1 00:00:03,200 --> 00:00:14,360 Speaker 1: This is Bloomberg Law with June Brusso from Bloomberg Radio. 2 00:00:15,280 --> 00:00:18,319 Speaker 2: So it is because of missus Wilson and so many 3 00:00:18,400 --> 00:00:21,799 Speaker 2: teachers like her, that I stand before you as Vice 4 00:00:21,840 --> 00:00:28,159 Speaker 2: President of the United States of America and that I 5 00:00:28,200 --> 00:00:31,880 Speaker 2: am running to become president of the United States of America. 6 00:00:32,640 --> 00:00:36,520 Speaker 3: It all happened rather quickly. After President Joe Biden ended 7 00:00:36,520 --> 00:00:40,760 Speaker 3: his reelection bid on Sunday. Vice President Kamala Harris sealed 8 00:00:40,800 --> 00:00:45,560 Speaker 3: her status as the presumptive Democratic presidential nominee. By Monday night, 9 00:00:45,880 --> 00:00:49,560 Speaker 3: after getting more than enough pledged delegates to cinch the nomination. 10 00:00:50,120 --> 00:00:54,080 Speaker 3: The Vice president took over Biden's campaign, which was renamed 11 00:00:54,200 --> 00:00:57,800 Speaker 3: Harris for President, and his campaign war chest of about 12 00:00:57,880 --> 00:01:02,200 Speaker 3: ninety six million dollars. Just as quickly, Republicans started a 13 00:01:02,280 --> 00:01:06,680 Speaker 3: multi pronged effort to steymy Harris. On Tuesday, Donald Trump's 14 00:01:06,680 --> 00:01:10,679 Speaker 3: presidential campaign filed a complaint with the Federal Election Commission, 15 00:01:10,880 --> 00:01:14,520 Speaker 3: claiming that the transfer of Biden's money to Harris violates 16 00:01:14,560 --> 00:01:18,320 Speaker 3: the law, and some Republicans, like House Speaker Mike Johnson, 17 00:01:18,760 --> 00:01:23,039 Speaker 3: began raising the specter of lawsuits challenging Harris's place on 18 00:01:23,120 --> 00:01:24,080 Speaker 3: the top of the ticket. 19 00:01:24,280 --> 00:01:27,600 Speaker 4: We have fifty different systems in each of the states 20 00:01:27,640 --> 00:01:30,520 Speaker 4: when it comes to presidential elections and choosing electors and 21 00:01:30,560 --> 00:01:32,399 Speaker 4: all the rest. And in some of the states there 22 00:01:32,400 --> 00:01:35,560 Speaker 4: are impediments to just switching someone out like that. Remember 23 00:01:35,640 --> 00:01:38,839 Speaker 4: that this claims to be the Party of Democracy, small 24 00:01:38,920 --> 00:01:42,360 Speaker 4: D democracy right. Fourteen million people went through the process 25 00:01:42,400 --> 00:01:45,720 Speaker 4: and chose this nominee, Joe Biden. Now a handful of 26 00:01:45,720 --> 00:01:48,120 Speaker 4: people have gotten together and decided he's no longer suitable. 27 00:01:48,400 --> 00:01:49,840 Speaker 4: That's not how this system works. 28 00:01:50,040 --> 00:01:52,600 Speaker 3: Or is it just that Johnson doesn't understand how the 29 00:01:52,640 --> 00:01:56,440 Speaker 3: system works? Joining me is elections law expert Richard Brefald, 30 00:01:56,560 --> 00:02:00,760 Speaker 3: a professor at Columbia Law School. Rich start where it 31 00:02:00,800 --> 00:02:03,840 Speaker 3: always starts, the money. Does Harris have the right to 32 00:02:03,880 --> 00:02:07,720 Speaker 3: take over the money raised by Biden's reelection campaign? 33 00:02:08,160 --> 00:02:10,200 Speaker 5: So the money is sort of in three parts, And 34 00:02:10,240 --> 00:02:13,000 Speaker 5: the only real issue was the money technically that went 35 00:02:13,040 --> 00:02:16,120 Speaker 5: to the Biden Harris campaign. So the money that goes 36 00:02:16,120 --> 00:02:18,480 Speaker 5: to the Democratic Party, of course she can use. And 37 00:02:18,520 --> 00:02:21,720 Speaker 5: I think they also had a pack going, a superpack going, 38 00:02:21,760 --> 00:02:23,560 Speaker 5: and of that, of course they can use. The issue 39 00:02:23,600 --> 00:02:27,240 Speaker 5: was the money that went to Biden Harris specifically, and 40 00:02:27,280 --> 00:02:30,200 Speaker 5: there I think it's a smaller amount, maybe like ninety million, 41 00:02:30,240 --> 00:02:32,680 Speaker 5: but I'm not sure about that. The assumption of all 42 00:02:32,720 --> 00:02:35,400 Speaker 5: the campaigns finance people I've spoken to is yes, as 43 00:02:35,440 --> 00:02:38,399 Speaker 5: long as Harris continues to be on the ticket, it's 44 00:02:38,480 --> 00:02:40,520 Speaker 5: money that she can use. The issue would have been 45 00:02:40,560 --> 00:02:43,800 Speaker 5: more if the Democrats nominated someone else, then I think 46 00:02:44,000 --> 00:02:46,920 Speaker 5: the Biden Harris committee would have had to transfer the 47 00:02:46,919 --> 00:02:50,160 Speaker 5: money to the Democratic Party, and the Democratic Party would 48 00:02:50,160 --> 00:02:52,679 Speaker 5: have the money. But as long as she's the nominee, 49 00:02:52,720 --> 00:02:55,000 Speaker 5: she is part of Biden Harris, which I think now 50 00:02:55,000 --> 00:02:57,760 Speaker 5: has already been renamed Harris. So the assumption of just 51 00:02:57,800 --> 00:03:00,839 Speaker 5: about every campaign finance lawyer I know is that, yes, 52 00:03:01,240 --> 00:03:04,480 Speaker 5: she can use it. I think the overwhelming assumption is 53 00:03:04,520 --> 00:03:07,280 Speaker 5: that the money went to her also it was going 54 00:03:07,639 --> 00:03:10,720 Speaker 5: to Biden and Harris. Harris is still running, so I 55 00:03:10,760 --> 00:03:13,720 Speaker 5: think that the vast majority of Camping c and An's 56 00:03:13,760 --> 00:03:16,440 Speaker 5: lawyers and scholars believe that it's money she can use. 57 00:03:17,080 --> 00:03:21,960 Speaker 3: Trump's presidential campaign filed a complaint with the Federal Election Commission. 58 00:03:22,280 --> 00:03:25,640 Speaker 3: It seems like a long shot, though for a couple 59 00:03:25,680 --> 00:03:30,200 Speaker 3: of reasons. Harris has sixty days to respond, and the 60 00:03:30,240 --> 00:03:34,920 Speaker 3: Federal Election Commission is known for moving at a glacial pace, 61 00:03:35,320 --> 00:03:37,400 Speaker 3: so at the worst it would just be a question 62 00:03:37,440 --> 00:03:38,800 Speaker 3: of paying fines later. 63 00:03:39,440 --> 00:03:41,680 Speaker 5: Not only it takes a long to move, but you 64 00:03:41,680 --> 00:03:44,080 Speaker 5: would need to get four votes, and there are three 65 00:03:44,120 --> 00:03:46,680 Speaker 5: Democrats who sit on the Commission. There's a six member 66 00:03:46,720 --> 00:03:51,120 Speaker 5: commission of three Democrats and the Republicans, and on most 67 00:03:51,200 --> 00:03:53,960 Speaker 5: major things they tend to vote on party mind, So 68 00:03:54,000 --> 00:03:55,960 Speaker 5: it just seems right. There's both the time that would 69 00:03:55,960 --> 00:03:59,600 Speaker 5: take and likely vote, and I think given the rules 70 00:03:59,600 --> 00:04:01,520 Speaker 5: of the election law, I think it will be very 71 00:04:01,560 --> 00:04:04,160 Speaker 5: hard for Republicans to side step the Commission and go 72 00:04:04,200 --> 00:04:07,880 Speaker 5: directly to court. Now somebody might try that, but I 73 00:04:07,920 --> 00:04:10,960 Speaker 5: do think it's kind of a lost cause. Given the 74 00:04:10,960 --> 00:04:13,040 Speaker 5: court system today. You never know one hundred percent, But 75 00:04:13,080 --> 00:04:15,240 Speaker 5: I think, as I said, the overwhelming belief is that 76 00:04:15,280 --> 00:04:17,720 Speaker 5: the money she could use and would be very unlikely 77 00:04:18,040 --> 00:04:21,279 Speaker 5: the Federal Election Commission would certainly during the course of 78 00:04:21,279 --> 00:04:23,560 Speaker 5: the campaign, but at any time come and say it 79 00:04:23,560 --> 00:04:24,480 Speaker 5: wasn't improper use. 80 00:04:24,920 --> 00:04:29,000 Speaker 3: Speaker Mike Johnson says he expects they'll be litigation, saying 81 00:04:29,040 --> 00:04:32,160 Speaker 3: there are fifty different systems and that in some states 82 00:04:32,200 --> 00:04:36,200 Speaker 3: there are impediments to swapping candidates. Could there be losses 83 00:04:36,279 --> 00:04:37,480 Speaker 3: on the basis of the switch. 