball players at the major league level, 0:04:55.800 --> 0:04:59.479 So just for major league baseball players like Kurt Flood, 0:05:00.000 --> 0:05:02.640 that would now be subject to sort of the normal 0:05:02.720 --> 0:05:05.080 rules of anti trust and labor law for that matter. 0:05:05.520 --> 0:05:09.560 But these clauses aren't used anymore anyway, so it's sort 0:05:09.600 --> 0:05:14.120 of in some sense factually irrelevant, but maybe a little 0:05:14.240 --> 0:05:18.679 legal issue. Congress left everything else that this law doesn't 0:05:18.680 --> 0:05:23.000 apply to anything else involving baseball. So in effect, the exemption, 0:05:23.520 --> 0:05:28.560 which Congress never approved, very different from all other exemptions 0:05:28.760 --> 0:05:32.239 that we have. Virtually all other exemptions Congress never approved 0:05:32.240 --> 0:05:35.280 this one. The exemption continues. 0:05:35.400 --> 0:05:39.880 Does baseball operate like a monopoly? And is that unlike 0:05:40.040 --> 0:05:42.440 football or basketball or hockey. 0:05:43.240 --> 0:05:47.520 So we could argue whether football and hockey and all 0:05:47.560 --> 0:05:52.040 of those operate like monopolies, separate argument. At least they 0:05:52.080 --> 0:05:56.839 are all subject to the anti trust laws. So all 0:05:57.160 --> 0:06:03.040 sports professional the NCAA, you know, college sports, all sports 0:06:03.360 --> 0:06:06.359 have been subject to the anti trustlaws. In the court, 0:06:07.120 --> 0:06:13.680 sport after sport will say, you know, baseball is its 0:06:13.720 --> 0:06:19.160 own thing. You're covered. So they are not free to 0:06:19.240 --> 0:06:22.760 violated any trust laws. Now, whether what they do is 0:06:22.880 --> 0:06:26.160 legal under d any trust laws is another story. And 0:06:26.880 --> 0:06:30.640 your quest is a really good one because in the 0:06:30.680 --> 0:06:35.480 most recent Supreme Court case involving organized sports, which involved 0:06:35.560 --> 0:06:41.359 the NCAA with NCAA against Allston and the effort of 0:06:41.400 --> 0:06:45.720 the NCAA to suppress the amounts of compensation to quote 0:06:45.760 --> 0:06:49.720 what they like to call student athletes, and basically they 0:06:49.720 --> 0:06:51.840 wanted to argue in the Supreme Court that you should 0:06:51.880 --> 0:06:54.680 really treat us differently, and the Supreme Court wrote, no, 0:06:54.800 --> 0:06:57.320 we're not treating you differently. You don't have any reason to. 0:06:58.080 --> 0:07:02.080 And Justice Dorsach for a majority sort of dropped a 0:07:02.080 --> 0:07:05.360 little hint about this and mentioned that the Supreme Court 0:07:05.400 --> 0:07:08.720 in the past had balied this is his word with 0:07:08.760 --> 0:07:12.480 what looks like an exemption for professional baseball. But we're 0:07:12.520 --> 0:07:15.360 not going to give it to you, folks. So you 0:07:16.120 --> 0:07:19.800 andCA are fully subject to the any trust laws, and 0:07:20.560 --> 0:07:24.280 your conduct is subject to any trust laws. So the 0:07:24.400 --> 0:07:27.600 court seems to have recognized, as this decided in twenty 0:07:27.640 --> 0:07:32.840 twenty one again, that baseball is a bit of an aberration. 0:07:33.320 --> 0:07:36.600 In this case, you have minor league teams who are 0:07:36.640 --> 0:07:41.800 eliminated alleging a violation of the Sherman Act caused by 0:07:41.800 --> 0:07:46.200 a horizontal agreement between competitors that has artificially reduced and 0:07:46.320 --> 0:07:50.160 capped output in the market for MLB teams affiliated with 0:07:50.320 --> 0:07:53.960 MLB clubs, and a federal judge dismissed it because of 0:07:54.560 --> 0:07:59.200 the baseball exemption right, Federal Judge Andrew Carter said, plaintiffs 0:07:59.200 --> 0:08:01.920 believe that the Supreme Court is poised to knock out 0:08:01.960 --> 0:08:05.200 the exemption, like a boxer waiting to launch a left 0:08:05.200 --> 0:08:09.720 hook after her opponent tosses out a torbid jab. It's possible. 