Speaker 1: This is Bloomberg Law with June Brusso from Bloomberg Radio.
Speaker 1: The sounds of baseball not only the national pastime and
Speaker 1: a more than ten billion dollar industry, but also the
Speaker 1: only sport in the country that's exempt from the anti
Speaker 1: trust laws. And now some minor league teams are asking
Speaker 1: the Supreme Court to eliminate baseball's anti trust exemption. Why,
Speaker 1: as they put it in one brief enough. Already joining
Speaker 1: me is anti trust expert Harry First, a professor at
Speaker 1: NYU Law School. Harry tell us how baseball got this
Speaker 1: anti trust exemption.
Speaker 2: Well, this is one of the most reviled exemptions from
Speaker 2: the point of view of antitrust lawyers unless they represent
Speaker 2: baseball companies or teams or leagues, and even the courts
Speaker 2: don't like it. So it came about originally because of
Speaker 2: a decision in nineteen twenty two by the Supreme Court
Speaker 2: called Federal Baseball. And this is an opinion written by
Speaker 2: Justice Holmes Uliver Wendell Holmes distinguished jurists, and it was
Speaker 2: an effort to actually push out some competing leagues. And
Speaker 2: Holmes said that, well, the any trust laws don't cover this.
Speaker 2: Baseball is neither commerce nor interstate commerce. It's just sport
Speaker 2: and it just takes place locally. So even though players
Speaker 2: even then traveled from state to state and there was
Speaker 2: a lot of money involved, perhaps Justice Holmes as the
Speaker 2: Boston Brahmin disdain baseball. It was sort of like us
Speaker 2: now raised with a certain kind of entertainment reviewing video games.
Speaker 2: What is that? And is there so much money involved?
Speaker 2: Are you serious? So maybe that was a poem's reaction.
Speaker 2: I don't know, But in any event, that was a
Speaker 2: decision any trust laws didn't apply. So that's nineteen twenty two.
Speaker 2: The Supreme Court reaffirmed that decision in a case called
Speaker 2: Toolson in nineteen fifty three involving New York Yankees. My
Speaker 2: memory is correct, and the court said, even though the
Speaker 2: decision was sort of dubious when made, it's now precedent,
Speaker 2: and all aspects of that decision had been undermined. Even
Speaker 2: in the intervening period, the courts had a rather a
Speaker 2: narrow conception of what constituted interstate commerce, perhaps in nineteen
Speaker 2: twenty two, but it had expanded clearly in the New
Speaker 2: Deal era, and any trust cases had gone along. And
Speaker 2: there's no doubt that baseball should have been considered an
Speaker 2: interstate commerce all along point a business, but the Court
Speaker 2: said in business of baseball is exempt from any trust
Speaker 2: laws from the Shermanac. And then the third case in
Speaker 2: this is a case called Flood against Kune. This involved
Speaker 2: Kurt Flood, who didn't want to be bound by what
Speaker 2: was called the reserve clause, which prevented players once they
Speaker 2: were under contract from going to some other team even
Speaker 2: after the contract was over. And this was an opinion
Speaker 2: written by Justice Blackman. This goes beyond it put of
Speaker 2: any trust law. If you teach a course in law
Speaker 2: school about precedent and the need to follow precedent, you
Speaker 2: know you would want to teach this opinion because it's
Speaker 2: a payon to baseball and the greats of baseball and
Speaker 2: how they flourished under this system. I mean, it was
Speaker 2: very clear that Harry Blackman was a great baseball fan
Speaker 2: and loved all these players. And now you come along,
Speaker 2: Kurt Flood, You're going to challenge the system. Give me
Speaker 2: a break. You know, everyone prospered. So on the basis
Speaker 2: of the doctrine of starry decisives, let the decision stand.
Speaker 2: The Supreme Court refused to overrule Tulsen and Federal Baseball
Speaker 2: behind it, saying no, we've had this exemption, this decision
Speaker 2: too long, no matter what we think of it, legally
Speaker 2: were bound. Now there's no one who will stand up
Speaker 2: for this, as I said, except people who represent baseball teams. Now,
Speaker 2: there is one final little bit of a change, which
Speaker 2: is Congress passed the law in nineteen ninety eight called
Speaker 2: the Kirk Flood Act, which took out of the exemption,
Speaker 2: put back into anti trust any contracts involving the employment
Speaker 2: of major league baseball players at the major league level,
Speaker 2: So just for major league baseball players like Kurt Flood,
Speaker 2: that would now be subject to sort of the normal
Speaker 2: rules of anti trust and labor law for that matter.