84 00:04:38,000 --> 00:04:41,000 Speaker 5: It seems like a totally ridiculous argument. The party doesn't 85 00:04:41,040 --> 00:04:43,480 Speaker 5: have a candidate. The party doesn't have a candidate until 86 00:04:43,480 --> 00:04:46,760 Speaker 5: they make a nomination. Biden was never nominated. If Democratic 87 00:04:46,800 --> 00:04:49,800 Speaker 5: convention has not met, even the so called virtual role 88 00:04:49,839 --> 00:04:53,280 Speaker 5: call we're talking about hasn't happened, the Democratic Party gets 89 00:04:53,279 --> 00:04:56,880 Speaker 5: to decide who the Democratic Party's nominee is, and they 90 00:04:56,920 --> 00:04:59,200 Speaker 5: haven't made a choice yet. I don't think there'd be 91 00:04:59,240 --> 00:05:02,200 Speaker 5: an issue even that's what was answered the nomination, because 92 00:05:02,240 --> 00:05:04,240 Speaker 5: they still get to write their own rules. Just to 93 00:05:04,240 --> 00:05:07,800 Speaker 5: make it clear, Biden was never the nominee. He was 94 00:05:07,960 --> 00:05:11,880 Speaker 5: the presumptive nominee. He was never the nominee, and so 95 00:05:12,480 --> 00:05:16,280 Speaker 5: there's no challenge to make. There's no substitution, No ballots 96 00:05:16,320 --> 00:05:20,800 Speaker 5: have been printed, and so it's it's totally blowing smoke. 97 00:05:21,320 --> 00:05:24,239 Speaker 3: So then what about the June twenty first memo from 98 00:05:24,360 --> 00:05:28,480 Speaker 3: the Heritage Foundation, the conservative think tank, where it says 99 00:05:28,480 --> 00:05:32,240 Speaker 3: it views swing states Georgia, Nevada, and Wisconsin as likely 100 00:05:32,279 --> 00:05:36,880 Speaker 3: arenas for pre election legal challenges because they have specific 101 00:05:36,960 --> 00:05:40,640 Speaker 3: procedures for withdrawal of a presidential nominee. 102 00:05:40,800 --> 00:05:42,719 Speaker 5: The only way there would be anything is that Biden 103 00:05:42,760 --> 00:05:46,400 Speaker 5: had actually been nominated. But Biden wasn't nominated. It doesn't 104 00:05:46,400 --> 00:05:49,720 Speaker 5: matter that Biden won primary there because many times a 105 00:05:49,800 --> 00:05:53,400 Speaker 5: candidate who's won primary insup states who's is the nomination. 106 00:05:53,720 --> 00:05:55,960 Speaker 5: So the fact that Harris didn't win the primary in 107 00:05:55,960 --> 00:05:58,599 Speaker 5: the NY of the states is irrelevant. Many candidate who 108 00:05:58,600 --> 00:06:02,279 Speaker 5: are an ultimate nominees lost some primaries, they still got 109 00:06:02,279 --> 00:06:04,000 Speaker 5: to be on the ballots of the states where they 110 00:06:04,040 --> 00:06:06,920 Speaker 5: lost the primary. So I think they might have some 111 00:06:07,080 --> 00:06:09,839 Speaker 5: argument that he'd actually been nominated and she was being 112 00:06:09,839 --> 00:06:12,880 Speaker 5: put in to replace him, but he was never nominated. 113 00:06:13,120 --> 00:06:17,120 Speaker 3: Which do you see any other legal complications of her candidacy. 114 00:06:17,600 --> 00:06:20,560 Speaker 5: No, I don't. I don't. I mean, I think again, 115 00:06:20,640 --> 00:06:23,919 Speaker 5: there's a potential potential challenge on the money when it 116 00:06:23,960 --> 00:06:27,320 Speaker 5: goes from Biden Harris to Harris somebody else. But I 117 00:06:27,360 --> 00:06:30,640 Speaker 5: do think there it's still Harris. I think that challenge 118 00:06:30,680 --> 00:06:34,680 Speaker 5: is pretty weak. There's absolutely no challenge on her being 119 00:06:34,720 --> 00:06:37,760 Speaker 5: on the ballot because you say, one more time, Biden 120 00:06:37,920 --> 00:06:41,760 Speaker 5: was never the nominee, so there's no issue about changing nominees. 121 00:06:42,120 --> 00:06:45,640 Speaker 5: He hadn't been nominated yet and you know, it was 122 00:06:45,839 --> 00:06:48,080 Speaker 5: not likely that he would have been defeated at the convention. 123 00:06:48,240 --> 00:06:50,919 Speaker 5: But there had been contested conventions. I mean, maybe the 124 00:06:50,960 --> 00:06:54,440 Speaker 5: less truly congested one was in nineteen seventy six when 125 00:06:54,520 --> 00:06:58,560 Speaker 5: Ronald Reagan was trying to unseat Gerald Ford. He came close, 126 00:06:58,680 --> 00:07:00,560 Speaker 5: and if he had done that, he would have been 127 00:07:00,600 --> 00:07:03,080 Speaker 5: the nominee. And the fact that forward with the incumbent 128 00:07:03,080 --> 00:07:05,159 Speaker 5: president and had one a bunch of states and primaries 129 00:07:05,320 --> 00:07:06,320 Speaker 5: would have been irrelevant. 130 00:07:06,640 --> 00:07:08,760 Speaker 3: So do you have any idea what Mike Johnson is 131 00:07:08,800 --> 00:07:09,720 Speaker 3: talking about? Then? 132 00:07:10,000 --> 00:07:11,560 Speaker 5: I have no idea what he's talking about. I mean, 133 00:07:11,560 --> 00:07:13,120 Speaker 5: I mean, some of the noise he's making is that 134 00:07:13,160 --> 00:07:16,800 Speaker 5: it's undemocratic, small d democratic. But the parties get to 135 00:07:16,800 --> 00:07:19,800 Speaker 5: write their own rules about who the nominees are. Supreme 136 00:07:19,800 --> 00:07:22,560 Speaker 5: Court has said that, going back to contested conventions in 137 00:07:22,560 --> 00:07:26,120 Speaker 5: the nineteen seventies, This is the parties are private organizations. 138 00:07:26,280 --> 00:07:28,200 Speaker 5: They get to write their own rules and to choose 139 00:07:28,240 --> 00:07:30,520 Speaker 5: their own nominees. And it looks like they're going to 140 00:07:30,600 --> 00:07:34,080 Speaker 5: choose to nominate Harris. If they do nominate Harris, she's 141 00:07:34,120 --> 00:07:36,480 Speaker 5: the nominee. She's the one who gets on the ballot. 142 00:07:36,680 --> 00:07:39,200 Speaker 5: And if for some reason, they choose to nominate somebody 143 00:07:39,200 --> 00:07:41,640 Speaker 5: else because something else happened in the next three weeks, 144 00:07:41,720 --> 00:07:43,240 Speaker 5: that person would be the nominee. 145 00:07:43,440 --> 00:07:45,520 Speaker 3: And what do you think about Johnson's argument that this 146 00:07:45,640 --> 00:07:50,280 Speaker 3: violates democratic principles that voters chose Biden in the primaries 147 00:07:50,560 --> 00:07:51,679 Speaker 3: and now they're getting Harris. 148 00:07:52,120 --> 00:07:54,880 Speaker 4: There's a reason it's unprecedented. You don't just, you know, 149 00:07:54,960 --> 00:07:58,080 Speaker 4: steamroll the rules in the process because you decide that 150 00:07:58,120 --> 00:07:59,640 Speaker 4: your candidate is no longer suitable. 151 00:08:00,000 --> 00:08:02,360 Speaker 5: I mean, I think, for one thing, Biden was always 152 00:08:02,440 --> 00:08:05,920 Speaker 5: running with Harris as his teammate, so to some extent, 153 00:08:05,960 --> 00:08:08,560 Speaker 5: they're still getting one of their choices. But I think 154 00:08:08,600 --> 00:08:11,120 Speaker 5: in the end, remember, the winner of the primary in 155 00:08:11,160 --> 00:08:14,160 Speaker 5: any one state is not guaranteed or in many states. 156 00:08:14,200 --> 00:08:17,280 Speaker 5: I mean, going back to nineteen sixty eight, Hubert Humphrey 157 00:08:17,320 --> 00:08:20,239 Speaker 5: didn't run any primaries and he was the nominee. Eugene 158 00:08:20,280 --> 00:08:23,920 Speaker 5: McCarthy won more primaries than Hubert Humphrey, but Hubert Humphrey 159 00:08:23,960 --> 00:08:24,640 Speaker 5: was the nominee. 160 00:08:25,000 --> 00:08:29,040 Speaker 3: Everyone agrees on one thing, this is unprecedented. But is 161 00:08:29,080 --> 00:08:33,000 Speaker 3: there anything in presidential history that would be analogous. 