0:08:10.080 --> 0:08:14.720 So this would squarely present the baseball exemption to the 0:08:14.760 --> 0:08:15.760 Supreme Court. 0:08:15.960 --> 0:08:18.760 So that's correct, that's what's seeing up the interest at 0:08:18.760 --> 0:08:21.200 the moment. The case went to the Court of Appeals 0:08:21.240 --> 0:08:25.360 which just sort of summarily agreed with the trial court. 0:08:25.720 --> 0:08:29.440 Great quote that you read there. And now the minor 0:08:29.520 --> 0:08:34.160 league teams who alleged a violation by being excluded from 0:08:34.480 --> 0:08:37.920 an agreement that the majors have made which limit the 0:08:38.000 --> 0:08:41.160 number of minor league teams they can affiliate with, are 0:08:41.200 --> 0:08:44.960 now asking the Supreme Court to take the case. So 0:08:45.800 --> 0:08:50.280 it's not clear whether the Court will actually take the case. 0:08:50.480 --> 0:08:52.760 The Court has discretion as to whether they take it 0:08:52.880 --> 0:08:55.640 or not, So the first question is will they take it, 0:08:56.040 --> 0:08:59.680 And presumably if the Court takes it, it means that 0:08:59.720 --> 0:09:05.000 they're interested in overruling the three cases that I mentioned. 0:09:05.280 --> 0:09:10.920 And the Supreme Court, you know, doesn't lightly overrule cases. 0:09:11.320 --> 0:09:17.120 Well maybe I should say recently, yeah, And the. 0:09:17.000 --> 0:09:23.280 Court has overruled on occasion longstanding any trust precedent that 0:09:23.400 --> 0:09:28.200 parties had followed for many years. The case is called Legion, 0:09:28.559 --> 0:09:32.040 which involved the legality of setting resale prices. The Supreme 0:09:32.080 --> 0:09:36.120 Court overruled an older case which had stood for ninety years, 0:09:36.160 --> 0:09:40.960 even longer than Federal baseball. So it's possible that the 0:09:41.000 --> 0:09:45.840 Court would would take this case, but I would wait 0:09:45.920 --> 0:09:51.200 to see if the Justice Department expresses desire to have 0:09:51.280 --> 0:09:55.560 the court take the case and overrule these other three cases. 0:09:55.760 --> 0:10:00.360 So I'm not certain whether the Justice Department will away 0:10:00.360 --> 0:10:03.199 in on this case. They did already in this particular 0:10:03.240 --> 0:10:05.800 case in the district court and in the Court of Appeals, 0:10:06.200 --> 0:10:09.760 but they did not ask the courts which couldn't actually 0:10:10.160 --> 0:10:12.200 to you know, ignore the exemption. 0:10:13.160 --> 0:10:16.040 Do you think this exemption is lasted because baseball is 0:10:16.080 --> 0:10:18.360 seen as you know, the national sport. 0:10:19.000 --> 0:10:23.680 The exemption is a sport in itself. You know, that's 0:10:23.679 --> 0:10:26.720 a very good question. So there's been a fair amount 0:10:26.760 --> 0:10:33.360 of litigation around this issue, with Litigan's trying to narrow it, 0:10:33.679 --> 0:10:37.079 you know, to keep it very closely read as an 0:10:37.120 --> 0:10:40.720 exemption as they you know, bring cases in lower courts 0:10:40.760 --> 0:10:44.760 that you know, are forced to follow the three cases 0:10:44.800 --> 0:10:49.520 that I mentioned. So there has been an effort by 0:10:49.600 --> 0:10:52.480 parties to do something about it, not an effort by 0:10:52.520 --> 0:10:54.760 the government to do something about it. As I think 0:10:54.800 --> 0:10:57.800 about it, you know, not to tuch this positive. So 0:10:58.080 --> 0:11:00.840 why has it lasted? Well, you know, part of it 0:11:00.920 --> 0:11:06.520 is a very basic theory of story decisives of following precedent. 