WEBVTT - Musk and Twitter - Will He or Won't He?? 0:00:03.160 --> 0:00:07.960 This is Bloomberg Law with June Brusso from Bloomberg Radio. 0:00:09.560 --> 0:00:12.400 Is it on or is it off? That's the question 0:00:12.440 --> 0:00:15.440 that's been asked about Elon musk deal to buy Twitter 0:00:15.600 --> 0:00:19.680 for the last six months. Now, Musk says it's on 0:00:20.000 --> 0:00:22.599 in a letter on Monday. The world's richest man made 0:00:22.600 --> 0:00:25.279 the proposal to go ahead with the forty four billion 0:00:25.280 --> 0:00:28.440 dollar deal to buy the social media network on the 0:00:28.440 --> 0:00:32.760 original terms. But Twitter has not dropped its lawsuit to 0:00:32.960 --> 0:00:35.519 force Musk to go through with the deal, and the 0:00:35.560 --> 0:00:40.120 trial date is still set for October. So what's going 0:00:40.200 --> 0:00:43.159 on here? To tell us is Eric Talley, a professor 0:00:43.200 --> 0:00:47.200 at Columbia Law School, why do you think Musk came 0:00:47.360 --> 0:00:51.640 in at the original offer price instead of trying a 0:00:51.640 --> 0:00:56.600 lower price. Well, look like any situation in which you 0:00:56.640 --> 0:00:59.240 know the parties are a party is reaching or trying 0:00:59.240 --> 0:01:01.520 to find resulution. There could be a whole bunch of 0:01:01.520 --> 0:01:05.280 different reasons. One of them, boast practically probably is the 0:01:05.319 --> 0:01:08.559 fact that everything is lined up to close the deal 0:01:08.600 --> 0:01:12.959 at twenty cents. The shareholders have voted, proxies have been 0:01:13.000 --> 0:01:15.839 sent out, the lenders have signed up to a deal 0:01:15.920 --> 0:01:17.880 that's going to go off with that price. So if 0:01:17.880 --> 0:01:19.759 you're going to change the price from that, like if 0:01:19.920 --> 0:01:21.759 if we're going to go for a settlement at fifty 0:01:21.800 --> 0:01:24.560 three twenty or something like that, pretty much all those 0:01:24.560 --> 0:01:26.720 things have to be put back in place again, and 0:01:26.760 --> 0:01:28.720 that can take some time. And you know, in the 0:01:28.760 --> 0:01:31.759 current market conditions, no one really is the biggest friend 0:01:31.800 --> 0:01:33.640 of trying to stall so long as you're trying to 0:01:33.640 --> 0:01:35.679 get this deal done. So that may be one of 0:01:35.680 --> 0:01:40.080 the main reasons why there's some attraction to getting exactly 0:01:40.120 --> 0:01:43.360 the same financial terms as we're with the initial deal. 0:01:43.959 --> 0:01:47.000 And what drove Musk to make this all for now. 0:01:47.319 --> 0:01:49.760 A couple of other things almost certainly drove him to 0:01:49.920 --> 0:01:52.720 do this now as opposed to two weeks ago. The 0:01:52.760 --> 0:01:54.880 first is just, you know, over the last couple of weeks, 0:01:54.920 --> 0:01:58.800 it has become clear that several of the defenses that 0:01:58.960 --> 0:02:01.920 Mr Musk was trying to put forward and those windows 0:02:01.960 --> 0:02:04.240 were starting to close a little bit. You know, his 0:02:04.520 --> 0:02:07.840 bought hunt that he was engaged in didn't seem like 0:02:07.840 --> 0:02:11.760 it was yielding the types of gross disparities between Twitter's 0:02:11.800 --> 0:02:14.760 disclosures and what the data scientists were finding. That he 0:02:14.800 --> 0:02:17.680 could walk away because that was a material adverse effect 0:02:17.720 --> 0:02:19.840 that probably was also going to imperil some of the 0:02:19.919 --> 0:02:25.480 situations related to fraud. A lot of the earlier discovery 0:02:25.560 --> 0:02:29.200 motions dealt with communications back and forth, and seems pretty 0:02:29.200 --> 0:02:32.280 clear that Mr Musk was well aware of bought issues. 