162 00:08:33,280 --> 00:08:35,200 Speaker 5: It's hard to make an analogy where there was somebody 163 00:08:35,240 --> 00:08:40,160 Speaker 5: who was so clearly the presumptive nominee and then who 164 00:08:40,280 --> 00:08:42,559 Speaker 5: pulls out at the last minute. There have been a 165 00:08:42,600 --> 00:08:46,120 Speaker 5: couple of elections where a candidate dies that the person's 166 00:08:46,120 --> 00:08:48,760 Speaker 5: already been nominated, and then there's a scrambled to place 167 00:08:48,800 --> 00:08:52,079 Speaker 5: that candidate. That has happened, But I can't recall anything 168 00:08:52,280 --> 00:08:55,679 Speaker 5: like this where there was somebody who had won all 169 00:08:55,679 --> 00:08:58,439 Speaker 5: the primaries, was the presumptive nominee and then decides no, 170 00:08:58,600 --> 00:09:02,760 Speaker 5: I'm not going to run, and the party quickly rallies 171 00:09:02,800 --> 00:09:05,920 Speaker 5: around another person. But again, this is the person who 172 00:09:06,000 --> 00:09:08,760 Speaker 5: was his number two. It's not a challenger who is 173 00:09:08,800 --> 00:09:13,640 Speaker 5: going to be chosen. So it is unprecedented, but it's utterly, 174 00:09:13,960 --> 00:09:17,079 Speaker 5: entirely consistent with the rules. Maybe just leave it at that. 175 00:09:17,640 --> 00:09:20,120 Speaker 5: Is that again, just to make it clear, he was 176 00:09:20,160 --> 00:09:23,320 Speaker 5: never the nominee, So they're not replacing a nominee. They're 177 00:09:23,360 --> 00:09:26,680 Speaker 5: just picking a nominee. And when people were donating money, 178 00:09:26,720 --> 00:09:30,000 Speaker 5: they were donating money to Biden Harris. It looks like they're. 179 00:09:29,880 --> 00:09:33,080 Speaker 3: Still going to get Harris, which delegates are planning a 180 00:09:33,200 --> 00:09:36,520 Speaker 3: virtual roll call vote within the next two weeks to 181 00:09:36,640 --> 00:09:40,360 Speaker 3: confirm Harris as their nominee. For president. Just suppose that 182 00:09:40,440 --> 00:09:41,880 Speaker 3: doesn't happen for some reason. 183 00:09:42,640 --> 00:09:45,480 Speaker 5: The way delegates work in the Democratic Party, even if 184 00:09:45,520 --> 00:09:48,199 Speaker 5: Biden were running, the nature of the pledge is it's 185 00:09:48,240 --> 00:09:50,640 Speaker 5: like an honor pledge or a good faith pledge. So 186 00:09:50,760 --> 00:09:54,120 Speaker 5: even the pledge, delegates actually could have voted for someone else. 187 00:09:54,280 --> 00:09:56,600 Speaker 5: So the fact that they've kind of announced a commitment 188 00:09:56,640 --> 00:10:00,280 Speaker 5: to her, they're not legally pledged to her, so people 189 00:10:00,320 --> 00:10:02,319 Speaker 5: could change their minds. I mean, I'm not saying that's 190 00:10:02,320 --> 00:10:04,760 Speaker 5: going to happen, but I think the real issue is 191 00:10:05,040 --> 00:10:07,520 Speaker 5: I think I saw Mary and Williamson I might have declared. 192 00:10:08,040 --> 00:10:10,680 Speaker 5: I think under the rules of the Democratic Party, anyone 193 00:10:10,720 --> 00:10:13,360 Speaker 5: who wants to be nominated would need to support of 194 00:10:13,440 --> 00:10:16,040 Speaker 5: three hundred delegates, with no more than fifty from one state. 195 00:10:16,480 --> 00:10:18,640 Speaker 5: And at this point it doesn't seem like there'll be 196 00:10:18,679 --> 00:10:21,160 Speaker 5: any other candidate, so I think in that sense, she 197 00:10:21,280 --> 00:10:23,800 Speaker 5: has it wrapped up. None of the other prominent figures 198 00:10:23,800 --> 00:10:26,720 Speaker 5: in Democratic parties have indicated any interest in running. I 199 00:10:26,720 --> 00:10:28,839 Speaker 5: think at this point they've all endorsed her, so in 200 00:10:28,960 --> 00:10:33,240 Speaker 5: some sense it's technically open. But she's going to be nominated, presumably, 201 00:10:33,320 --> 00:10:37,719 Speaker 5: if not by acclamation then by some overwhelming quote, and. 202 00:10:37,679 --> 00:10:40,640 Speaker 3: I guess the only mystery left is who she'll choose 203 00:10:40,679 --> 00:10:43,640 Speaker 3: as vice president. Thanks so much, rich for clearing up 204 00:10:43,679 --> 00:10:47,960 Speaker 3: the confusion and ending the speculation. That's Professor Richard Rfault 205 00:10:48,080 --> 00:10:50,840 Speaker 3: of Columbia Law School coming up next on the Bloomberg 206 00:10:51,000 --> 00:10:53,680 Speaker 3: Law Show. You may remember in late May when the 207 00:10:53,920 --> 00:10:58,079 Speaker 3: Justice Department filed a major antitrust lawsuit to break up 208 00:10:58,200 --> 00:11:02,079 Speaker 3: Live Nation and Ticketmaster. Well, we've just seen Live Nation's 209 00:11:02,160 --> 00:11:06,040 Speaker 3: first response, and it's pretty underwhelming. I'm June Grosso and 210 00:11:06,080 --> 00:11:07,280 Speaker 3: you're listening to Bloomberg. 211 00:11:09,920 --> 00:11:15,560 Speaker 6: Ticketmaster can impose a seemingly endless list of fees on fans. 212 00:11:16,280 --> 00:11:22,679 Speaker 6: Those include ticketing fees, service fees, convenience fees, platinum fees, 213 00:11:23,120 --> 00:11:28,480 Speaker 6: price master fees, per order fees, handling fees, and payment 214 00:11:28,600 --> 00:11:29,600 Speaker 6: processing fees. 215 00:11:30,240 --> 00:11:34,520 Speaker 3: Anyone who's bought concert tickets on Ticketmaster can probably relate 216 00:11:34,559 --> 00:11:38,520 Speaker 3: to Attorney General Merrick Garland's description of the seemingly non 217 00:11:38,679 --> 00:11:43,360 Speaker 3: ending fees to purchase. Ticketmaster, the country's largest ticketing company, 218 00:11:43,600 --> 00:11:48,040 Speaker 3: and its parent company, Live Nation, the country's largest concert promoter, 219 00:11:48,520 --> 00:11:52,480 Speaker 3: have a long history of clashes with major artists, including 220 00:11:52,480 --> 00:11:56,040 Speaker 3: the fiasco in twenty twenty two. When the website crashed 221 00:11:56,120 --> 00:12:00,400 Speaker 3: during a pre sale for Taylor Swift Stadium tour, led 222 00:12:00,400 --> 00:12:03,920 Speaker 3: to congressional hearings. Garland said it was time for fans 223 00:12:03,960 --> 00:12:07,079 Speaker 3: and artists to stop paying the price for the monopoly, 224 00:12:07,480 --> 00:12:10,240 Speaker 3: and so the Justice Department and more than two dozen 225 00:12:10,320 --> 00:12:14,120 Speaker 3: states filed a sweeping anti trusts lawsuit in May to 226 00:12:14,240 --> 00:12:16,920 Speaker 3: force the breakup of Live Nation and Ticketmaster. 227 00:12:17,679 --> 00:12:21,880 Speaker 6: Live Nation suffocates its competition using a variety of tactics, 228 00:12:22,320 --> 00:12:27,520 Speaker 6: from acquisitions of smaller regional promoters and venues to threats 229 00:12:27,559 --> 00:12:32,360 Speaker 6: and retaliation to agreements with rivals designed to neutralize them. 230 00:12:32,760 --> 00:12:37,839 Speaker 6: This has included acquiring or co opting key independent promoters. 231 00:12:38,200 --> 00:12:42,160 Speaker 3: Live Nation denies its a monopoly, and its CFO, Joe Burke, 232 00:12:42,240 --> 00:12:45,800 Speaker 3: told told the Senate Judiciary Committee last year that it 233 00:12:45,920 --> 00:12:48,320 Speaker 3: was not responsible for high ticket prices. 234 00:12:48,559 --> 00:12:52,120 Speaker 7: Pricing and distribution strategies are determined by the artists and 235 00:12:52,160 --> 00:12:55,680 Speaker 7: their teams. Service fees, even if they're called ticketing fees, 236 00:12:56,080 --> 00:12:59,440 Speaker 7: are retained mainly by the venues in their portion of 237 00:12:59,440 --> 00:13:03,240 Speaker 7: the service fee. The Ticketmaster retains has been falling steadily 238 00:13:03,280 --> 00:13:04,160 Speaker 7: over time. 239 00:13:04,240 --> 00:13:07,920 Speaker 3: But Live Nation's first official response to the lawsuit, in 240 00:13:07,960 --> 00:13:11,920 Speaker 3: a letter to the trial judge is really underwhelming according 241 00:13:11,960 --> 00:13:15,720 Speaker 3: to anti trust experts, and one of those experts joins me. Now, 242 00:13:16,000 --> 00:13:19,400 Speaker 3: Harry First, a professor at NYU Law School. Harry start 243 00:13:19,440 --> 00:13:22,520 Speaker 3: by telling us about the Justice Department's anti trust case. 244 00:13:23,120 --> 00:13:26,120 Speaker 8: Okay, so this is in some ways basically a suit 245 00:13:26,200 --> 00:13:29,400 Speaker 8: to correct a bad mistake the Justice Department made in 246 00:13:29,480 --> 00:13:33,280 Speaker 8: twenty ten. So it's taken them a while, but eventually 247 00:13:33,640 --> 00:13:36,320 Speaker 8: anti trust enforcers are trying to get it right. So 248 00:13:36,480 --> 00:13:40,400 Speaker 8: what happened was in two thousand and nine, Ticketmaster and 249 00:13:40,559 --> 00:13:45,080 Speaker 8: Live Nation decided to merge, and the Justice Department looked 250 00:13:45,080 --> 00:13:49,600 Speaker 8: at it. Ticketmaster, of course, sells ticketing services to major 251 00:13:49,679 --> 00:13:53,680 Speaker 8: venues around the country what's now called primary ticketing services. 