0:11:06.760 --> 0:11:09.120 Courts are forced to do that, and the Supreme Court 0:11:09.520 --> 0:11:12.840 hasn't paid attention to this area that much, and for 0:11:12.880 --> 0:11:15.800 a while wasn't paying much attention to anti trust. Now 0:11:15.840 --> 0:11:19.400 that's sort of changed recently, so maybe now the court 0:11:19.440 --> 0:11:23.440 will have an appetite to look at it. They've messed 0:11:23.480 --> 0:11:26.600 around with other sports, why not baseball. 0:11:26.640 --> 0:11:30.560 In twenty twenty two, the MLB Commissioner wrote to the 0:11:30.559 --> 0:11:34.160 Senate Judiciary Committee, who is hearing this issue, that players 0:11:34.200 --> 0:11:38.240 could lose job opportunities and communities could lose minor league 0:11:38.240 --> 0:11:41.760 teams if baseball is stripped of its anti trust exemption. 0:11:42.280 --> 0:11:44.320 But let's say this does go to Supreme Court, what 0:11:44.440 --> 0:11:46.280 kind of an argument could they make that they should 0:11:46.320 --> 0:11:48.000 still have an anti trust exemption? 0:11:48.440 --> 0:11:51.160 Yes, in a case in which communities are losing their 0:11:51.760 --> 0:11:55.320 minor league teams exactly because without this asciliation they don't 0:11:55.320 --> 0:11:58.400 have the financial support to continue. Well, they're not going 0:11:58.440 --> 0:12:01.839 to make that argument, I guess this case. Presumably they would. 0:12:01.960 --> 0:12:05.240 They would pitch a lot of it on stability and 0:12:05.760 --> 0:12:11.440 expectations that parties have based their relationships over the years 0:12:11.960 --> 0:12:18.160 on operating collectively. Leagues need to operate collectively, and this would, 0:12:18.280 --> 0:12:22.560 you know, subject this sport to needless litigation, which might 0:12:22.679 --> 0:12:27.600 in the end result in massive costs and not produce 0:12:27.679 --> 0:12:30.920 better baseball. It's a hard argument to make when every 0:12:30.920 --> 0:12:35.080 other sport is subject to any trust laws. So I 0:12:35.120 --> 0:12:37.800 think when it gets the Supreme Court, they'll have to 0:12:37.880 --> 0:12:41.280 look for things which explains for some reason why this 0:12:41.440 --> 0:12:46.400 sport should be sort of outside normal rules of competition law. 0:12:46.440 --> 0:12:50.640 And the Court, once presented with that sort of actual argument, 0:12:50.760 --> 0:12:56.240 will often say, you know, hey, not our call, pardon joke, 0:12:56.640 --> 0:13:00.560 not our coal. Congress generally says, you know that we 0:13:00.679 --> 0:13:04.079 like competition, and if you think that competition is not 0:13:04.240 --> 0:13:07.360 the way to go here, go to Congress. You've never 0:13:07.440 --> 0:13:11.640 done that. You've never gotten congressional approval to this. You know, 0:13:11.800 --> 0:13:15.280 lots of other industries have. So if you want to 0:13:15.280 --> 0:13:18.440 make your case, make it there, don't make it here. 0:13:18.520 --> 0:13:23.400 The normal rule is competition, and we don't really like exemptions. 0:13:23.880 --> 0:13:26.320 So I think maybe in the end the question is 0:13:26.320 --> 0:13:28.960 going to be whether the Supreme Court thinks this is 0:13:29.040 --> 0:13:32.480 important enough to take or you know, let's just sort 0:13:32.520 --> 0:13:36.480 of rock along this spike. Certainly, baseball is a big 0:13:36.600 --> 0:13:41.680 enough industry, and you know, normally we like commercial relationships, 0:13:41.720 --> 0:13:45.959 particularly when lots of money's involved and lots of consumer interests, 0:13:46.080 --> 0:13:50.960 lots of labor interests, frankly community interests. You know, normally 0:13:51.000 --> 0:13:53.920 we like that to be decided by marketplace. 0:13:54.200 --> 0:13:57.320 The best argument I thought was the minor league teams, 0:13:57.640 --> 0:14:00.440 in a brief to the Second Circuit, said, but the 0:14:00.440 --> 0:14:03.280 court should, if it sees fit, dispatch this case to 0:14:03.320 --> 0:14:06.480 the Supreme Court, where the message attached enough already. 