0:02:32.320 --> 0:02:34.160 In fact, that's why he was going to go into 0:02:34.200 --> 0:02:36.760 this deal, and he was telling everyone about it. So 0:02:36.800 --> 0:02:39.160 I think a lot of the off ramps that he 0:02:39.240 --> 0:02:42.000 had kind of hoped he'd be able to get those 0:02:42.040 --> 0:02:44.880 windows started to narrow considerably, and it made it look 0:02:44.960 --> 0:02:47.640 more and more like, well, this may be a company 0:02:47.680 --> 0:02:50.320 that I end up owning. When you combine that with 0:02:50.400 --> 0:02:54.079 the fact that a He's about to go into a deposition, 0:02:54.160 --> 0:02:57.720 that deposition was probably going to be excruciating long and 0:02:57.800 --> 0:03:00.520 possibly a little bit embarrassing, because there are a lot 0:03:00.600 --> 0:03:03.800 of claims that he or his lawyers had made that 0:03:03.919 --> 0:03:08.760 had been almost fully rebutted by other witnesses, and it's 0:03:08.760 --> 0:03:10.480 clear that he was going to be called and and 0:03:10.520 --> 0:03:13.480 may still be called on a lot of those inconsistencies, 0:03:13.919 --> 0:03:16.560 and you know that would be videoed and shown in court. 0:03:16.600 --> 0:03:19.320 So I think that that going into that deposition there 0:03:19.360 --> 0:03:21.240 never fun, but this one was going to be a 0:03:21.280 --> 0:03:24.280 particularly unpleasant one, and then you finally combine it with 0:03:24.320 --> 0:03:27.680 the fact that if things are starting to shape up 0:03:27.720 --> 0:03:31.760 to look as though Mr Musk is now overwhelmingly likely 0:03:31.800 --> 0:03:35.200 that be owning Twitter. However, this thing settles how much 0:03:35.240 --> 0:03:37.720 more does he want to try to ncap this company? 0:03:37.760 --> 0:03:40.920 Because most of his defenses you pretty much boiled down 0:03:40.920 --> 0:03:43.040 to saying Twitter is a terrible company. Who would want 0:03:43.080 --> 0:03:44.600 to buy it, who would want to own it, who 0:03:44.600 --> 0:03:46.120 would want to work for it, who would want to 0:03:46.120 --> 0:03:48.320 be a customer of it? And if that's going to 0:03:48.400 --> 0:03:50.200 be his booby prize at the end of the day, 0:03:50.320 --> 0:03:52.560 maybe he sort of thought it's best I stopped being 0:03:52.680 --> 0:03:55.240 sort of the saboteur and start being the booster of 0:03:55.320 --> 0:03:58.440 this company. And so it's not terribly surprising that at 0:03:58.480 --> 0:04:01.440 some point, well, once he real is that he's going 0:04:01.520 --> 0:04:04.880 to be trying to recruit people to stay, the employees 0:04:04.920 --> 0:04:07.880 to stay, another investors to come in. That involves telling 0:04:07.880 --> 0:04:10.640 a positive story, not a negative story, and and the 0:04:10.880 --> 0:04:13.680 earlier he can pivot to doing that, perhaps the better. 0:04:14.440 --> 0:04:17.680 His offer was made with a proviso that the Delaware 0:04:17.760 --> 0:04:21.359 Chancery Court enter an immediate stay of Twitter's fight and 0:04:21.400 --> 0:04:24.960 adjourn the trial. His offer came with the proviso that 0:04:25.080 --> 0:04:28.640 there be an immediate stay of Twitter's legal fight and 0:04:28.839 --> 0:04:31.960 an a german of the trial. Twitter has not done that. 0:04:32.600 --> 0:04:36.000 Is this a case of fool me once, Shame on you, 0:04:36.120 --> 0:04:39.520 fool me twice, shame on me, fool me three, four 0:04:39.600 --> 0:04:42.800 or five times, shame on Twitter. Well that was a 0:04:42.880 --> 0:04:45.680 nice try by Mr Boss, but quite frankly, you know, 0:04:45.760 --> 0:04:48.920 the imagery of Lucy holding the football and Charlie Brown 0:04:49.040 --> 0:04:51.360 running up to kick the football again I think is 0:04:51.480 --> 0:04:53.760 definitely in play here, right. The fact of the matter 0:04:53.839 --> 0:04:57.560 is that letter sort of says I am gonna undertake 0:04:57.600 --> 0:04:59.760 to agree to do what I've already agreed to do 0:04:59.800 --> 0:05:02.279 in was trying to back out on. And so when 0:05:02.279 --> 0:05:06.080 you really read that letter closely, yes, it signals that 0:05:06.120 --> 0:05:08.120 he's had a change of heart, that he's willing to 0:05:08.160 --> 0:05:10.640 try to close this deal on its original terms. That's 0:05:10.640 --> 0:05:14.279 great news for Twitter, but it doesn't really put his 0:05:14.440 --> 0:05:18.560 