Speaker 2: But these clauses aren't used anymore anyway, so it's sort
Speaker 2: of in some sense factually irrelevant, but maybe a little
Speaker 2: legal issue. Congress left everything else that this law doesn't
Speaker 2: apply to anything else involving baseball. So in effect, the exemption,
Speaker 2: which Congress never approved, very different from all other exemptions
Speaker 2: that we have. Virtually all other exemptions Congress never approved
Speaker 2: this one. The exemption continues.
Speaker 1: Does baseball operate like a monopoly? And is that unlike
Speaker 1: football or basketball or hockey.
Speaker 2: So we could argue whether football and hockey and all
Speaker 2: of those operate like monopolies, separate argument. At least they
Speaker 2: are all subject to the anti trust laws. So all
Speaker 2: sports professional the NCAA, you know, college sports, all sports
Speaker 2: have been subject to the anti trustlaws. In the court,
Speaker 2: sport after sport will say, you know, baseball is its
Speaker 2: own thing. You're covered. So they are not free to
Speaker 2: violated any trust laws. Now, whether what they do is
Speaker 2: legal under d any trust laws is another story. And
Speaker 2: your quest is a really good one because in the
Speaker 2: most recent Supreme Court case involving organized sports, which involved
Speaker 2: the NCAA with NCAA against Allston and the effort of
Speaker 2: the NCAA to suppress the amounts of compensation to quote
Speaker 2: what they like to call student athletes, and basically they
Speaker 2: wanted to argue in the Supreme Court that you should
Speaker 2: really treat us differently, and the Supreme Court wrote, no,
Speaker 2: we're not treating you differently. You don't have any reason to.
Speaker 2: And Justice Dorsach for a majority sort of dropped a
Speaker 2: little hint about this and mentioned that the Supreme Court
Speaker 2: in the past had balied this is his word with
Speaker 2: what looks like an exemption for professional baseball. But we're
Speaker 2: not going to give it to you, folks. So you
Speaker 2: andCA are fully subject to the any trust laws, and
Speaker 2: your conduct is subject to any trust laws. So the
Speaker 2: court seems to have recognized, as this decided in twenty
Speaker 2: twenty one again, that baseball is a bit of an aberration.
Speaker 1: In this case, you have minor league teams who are
Speaker 1: eliminated alleging a violation of the Sherman Act caused by
Speaker 1: a horizontal agreement between competitors that has artificially reduced and
Speaker 1: capped output in the market for MLB teams affiliated with
Speaker 1: MLB clubs, and a federal judge dismissed it because of
Speaker 1: the baseball exemption right, Federal Judge Andrew Carter said, plaintiffs
Speaker 1: believe that the Supreme Court is poised to knock out
Speaker 1: the exemption, like a boxer waiting to launch a left
Speaker 1: hook after her opponent tosses out a torbid jab. It's possible.
Speaker 1: So this would squarely present the baseball exemption to the
Speaker 1: Supreme Court.
Speaker 2: So that's correct, that's what's seeing up the interest at
Speaker 2: the moment. The case went to the Court of Appeals
Speaker 2: which just sort of summarily agreed with the trial court.
Speaker 2: Great quote that you read there. And now the minor
Speaker 2: league teams who alleged a violation by being excluded from
Speaker 2: an agreement that the majors have made which limit the
Speaker 2: number of minor league teams they can affiliate with, are
Speaker 2: now asking the Supreme Court to take the case. So
Speaker 2: it's not clear whether the Court will actually take the case.
Speaker 2: The Court has discretion as to whether they take it
Speaker 2: or not, So the first question is will they take it,
Speaker 2: And presumably if the Court takes it, it means that
Speaker 2: they're interested in overruling the three cases that I mentioned.
Speaker 2: And the Supreme Court, you know, doesn't lightly overrule cases.
Speaker 1: Well maybe I should say recently, yeah, And the.
Speaker 2: Court has overruled on occasion longstanding any trust precedent that
Speaker 2: parties had followed for many years. The case is called Legion,
Speaker 2: which involved the legality of setting resale prices. The Supreme
Speaker 2: Court overruled an older case which had stood for ninety years,
Speaker 2: even longer than Federal baseball. So it's possible that the
Speaker 2: Court would would take this case, but I would wait
Speaker 2: to see if the Justice Department expresses desire to have
Speaker 2: the court take the case and overrule these other three cases.
Speaker 2: So I'm not certain whether the Justice Department will away
Speaker 2: in on this case. They did already in this particular
Speaker 2: case in the district court and in the Court of Appeals,
Speaker 2: but they did not ask the courts which couldn't actually
Speaker 2: to you know, ignore the exemption.
Speaker 1: Do you think this exemption is lasted because baseball is
Speaker 1: seen as you know, the national sport.