0:14:06.880 --> 0:14:11.240 Well, you know there's precedent for courts of appeals to 0:14:11.360 --> 0:14:14.040 do just that, to sort of say, look, our hands 0:14:14.040 --> 0:14:16.640 are tied. This is a terrible result, but our hands 0:14:16.640 --> 0:14:19.840 are tied, and sort of say, please take this now. 0:14:20.000 --> 0:14:23.520 The Second Circuit didn't quite do that, actually, I mean, 0:14:23.560 --> 0:14:27.360 they could have gone through the reasons. And there are 0:14:27.400 --> 0:14:30.600 opinions like this in other areas of any trust, going 0:14:30.680 --> 0:14:33.760 through the reasons for why this is so out of step. 0:14:34.400 --> 0:14:36.840 Commentators have written about this, there are books on this, 0:14:37.440 --> 0:14:42.280 uniformly condemned it, and you know why. They say it 0:14:42.320 --> 0:14:46.880 would only help fans and everybody except maybe the owners 0:14:46.880 --> 0:14:50.840 of these franchises. But owners of sports franchises seem to 0:14:50.840 --> 0:14:53.360 be doing pretty darn well even when the anti trust 0:14:53.360 --> 0:14:57.320 wall was applying, So they could have done more. But 0:14:57.560 --> 0:15:00.000 I'm actually waiting to see what the Justice departm. 0:15:01.000 --> 0:15:03.600 I do think they need a sports case this term. 0:15:03.840 --> 0:15:06.800 Thanks so much, Harry, it's always a delight. That's Professor 0:15:06.840 --> 0:15:10.880 Harry First of NYU Law School. Coming up next, we'll 0:15:10.880 --> 0:15:14.440 look at the charges against New Jersey Senator Bob Menendez. 0:15:14.800 --> 0:15:16.880 I'm June Grosso and you're listening to Bloomberg. 0:15:17.200 --> 0:15:21.240 Everything I've accomplished, I've worked for despite the naysayers and 0:15:21.280 --> 0:15:25.960 everyone who has underestimated me. I recognize this will be 0:15:25.960 --> 0:15:29.520 the biggest fight yet, but as I have stated throughout 0:15:29.560 --> 0:15:32.840 this whole process, I firmly believe that when all the 0:15:32.880 --> 0:15:36.960 facts are presented, not only will I be exonerated, but 0:15:37.040 --> 0:15:39.520 I still will be the New Jersey's senior senator. 0:15:39.760 --> 0:15:43.040 New Jersey Senator Bob Menendez told the public he was 0:15:43.120 --> 0:15:47.120 not guilty of bribery and corruption charges and entered a 0:15:47.200 --> 0:15:51.480 not guilty plea in court today. The Democratic senator has 0:15:51.520 --> 0:15:55.760 faced corruption charges before, his last trial, ending with a 0:15:55.840 --> 0:16:00.440 deadlock jury in twenty seventeen, but this time it appears different, 0:16:00.640 --> 0:16:04.440 and his fellow Democratic senators are calling on him to resign, 0:16:05.000 --> 0:16:08.720 including New Jersey Senator Cory Booker, who said the indictment 0:16:08.760 --> 0:16:14.440 showed shocking allegations of corruption and specific disturbing details of wrongdoing. 0:16:15.160 --> 0:16:18.800 The office of the Manhattan US Attorney, Damian Williams brought 0:16:18.840 --> 0:16:19.520 the charges. 0:16:19.960 --> 0:16:23.600 The indictment alleges that through that relationship, the senator and 0:16:23.680 --> 0:16:27.080 his wife accepted hundreds of thousands of dollars of bribes 0:16:27.560 --> 0:16:30.840 in exchange for Senator Menendez using his power and influence 0:16:31.320 --> 0:16:35.720 to protect and to enrich those businessmen and to benefit 0:16:35.760 --> 0:16:36.960 the government of Egypt. 0:16:37.320 --> 0:16:40.080 And there were pictures of some of the evidence seized 0:16:40.080 --> 0:16:43.240 from Menendez his home, the gold bars worth more than 0:16:43.280 --> 0:16:47.160 one hundred thousand dollars, nearly five hundred thousand dollars in 0:16:47.320 --> 0:16:51.360 cash stoffed in envelopes and hidden in clothes and closets, 0:16:51.600 --> 0:16:55.640 and the Mercedes convertible. Joining me is former federal prosecutor 0:16:55.720 --> 0:16:59.800 Jennifer Rogers, a lecturer in law at Columbia Law School. 