money where his mouth is. It's conditioned on an immediate 0:05:18.600 --> 0:05:23.200 stay of all proceedings and on the debt commitments closing. Well, 0:05:23.320 --> 0:05:25.359 you know, the fact of the matter is that doesn't 0:05:25.400 --> 0:05:27.960 really change any of the positions that he was in 0:05:28.120 --> 0:05:30.360 All it does is it signals that he's now more 0:05:30.520 --> 0:05:34.360 open to closing on these particular terms. So Twitter would 0:05:34.360 --> 0:05:38.000 be foolish if they said, Okay, now that you've signaled 0:05:38.000 --> 0:05:42.520 this relatively limp willingness to go forward, we should just 0:05:42.640 --> 0:05:45.560 put everything on hold, even though we're careening towards this 0:05:45.880 --> 0:05:48.760 October seventeenth day. You know, if part of what was 0:05:48.839 --> 0:05:52.800 motivating him to issue this letter was sort of a 0:05:52.920 --> 0:05:56.640 fear of walking into that deposition room, well, if that's 0:05:56.680 --> 0:05:59.040 you know, has come to Jesus moment and deciding he's 0:05:59.080 --> 0:06:01.200 going to soften up on the steal, why would Twitter 0:06:01.240 --> 0:06:03.520 ever want to put on the brakes on their lawsuits. 0:06:03.520 --> 0:06:06.000 So if I'm Twitter's attorneys and it seems like this 0:06:06.040 --> 0:06:08.680 is what they've been doing, you know, you're telling your associates, no, 0:06:08.880 --> 0:06:11.400 you don't plan a trip to the Bahamas that week. 0:06:11.520 --> 0:06:13.919 We're planning to go to trial and until and in 0:06:14.080 --> 0:06:16.920 less the ink is dry on a deal that's much 0:06:16.960 --> 0:06:19.600 more credible than the first one. We're not gonna let 0:06:19.600 --> 0:06:22.520 this slow down, you know, any or at least not 0:06:22.640 --> 0:06:24.599 very many parts of the schedule that we put in 0:06:24.640 --> 0:06:27.400 place to get us ready for trial. What happens next. 0:06:27.880 --> 0:06:31.479 Is the deposition going to go forward? Well, the deposition 0:06:31.560 --> 0:06:34.520 is scheduled to be on October six and seven, I think, 0:06:34.520 --> 0:06:37.880 and that is absolutely still in the books. Now, they 0:06:37.960 --> 0:06:41.760 might push the deposition by a couple of days. It's 0:06:41.800 --> 0:06:45.400 conceivable they would, particularly if it's the queasy feeling about 0:06:45.400 --> 0:06:48.640 that deposition that is in fact um inducing a little 0:06:48.680 --> 0:06:51.680 bit of softening up with Mr Musk. That is probably 0:06:51.720 --> 0:06:54.360 gonna mean that other things get accelerated into its place, 0:06:54.680 --> 0:06:57.039 and that would give them maybe, you know, forty eight 0:06:57.040 --> 0:06:59.160 hours to try to work out whether they can get 0:06:59.240 --> 0:07:01.960 all of their box in a row to close the deal. 0:07:02.360 --> 0:07:05.120 But you know, if they are negotiating in the background 0:07:05.200 --> 0:07:07.520 what this closed deal is going to look like, I 0:07:07.520 --> 0:07:11.320 would expect that Twitter is trying to make sure that 0:07:11.400 --> 0:07:13.600 there are concessions there that are a little bit more 0:07:13.640 --> 0:07:16.800 concrete than merely a repetition of the promise that he 0:07:16.840 --> 0:07:19.920 made back in April to close the deal. So, for example, 0:07:20.280 --> 0:07:23.520 they might have him stipulate the various legal outcomes and 0:07:23.640 --> 0:07:27.280 essentially say I'm going to agree that the specific performance 0:07:27.440 --> 0:07:29.520 is in fact the right order here and concede my 0:07:29.600 --> 0:07:32.640 liability on the issue, or alternatively, they might say, Okay, 0:07:32.640 --> 0:07:34.600 if you want to go through this deal, it's going 0:07:34.640 --> 0:07:36.960 to take a few more days or weeks to get 0:07:37.000 --> 0:07:39.920 things lined up. We would like you to immediately put 0:07:40.200 --> 0:07:43.480 enough cash and stock in other companies like Tesla and 0:07:43.520 --> 0:07:46.400 SpaceX into an escrow account so that if you try 0:07:46.440 --> 0:07:48.160 to back out on it, we don't have to try 0:07:48.160 --> 0:07:51.200 to haul you into court for a specific performance degree. 