Speaker 2: The exemption is a sport in itself. You know, that's
Speaker 2: a very good question. So there's been a fair amount
Speaker 2: of litigation around this issue, with Litigan's trying to narrow it,
Speaker 2: you know, to keep it very closely read as an
Speaker 2: exemption as they you know, bring cases in lower courts
Speaker 2: that you know, are forced to follow the three cases
Speaker 2: that I mentioned. So there has been an effort by
Speaker 2: parties to do something about it, not an effort by
Speaker 2: the government to do something about it. As I think
Speaker 2: about it, you know, not to tuch this positive. So
Speaker 2: why has it lasted? Well, you know, part of it
Speaker 2: is a very basic theory of story decisives of following precedent.
Speaker 2: Courts are forced to do that, and the Supreme Court
Speaker 2: hasn't paid attention to this area that much, and for
Speaker 2: a while wasn't paying much attention to anti trust. Now
Speaker 2: that's sort of changed recently, so maybe now the court
Speaker 2: will have an appetite to look at it. They've messed
Speaker 2: around with other sports, why not baseball.
Speaker 1: In twenty twenty two, the MLB Commissioner wrote to the
Speaker 1: Senate Judiciary Committee, who is hearing this issue, that players
Speaker 1: could lose job opportunities and communities could lose minor league
Speaker 1: teams if baseball is stripped of its anti trust exemption.
Speaker 1: But let's say this does go to Supreme Court, what
Speaker 1: kind of an argument could they make that they should
Speaker 1: still have an anti trust exemption?
Speaker 2: Yes, in a case in which communities are losing their
Speaker 2: minor league teams exactly because without this asciliation they don't
Speaker 2: have the financial support to continue. Well, they're not going
Speaker 2: to make that argument, I guess this case. Presumably they would.
Speaker 2: They would pitch a lot of it on stability and
Speaker 2: expectations that parties have based their relationships over the years
Speaker 2: on operating collectively. Leagues need to operate collectively, and this would,
Speaker 2: you know, subject this sport to needless litigation, which might
Speaker 2: in the end result in massive costs and not produce
Speaker 2: better baseball. It's a hard argument to make when every
Speaker 2: other sport is subject to any trust laws. So I
Speaker 2: think when it gets the Supreme Court, they'll have to
Speaker 2: look for things which explains for some reason why this
Speaker 2: sport should be sort of outside normal rules of competition law.
Speaker 2: And the Court, once presented with that sort of actual argument,
Speaker 2: will often say, you know, hey, not our call, pardon joke,
Speaker 2: not our coal. Congress generally says, you know that we
Speaker 2: like competition, and if you think that competition is not
Speaker 2: the way to go here, go to Congress. You've never
Speaker 2: done that. You've never gotten congressional approval to this. You know,
Speaker 2: lots of other industries have. So if you want to
Speaker 2: make your case, make it there, don't make it here.
Speaker 2: The normal rule is competition, and we don't really like exemptions.
Speaker 2: So I think maybe in the end the question is
Speaker 2: going to be whether the Supreme Court thinks this is
Speaker 2: important enough to take or you know, let's just sort
Speaker 2: of rock along this spike. Certainly, baseball is a big
Speaker 2: enough industry, and you know, normally we like commercial relationships,
Speaker 2: particularly when lots of money's involved and lots of consumer interests,
Speaker 2: lots of labor interests, frankly community interests. You know, normally
Speaker 2: we like that to be decided by marketplace.
Speaker 1: The best argument I thought was the minor league teams,
Speaker 1: in a brief to the Second Circuit, said, but the
Speaker 1: court should, if it sees fit, dispatch this case to
Speaker 1: the Supreme Court, where the message attached enough already.
Speaker 2: Well, you know there's precedent for courts of appeals to
Speaker 2: do just that, to sort of say, look, our hands
Speaker 2: are tied. This is a terrible result, but our hands
Speaker 2: are tied, and sort of say, please take this now.
Speaker 2: The Second Circuit didn't quite do that, actually, I mean,
Speaker 2: they could have gone through the reasons. And there are
Speaker 2: opinions like this in other areas of any trust, going
Speaker 2: through the reasons for why this is so out of step.
Speaker 2: Commentators have written about this, there are books on this,
Speaker 2: uniformly condemned it, and you know why. They say it
Speaker 2: would only help fans and everybody except maybe the owners
Speaker 2: of these franchises. But owners of sports franchises seem to
Speaker 2: be doing pretty darn well even when the anti trust
Speaker 2: wall was applying, So they could have done more. But
Speaker 2: I'm actually waiting to see what the Justice departm.
Speaker 1: I do think they need a sports case this term.
Speaker 1: Thanks so much, Harry, it's always a delight. That's Professor
Speaker 1: Harry First of NYU Law School. Coming up next, we'll
Speaker 1: look at the charges against New Jersey Senator Bob Menendez.
Speaker 1: I'm June Grosso and you're listening to Bloomberg.