0:17:00.400 --> 0:17:06.000 The allegations against Menendez were stunning to many people, So 0:17:06.080 --> 0:17:07.080 tell us about them. 0:17:07.720 --> 0:17:11.440 Well, he's charged in three counts of bribery. They basically 0:17:11.880 --> 0:17:15.480 used the same facts to charge it, using three different statues, 0:17:15.560 --> 0:17:18.840 kind of a belt and suspenders approach. But it's effectively 0:17:19.040 --> 0:17:23.399 that he did favors official acts in his role as 0:17:24.000 --> 0:17:27.400 senator and as chair of the Foreign Relations Committee for 0:17:27.800 --> 0:17:31.560 these three businessmen who then paid him for those favors 0:17:31.560 --> 0:17:36.240 and cash and gold bars and a Mercedes convertible and 0:17:36.440 --> 0:17:37.119 some other stuff. 0:17:37.320 --> 0:17:40.560 The one hundred thousand dollars in gold bars sort of stands 0:17:40.600 --> 0:17:44.159 out because who has gold bars? And add to that 0:17:44.320 --> 0:17:47.320 his Google search for how much is one kilo of 0:17:47.359 --> 0:17:52.399 gold worth? Do you think the prosecutors framed this in 0:17:52.440 --> 0:17:55.320 a way to bring out the dramatic in it. 0:17:56.200 --> 0:17:58.600 Well, you know, there's always a little bit of flair 0:17:58.680 --> 0:18:01.720 for the drama, I think. You know, jackets stuffed with 0:18:01.920 --> 0:18:05.000 cash too has a sort of flare that looks good 0:18:05.040 --> 0:18:08.040 in the photos too. But you know, really, prosecutors have 0:18:08.119 --> 0:18:11.399 to prove three things. They have to prove that something 0:18:11.440 --> 0:18:14.160 of value was given, and that's the point of saying 0:18:14.600 --> 0:18:18.440 this cash was found, the gold bars, the car. They 0:18:18.480 --> 0:18:22.040 have to prove that official acts by the public official 0:18:22.119 --> 0:18:24.640 were promised or given. And then they have to prove 0:18:24.720 --> 0:18:27.919 the quid propo the connection between the two things. So 0:18:28.280 --> 0:18:31.280 you know, prosecutors have to prove all three of those things. 0:18:31.280 --> 0:18:33.560 So they're going to be careful to make sure to 0:18:33.640 --> 0:18:35.880 do that. But I think, you know, they just took 0:18:35.920 --> 0:18:38.960 advantage of the fact that this is really a textbook 0:18:39.320 --> 0:18:43.399 bribery case. You so clearly have all three of those things, 0:18:43.760 --> 0:18:46.119 and it's just so obvious. I mean, who keeps that 0:18:46.240 --> 0:18:48.480 kind of cash around? Who keeps it in that way? 0:18:48.520 --> 0:18:51.439 You know, not in a safe, stuffed in jackets and things. 0:18:51.840 --> 0:18:55.119 So I just think it was so photogenic. I guess, 0:18:55.160 --> 0:18:58.000 if you will, just such a kind of textbook, quintessential 0:18:58.040 --> 0:19:00.760 bribery case that it makes it easy to be a 0:19:00.760 --> 0:19:01.919 little bit dramatic with it. 0:19:03.000 --> 0:19:06.760 Tell me what you think of Menandez's explanation for the 0:19:07.000 --> 0:19:09.879 nearly five hundred thousand dollars in cash he had in 0:19:09.920 --> 0:19:12.000 the house for thirty years. 0:19:12.520 --> 0:19:16.080 I have withdrawn thousands of dollars in cash from my 0:19:16.200 --> 0:19:20.800 personal savings account, which I have kept for emergencies and 0:19:20.880 --> 0:19:24.760 because of the history of my family facing confiscation in Cuba. 0:19:25.400 --> 0:19:28.959 Now this may seem old fashioned, but these were moneys 0:19:29.040 --> 0:19:32.880 drawn from my personal savings account based on the income 0:19:32.920 --> 0:19:36.800 that I have lawfully derived over those thirty years. 