252 00:13:53,760 --> 00:13:57,840 Speaker 8: The secondary markets weren't so developed then reselling and Live 253 00:13:57,920 --> 00:14:01,079 Speaker 8: Nation was the biggest promoter at the time and it 254 00:14:01,240 --> 00:14:04,640 Speaker 8: sort of entered the ticketing market. But basically this was 255 00:14:05,040 --> 00:14:08,760 Speaker 8: what's referred to as a vertical merger, not really competitors 256 00:14:08,880 --> 00:14:13,040 Speaker 8: or not much competitors yet. But at the time the 257 00:14:13,120 --> 00:14:17,520 Speaker 8: Justice Department understood what was going on. So Live Nation, 258 00:14:17,679 --> 00:14:22,520 Speaker 8: which was a big promoter and booker of venues, wanted 259 00:14:22,560 --> 00:14:28,520 Speaker 8: to put its shows into venues that would use Ticketmaster ticketing. 260 00:14:28,720 --> 00:14:31,960 Speaker 8: So the venues knew that if they wanted to get 261 00:14:32,080 --> 00:14:35,240 Speaker 8: you a really good show, the best way to do 262 00:14:35,360 --> 00:14:39,640 Speaker 8: it was to use Ticketmaster because they really needed Live 263 00:14:39,760 --> 00:14:45,160 Speaker 8: Nations talents. So Live Nation, as a promoter of major tours, 264 00:14:45,200 --> 00:14:48,920 Speaker 8: thought that this tie up would sort of help both businesses, 265 00:14:49,000 --> 00:14:53,120 Speaker 8: as did Ticketmaster. It would give Ticketmaster and edge over 266 00:14:53,200 --> 00:14:56,440 Speaker 8: competitors in the ticketing business, and it would increase Live 267 00:14:56,560 --> 00:15:00,280 Speaker 8: Nations revenues because now they owned a ticket in company. 268 00:15:00,440 --> 00:15:05,520 Speaker 8: So control the talent, control entry or choice of the venues, 269 00:15:05,760 --> 00:15:09,680 Speaker 8: and you control ticketing. So at the time, the Justice 270 00:15:09,720 --> 00:15:13,600 Speaker 8: Department knew this, there was testimony about this, and also 271 00:15:14,000 --> 00:15:17,960 Speaker 8: Ticketmaster had, you know, in major venues, a major share 272 00:15:18,040 --> 00:15:21,320 Speaker 8: of the market, maybe seventy or so percent, so they 273 00:15:21,360 --> 00:15:24,160 Speaker 8: had a dominant or monopoly position at the time. But 274 00:15:24,560 --> 00:15:29,200 Speaker 8: instead of saying you can't merge, they said, hey, go 275 00:15:29,240 --> 00:15:32,000 Speaker 8: ahead and merge. We've got some conditions for you. First, 276 00:15:32,200 --> 00:15:34,400 Speaker 8: help a company is trying to get into the ticketing 277 00:15:34,440 --> 00:15:37,240 Speaker 8: business get into it through some software. Okay, that was 278 00:15:37,280 --> 00:15:40,360 Speaker 8: one idea. The second thing is we'll tell Live Nations 279 00:15:40,520 --> 00:15:45,080 Speaker 8: that they can't condition their talents, you know, with venues 280 00:15:45,280 --> 00:15:48,920 Speaker 8: on using Ticketmaster. They can't make that a condition and 281 00:15:48,960 --> 00:15:53,359 Speaker 8: they can't retaliate against the venue if that venue subsequently 282 00:15:53,400 --> 00:15:58,720 Speaker 8: decides to use a ticketing company. So no conditioning, no retaliation. Fine. 283 00:15:58,840 --> 00:16:02,080 Speaker 8: We think this is wonderful. Parties merge the new entrant. 284 00:16:02,120 --> 00:16:05,480 Speaker 8: Turns out never does well, and almost from the beginning 285 00:16:05,640 --> 00:16:09,080 Speaker 8: they violate the decree, And in fact, they don't have 286 00:16:09,160 --> 00:16:13,880 Speaker 8: to actually violate it because every promoter, every venue owner 287 00:16:14,240 --> 00:16:17,120 Speaker 8: knows what the deal is. You know, give Live Nation 288 00:16:17,600 --> 00:16:20,560 Speaker 8: the ticketing revenue, more likely you're going to get the 289 00:16:20,680 --> 00:16:23,240 Speaker 8: good tours into your venue, and there's a lot of 290 00:16:23,240 --> 00:16:27,840 Speaker 8: competition for that. So this decree never worked. It didn't 291 00:16:27,880 --> 00:16:32,240 Speaker 8: work because the parties violated. There were later proceedings because 292 00:16:32,240 --> 00:16:34,680 Speaker 8: it looked like they were violating it, and then kame 293 00:16:34,720 --> 00:16:37,400 Speaker 8: Taylor Swift. 294 00:16:36,600 --> 00:16:39,400 Speaker 3: And then the hearings in the Senate. That was the push. 295 00:16:39,600 --> 00:16:42,480 Speaker 3: Wasn't it for the Justice Department to actually sue? 296 00:16:42,680 --> 00:16:45,640 Speaker 8: That finally pushed the Justice Department. This has been a 297 00:16:45,640 --> 00:16:49,800 Speaker 8: pretty aggressive Justice Department on any trust to say, you know, 298 00:16:50,440 --> 00:16:54,360 Speaker 8: just really, it's almost fifteen years. It just didn't work 299 00:16:54,920 --> 00:16:57,840 Speaker 8: and it's time to do something about it. So the 300 00:16:57,920 --> 00:17:02,440 Speaker 8: lawsuit we see now is the Justice Department saying Ticketmaster 301 00:17:02,600 --> 00:17:07,480 Speaker 8: has a monopoly position in primary ticketing services, and it's 302 00:17:07,520 --> 00:17:11,359 Speaker 8: solidified by being owned by Live Nation. We've got to 303 00:17:11,400 --> 00:17:15,360 Speaker 8: stop it, declare them monopoly, and then break them up. 304 00:17:15,680 --> 00:17:18,159 Speaker 3: So they're at the motion to dismiss stage, and the 305 00:17:18,280 --> 00:17:23,040 Speaker 3: trial judge had asked Live Nation to identify issues it 306 00:17:23,119 --> 00:17:27,120 Speaker 3: might move to dismiss. Live Nation offered its first official 307 00:17:27,200 --> 00:17:30,040 Speaker 3: response to the suit in a letter to the judge, 308 00:17:30,359 --> 00:17:34,879 Speaker 3: and its response was quite narrow, really just challenging one 309 00:17:35,359 --> 00:17:39,159 Speaker 3: of the government's claims, the tying claim. What did you 310 00:17:39,200 --> 00:17:40,879 Speaker 3: think of Live Nation's response? 311 00:17:42,880 --> 00:17:48,680 Speaker 8: Not much? I mean, okay, it involves a little more 312 00:17:48,760 --> 00:17:53,119 Speaker 8: factual analysis of who's force to do was basically a 313 00:17:53,200 --> 00:17:58,040 Speaker 8: compelled arrangement. So there is in the Justice Department's complaint 314 00:17:58,119 --> 00:18:02,160 Speaker 8: not just a complaint about monopolization of the ticketing markets 315 00:18:02,200 --> 00:18:06,280 Speaker 8: and large venues. There's a complaint about a tying arrangement 316 00:18:06,520 --> 00:18:10,760 Speaker 8: that involves talent itself. So a tying arrangement is basically, 317 00:18:11,040 --> 00:18:14,040 Speaker 8: you have two products. A seller says, if you want 318 00:18:14,119 --> 00:18:16,560 Speaker 8: my A product, guess what you've got to take B. 319 00:18:17,000 --> 00:18:19,200 Speaker 8: So you know, if you want my car, you got 320 00:18:19,240 --> 00:18:21,480 Speaker 8: to take my tires. There's always a question of what 321 00:18:21,560 --> 00:18:24,960 Speaker 8: two products are, but that's the basic of a tying arrangement, 322 00:18:25,040 --> 00:18:29,000 Speaker 8: and the Justice Department alleges that Talent knows there's this 323 00:18:29,200 --> 00:18:34,919 Speaker 8: talent promoting services market that Live Nation also is involved in. 324 00:18:35,040 --> 00:18:38,080 Speaker 8: So if you want those promotion services, you've got to 325 00:18:38,119 --> 00:18:41,199 Speaker 8: be sure to be booked into the proper venues that, 326 00:18:41,280 --> 00:18:45,399 Speaker 8: of course are using Ticketmaster. This is part of the complaint, 327 00:18:45,720 --> 00:18:49,160 Speaker 8: and it's a part that the defendant, Ticketmaster A Love 328 00:18:49,160 --> 00:18:53,800 Speaker 8: of Nation, says it might move to dismiss, but frankly, 329 00:18:53,920 --> 00:18:57,160 Speaker 8: it seems like a rather minor part of the complaint. 330 00:18:57,280 --> 00:19:00,960 Speaker 8: The big part is their monopolization claim and the big 331 00:19:01,040 --> 00:19:05,400 Speaker 8: relief is to break up the company. So time can 332 00:19:05,440 --> 00:19:08,879 Speaker 8: be a problem, and it's historically been a problem, but 333 00:19:09,400 --> 00:19:13,359 Speaker 8: it's not the central problem of this piece of litigation. 