Speaker 3: Everything I've accomplished, I've worked for despite the naysayers and
Speaker 3: everyone who has underestimated me. I recognize this will be
Speaker 3: the biggest fight yet, but as I have stated throughout
Speaker 3: this whole process, I firmly believe that when all the
Speaker 3: facts are presented, not only will I be exonerated, but
Speaker 3: I still will be the New Jersey's senior senator.
Speaker 1: New Jersey Senator Bob Menendez told the public he was
Speaker 1: not guilty of bribery and corruption charges and entered a
Speaker 1: not guilty plea in court today. The Democratic senator has
Speaker 1: faced corruption charges before, his last trial, ending with a
Speaker 1: deadlock jury in twenty seventeen, but this time it appears different,
Speaker 1: and his fellow Democratic senators are calling on him to resign,
Speaker 1: including New Jersey Senator Cory Booker, who said the indictment
Speaker 1: showed shocking allegations of corruption and specific disturbing details of wrongdoing.
Speaker 1: The office of the Manhattan US Attorney, Damian Williams brought
Speaker 1: the charges.
Speaker 4: The indictment alleges that through that relationship, the senator and
Speaker 4: his wife accepted hundreds of thousands of dollars of bribes
Speaker 4: in exchange for Senator Menendez using his power and influence
Speaker 4: to protect and to enrich those businessmen and to benefit
Speaker 4: the government of Egypt.
Speaker 1: And there were pictures of some of the evidence seized
Speaker 1: from Menendez his home, the gold bars worth more than
Speaker 1: one hundred thousand dollars, nearly five hundred thousand dollars in
Speaker 1: cash stoffed in envelopes and hidden in clothes and closets,
Speaker 1: and the Mercedes convertible. Joining me is former federal prosecutor
Speaker 1: Jennifer Rogers, a lecturer in law at Columbia Law School.
Speaker 1: The allegations against Menendez were stunning to many people, So
Speaker 1: tell us about them.
Speaker 5: Well, he's charged in three counts of bribery. They basically
Speaker 5: used the same facts to charge it, using three different statues,
Speaker 5: kind of a belt and suspenders approach. But it's effectively
Speaker 5: that he did favors official acts in his role as
Speaker 5: senator and as chair of the Foreign Relations Committee for
Speaker 5: these three businessmen who then paid him for those favors
Speaker 5: and cash and gold bars and a Mercedes convertible and
Speaker 5: some other stuff.
Speaker 1: The one hundred thousand dollars in gold bars sort of stands
Speaker 1: out because who has gold bars? And add to that
Speaker 1: his Google search for how much is one kilo of
Speaker 1: gold worth? Do you think the prosecutors framed this in
Speaker 1: a way to bring out the dramatic in it.
Speaker 5: Well, you know, there's always a little bit of flair
Speaker 5: for the drama, I think. You know, jackets stuffed with
Speaker 5: cash too has a sort of flare that looks good
Speaker 5: in the photos too. But you know, really, prosecutors have
Speaker 5: to prove three things. They have to prove that something
Speaker 5: of value was given, and that's the point of saying
Speaker 5: this cash was found, the gold bars, the car. They
Speaker 5: have to prove that official acts by the public official
Speaker 5: were promised or given. And then they have to prove
Speaker 5: the quid propo the connection between the two things. So
Speaker 5: you know, prosecutors have to prove all three of those things.
Speaker 5: So they're going to be careful to make sure to
Speaker 5: do that. But I think, you know, they just took
Speaker 5: advantage of the fact that this is really a textbook
Speaker 5: bribery case. You so clearly have all three of those things,
Speaker 5: and it's just so obvious. I mean, who keeps that
Speaker 5: kind of cash around? Who keeps it in that way?
Speaker 5: You know, not in a safe, stuffed in jackets and things.
Speaker 5: So I just think it was so photogenic. I guess,
Speaker 5: if you will, just such a kind of textbook, quintessential
Speaker 5: bribery case that it makes it easy to be a
Speaker 5: little bit dramatic with it.
Speaker 1: Tell me what you think of Menandez's explanation for the
Speaker 1: nearly five hundred thousand dollars in cash he had in
Speaker 1: the house for thirty years.
Speaker 3: I have withdrawn thousands of dollars in cash from my
Speaker 3: personal savings account, which I have kept for emergencies and
Speaker 3: because of the history of my family facing confiscation in Cuba.
Speaker 3: Now this may seem old fashioned, but these were moneys
Speaker 3: drawn from my personal savings account based on the income
Speaker 3: that I have lawfully derived over those thirty years.