0:19:37.440 --> 0:19:40.320 Yeah, that's just silly. I mean, he's really just begging 0:19:40.359 --> 0:19:44.840 them to do what would be called an unexplained wealth analysis, right, like, oh, really, 0:19:44.920 --> 0:19:48.119 that's all his legitimate money from his paychecks. All right, Well, 0:19:48.200 --> 0:19:50.480 let's look at what his paychecks are and what other 0:19:50.600 --> 0:19:53.600 means he has. I mean, is he independently wealthy? Does 0:19:53.640 --> 0:19:57.040 he have major investments that he converted to cash? You know, 0:19:57.119 --> 0:19:59.760 what is the explanation for having that kind of cash 0:19:59.760 --> 0:20:01.720 in the first place when you look at his bank 0:20:01.720 --> 0:20:03.960 accounts and how much money he makes being a senator. 0:20:04.359 --> 0:20:06.359 And I don't think it's going to stack up. So 0:20:06.720 --> 0:20:09.879 I doubt that that defense, well he kind of offered 0:20:09.880 --> 0:20:12.040 it in the first instance, is going to make its 0:20:12.119 --> 0:20:14.800 way into the trial. I think that they'll have to 0:20:14.840 --> 0:20:17.439 focus on other things if they end up actually taking 0:20:17.480 --> 0:20:18.040 this to trial. 0:20:18.359 --> 0:20:20.920 So what struck me? And you know, maybe this happens 0:20:20.920 --> 0:20:24.600 more often than I know, But how often do the 0:20:24.640 --> 0:20:28.959 FEDS test money for fingerprints and DNA especially? 0:20:30.440 --> 0:20:30.680 Yeah? 0:20:30.760 --> 0:20:33.679 Not very often. Yeah, I understand that there was some 0:20:33.880 --> 0:20:36.720 DNA sound on I think on an envelope that some 0:20:36.840 --> 0:20:39.040 of the money was in. You know, it's not a 0:20:39.080 --> 0:20:43.359 great conductor of fingerprints. You know, metal and other surfaces 0:20:43.400 --> 0:20:46.240 are much better. But you really do want to try 0:20:46.280 --> 0:20:49.960 if you can to establish the connection between the bribes 0:20:50.040 --> 0:20:52.359 and the people who were giving the bribes. So in 0:20:52.400 --> 0:20:54.640 this case, it makes sense to test if you think 0:20:54.680 --> 0:20:58.040 you can get something like fingerprints, and it worked. They 0:20:58.040 --> 0:21:01.560 were able to establish a link between that particular bunch 0:21:01.600 --> 0:21:04.280 of money and one of the business men who was 0:21:04.320 --> 0:21:06.959 one of the bribe wars and co defendants, so it 0:21:07.000 --> 0:21:07.560 worked for them. 0:21:07.960 --> 0:21:10.640 Is the toughest part of this case for the prosecution 0:21:10.840 --> 0:21:12.640 to prove the quid pro quo. 0:21:13.280 --> 0:21:16.000 I think actually in this case. I mean that often 0:21:16.160 --> 0:21:18.560 is the toughest I think in this case because they 0:21:18.600 --> 0:21:21.800 have such a wealth of evidence with the text that 0:21:22.200 --> 0:21:25.359 they recovered that they I think did a wire tap 0:21:25.440 --> 0:21:27.880 on that really sets out the scheme in the back 0:21:27.880 --> 0:21:30.520 and forth. So I think the most challenging thing in 0:21:30.560 --> 0:21:34.119 this case is actually proving the official acts that the 0:21:34.160 --> 0:21:37.919 things that Menendez did and promised to do for the 0:21:37.960 --> 0:21:41.720 bribe Wars his co defendants were actually technically official acts. 0:21:41.800 --> 0:21:44.879 Because over the years, the last ten or so years, 0:21:44.880 --> 0:21:47.879 the Supreme Court really has narrowed what that means to 0:21:47.960 --> 0:21:51.119 be an official act, and we don't yet exactly know 0:21:51.200 --> 0:21:54.440 the outside contours of that because you know, every time 0:21:54.480 --> 0:21:57.480 you litigate one of these cases and the Supreme Court 0:21:57.520 --> 0:21:59.760 speaks on it, then you kind of know on that 0:21:59.800 --> 0:22:02.600 particular set of facts. So you know whether or not 0:22:02.760 --> 0:22:05.199 every single thing that Menendez did and agreed to do 0:22:05.359 --> 0:22:08.920 will be ultimately deemed an official act under the Supreme 0:22:09.000 --> 0:22:13.040 Court's version of that is undetermined. I still think they 0:22:13.040 --> 0:22:15.040 have a strong case. I think many of the actions 0:22:15.080 --> 0:22:17.439 are clearly official acts. But that's where it gets a 0:22:17.680 --> 0:22:20.880 little bit muddy on the edges about what they can 0:22:20.880 --> 0:22:21.920 try to challenge. 