334 00:19:13,880 --> 00:19:16,159 Speaker 8: So they haven't made their motion yet and it's a 335 00:19:16,200 --> 00:19:19,920 Speaker 8: little I don't know what they're doing with this particular part. 336 00:19:20,160 --> 00:19:22,960 Speaker 8: They are trying to move the case to a different court, 337 00:19:23,080 --> 00:19:27,520 Speaker 8: so maybe they don't want to reveal their entire legal 338 00:19:27,560 --> 00:19:30,200 Speaker 8: strategy at the moment, I really don't know, but they're 339 00:19:30,240 --> 00:19:33,159 Speaker 8: trying to change where the case is going to be 340 00:19:33,280 --> 00:19:35,200 Speaker 8: tried from New York to DC. 341 00:19:35,800 --> 00:19:38,359 Speaker 3: Yeah, and why do they want to change venues? Do 342 00:19:38,440 --> 00:19:40,639 Speaker 3: they think they'll have more luck in DC than in 343 00:19:40,680 --> 00:19:41,120 Speaker 3: New York? 344 00:19:41,440 --> 00:19:42,760 Speaker 8: I knew you were going to ask me that. 345 00:19:43,320 --> 00:19:44,600 Speaker 3: I guess I'm too predictable. 346 00:19:45,000 --> 00:19:48,600 Speaker 8: And I'm not really sure why they want to do that. 347 00:19:48,840 --> 00:19:53,240 Speaker 8: Flow things down. Maybe they're dissatisfied with this particular judge. 348 00:19:53,280 --> 00:19:56,639 Speaker 8: They know who they've got here. Maybe the docket is 349 00:19:56,720 --> 00:19:59,720 Speaker 8: slower in DC, They've got a lot of cases there. 350 00:20:00,119 --> 00:20:02,600 Speaker 8: Part of it may be related to their effort to 351 00:20:02,800 --> 00:20:07,560 Speaker 8: dismiss the state claims. So the states are asking for damages, 352 00:20:07,920 --> 00:20:11,040 Speaker 8: not clear which states, but under their state law. And 353 00:20:11,359 --> 00:20:14,520 Speaker 8: there's now precedent in the DC Circuit which takes a 354 00:20:14,560 --> 00:20:19,080 Speaker 8: somewhat dim view of these kinds of state claims in 355 00:20:19,160 --> 00:20:22,840 Speaker 8: any trust cases, a case that involved the Facebook litigation 356 00:20:23,080 --> 00:20:26,719 Speaker 8: in the District of Columbia. So maybe they feel they 357 00:20:27,040 --> 00:20:30,399 Speaker 8: have a better chance of getting those state claims dismiss there. 358 00:20:30,600 --> 00:20:33,439 Speaker 8: And the state claims also come with a request for 359 00:20:33,640 --> 00:20:38,200 Speaker 8: a jury trial. So hard for me to know exactly strategically, 360 00:20:38,359 --> 00:20:40,920 Speaker 8: you know what all is going on, And I mean, 361 00:20:41,000 --> 00:20:44,240 Speaker 8: obviously people don't ask for change of venue unless they 362 00:20:44,280 --> 00:20:46,840 Speaker 8: think they'll be better off someplace else. But I'm not 363 00:20:46,960 --> 00:20:48,119 Speaker 8: quite sure why they. 364 00:20:48,000 --> 00:20:51,400 Speaker 3: Think that, And so in this letter to the judge 365 00:20:51,480 --> 00:20:55,800 Speaker 3: they try to knock out the state claims in different ways. 366 00:20:56,040 --> 00:20:58,960 Speaker 3: Are they trying to avoid a jury trial in a 367 00:20:59,040 --> 00:21:03,000 Speaker 3: case like this where I mean, who hasn't been aggrieved 368 00:21:03,160 --> 00:21:05,080 Speaker 3: by ticket Master? 369 00:21:05,400 --> 00:21:08,520 Speaker 8: You mean you think the jury might not be too sympathetic. 370 00:21:08,040 --> 00:21:11,080 Speaker 3: That's what I'm thinking, but everyone hates. 371 00:21:11,200 --> 00:21:14,320 Speaker 8: Yeah, that's a good instinct. I think on this they 372 00:21:14,359 --> 00:21:16,520 Speaker 8: really would not want to have to present this case 373 00:21:16,560 --> 00:21:20,040 Speaker 8: to a jury. And the claim for damages seems it's 374 00:21:20,040 --> 00:21:24,000 Speaker 8: a little vague, which the defendant does say, and I 375 00:21:24,040 --> 00:21:26,520 Speaker 8: think correctly, you know, not that he can't be made 376 00:21:27,000 --> 00:21:30,280 Speaker 8: less vague. But if there's not a claim for damages, 377 00:21:30,600 --> 00:21:33,520 Speaker 8: then the case gets tried before a judge, and you 378 00:21:33,680 --> 00:21:37,240 Speaker 8: just hope, I guess that the judges never bought a ticket. Now, 379 00:21:37,480 --> 00:21:39,520 Speaker 8: if it doesn't get moved them, they're going to make 380 00:21:39,560 --> 00:21:42,200 Speaker 8: the same claims in New York. And you know they've 381 00:21:42,240 --> 00:21:46,440 Speaker 8: already cited the DC circuit case. But you know it's 382 00:21:46,480 --> 00:21:49,000 Speaker 8: stronger if it's in a circuit in which you're litigating, 383 00:21:49,200 --> 00:21:50,840 Speaker 8: not in a sister circuit. 384 00:21:51,119 --> 00:21:53,920 Speaker 3: As you mentioned, DOJ wants a breakup of the company, 385 00:21:54,000 --> 00:21:56,840 Speaker 3: which is a drastic remedy. But I've heard it said 386 00:21:56,920 --> 00:21:59,520 Speaker 3: that if it applies anywhere, it should be here. 387 00:22:00,119 --> 00:22:02,719 Speaker 8: Yeah, I mean, in many ways this is I mean, 388 00:22:02,760 --> 00:22:04,720 Speaker 8: I don't know for sure because they don't know the 389 00:22:04,760 --> 00:22:07,879 Speaker 8: inner workings of how integrated the firms are. But this 390 00:22:07,960 --> 00:22:12,480 Speaker 8: should be a case where it's relatively easy, relatively being 391 00:22:12,480 --> 00:22:16,560 Speaker 8: the keyword to break the company up because they do 392 00:22:16,640 --> 00:22:20,400 Speaker 8: operate as at least public Facing has two separate companies. 393 00:22:20,440 --> 00:22:23,679 Speaker 8: They do two separate things. They're in separate markets that 394 00:22:23,800 --> 00:22:27,760 Speaker 8: are linked, but they used to operate separately before and 395 00:22:27,960 --> 00:22:32,160 Speaker 8: presumably could operate separately again. So I think you're right. 396 00:22:32,560 --> 00:22:34,879 Speaker 8: This is a case where, you know, restructuring of the 397 00:22:34,960 --> 00:22:38,920 Speaker 8: company sounds like it is doable. The question is whether 398 00:22:38,960 --> 00:22:43,280 Speaker 8: that's going to change Ticketmaster's monopoly position or not, And 399 00:22:43,760 --> 00:22:45,920 Speaker 8: that's sort of the next step. So you could break 400 00:22:45,960 --> 00:22:48,680 Speaker 8: them up, but you know, how much will that increase 401 00:22:48,760 --> 00:22:50,200 Speaker 8: competition in itself? 402 00:22:50,640 --> 00:22:54,280 Speaker 3: Can live Nation use the fact that DOJ allowed the 403 00:22:54,320 --> 00:22:57,960 Speaker 3: merger to proceed in the first place, and then agreed 404 00:22:58,000 --> 00:23:02,640 Speaker 3: to extend the initial consent decree as recently as twenty nineteen, 405 00:23:02,720 --> 00:23:07,760 Speaker 3: even after it found that live Nation repeatedly violated the decree. 406 00:23:07,840 --> 00:23:10,560 Speaker 8: They will make that argument. Is it a good legal argument? 407 00:23:11,000 --> 00:23:13,600 Speaker 8: I really don't think so. There is not what's called 408 00:23:13,680 --> 00:23:17,479 Speaker 8: in a stoppel against the government. The government is able 409 00:23:17,560 --> 00:23:22,159 Speaker 8: to and free to change its policy as it sees 410 00:23:22,200 --> 00:23:24,760 Speaker 8: how it works. There are older cases in which the 411 00:23:24,840 --> 00:23:28,840 Speaker 8: government accepted this particular remedy. The remedy didn't work out. 412 00:23:29,119 --> 00:23:32,280 Speaker 8: The district court judge in fact in that older case said, gee, 413 00:23:32,280 --> 00:23:34,760 Speaker 8: I can't change this decree. You entered it, and the 414 00:23:34,800 --> 00:23:37,720 Speaker 8: Supreme Court said, no, you can. It didn't work. Ten 415 00:23:37,840 --> 00:23:40,080 Speaker 8: years you had a chance for this to work and 416 00:23:40,119 --> 00:23:43,199 Speaker 8: it didn't bring competition. Ten years is long enough. So 417 00:23:43,560 --> 00:23:46,520 Speaker 8: I don't think in the end that's really a good argument. 418 00:23:46,760 --> 00:23:50,040 Speaker 8: You know, things change and decrees don't work out, and 419 00:23:50,119 --> 00:23:52,720 Speaker 8: they don't bind successive governments forever. 420 00:23:53,280 --> 00:23:55,680 Speaker 3: Always great to get your insights, Harry, Thanks so much. 421 00:23:56,040 --> 00:23:59,800 Speaker 3: That's Professor Harry First of NYU Law School. Coming up next. 422 00:24:00,119 --> 00:24:04,520 Speaker 3: Defense attorneys beware of those plea bargaining sessions. I'm June Grass. 