Speaker 5: Yeah, that's just silly. I mean, he's really just begging
Speaker 5: them to do what would be called an unexplained wealth analysis, right, like, oh, really,
Speaker 5: that's all his legitimate money from his paychecks. All right, Well,
Speaker 5: let's look at what his paychecks are and what other
Speaker 5: means he has. I mean, is he independently wealthy? Does
Speaker 5: he have major investments that he converted to cash? You know,
Speaker 5: what is the explanation for having that kind of cash
Speaker 5: in the first place when you look at his bank
Speaker 5: accounts and how much money he makes being a senator.
Speaker 5: And I don't think it's going to stack up. So
Speaker 5: I doubt that that defense, well he kind of offered
Speaker 5: it in the first instance, is going to make its
Speaker 5: way into the trial. I think that they'll have to
Speaker 5: focus on other things if they end up actually taking
Speaker 5: this to trial.
Speaker 1: So what struck me? And you know, maybe this happens
Speaker 1: more often than I know, But how often do the
Speaker 1: FEDS test money for fingerprints and DNA especially?
Speaker 3: Yeah?
Speaker 5: Not very often. Yeah, I understand that there was some
Speaker 5: DNA sound on I think on an envelope that some
Speaker 5: of the money was in. You know, it's not a
Speaker 5: great conductor of fingerprints. You know, metal and other surfaces
Speaker 5: are much better. But you really do want to try
Speaker 5: if you can to establish the connection between the bribes
Speaker 5: and the people who were giving the bribes. So in
Speaker 5: this case, it makes sense to test if you think
Speaker 5: you can get something like fingerprints, and it worked. They
Speaker 5: were able to establish a link between that particular bunch
Speaker 5: of money and one of the business men who was
Speaker 5: one of the bribe wars and co defendants, so it
Speaker 5: worked for them.
Speaker 1: Is the toughest part of this case for the prosecution
Speaker 1: to prove the quid pro quo.
Speaker 5: I think actually in this case. I mean that often
Speaker 5: is the toughest I think in this case because they
Speaker 5: have such a wealth of evidence with the text that
Speaker 5: they recovered that they I think did a wire tap
Speaker 5: on that really sets out the scheme in the back
Speaker 5: and forth. So I think the most challenging thing in
Speaker 5: this case is actually proving the official acts that the
Speaker 5: things that Menendez did and promised to do for the
Speaker 5: bribe Wars his co defendants were actually technically official acts.
Speaker 5: Because over the years, the last ten or so years,
Speaker 5: the Supreme Court really has narrowed what that means to
Speaker 5: be an official act, and we don't yet exactly know
Speaker 5: the outside contours of that because you know, every time
Speaker 5: you litigate one of these cases and the Supreme Court
Speaker 5: speaks on it, then you kind of know on that
Speaker 5: particular set of facts. So you know whether or not
Speaker 5: every single thing that Menendez did and agreed to do
Speaker 5: will be ultimately deemed an official act under the Supreme
Speaker 5: Court's version of that is undetermined. I still think they
Speaker 5: have a strong case. I think many of the actions
Speaker 5: are clearly official acts. But that's where it gets a
Speaker 5: little bit muddy on the edges about what they can
Speaker 5: try to challenge.
Speaker 1: So he's also accused of giving Egyptian officials highly sensitive information.
Speaker 1: Is that part of the charges or is that just background?
Speaker 5: So that's a really interesting piece of this. They did
Speaker 5: not charge him with being a foreign agent or anything
Speaker 5: that would require them to prove that he basically was
Speaker 5: acting and he just interests against the US's interests. It
Speaker 5: is a piece of evidence in the bribery case because
Speaker 5: it's one of the things that he did for them, right,
Speaker 5: one of the things that he gave them was this information,
Speaker 5: and they bribed him for it. They gave him money
Speaker 5: or you know, whatever the case may be. In that particule,
Speaker 5: regular instance, they give him a bribe for that information.
Speaker 5: So it does come in. It's part of the bribery case,
Speaker 5: but it's not charged separately in terms of like a
Speaker 5: foreign agent charge or anything like that. And I think
Speaker 5: prosecutors were very smart about that, because charging that kind
Speaker 5: of case leads to all sorts of complications with classified information,
Speaker 5: makes discovery more complicated, makes the trial more complicated. They
Speaker 5: charged it just lean and mean, just the bribery, very strong, unclassified,
Speaker 5: easy to do discovery, easy to do the trial if
Speaker 5: it comes to that. So I think that was a
Speaker 5: wise strategic decision.
Speaker 1: Do you think the Justice Department learned from the last
Speaker 1: trial and didn't want the same thing to happen twice.
Speaker 5: Well, it's a different group of prosecutors. This prosecution is
Speaker 5: out of the Manhattan US Attorney's Office. The other one
Speaker 5: was out of Main Justice, So it's not the same people.
Speaker 5: But sure every time you see a case falter, you
Speaker 5: learn from that experience and you know the thing is
Speaker 5: here is really just a completely separate set of facts.