0:07:51.240 --> 0:07:53.920 We'll just have a judge attached that account and have 0:07:54.040 --> 0:07:56.120 it empty out to us and have that will kind 0:07:56.120 --> 0:07:58.120 of put your money where your mouth is. So there 0:07:58.160 --> 0:08:00.520 are ways that they can try to put a few 0:08:00.520 --> 0:08:03.800 more teeth into this undertaking to close this deal at 0:08:03.840 --> 0:08:07.160 fifty cents, But I can't imagine that they would simply 0:08:07.200 --> 0:08:11.640 be happy to both delay and just reaffirm the the 0:08:12.320 --> 0:08:14.200 you know, all of the provisions as they are now. 0:08:14.200 --> 0:08:16.880 They can't do too much to the deal to change 0:08:16.880 --> 0:08:18.760 it around, or else they're gonna have to go back 0:08:18.800 --> 0:08:21.600 and you know, issue new proxies to shareholders, get another 0:08:21.640 --> 0:08:24.560 shareholder vote, and you know, go back to the to 0:08:24.680 --> 0:08:27.640 the debt commitment letter and and and hope to get 0:08:27.640 --> 0:08:30.160 a new one of those as well. So these will 0:08:30.200 --> 0:08:34.000 be mainly sort of um, you know, additions or writers 0:08:34.040 --> 0:08:37.600 to ensure prompt payment by Mr Musk uh and and 0:08:37.640 --> 0:08:40.480 adding on something like an escrow account or um an 0:08:40.480 --> 0:08:45.839 admission to liability wouldn't necessarily require changing the other terms 0:08:45.840 --> 0:08:49.880 of the agreement. What might the judge do to make 0:08:49.920 --> 0:08:54.560 sure that this deal happens before she decides to you know, 0:08:55.120 --> 0:08:59.400 before she said, decides to cancel the trial. Well, typically, 0:08:59.520 --> 0:09:02.760 you know, when parties go into deep negotiations about a 0:09:02.800 --> 0:09:05.640 potential settlement, the judgment will give them a little bit 0:09:05.640 --> 0:09:08.480 of room to do it, but not infinite room to 0:09:08.480 --> 0:09:11.320 do it, because you know, chance McCormick is pretty savvy 0:09:11.360 --> 0:09:13.320 to this as well, that one of the part Mr 0:09:13.400 --> 0:09:16.120 Musk has been alleged to already have been engaged in 0:09:16.280 --> 0:09:19.120 you know, stalling tactic in this litigation. So I think 0:09:19.200 --> 0:09:21.880 there's a sense in which the courts and Twitter would 0:09:21.920 --> 0:09:23.960 sort of say, okay, look, we'll give you enough room 0:09:24.120 --> 0:09:26.400 to see if we can negotiate a settlement of this deal, 0:09:26.480 --> 0:09:28.959 but not if all it really is is a pretext 0:09:29.000 --> 0:09:32.640 to put everything on hold. So I suspect that Chancellor 0:09:32.720 --> 0:09:35.640 McCormick will give them a little bit of leeway, particularly 0:09:35.679 --> 0:09:37.640 if they both show up saying we really think we're 0:09:37.679 --> 0:09:40.640 close to a deal, your honor, she might bump a 0:09:40.640 --> 0:09:43.400 couple of the depositions. I doubt she's going to bump 0:09:43.440 --> 0:09:46.040 the trial date, quite frankly, because you know that's been 0:09:46.040 --> 0:09:48.839 set for months now, and you know, Chance McCormick is 0:09:48.840 --> 0:09:51.080 not the only case that she's hearing. She's scheduling all 0:09:51.080 --> 0:09:53.760 these other cases around it as well. So that week 0:09:53.800 --> 0:09:56.400 has been reserved and dedicated to this case, and I 0:09:56.880 --> 0:09:59.480 anticipate that it's going to be the matter that goes 0:09:59.520 --> 0:10:02.440 forward at time. You know that there are still pieces 0:10:02.480 --> 0:10:04.480 to put together. One of the big wild cards in 0:10:04.520 --> 0:10:08.000 this case is whether suddenly the lenders in the deal, 0:10:08.040 --> 0:10:10.000 we're going to get cold feet and show up and 0:10:10.040 --> 0:10:12.680 say we're not willing to go forward, which then could 0:10:12.720 --> 0:10:16.000 throw things into even more chaos. So my guess is 0:10:16.040 --> 0:10:18.800 that these discussions