0:22:22.200 --> 0:22:26.720 So he's also accused of giving Egyptian officials highly sensitive information. 0:22:27.520 --> 0:22:31.080 Is that part of the charges or is that just background? 0:22:32.119 --> 0:22:35.440 So that's a really interesting piece of this. They did 0:22:35.520 --> 0:22:39.480 not charge him with being a foreign agent or anything 0:22:39.960 --> 0:22:42.879 that would require them to prove that he basically was 0:22:42.960 --> 0:22:46.919 acting and he just interests against the US's interests. It 0:22:47.000 --> 0:22:48.920 is a piece of evidence in the bribery case because 0:22:48.920 --> 0:22:51.280 it's one of the things that he did for them, right, 0:22:51.320 --> 0:22:54.840 one of the things that he gave them was this information, 0:22:55.080 --> 0:22:57.879 and they bribed him for it. They gave him money 0:22:57.960 --> 0:23:00.000 or you know, whatever the case may be. In that particule, 0:23:00.000 --> 0:23:02.600 regular instance, they give him a bribe for that information. 0:23:02.760 --> 0:23:05.160 So it does come in. It's part of the bribery case, 0:23:05.200 --> 0:23:09.159 but it's not charged separately in terms of like a 0:23:09.200 --> 0:23:12.000 foreign agent charge or anything like that. And I think 0:23:12.040 --> 0:23:16.399 prosecutors were very smart about that, because charging that kind 0:23:16.560 --> 0:23:21.960 of case leads to all sorts of complications with classified information, 0:23:22.560 --> 0:23:26.040 makes discovery more complicated, makes the trial more complicated. They 0:23:26.160 --> 0:23:31.200 charged it just lean and mean, just the bribery, very strong, unclassified, 0:23:31.359 --> 0:23:33.760 easy to do discovery, easy to do the trial if 0:23:33.800 --> 0:23:35.480 it comes to that. So I think that was a 0:23:35.480 --> 0:23:36.880 wise strategic decision. 0:23:37.280 --> 0:23:40.680 Do you think the Justice Department learned from the last 0:23:40.720 --> 0:23:44.000 trial and didn't want the same thing to happen twice. 0:23:45.080 --> 0:23:48.480 Well, it's a different group of prosecutors. This prosecution is 0:23:48.480 --> 0:23:51.600 out of the Manhattan US Attorney's Office. The other one 0:23:51.640 --> 0:23:54.399 was out of Main Justice, So it's not the same people. 0:23:54.440 --> 0:23:57.800 But sure every time you see a case falter, you 0:23:58.240 --> 0:24:01.760 learn from that experience and you know the thing is 0:24:01.840 --> 0:24:05.000 here is really just a completely separate set of facts. 0:24:05.040 --> 0:24:09.360 You know, last time the charges involved someone allegedly bribing Menendez, 0:24:09.359 --> 0:24:12.080 who was a close personal friend, and ultimately I think 0:24:12.160 --> 0:24:15.720 the jurors couldn't figure out whether the official accidne were 0:24:15.800 --> 0:24:18.240 because of the bribes or because of the friendship here, 0:24:18.520 --> 0:24:21.920 there's no relationship like that. This was purely transactional. It's 0:24:21.920 --> 0:24:23.760 all laid out there in the text, so they don't 0:24:23.800 --> 0:24:26.800 have the same challenges. But yeah, I mean, anytime you 0:24:27.320 --> 0:24:29.719 have a loss, hopefully you learn something from it. 0:24:29.960 --> 0:24:33.360 Why is a Manhattan US attorney bringing this And how 0:24:33.400 --> 0:24:36.480 much of a disadvantage is that for Menandez not having 0:24:36.520 --> 0:24:39.280 a sort of a home court advantage. 0:24:39.560 --> 0:24:42.520 Well, I don't exactly know. I mean, it would depend 0:24:42.520 --> 0:24:46.600 in part on which FBI office started the investigation. You know, 0:24:46.680 --> 0:24:49.880