Speaker 5: You know, last time the charges involved someone allegedly bribing Menendez,
Speaker 5: who was a close personal friend, and ultimately I think
Speaker 5: the jurors couldn't figure out whether the official accidne were
Speaker 5: because of the bribes or because of the friendship here,
Speaker 5: there's no relationship like that. This was purely transactional. It's
Speaker 5: all laid out there in the text, so they don't
Speaker 5: have the same challenges. But yeah, I mean, anytime you
Speaker 5: have a loss, hopefully you learn something from it.
Speaker 1: Why is a Manhattan US attorney bringing this And how
Speaker 1: much of a disadvantage is that for Menandez not having
Speaker 1: a sort of a home court advantage.
Speaker 5: Well, I don't exactly know. I mean, it would depend
Speaker 5: in part on which FBI office started the investigation. You know,
Speaker 5: what they learned first that kind of triggered the case
Speaker 5: for them to trigger the investigation. You know, sometimes there
Speaker 5: are multiple offices involved, and then the Department of Justice
Speaker 5: main Justice will decide who gets it. So it's hard
Speaker 5: to know. You know, they obviously will have to have
Speaker 5: some ties to Manhattan or else they wouldn't have venue.
Speaker 5: But it's not exactly clear. And I mean, I think
Speaker 5: he probably would prefer to be in New Jersey because
Speaker 5: you know, those are his constituents. But you know, at
Speaker 5: the end of the day, everybody knows Bob Menendez. I
Speaker 5: don't know that he would get a better jury in
Speaker 5: New Jersey than he'll get in Manhattan. It's still if
Speaker 5: you want to think about it politically, it's still a
Speaker 5: very blue area. I guess if he's a Democratic senator,
Speaker 5: and you may think that that helps them. Now, I'm
Speaker 5: not exactly sure why I ended up there, but listen,
Speaker 5: that's my old shop, and so I'm biased, but I
Speaker 5: think they're the best prosecutors anywhere, So I think it's
Speaker 5: a good thing that it did.
Speaker 1: Coming up next, I'll continue this conversation with Jennifer Rogers
Speaker 1: and we'll talk about what possible defenses Menendez may have.
Speaker 1: I'm June Gross. When you're listening to Bloomberg, I've been
Speaker 1: talking to former federal prosecutor Jennifer Rogers about the federal
Speaker 1: charges against New Jersey Senator Bob Menendez. For just explain
Speaker 1: in a little more depth what happened during that twenty
Speaker 1: seventeen trial.
Speaker 5: Yeah, so there were a few things that happened.
Speaker 1: You know.
Speaker 5: First of all, as I said, there's been this kind
Speaker 5: of ten year period where the Supreme Court has been
Speaker 5: changing the law effectively in these public corruption cases, and
Speaker 5: so prosecutors really have been at a disadvantage in terms
Speaker 5: of figuring out what to charge, how to charge how
Speaker 5: to ask for jury instructions and then crossing their fingers
Speaker 5: that it would get all undone by the next public
Speaker 5: corruption case that went up to the Supreme Court. So
Speaker 5: some of that is kind of the uncertainty. But they
Speaker 5: charged two kinds of bribes in that case. And this
Speaker 5: basically is the relationship between the Senator Menendez and his
Speaker 5: close personal friend and ophthalmologists from Florida, doctor Melgan. And
Speaker 5: you know, they charged two kinds of bribes. They charged
Speaker 5: campaign donations. And the challenge with campaign donations, if you
Speaker 5: charge them and they are reported properly and so on,
Speaker 5: is you have to prove an explicit quid problem that like,
Speaker 5: I'm giving you these campaign donations in exchange for the
Speaker 5: following official acts, right, which is virtually impossible to actually get.
Speaker 5: So they had trouble with that one. They didn't have
Speaker 5: that proof of trial. And then they charged a set
Speaker 5: of bribes that were in the form of trips, basically
Speaker 5: trips where doctor Melgan and Senator Menendez went together on
Speaker 5: the private jet to the fancy home sometimes overseas, etc.
Speaker 5: And those are deemed gifts to Menendez, right, he didn't
Speaker 5: pay his friend doctor Melgan back for the expenses associated
Speaker 5: with those trips. But the problem with that theory is
Speaker 5: that I think a lot of the jurors thought, well,
Speaker 5: how do we know that that's not because of the friendship.
Speaker 5: I mean, if you had a really wealthy friend, maybe
Speaker 5: that friend would spring for you to go on vacation
Speaker 5: with him or her. Right, So they had trouble saying
Speaker 5: that the things that Senator Menendez did for doctor Melgan,
Speaker 5: and there were things, I mean, he did definitely try
Speaker 5: to influence certain official actions on behalf of doctor Melgan.