aren't just between Twitter and Musk, but 0:10:18.840 --> 0:10:20.600 the lenders are in the room as well, just trying 0:10:20.600 --> 0:10:23.079 to make sure that every you know, all the remaining 0:10:23.080 --> 0:10:25.440 pieces that have to be put in place can be 0:10:25.520 --> 0:10:28.800 put in place. Enough assurances can be given to Twitter 0:10:28.880 --> 0:10:31.480 that the deal will close and they can execute any 0:10:31.520 --> 0:10:34.600 additional paperwork that they need to make that happen. What 0:10:34.720 --> 0:10:38.720 else could happen to trip up the deal? Well, there 0:10:38.800 --> 0:10:42.000 still is this wild card about the lenders. Now, the 0:10:42.080 --> 0:10:45.120 lenders don't have a lot of outsum in this deal, 0:10:45.200 --> 0:10:47.600 but there is a set of dominoes that could fall 0:10:47.679 --> 0:10:51.360 over if the lenders somehow legitimately back out. The most 0:10:51.440 --> 0:10:53.840 critical one is that if the lenders back out, while 0:10:53.840 --> 0:10:57.600 it doesn't forgive Musk entirely of his obligations, it would 0:10:57.679 --> 0:11:01.200 at least per the terms of the contract limit his 0:11:01.480 --> 0:11:05.040 liability to money damages, which is probably going to be 0:11:05.120 --> 0:11:08.240 the termination fee of a billion dollars. So the lenders 0:11:08.280 --> 0:11:12.280 backing out for independent reasons, not goaded on or coached 0:11:12.320 --> 0:11:15.359 by Mr Musk, has always been kind of an interesting 0:11:15.520 --> 0:11:18.880 wild card in this situation, and there aren't too many 0:11:19.120 --> 0:11:22.200 outs that the lenders have, But it could well be 0:11:22.480 --> 0:11:24.440 that one of the things that is going to be 0:11:24.480 --> 0:11:26.960 you know, really critical for the lenders, and he is 0:11:26.960 --> 0:11:30.800 actually part of the deal itself, is that there has 0:11:30.840 --> 0:11:34.320 to be a solvency certificate that is issued for for Twitter, 0:11:34.400 --> 0:11:36.760 that it's got to be assured that it's going to 0:11:36.840 --> 0:11:39.720 be solvent upon the closing of the deal, that it 0:11:39.800 --> 0:11:43.600 won't have liabilities and excessive assets or won't have cash 0:11:43.640 --> 0:11:47.120 flows that are incapable of meeting its debts. Someone's got 0:11:47.120 --> 0:11:49.480 to sign onto that, and weirdly enough, the entity that 0:11:49.520 --> 0:11:53.160 has to sign onto that solvency certificate is Elon Musk himself. 0:11:53.320 --> 0:11:56.080 So there could be some kind of odd fun and 0:11:56.160 --> 0:11:58.880 games that take place in which Musque says, I don't 0:11:58.920 --> 0:12:01.440 think I can sign on to a solvency certificate, and 0:12:01.480 --> 0:12:03.600 therefore the banks are going to pull their lending, and 0:12:03.640 --> 0:12:07.000 therefore he doesn't have to close under the contract. I 0:12:07.160 --> 0:12:10.120 do think that there is a danger that if that happens, though, 0:12:10.200 --> 0:12:13.400 it's going to be perceived by Twitter and probably the 0:12:13.520 --> 0:12:15.720 judge is being a little bit too cute, see, So 0:12:15.920 --> 0:12:18.320 I have some reservations about whether they're even going to 0:12:18.360 --> 0:12:22.000 try to go down that road. It is a theoretical possibility, 0:12:22.080 --> 0:12:24.280 so that might be something to keep our eyes out on. 0:12:24.679 --> 0:12:27.439 And the letter that Mr Musk sent about his offer 0:12:27.480 --> 0:12:31.160 to you know, come back to the table also says well, 0:12:31.200 --> 0:12:34.160 provided that the debt gets funded as well, So he 0:12:34.240 --> 0:12:37.240 has kind of worked in some wiggle rooms some margin 0:12:37.320 --> 0:12:40.080 of error on that front as well. And it's something 0:12:40.120 --> 0:12:41.640 that you know, you kind of look at, you say, okay, 0:12:41.800 --> 0:12:44.679 this is a letter that has some concessions in it, 0:12:44.720 --> 0:12:47.760 but it is not yet the paragon of predictability that 0:12:47.800 --> 0:12:50.320 I think Twitter would want or the Judge Eric. Is 