423 00:24:04,560 --> 00:24:08,800 Speaker 3: When you're listening to Bloomberg, Plea bargains account for almost 424 00:24:08,920 --> 00:24:12,760 Speaker 3: ninety eight percent of federal convictions. And we've all seen 425 00:24:12,800 --> 00:24:16,200 Speaker 3: how it works, sort of in movies and TV shows 426 00:24:16,280 --> 00:24:19,560 Speaker 3: like Presumed Innocent, where the defense attorney is trying to 427 00:24:19,560 --> 00:24:21,160 Speaker 3: get his client a plea. 428 00:24:21,000 --> 00:24:24,080 Speaker 9: Deal, blood and guts everywhere at her home, not so 429 00:24:24,160 --> 00:24:27,119 Speaker 9: much as a microscopic drop in this car he cleaned 430 00:24:27,119 --> 00:24:30,560 Speaker 9: it or on his clothing cleaned it also weapons disposed 431 00:24:30,600 --> 00:24:34,159 Speaker 9: that it. Rusty cannot risk spending the rest of his 432 00:24:34,359 --> 00:24:37,560 Speaker 9: natural life in prison, and you cannot chance an acquittal 433 00:24:37,600 --> 00:24:41,600 Speaker 9: and the obliteration of all of your political capital. We'll 434 00:24:41,640 --> 00:24:43,960 Speaker 9: cop to the obstruction three years. 435 00:24:47,040 --> 00:24:50,560 Speaker 4: Ray, you seriously think we'll plead it out on an 436 00:24:50,560 --> 00:24:52,160 Speaker 4: obstruction surn But what. 437 00:24:52,200 --> 00:24:56,119 Speaker 3: If prosecutors use information they get from defense lawyers in 438 00:24:56,160 --> 00:25:00,240 Speaker 3: those sessions against the defendant. That's basically what happened to 439 00:25:00,280 --> 00:25:04,679 Speaker 3: Senator Bob Menandez in his corruption trial. While the gold bars, 440 00:25:04,720 --> 00:25:07,720 Speaker 3: the half million in cash, and the Mercedes Benz got 441 00:25:07,800 --> 00:25:11,760 Speaker 3: most of the attention, federal prosecutors made an unusual and 442 00:25:11,880 --> 00:25:16,280 Speaker 3: aggressive move in charging Menendez with obstruction based on the 443 00:25:16,320 --> 00:25:19,560 Speaker 3: presentation made by his former lawyer in a meeting with 444 00:25:19,640 --> 00:25:23,880 Speaker 3: prosecutors before the indictment. Joining me is former federal prosecutor. 445 00:25:23,920 --> 00:25:27,719 Speaker 3: Ariel Newman, a partner at Bird Marilla Ariel how common 446 00:25:27,840 --> 00:25:31,080 Speaker 3: is it for defense attorneys to meet with prosecutors to 447 00:25:31,160 --> 00:25:33,120 Speaker 3: try to talk them out of bringing charges. 448 00:25:33,680 --> 00:25:36,720 Speaker 10: So in this case, we're talking about pre indictment, meaning 449 00:25:36,760 --> 00:25:40,280 Speaker 10: before the defendant is charged, And these meetings are very, 450 00:25:40,400 --> 00:25:43,240 Speaker 10: very common, especially in the white collar context where we're 451 00:25:43,240 --> 00:25:46,399 Speaker 10: talking about fraud crimes of some sort. We are going 452 00:25:46,560 --> 00:25:49,840 Speaker 10: in and making the case to the prosecutors about why 453 00:25:49,840 --> 00:25:53,320 Speaker 10: they shouldn't pursue a case against our client. And it 454 00:25:53,359 --> 00:25:56,119 Speaker 10: may be legal arguments, it may be factual arguments, but 455 00:25:56,440 --> 00:25:58,560 Speaker 10: we are trying to convince them that they don't have 456 00:25:58,600 --> 00:26:01,359 Speaker 10: a case, or for whatever reason, they shouldn't pursue a 457 00:26:01,400 --> 00:26:02,439 Speaker 10: case that they think they have. 458 00:26:02,800 --> 00:26:06,960 Speaker 3: Are these meetings supposed to be confidential or can prosecutors 459 00:26:07,040 --> 00:26:09,960 Speaker 3: use the information given to them at trial? 460 00:26:10,600 --> 00:26:13,240 Speaker 10: Usually there is an agreement or there's a request for 461 00:26:13,280 --> 00:26:16,160 Speaker 10: an agreement by the defense lawyer that these are protected 462 00:26:16,200 --> 00:26:19,600 Speaker 10: as settlement conversations. There's a sederal rule of evidence that 463 00:26:19,680 --> 00:26:24,440 Speaker 10: says settlement communications can't be admitted for almost and that's 464 00:26:24,440 --> 00:26:27,760 Speaker 10: an important almost almost any purpose at trial, and so 465 00:26:28,160 --> 00:26:31,080 Speaker 10: generally the expectation is that these are going to be 466 00:26:31,600 --> 00:26:35,440 Speaker 10: largely confidential. And then the caveat to that is sometimes there 467 00:26:35,600 --> 00:26:38,399 Speaker 10: is an agent that's an FBI agent, who is taking 468 00:26:38,400 --> 00:26:41,119 Speaker 10: notes during the meeting. If that's happening, you tend to 469 00:26:41,160 --> 00:26:43,879 Speaker 10: know that it may not be as confidential as you hope. Also, 470 00:26:44,000 --> 00:26:46,280 Speaker 10: I mean, I've had it where they write a report 471 00:26:46,359 --> 00:26:48,520 Speaker 10: and then they produce it in discovery. If the government 472 00:26:48,560 --> 00:26:51,320 Speaker 10: goes ahead and charges your clients anyway, and there's other 473 00:26:51,400 --> 00:26:53,960 Speaker 10: people who are charged in the case along with your client, 474 00:26:54,119 --> 00:26:57,399 Speaker 10: and suddenly they are seeing a report about what you 475 00:26:57,480 --> 00:26:59,840 Speaker 10: said during that meeting where you were trying to convince 476 00:26:59,840 --> 00:27:01,520 Speaker 10: the government not to charge your client. 477 00:27:01,760 --> 00:27:03,800 Speaker 3: I mean, was that in a case where you thought 478 00:27:03,960 --> 00:27:06,440 Speaker 3: what you were saying was not to be used. 479 00:27:06,800 --> 00:27:09,800 Speaker 10: We thought it was a confidential settlement meeting. They never 480 00:27:10,280 --> 00:27:13,919 Speaker 10: tried to introduce it at trial. But there isn't really 481 00:27:14,000 --> 00:27:16,639 Speaker 10: anything prohibiting them from doing what they did unless you 482 00:27:16,680 --> 00:27:19,919 Speaker 10: have an agreement explicitly that they won't. And I have 483 00:27:20,040 --> 00:27:22,280 Speaker 10: found more and more as I have asked for those 484 00:27:22,320 --> 00:27:26,280 Speaker 10: agreements that prosecutors and especially prosecutors from what we call 485 00:27:26,359 --> 00:27:29,080 Speaker 10: main Justice DOJ and DC as opposed to the local 486 00:27:29,160 --> 00:27:32,239 Speaker 10: US attorney's office are less and less willing to have 487 00:27:32,280 --> 00:27:34,160 Speaker 10: any sort of agreement about what they're going to do 488 00:27:34,320 --> 00:27:36,960 Speaker 10: with the information you provide. But what happened in the 489 00:27:36,960 --> 00:27:39,920 Speaker 10: Menendez case, Honestly, I've never heard of that before, and 490 00:27:40,280 --> 00:27:42,440 Speaker 10: everybody I've talked to has never heard of it before, 491 00:27:42,680 --> 00:27:46,800 Speaker 10: where prosecutors in that case charged the defendant with obstruction 492 00:27:47,280 --> 00:27:52,359 Speaker 10: because they claim the lawyers provided false factual information during 493 00:27:52,480 --> 00:27:56,720 Speaker 10: those meetings, which they say the lawyers got from the defendant. 494 00:27:56,720 --> 00:27:59,320 Speaker 10: You know, we are always talking about facts during the 495 00:27:59,440 --> 00:28:03,240 Speaker 10: meeting legal arguments, but we're also making factual arguments. And 496 00:28:03,680 --> 00:28:05,440 Speaker 10: I've never heard of and like I say, nobody else 497 00:28:05,440 --> 00:28:07,240 Speaker 10: that I know I has ever heard of the government 498 00:28:07,320 --> 00:28:10,119 Speaker 10: charging obstruction based on what you say during those meetings. 499 00:28:10,400 --> 00:28:12,479 Speaker 3: And we should point out that the exception to the 500 00:28:12,480 --> 00:28:16,000 Speaker 3: federal rule that you referred to before is that statements 501 00:28:16,080 --> 00:28:20,600 Speaker 3: made during these negotiations can be used to prove obstruction, 502 00:28:21,040 --> 00:28:24,160 Speaker 3: as in the Menendez case. So Abby Lowell, a high 503 00:28:24,160 --> 00:28:29,840 Speaker 3: profile criminal defense attorney, represented Menendez in these pre indictment 504 00:28:29,960 --> 00:28:33,439 Speaker 3: negotiations with the prosecutors in the Southern District, and he 505 00:28:33,520 --> 00:28:36,520 Speaker 3: made a PowerPoint presentation. Is that unusual? 