Speaker 5: Like that side of the case was okay, But the
Speaker 5: question is we're the bribes actually in exchange for those benefits,
Speaker 5: and that's where that case had trouble.
Speaker 1: Can you see a defense that Menandez could raise.
Speaker 5: The case is very strong, I think on all fronts.
Speaker 5: The most likely place where they have a little bit
Speaker 5: of wiggle room some arguments to make is the official
Speaker 5: act piece of it, because it's not entirely clear the
Speaker 5: outside limits of what an official act can be. We
Speaker 5: know from the Supreme Court case the McDonald case about
Speaker 5: the former Virginia governor that it has to be something governmental, right,
Speaker 5: not just that you do because you're a senator, for example.
Speaker 5: But it really goes to kind of a typical government function,
Speaker 5: so passing a piece of legislation, holding up a piece
Speaker 5: of legislation, doing an investigation in Congress like those are
Speaker 5: the sorts of things that would definitely be seemed to
Speaker 5: be an official act, but it's not one hundred percent
Speaker 5: clear that other things to just using your influence would
Speaker 5: necessarily clear that bar So they've charged him with or
Speaker 5: they've mentioned in the indictment that he tried to influence
Speaker 5: prosecutors in New Jersey about cases that his co defendants
Speaker 5: were interested in. They said he tried to influence an
Speaker 5: official at the US Department of Agriculture to help these
Speaker 5: co defendants in a business that they wanted. Those sorts
Speaker 5: of things are a little bit on the line, so,
Speaker 5: you know, I think they could be deemed to be
Speaker 5: official acts, but it's not one hundred percent clear. So
Speaker 5: if I'm menndez a lawyers, That's where I'm probably going
Speaker 5: to be looking and seeing if there are arguments to
Speaker 5: make there for you know, those things maybe distasteful, but
Speaker 5: are they technically official acts as far as the statute goes.
Speaker 5: That's what I'd be looking for.
Speaker 1: Do you think prosecutors are going to try to flip
Speaker 1: some of the other defendants, not his wife, but the others.
Speaker 5: They might, I assume would at least be open to
Speaker 5: talking to those lawyers and those defendants about that issue.
Speaker 5: I mean, you know, they have so many communications, they
Speaker 5: have all these text messages, and so I don't know
Speaker 5: that they need a cooperator in the way that you
Speaker 5: often really want one in a case like this. That said,
Speaker 5: prosecutors in my experience are always willing to listen to
Speaker 5: a defendant who wants to come forward and say, here's
Speaker 5: why I deserve a cooperation agreement. So I think they'll
Speaker 5: probably listen to them and listen. If they can provide
Speaker 5: evidence that they don't already have that will help them
Speaker 5: with their case, they probably would sign one of them
Speaker 5: up or two of them up, depending on you know
Speaker 5: what the facts are.
Speaker 1: Would all the defendants be tried together or do you
Speaker 1: think Menandez might be able to get his trial severed.
Speaker 5: I think they'll all be tried together. I mean, usually
Speaker 5: to conserve resources, they try to keep cases like this together.
Speaker 5: The only real reason he would have to try to
Speaker 5: sever it is if there are defenses that conflict with
Speaker 5: each other. You know, if there's no fair way to
Speaker 5: try them together because they're pointing the finger at each
Speaker 5: other in an antagonistic way, you know, that's where you
Speaker 5: would see a problem with something like that. But you know,
Speaker 5: I we'll have to see how it developed. I think
Speaker 5: there's a you know, there's a presumption for keeping cases
Speaker 5: like this together because obviously to try it twice, you know,
Speaker 5: not to mention five times with five defendants, would be
Speaker 5: just too much of a burden on the system.
Speaker 1: So this is a bit of an opinion question. But
Speaker 1: it seems like Senate Democrats have already tried and convicted
Speaker 1: him just based on the allegations and the complaint. I'm
Speaker 1: wondering if you think that's because the allegations are so
Speaker 1: striking or just because it's politics.
Speaker 5: You know, it's hard to know what they're all thinking.
Speaker 5: As far as the political side. I will say there
Speaker 5: might be a bit of fatigue with Senator Menendez because
Speaker 5: we have been through this before, and even though he
Speaker 5: ended up with a hung jury and not being convicted,
Speaker 5: you know, there were clear ethical violations there the Senate
Speaker 5: down So you know, here we go again, right on
Speaker 5: the heels of the determination that he wouldn't be retried
Speaker 5: on that case. He's you know, meeting up with these
Speaker 5: people and starting a similar scheme all over again. I
Speaker 5: also think that the nature of the evidence has explained
Speaker 5: in the indictment is pretty black and white. It's not
Speaker 5: as if they say, you know, in the indictment, we
Speaker 5: have a cooperating witness c W one and the witness
Speaker 5: says X, Y and Z, and you can think, well,
Speaker 5: maybe the witness is lying, maybe his credibility problems. You know,
Speaker 5: they have these communications, they are what they are, black
Speaker 5: and white. There will be transcripts, so you know, I
Speaker 5: think those things together probably suggest to these politicians that
Speaker 5: there's not a lot of opportunity to wiggle out of this.