0:12:50.320 --> 0:12:53.880 it just coincidence that Musk was getting blowback for his 0:12:54.160 --> 0:12:58.640 peace plan proposal on Ukraine and then news breaks the 0:12:58.679 --> 0:13:01.320 next day that he's going forward with the Twitter deal. 0:13:02.679 --> 0:13:05.320 I do think that there there, you know, have been, 0:13:05.559 --> 0:13:07.800 you know, in addition to a bunch of the other distractions, 0:13:07.960 --> 0:13:10.520 right um, Mr Musk's decision that he's going to engage 0:13:10.520 --> 0:13:14.520 in foreign policy initiatives for Ukraine being only one of them, 0:13:14.840 --> 0:13:17.200 but you know, some bad news for Tesla in terms 0:13:17.240 --> 0:13:20.600 of their production numbers and so forth. I do think 0:13:20.600 --> 0:13:22.840 there's a sense that the number of other distractions have 0:13:23.000 --> 0:13:26.559 grown sufficiently large that maybe Mr Musk sort of thought, Okay, 0:13:26.559 --> 0:13:28.640 this was fun for a while, this was entertaining for 0:13:29.200 --> 0:13:31.160 a few months, but now I got other things on 0:13:31.200 --> 0:13:33.080 my plate, and you know what, I kind of see 0:13:33.080 --> 0:13:34.920 where this is going anyway, so I might as well 0:13:34.920 --> 0:13:37.000 close this deal. I think you combine that with the 0:13:37.000 --> 0:13:40.000 fact that you know this was not destined to be 0:13:40.200 --> 0:13:42.400 a walk in the park, this deposition, I think there 0:13:42.400 --> 0:13:44.800 would be a lot of cringe worthy moments for Team 0:13:44.840 --> 0:13:48.040 Musk during this deposition of staments that are just outright 0:13:48.120 --> 0:13:52.000 inconsistent and by Twitter's account, just lies about what Mr 0:13:52.040 --> 0:13:55.319 Musk did and didn't do in his communications back in April. 0:13:55.520 --> 0:13:57.640 That no one really wants to have to sit through 0:13:57.679 --> 0:14:03.680 that squirm fest of a deposition, And thanks so much. Eric. 0:14:03.920 --> 0:14:09.880 That's Eric Tally, a professor at Columbia Law School. Tom Barrick, 0:14:10.000 --> 0:14:13.000 the founder of Colony Capital and a close ally of 0:14:13.080 --> 0:14:16.600 Donald Trump, is on trial in Brooklyn for using his 0:14:16.720 --> 0:14:20.560 access to the former president to secretly help the United 0:14:20.600 --> 0:14:25.000 Arab Emirates to try to gain influence over American foreign policy. 0:14:25.320 --> 0:14:29.600 Prosecutors say that Barrick and his former assistant Matthew Grimes 0:14:29.880 --> 0:14:32.920 were the eyes and ears and voices of the u 0:14:33.000 --> 0:14:37.400 a E, providing the country with sensitive information and access 0:14:37.400 --> 0:14:40.760 to the highest levels of US government. But the defense 0:14:40.760 --> 0:14:43.840 says Barrick was a globe trotting businessman who ran a 0:14:43.920 --> 0:14:48.720 forty billion dollar investment fund and called the prosecutions allegations 0:14:48.720 --> 0:14:52.320 that he was an illegal foreign agent nonsense. Joining me 0:14:52.320 --> 0:14:55.760 as Bloomberg Legal reporter Patricia Hurtado, who's covering the trial 0:14:56.400 --> 0:15:00.280 tell us what prosecutors are accusing Barrack of well. Tom 0:15:00.280 --> 0:15:04.840 Barrick is a longtime friend of Donald Trump's who acted 0:15:04.880 --> 0:15:09.600 as one of his campaign finance guys in sixteen. The 0:15:09.640 --> 0:15:13.360 government alleges that during the run up to the election, 0:15:13.680 --> 0:15:17.280 as well as Trump's election as president, he and his 0:15:17.720 --> 0:15:23.200 former assistant gentleman named Matthew Grimes basically conspired to act 0:15:23.280 --> 0:15:27.720 as unregistered foreign agents for the government of the United 0:15:27.760 --> 0:15:32.360 Arab Emirates, and the allegations are that he agreed to 0:15:32.440 --> 0:15:36.320 do the U a e. S bidding to help influence 0:15:36.560 --> 0:15:40.600 the new presidency and the new the new administration, arranging 0:15:40.720 --> 0:15:45.480 for meetings talking points. He denies it all. He said 0:15:45.600 --> 0:15:48.840 he was just a business fan doing his business. The 0:15:48.880 --> 0:15:51.920 government alleges he made money. According to the government, the 0:15:52.120 --> 0:15:55.760 Emirati Sovereign Wealth Funds later invested about three seventy four 0:15:55.800 --> 0:15:59.400 million into a fund and real estate projects he backed. 