506 00:28:37,040 --> 00:28:40,280 Speaker 10: Not at all, very common. That helps outline the discussion, 507 00:28:40,400 --> 00:28:43,000 Speaker 10: helps frame what you're going to be talking about, and 508 00:28:43,040 --> 00:28:45,880 Speaker 10: the hammer home the point that you want the government 509 00:28:45,880 --> 00:28:49,480 Speaker 10: to focus on. So very very common to have a presentation, 510 00:28:49,680 --> 00:28:53,000 Speaker 10: and I think important in any of these presentations that 511 00:28:53,000 --> 00:28:55,680 Speaker 10: that's all what it is, maybe an outline or maybe 512 00:28:55,720 --> 00:28:57,960 Speaker 10: just a couple of bullet points on a screen, maybe 513 00:28:58,000 --> 00:29:01,560 Speaker 10: a couple pictures or citations to cases. None of us 514 00:29:01,560 --> 00:29:04,480 Speaker 10: are putting the entire context of what we're going to 515 00:29:04,520 --> 00:29:07,040 Speaker 10: say up on the screen. In fact, my practices edit 516 00:29:07,080 --> 00:29:08,760 Speaker 10: it down to the fewest words possible. 517 00:29:09,200 --> 00:29:13,440 Speaker 3: The judge allowed the government to introduce a trial pages 518 00:29:13,680 --> 00:29:18,360 Speaker 3: from that PowerPoint presentation. I mean, what about attorney client privilege? 519 00:29:18,400 --> 00:29:22,680 Speaker 3: What about attorney work product? Where were those concepts in this? 520 00:29:23,360 --> 00:29:26,920 Speaker 10: So attorney client privilege once you share with the government, 521 00:29:27,040 --> 00:29:30,040 Speaker 10: let's say what your client said, then it's free game. 522 00:29:30,160 --> 00:29:32,960 Speaker 10: Right you've sort of waived at least as to those statements. 523 00:29:33,080 --> 00:29:35,720 Speaker 10: Arguably the privilege depends how you say it, right, my 524 00:29:35,920 --> 00:29:39,320 Speaker 10: client told me X that's pretty much a waiver. But 525 00:29:39,880 --> 00:29:43,200 Speaker 10: the attorney work product is a different question. And generally 526 00:29:43,840 --> 00:29:46,200 Speaker 10: my view is that we shouldn't be giving the government 527 00:29:46,240 --> 00:29:48,680 Speaker 10: our work product defense lawyers. We shouldn't be giving them 528 00:29:48,680 --> 00:29:51,720 Speaker 10: our powerpoints because they can, as it appears they did 529 00:29:51,760 --> 00:29:53,760 Speaker 10: here take it out of context right here that I 530 00:29:53,760 --> 00:29:56,280 Speaker 10: think they put in four pages from what was obviously 531 00:29:56,320 --> 00:30:00,360 Speaker 10: a longer PowerPoint into evidence and the defense, if I 532 00:30:00,440 --> 00:30:02,960 Speaker 10: understand it, was really stymied in their effort to get 533 00:30:03,000 --> 00:30:05,160 Speaker 10: in any of the context around them. And it's that 534 00:30:05,320 --> 00:30:08,560 Speaker 10: context where the caveats are given, where the lawyers are 535 00:30:08,760 --> 00:30:11,800 Speaker 10: making sure that it's understood that this may not be 536 00:30:11,920 --> 00:30:14,160 Speaker 10: exactly what the client, that maybe this is what our 537 00:30:14,200 --> 00:30:18,000 Speaker 10: investigation has shown or something else. But without that context, 538 00:30:18,000 --> 00:30:21,200 Speaker 10: it becomes very difficult to get the full picture of 539 00:30:21,240 --> 00:30:23,080 Speaker 10: what was actually said during that meeting. 540 00:30:23,560 --> 00:30:26,280 Speaker 3: In light of this, you have written for Bloomberg Law 541 00:30:26,560 --> 00:30:30,440 Speaker 3: some advice for defense lawyers in these situations. First, whether 542 00:30:30,480 --> 00:30:33,600 Speaker 3: to even have the meeting? I mean, how often our 543 00:30:33,680 --> 00:30:38,800 Speaker 3: defense lawyers successful in getting prosecutors not to charge their client? 544 00:30:39,040 --> 00:30:41,000 Speaker 3: Is it worth even having one of these meetings? 545 00:30:41,320 --> 00:30:43,880 Speaker 10: I've done it, and you know people who have had success. 546 00:30:43,960 --> 00:30:46,840 Speaker 10: It depends where the government is in the process and 547 00:30:47,200 --> 00:30:49,640 Speaker 10: how could your facts and your arguments are It is 548 00:30:49,680 --> 00:30:54,000 Speaker 10: certainly in many cases worth making the presentation. First, of all, 549 00:30:54,240 --> 00:30:57,000 Speaker 10: often in advance of that, you have discussions with the 550 00:30:57,040 --> 00:30:59,680 Speaker 10: government where you can learn more about their case and 551 00:31:00,120 --> 00:31:03,320 Speaker 10: gives you a chance to find out sometimes where the 552 00:31:03,320 --> 00:31:05,800 Speaker 10: holes are in your arguments as well. Right if I 553 00:31:05,840 --> 00:31:08,080 Speaker 10: come in and I make some argument, the government says, oh, 554 00:31:08,080 --> 00:31:11,240 Speaker 10: that's all well and good, but what about XYZ And 555 00:31:11,440 --> 00:31:13,760 Speaker 10: for whatever reason I didn't know about X y Z. Well, 556 00:31:13,920 --> 00:31:16,800 Speaker 10: now we're more informed going into the next decisions about 557 00:31:16,800 --> 00:31:19,960 Speaker 10: what we're going to do. The big downside to making 558 00:31:20,000 --> 00:31:23,000 Speaker 10: these presentations is that you're showing your cards to some extent. 559 00:31:23,400 --> 00:31:26,680 Speaker 10: You're going in and you're making your pitch to the government. 560 00:31:26,680 --> 00:31:30,120 Speaker 10: You're arguing your facts, you're arguing your evidence, and you know, 561 00:31:30,280 --> 00:31:33,040 Speaker 10: the sort of conventional wisdom is that that allows the 562 00:31:33,040 --> 00:31:35,960 Speaker 10: government to shore up their case as well. They find 563 00:31:35,960 --> 00:31:38,520 Speaker 10: out where their potential holes are and where the weaknesses 564 00:31:38,520 --> 00:31:40,720 Speaker 10: in their case are. And so it's certainly a balancing 565 00:31:40,760 --> 00:31:44,200 Speaker 10: decision in every situation of whether you do this meeting, 566 00:31:44,600 --> 00:31:48,280 Speaker 10: but in many cases it's worthwhile. And in many cases 567 00:31:48,280 --> 00:31:51,520 Speaker 10: the client is really pushing because they're facing the prospect 568 00:31:51,560 --> 00:31:54,440 Speaker 10: of federal felony charges and this may be the best 569 00:31:54,440 --> 00:31:56,280 Speaker 10: shot they have to avoid them. Or at least they 570 00:31:56,280 --> 00:31:58,080 Speaker 10: think that. And that's one of the things I talk 571 00:31:58,120 --> 00:32:00,840 Speaker 10: about is how to resist that pressure. Whether to resist 572 00:32:00,920 --> 00:32:03,360 Speaker 10: that pressure. It's not always so easy when the guy 573 00:32:03,440 --> 00:32:06,440 Speaker 10: paying the bills is telling you do something to stop this. Please. 574 00:32:06,800 --> 00:32:09,640 Speaker 3: Are there any magic words that you should say at 575 00:32:09,680 --> 00:32:12,479 Speaker 3: the beginning or you should have put in writing so 576 00:32:12,520 --> 00:32:14,640 Speaker 3: that you avoid a menenda situation? 577 00:32:16,080 --> 00:32:18,120 Speaker 10: Well, there are no magic words, and so you just 578 00:32:18,200 --> 00:32:21,800 Speaker 10: have to be careful and clear as you approach this. 579 00:32:22,080 --> 00:32:23,960 Speaker 10: One of the main things is I do think it's 580 00:32:23,960 --> 00:32:27,680 Speaker 10: worth getting an agreement that these are settlement communications and 581 00:32:27,920 --> 00:32:30,959 Speaker 10: that at least gives some protection to how anything that 582 00:32:31,000 --> 00:32:33,280 Speaker 10: comes out of the meeting might be used in the future. 