Speaker 5: And you know, we'll see when the discovery gets turned over,
Speaker 5: which should be pretty soon, whether Menendez comes off of
Speaker 5: his claim that he won't resign and you know, is
Speaker 5: going to surge forward. I think once he actually confirms
Speaker 5: that what is in the indictment is accurate, he's probably
Speaker 5: going to be talking to his lawyers about how to
Speaker 5: try to mitigate this and look for some sort of
Speaker 5: plea deal to a lesser offense or something like that.
Speaker 1: You think that's possible that the prosecutors would agree to
Speaker 1: a lesser offense.
Speaker 5: Sure, sure, I mean the trick in a case like
Speaker 5: this is finding one, honestly, because all three of these
Speaker 5: offenses that they've charged are really just different ways to
Speaker 5: charge bribery, and the sentencing guidelines are going to be
Speaker 5: the same for all of them. So the trick would
Speaker 5: be trying to find something with a lesser guidelines range.
Speaker 5: But yeah, prosecutors are always looking to save resources by
Speaker 5: pleading things out. And you know, when you have a case,
Speaker 5: a public corruption case with a corrupt politician who is
Speaker 5: still in office, prosecutors have an interest in getting that
Speaker 5: person out of office. So if he comes in and says,
Speaker 5: you know, listen, I'd like to take a plea, they're like, great, that,
Speaker 5: you know, wraps up our case. We don't have to
Speaker 5: do a long period of pre trial and then go
Speaker 5: to trial. And if it includes a deal that he'll
Speaker 5: resign all about, you know, he's he's out sooner than
Speaker 5: he would otherwise be. So I'm sure prosecutors would be
Speaker 5: willing to think about that. The question is, you know,
Speaker 5: what can they find it would be agreeable to both
Speaker 5: sides For him to plead.
Speaker 1: To Do you think that any deal would have to
Speaker 1: include jail time.
Speaker 5: I don't know. Yeah, I don't know where prosecutors would
Speaker 5: come out on that. You know, on the one hand,
Speaker 5: he's on the older side, you know, is he I
Speaker 5: was going to say, is a recidivus? I guess actually
Speaker 5: if he is a recidivist, because we had the other
Speaker 5: case and then this one on the heels of it.
Speaker 5: But if he's removed from office, you know, the opportunity
Speaker 5: for this sort of thing will be obviously significantly lessened.
Speaker 5: So I'm not sure whether they would insist on something
Speaker 5: with jail time. I mean, prosecutors never get to decide
Speaker 5: the sentence anyway. Even if you agree on a range,
Speaker 5: is ultimately up to the judge. So you know, I
Speaker 5: certainly could see them picking a range that is low
Speaker 5: enough that a judge might decide, you know, ultimately to
Speaker 5: just give probation. But you know, they know the case
Speaker 5: much better obviously than we all do from the outside,
Speaker 5: So yeah, I'm not sure how they would view the
Speaker 5: and decide, you know, what they think is the appropriate Then.
Speaker 1: What's interesting is several people told Politico that after Friday's
Speaker 1: indictment Menandez seemed emboldened almost. And I saw he was
Speaker 1: being questioned by reporters yesterday as he was running through
Speaker 1: the Senate halls, and he said, because I'm innocent, what's
Speaker 1: wrong with you guys? But maybe when he sees the evidence.
Speaker 5: Yeah, I mean he may just his knee jerk reaction
Speaker 5: may have been, you know, I beat you before I
Speaker 5: can beat you again, forget about it. But you know,
Speaker 5: in the cold, sober light of day, when they have
Speaker 5: the evidence, when he's sitting down with his lawyers, and
Speaker 5: when they explain to him the differences between this case
Speaker 5: and the prior case, you know, I suspect he won't
Speaker 5: have so much bravado, at least in private. You know,
Speaker 5: who knows what he'll continue to maintain in public. He's
Speaker 5: kind of on the ropes politically, right with all of
Speaker 5: these colleagues of him, of his calling for his resignation.
Speaker 5: So maybe he feels like that's the face he has
Speaker 5: to put on to fight that battle in this moment.
Speaker 5: But you know, behind the scenes, I'm sure he'll be
Speaker 5: more thoughtful about this case.
Speaker 1: So always great to have you on, Jennifer and to
Speaker 1: get your insights that's former federal prosecutor Jennifer Rogers a
Speaker 1: lecture in law at Columbia Law School. And that's it
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