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

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

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

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

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Speaker 1: and on Bloomberg dot com slash Podcasts. In his January

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Speaker 1: seventeenth letter to Federal Reserve Chair Janet Yellen, the acting

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Speaker 1: director of the Consumer Financial Protection Bureau, Mick mulveny, requested

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Speaker 1: zero dollars and operating funds for the second quarter. Earlier

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Speaker 1: this month, he announced that a controversial rule governing payday

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Speaker 1: lenders would be rewritten, and yesterday, in an op ed

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Speaker 1: in The Wall Street Journal, mulveney pledged to tone down

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Speaker 1: the agency's aggressive regulatory and enforcement stance and said that

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Speaker 1: all the bureau's activities will be put under review. Joining

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Speaker 1: me his former Democratic Congressman Barney Frank of Massachusetts. He

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Speaker 1: was the co sponsor of the Dodd Frank Act, which

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Speaker 1: created the c f PB. Thanks for joining us, Congressman,

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Speaker 1: You're welcome. What's your reaction to Mulvaney's description of the

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Speaker 1: quote new mission for the CFPB in the op ed,

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Speaker 1: A complete lack of surprise that a man who voted

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Speaker 1: against creation of the agency, it's been very much opposed

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Speaker 1: to any consumer protection activities on the part of the government,

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Speaker 1: and now that he has a chance thanks to President Trump,

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Speaker 1: UM is planning to start aging his requests. Finds explained

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Speaker 1: what we had to protect this agency from having its

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Speaker 1: fun shut off for potting reasons. By the way, in

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Speaker 1: doing that, we don't treat that AGC any differently than

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Speaker 1: the Federal Reserve itself. The control of the currency of

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Speaker 1: the fdi C. It has long been the practice at

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Speaker 1: any of the bank regulatory agency because of the potential

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Speaker 1: problem of specific politically motivated interventions don't get subject to

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Speaker 1: the appropriation process. Um. But what I've found really striking

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Speaker 1: two points about Malbiany. One, he complains that this agency

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Speaker 1: is not, in his judgment balance, it's not equally concerned

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Speaker 1: with the financial institutions and the consumers. But the fact

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Speaker 1: is that there are several institutions who are there to

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Speaker 1: protect the financial institution. The f d i C, the

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Speaker 1: control the currency, and the federals all have the safety

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Speaker 1: and soundness and the protection of the institutions as them.

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Speaker 1: Isn't we looked at the regulatory framework in two thousand

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Speaker 1: nine and ten, we said, you know, we have three

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Speaker 1: agencies up important part of them all, but none has

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Speaker 1: a simpory role of protecting consumers. So apparently Mr Malbny

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Speaker 1: thinks three to one and transferre the institutions is terribly

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Speaker 1: unfair to them. He prefers in three his era. The

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Speaker 1: other is he says, oh, you should not have any

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Speaker 1: enforcement unless there was a clear rule that was violated.

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Speaker 1: Here's the great hypocrisy of men me, of those who

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Speaker 1: are against regulations but don't want to come right and

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Speaker 1: say it. They don't don't be too specific in your

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Speaker 1: body and joining me as my co host Peter Barnes, Peter,

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Speaker 1: this op ed was really sort of adding to the

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Speaker 1: many things that mulveney has done over the last month

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Speaker 1: to to take the enforcement powers of the CFPB down

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Speaker 1: a notch absolutely right June. And of course this is

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Speaker 1: what the president wanted from mc mulvaney, and mc mulvaney

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Speaker 1: went in there with this mission um carrying the president's

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Speaker 1: wishes to that agency, which is, as you know, has

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Speaker 1: been heavily criticized over the years by Republicans and critics

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Speaker 1: as too heavy handed. In its regulation of the of

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Speaker 1: financial services UH. And thus Mulveney talking in this op

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Speaker 1: ed about how he's going to maybe not be as

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Speaker 1: heavy handed while he's at least there as the acting director.