583 00:32:33,800 --> 00:32:36,440 Speaker 10: And a big one that I think we see here 584 00:32:36,880 --> 00:32:40,920 Speaker 10: is where at all possible not to source the information 585 00:32:41,320 --> 00:32:44,000 Speaker 10: that's in your presentation to your client, meaning not to 586 00:32:44,040 --> 00:32:46,880 Speaker 10: say my client told me X or my client says 587 00:32:47,040 --> 00:32:50,160 Speaker 10: why about this situation? And once you say that, you 588 00:32:50,240 --> 00:32:53,320 Speaker 10: are then really putting the client on the line and 589 00:32:53,360 --> 00:32:54,880 Speaker 10: their credibility on the line. 590 00:32:55,160 --> 00:32:58,600 Speaker 3: So, in talking to other defense lawyers, do you think 591 00:32:58,640 --> 00:33:02,280 Speaker 3: that they're more aware now or more afraid of what 592 00:33:02,360 --> 00:33:03,880 Speaker 3: might happen in these meetings? 593 00:33:04,440 --> 00:33:07,800 Speaker 10: I think this prosecution for people who are aware of it, 594 00:33:07,880 --> 00:33:10,200 Speaker 10: sent a bit of a shockwave through the defense bar. 595 00:33:10,720 --> 00:33:12,800 Speaker 10: I haven't had a reaction like I had to this 596 00:33:12,920 --> 00:33:15,920 Speaker 10: article from the defense bar. People pointing out to me 597 00:33:16,040 --> 00:33:19,680 Speaker 10: that they are changing their practices, people responding that they've 598 00:33:19,720 --> 00:33:21,680 Speaker 10: never heard of this, and they're going to have to 599 00:33:21,720 --> 00:33:23,760 Speaker 10: think about it going forward. You know, we're going to 600 00:33:23,760 --> 00:33:27,959 Speaker 10: have to see whether this was an outlier, very aggressive prosecution, 601 00:33:28,680 --> 00:33:31,240 Speaker 10: or whether this is something that is going to be 602 00:33:31,280 --> 00:33:33,880 Speaker 10: a tool, a new tool in the government's told belt, 603 00:33:33,920 --> 00:33:35,719 Speaker 10: and we're all going to have to be cognizant of it. 604 00:33:35,960 --> 00:33:37,920 Speaker 10: So I do think it's going to change or at 605 00:33:38,000 --> 00:33:40,840 Speaker 10: least make us more cautious as we go into these meetings. 606 00:33:41,120 --> 00:33:43,800 Speaker 3: Menanda says he's going to appeal his conviction all the 607 00:33:43,800 --> 00:33:46,960 Speaker 3: way to the Supreme Court if necessary. And we've seen 608 00:33:47,000 --> 00:33:51,200 Speaker 3: the Supreme Court in the last decade or so narrowing 609 00:33:51,280 --> 00:33:55,360 Speaker 3: the definition of corruption, leading to a number of convictions 610 00:33:55,400 --> 00:33:59,360 Speaker 3: of public figures being overturned. Do you think that'll be 611 00:33:59,400 --> 00:34:01,520 Speaker 3: one of his poor So, I'm. 612 00:34:01,400 --> 00:34:04,440 Speaker 10: Sure it's something he'll bring up. I've had bribery cases, 613 00:34:04,560 --> 00:34:07,080 Speaker 10: public corruption cases, and this is sort of where the 614 00:34:07,120 --> 00:34:09,880 Speaker 10: rub is right now as the Supreme Course is going 615 00:34:09,920 --> 00:34:12,560 Speaker 10: through and as you say, narrowing the definition of what 616 00:34:12,600 --> 00:34:15,080 Speaker 10: we call an official act. I would be shocked if 617 00:34:15,080 --> 00:34:16,920 Speaker 10: they don't focus on that. They were focused on it 618 00:34:17,000 --> 00:34:19,240 Speaker 10: in the pre trial and then again during the trial, 619 00:34:19,520 --> 00:34:21,879 Speaker 10: and it seems to me that they've got some good 620 00:34:21,960 --> 00:34:24,279 Speaker 10: arguments and they've got some that may be more of 621 00:34:24,320 --> 00:34:28,279 Speaker 10: a challenge. It's really about whether Menendez was using his 622 00:34:28,360 --> 00:34:34,840 Speaker 10: official position on any decision or action on any question matter, cause, preceding, 623 00:34:34,920 --> 00:34:37,960 Speaker 10: or controversy which may be pending before him in his 624 00:34:38,000 --> 00:34:43,319 Speaker 10: official capacity. So, for instance, he as was alleged interfered 625 00:34:43,480 --> 00:34:47,640 Speaker 10: with a state prosecution by calling up a state prosecutor 626 00:34:47,640 --> 00:34:49,799 Speaker 10: and saying, hey, maybe take another look at this now, 627 00:34:49,920 --> 00:34:53,399 Speaker 10: that's not really something that's pending before him, And maybe 628 00:34:53,480 --> 00:34:56,120 Speaker 10: a harder argument that that's an official act. He doesn't 629 00:34:56,160 --> 00:34:58,400 Speaker 10: really have an official role there. He's sort of using 630 00:34:58,440 --> 00:35:02,480 Speaker 10: his influence and position. Whereas maybe as he's alleged to 631 00:35:02,600 --> 00:35:07,040 Speaker 10: have interfered with the nomination of the US Attorney from 632 00:35:07,080 --> 00:35:11,239 Speaker 10: New Jersey by essentially corruptly making a recommendation to the 633 00:35:11,280 --> 00:35:13,800 Speaker 10: president of who to nominate, well, that may be closer 634 00:35:13,800 --> 00:35:16,960 Speaker 10: to the line because that is the traditional function of 635 00:35:17,000 --> 00:35:20,040 Speaker 10: the senator from a particular state, and that is potentially 636 00:35:20,120 --> 00:35:23,080 Speaker 10: something that was pending before him in his official capacity. 637 00:35:23,160 --> 00:35:25,719 Speaker 10: So it seems to me that they may have some luck, 638 00:35:25,840 --> 00:35:28,920 Speaker 10: but I'd be surprised if they can fully get everything reversed. 639 00:35:28,960 --> 00:35:30,919 Speaker 10: And that's just one part of the case. Obviously, there's 640 00:35:30,920 --> 00:35:33,840 Speaker 10: other pieces that don't rely on that official Act element. 641 00:35:33,960 --> 00:35:35,960 Speaker 10: Those are going to be harder for them to succeed on. 642 00:35:36,000 --> 00:35:38,080 Speaker 3: From what I can see, do you think his conviction 643 00:35:38,480 --> 00:35:41,600 Speaker 3: for being an agent of Egypt will be easier for 644 00:35:41,640 --> 00:35:42,680 Speaker 3: the defense to attack? 645 00:35:42,960 --> 00:35:44,520 Speaker 10: I think what you have to look at is the 646 00:35:44,520 --> 00:35:50,120 Speaker 10: full picture, right, because the argument is essentially that legislators, 647 00:35:50,120 --> 00:35:52,799 Speaker 10: and especially a senior senator like him, who's doing the 648 00:35:52,840 --> 00:35:55,080 Speaker 10: foreign affairs work that he's doing, are going to have 649 00:35:55,160 --> 00:35:58,160 Speaker 10: contact with foreign officials and are going to take positions 650 00:35:58,200 --> 00:36:02,040 Speaker 10: that may be to the benefit of a particular country, 651 00:36:02,080 --> 00:36:04,080 Speaker 10: in this case Egypt, And so that's just sort of 652 00:36:04,120 --> 00:36:06,640 Speaker 10: part and parcel of what they do. And as a 653 00:36:06,680 --> 00:36:11,160 Speaker 10: member of Congress, the challenge in a case like this is, well, 654 00:36:11,200 --> 00:36:13,919 Speaker 10: what about the rest of the picture? Right? And here 655 00:36:14,000 --> 00:36:16,880 Speaker 10: it's the cash and the gold bars and the deleted 656 00:36:16,920 --> 00:36:19,960 Speaker 10: messages and so on and so forth that the jury 657 00:36:20,000 --> 00:36:22,399 Speaker 10: obviously felt that takes it out of the realm of 658 00:36:22,560 --> 00:36:25,480 Speaker 10: what you're doing in your official capacity and puts it 659 00:36:25,560 --> 00:36:28,000 Speaker 10: more into the realm of something that is corrupt. And 660 00:36:28,080 --> 00:36:30,200 Speaker 10: so that's what's going to be the bigger challenge I 661 00:36:30,239 --> 00:36:32,880 Speaker 10: think on appeal is how do you question the jury's 662 00:36:32,960 --> 00:36:35,440 Speaker 10: verdict in light of the full scope of the evidence. 663 00:36:35,480 --> 00:36:37,719 Speaker 10: And that's always what makes these cases difficult. 664 00:36:38,120 --> 00:36:41,920 Speaker 3: Menandez as lawyers say they're going to appeal aggressively, so 665 00:36:41,960 --> 00:36:44,720 Speaker 3: we'll see what arguments they come up with. Thanks so much, Ariel. 666 00:36:44,920 --> 00:36:47,960 Speaker 3: That's Ariel Newman of Bird Marilla. And that's it for 667 00:36:47,960 --> 00:36:51,000 Speaker 3: this edition of the Bloomberg Law Podcast. Remember you can 668 00:36:51,040 --> 00:36:53,960 Speaker 3: always get the latest legal news by subscribing and listening 669 00:36:54,000 --> 00:36:57,719 Speaker 3: to the show on Apple Podcasts, Spotify, and at Bloomberg 670 00:36:57,760 --> 00:37:01,799 Speaker 3: dot com, slash podcast, Slash Law. I'm June Grosso and 671 00:37:01,960 --> 00:37:03,200 Speaker 3: this is Bloomberg