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Speaker 1: What I was struck and you and you mentioned that, UM,

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Speaker 1: there's been a lot of criticism at the CFPB has

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Speaker 1: been too aggressive ensuing businesses UM and whether this step

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Speaker 1: back is appropriate in light of that. However, this doesn't

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Speaker 1: seem to be just a step back. It seems to

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Speaker 1: be just withdrawing from the field completely, and that, of

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Speaker 1: course is what supporters of the CFPB are concerned about,

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Speaker 1: including Barney Frank, including Senator Elizabeth Warren. Barney Frank of

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Speaker 1: course helping to create the CFPB as one of the

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Speaker 1: authors of the Dodd Frank legislation back in UH two

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Speaker 1: thousand and eight two thousand nine, and the Senator Warren

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Speaker 1: being the first acting head of it once it was

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Speaker 1: set up, coming down from Harvard University, appointed by President

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Speaker 1: Obama to stand up the agency. And then remember that

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Speaker 1: she was not confirmed the she wouldn't be confirmed the

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Speaker 1: Senate refused to confirm her, so then she decided to

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Speaker 1: run for senator herself and became the Senator from Massachu sits,

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Speaker 1: and of course Richard Cordrey took over the position of

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Speaker 1: director of the CFPB, but he resigned a few months

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Speaker 1: ago because he intends to run for the governor of Ohio.

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Speaker 1: So it seems to be a position that's on the move.

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Speaker 1: But now we have acting director Mick mulvaney. He has

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Speaker 1: not been confirmed. He is going to be just in

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Speaker 1: that position until President Trump appoints someone else. Attorney General

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Speaker 1: Jeff Sessions is the highest ranking Trump administration official to

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Speaker 1: be questioned by investigators for Special Counsel Robert Muller. The

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Speaker 1: Attorney General, has invoked executive privilege about his conversations with

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Speaker 1: the President in appearances before congressional committees. Here's an exchange

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Speaker 1: between Senator Diane find Stein and Sessions in October. Did

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Speaker 1: the President ever mentioned to you his concern about lifting

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Speaker 1: the cloud on the Russia investigation? Senator fystand. That calls

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Speaker 1: for a communication that I've had with the President, and

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Speaker 1: I believe it remains confidential. My guest is William Banks,

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Speaker 1: professor at Syracuse University Law School. Bill Sessions is entangled

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Speaker 1: in Muller's investigation in several ways. Does his questioning at

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Speaker 1: this point tell us where the investigation is well. I

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Speaker 1: think it does provide a fairly strong signals June that

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Speaker 1: the investigation is focusing now on potential obstruction of justice,

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Speaker 1: including by President Trump himself and respect to the firing

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Speaker 1: of James Comey, and also in his handling of the

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Speaker 1: dismissal of of Mr Flynn, concessions get away with invoking

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Speaker 1: executive privilege before Muller as he did at Congressional committees

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Speaker 1: in public and private. It's not likely. I think that,

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Speaker 1: in part because of public comments made by President Trump

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Speaker 1: on the record, in the lack of media interviews, and otherwise,

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Speaker 1: Trump has already said certain things that would support at

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Speaker 1: least a serious inquiry into whether obstruction has been committed.

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Speaker 1: So that whether Sessions tries to stonewall with the privileged

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Speaker 1: claims or some other I think that that the facts

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Speaker 1: are are going to be discovered by the Mueller team

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Speaker 1: here in the not too distant future. Also, he is

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Speaker 1: one witness after many many witnesses before him, and the

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Speaker 1: New York Times reported that in December the Mueller team

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Speaker 1: in had former FBI Director James Comey in for an interview.

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Speaker 1: So is Sessions more likely a witness or a target.

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Speaker 1: He was involved in the firing of of Comy. He

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Speaker 1: ordered Rod Rosenstein to rewrite the letter he met with

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Speaker 1: Russians during the campaign and lied about it under oath

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Speaker 1: until he was, you know, provoked to tell the truth. Yes,

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Speaker 1: so you've identified an important question that we that we

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Speaker 1: don't know the answer to yet, whether he becomes a

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Speaker 1: cooperating witness or a target, and that you know that

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Speaker 1: remains to be seen. It remains for further discussions between

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Speaker 1: Sessions and the Mueller team and Sessions and council. I

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Speaker 1: think it also depends in part on the outcome of

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Speaker 1: the eventual interview that the Muller team has with President Trump.

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Speaker 1: As we've heard that, you know, those those interviews are

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Speaker 1: getting closer. The lawyers for for Mueller and for the

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Speaker 1: President negotiating on terms, which parts of them might be

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Speaker 1: done live face to face and others handled and written submissions.

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Speaker 1: There's a precedent of that, as we know with with

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Speaker 1: President Clinton. So I think that's going to happen fairly soon.

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Speaker 1: And based on the public record again, they're they're uh,

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Speaker 1: there's a lot of material there to support a potential

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Speaker 1: obstruction Church Sessions in his time before Congress, when he's

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Speaker 1: asked questions, particularly about something having to do with Russia.

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Speaker 1: His appearance, for example, at a committee meeting where um

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Speaker 1: the the Papadopolis who has already turned state's evidence, um

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Speaker 1: was He's he said, I recall this, but I don't

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Speaker 1: recall that. I recall my part, but I don't recall

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Speaker 1: the rest of it. What happens in an FBI interrogation

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Speaker 1: room when you say something like that, We'll try to

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Speaker 1: go back and read pieces of testimony or or a

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Speaker 1: contemporaneous statements may by others that should refresh sessions recollection.

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Speaker 1: You know, Sessions is in a very uncomfortable position here

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Speaker 1: and has been now for for more than a year.

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Speaker 1: He's trying to be loyal to the president. At the

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Speaker 1: same time he's trying to remain independent of the president,

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Speaker 1: because that's his job as attorney General, has to uphold

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Speaker 1: the rule of law and to protect the independence of

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Speaker 1: best investigations conducted by the Justice Department. He's sort of

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Speaker 1: bent in both directions here. Well, of course, it's it's

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Speaker 1: very difficult. Yeah. Recently, Sessions asked FBI Director Christopher Ray

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Speaker 1: to change the senior ranks of the FBI, which prompted

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Speaker 1: Ray to threaten to resign if pressure to do that.

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Speaker 1: According to a person familiar with the matter, that seems

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Speaker 1: wrong on several letters levels. What's your take on that, Well,

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Speaker 1: it's it's you know, the movements have been questionable. Certainly

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Speaker 1: they have a partisan bent to them. But on the

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Speaker 1: other hand, it's it's certainly within the legal bounds and

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Speaker 1: and not all that unusual for the senior ranks of

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Speaker 1: the Justice Department to change over when when the administration changes.

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Speaker 1: So some of these officials have been in their positions

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Speaker 1: for a good long time and they're they're not political persons.

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Speaker 1: They're the highest level of professionals, such as Jim Baker,

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Speaker 1: the former General Council has now been reassigned. But you know,

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Speaker 1: I wouldn't think that too negatively of of Sessions or

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Speaker 1: the Justice Department for trying to shift around the senior

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Speaker 1: positions inside the department. It's not so much thinking negatively

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Speaker 1: about Sessions. It's about whether with with Sessions directing the

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Speaker 1: FBI leader about his senior staff. That that's my question,

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Speaker 1: whether that's unusual, Well, yes, but again, the the FBI,

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Speaker 1: Christopher Ray has stood up two Sessions here and said

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Speaker 1: that he wanted he would take all steps necessary to

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Speaker 1: protect the independence of the Bureau and its investigation. And

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Speaker 1: I think so far at least Ray has been stitfast

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Speaker 1: here and the President has not moved either through Sessions

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Speaker 1: are on his own to try to intimidate or dismiss Mr. Ray.

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Speaker 1: Just briefly, both Papadopolis and Flynn pleaded guilty to lyne

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Speaker 1: to f to the FBI during these sworn interviews. And

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Speaker 1: knowing the way Sessions has lied to Congress and then

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Speaker 1: backtracked when he's caught with the facts, is there a

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Speaker 1: possibility that that could also be facing him? He could?

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Speaker 1: You know? The the lie is that there does constitute

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Speaker 1: a false statement the way that the statute has written.

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Speaker 1: But again, I think the Molar team would be far

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Speaker 1: more interested in andociating an arrangement with Sessions to protect

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Speaker 1: him from any kind of uh A criminal charge in

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Speaker 1: return for his cooperation with their investigation, and I expect

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Speaker 1: we might see more of that in the weeks ahead.

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Speaker 1: Just yes or no here, but hasn't has an Attorney

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Speaker 1: general been turned before in this Yes? Yes? Think about

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Speaker 1: President Nixon and Mr Agney. There you go. You've refreshed

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Speaker 1: my recollection. Thanks so much, Bill. That's William Banks, a

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Speaker 1: professor at Syracuse University Law School. Thanks for listening to

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Speaker 1: the Bloomberg Law Podcast. You can subscribe and listen to

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Speaker 1: the show on Apple Podcasts, SoundCloud, and on bloomberg dot

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Speaker 1: com slash podcast. I'm June Brosso. This is Bloomberg