0:16:00.520 --> 0:16:05.720 So was there any formal agreement or anything that the 0:16:05.760 --> 0:16:10.080 government can point to to specifically show the agreement. No, 0:16:10.640 --> 0:16:12.760 which you have to do. And so if you are 0:16:12.840 --> 0:16:17.680 acting as a foreign agent, it's a violation section. And 0:16:17.720 --> 0:16:21.280 according to this you're supposed to tell the US government 0:16:21.360 --> 0:16:25.960 that you're doing lobbying for the foreign country. The US 0:16:26.000 --> 0:16:29.160 says he failed to tell them that he never registered. 0:16:29.440 --> 0:16:34.080 Neither did Grimes. Meanwhile, they charged an Emirati who is 0:16:34.120 --> 0:16:38.720 now a fugitive, of acting as the point man basically 0:16:39.080 --> 0:16:43.280 for the United Arab Emirates in the US with Barrick 0:16:43.360 --> 0:16:46.440 and Grimes. And then the minute he understood that the 0:16:46.520 --> 0:16:50.200 US was investigating, that he left the country. And what 0:16:50.320 --> 0:16:56.640 about barracks associate that's on trial. Yeah, he's his young assistant. 0:16:56.760 --> 0:16:59.480 He was twenty two when he started working for Barrick 0:16:59.760 --> 0:17:04.400 right out of Wharton, and he's accused of helping arranged 0:17:04.480 --> 0:17:08.360 these meetings and helping arrange these communicates. But his lawyer, 0:17:08.480 --> 0:17:11.639 Abby Lowell, has said he was just a gopher for Barrick, 0:17:11.760 --> 0:17:15.600 arranging for making sure he had his bosses smoothie every 0:17:15.640 --> 0:17:19.520 morning and the coffee was hot, and that the Colony 0:17:19.600 --> 0:17:23.560 Capital private jet had the right food in it. So 0:17:23.720 --> 0:17:27.679 he was basically his assistant. Nothing more. So is the 0:17:27.760 --> 0:17:31.080 defense he didn't do it or he didn't get money 0:17:31.119 --> 0:17:35.960 for it, or what. It's both that he didn't do it, 0:17:36.400 --> 0:17:39.320 and if he got money, it was because of investments 0:17:39.359 --> 0:17:42.359 that were just separate and apart from any kind of activity. 0:17:42.720 --> 0:17:46.600 Basically that he denies any wrongdoing. He denies being an 0:17:46.680 --> 0:17:51.280 unregistered foreign agent, he denies acting and lobbying on behalf 0:17:51.280 --> 0:17:54.359 of the United Arab Emirates, And in fact, he's argued 0:17:54.400 --> 0:17:58.719 that there were actually points where he was advocating for Cutter. 0:17:58.960 --> 0:18:01.840 There was a blockade to ends Cutter, and he was 0:18:01.920 --> 0:18:06.600 advocating for Cutter, which is another Gulf country which was 0:18:06.800 --> 0:18:11.840 violently opposed by the UAE and they were basically sworn enemies. 0:18:11.880 --> 0:18:15.200 So why would you support one country and then support 0:18:15.240 --> 0:18:18.440 another country when their enemies? What would you say from 0:18:18.480 --> 0:18:22.399 the opening statements is the best piece of evidence the 0:18:22.480 --> 0:18:26.200 prosecution has. Well, I mean, the other thing that he's 0:18:26.280 --> 0:18:30.879 charged with is lying to the FBI about this investigation 0:18:31.000 --> 0:18:34.080 when they question him point blank. Now, a lot of 0:18:34.119 --> 0:18:37.440 the evidence has been alluded to, but it's under steal 0:18:37.680 --> 0:18:42.880 because it's classified. So there's apparently information there that has 0:18:42.920 --> 0:18:46.080 been redacted half of the documents that get filed or 0:18:46.280 --> 0:18:50.400 blacked out, according to the defense, but they expect to 0:18:50.440 --> 0:18:53.880 call people in the former Trump administration to discuss that 0:18:54.240 --> 0:18:59.560 Trump and high ranking officials and the Trump administration were 0:18:59.600 --> 0:19:03.399 away error that Barrick was talking to the Emiratis and 0:19:03.440 --> 0:19:05.800 this was just the way they did business, and they 0:19:05.800 --> 0:19:09.080 were using Barrack because he was well known to them. 0:19:09.119 --> 0:19:12.440 Because one of the arguments is that Trump gets elected 0:19:12.800 --> 0:19:16.640 as a businessman and a former reality TV sheet show host, right, 0:19:16.800 --> 0:19:21.560 so he doesn't have the traditional avenues of knowing who's 0:19:21.560 --> 0:19:24.000 going to be a former foreign policy advisor. You know, 0:19:24.160 --> 0:19:28.840 that can be a conduit to reaching the newly elected president. 0:19:29.240 --> 0:19:32.360 So he would still have to register as a foreign agent, though, 0:19:32.359 --> 0:19:35.520 wouldn't he? Yeah, he would, And but I think the 0:19:35.680 --> 0:19:39.320 argument is if Trump maybe knew, and maybe high ranking 0:19:39.359 --> 0:19:42.000 members of the administration knew that this was being done, 0:19:42.680 --> 0:19:45.159 I guess there is an argument of plausible deniability as 0:19:45.200 --> 0:19:48.359 far as the defense is concerned, right, because if they knew, 0:19:48.480 --> 0:19:52.760 what's the problem here, and that perhaps another administration is 0:19:52.800 --> 0:19:56.000 seeing different because Trump is no longer in office. It 0:19:56.040 --> 0:20:01.040 seems like lying to the FBI is one of the 0:20:01.119 --> 0:20:05.840 prosecution sort of fallbacks in these cases. And that's an 0:20:05.840 --> 0:20:09.360 easy case for the prosecution to make because the FBI 0:20:09.480 --> 0:20:13.800 usually has the answer is before they asked the questions. Yeah, 0:20:13.800 --> 0:20:16.720 but it's interesting because they're arguing the same defense Martha 0:20:16.760 --> 0:20:19.680 Stewart made, which is you guys didn't take notes. I 0:20:19.680 --> 0:20:21.760 mean you took notes by hand, but you didn't record it. 0:20:21.800 --> 0:20:23.960 How do you know you didn't write the questions down? 0:20:24.240 --> 0:20:26.240 How do we know that the answer was wrong when 0:20:26.240 --> 0:20:29.119 you don't have the question? He answered, you know you 0:20:29.200 --> 0:20:31.359 have an answer, but you don't know what the question was. 0:20:31.440 --> 0:20:34.479 And so how's the jury supposed to infer the worst 0:20:34.520 --> 0:20:38.800 possible interpretation and take the worst inference? Well, we know 0:20:38.880 --> 0:20:42.440 that defense did not work for Martha Stewart. How is 0:20:42.520 --> 0:20:46.120 jury selection? One of the interesting things that happened during 0:20:46.200 --> 0:20:51.040 jury selection is jurors were questioned closely about their feelings 0:20:51.080 --> 0:20:56.320 about Donald Trump himself and how closely they followed the 0:20:57.280 --> 0:21:01.760 sixteen campaign, and um, the judge actually asked prospective jurors 0:21:01.800 --> 0:21:04.760 how did they feel about Trump? Donald Trump himself and 0:21:04.800 --> 0:21:07.680 what would they think if he came in to testify 0:21:07.800 --> 0:21:11.879 as a witness in this case. So that was extraordinarily 0:21:12.000 --> 0:21:14.840 unusual to hear that, especially at a time when we're 0:21:14.880 --> 0:21:19.159 having the Moral Lago investigation and whether or not, you know, 0:21:19.200 --> 0:21:22.280 the January six hearings are going on and what transpired there. 0:21:22.920 --> 0:21:28.680 So it's it's quite interesting that there's some possibility that 0:21:28.760 --> 0:21:32.640 Donald Trump or high ranking members of his administration could 0:21:32.680 --> 0:21:36.800 be called in to testify, including Jared Kushner and possibly 0:21:37.520 --> 0:21:41.119 a former Secretary of State Rex Tillerson and um former 0:21:41.160 --> 0:21:45.200 Treasury Secretary Steve the Nuchin about what did Barracks say 0:21:45.280 --> 0:21:47.560 and what did you know about it? Did the judge 0:21:47.640 --> 0:21:52.200 let jurison who had any negative thoughts about Trump negative 0:21:52.200 --> 0:21:55.880 feelings about Trump? For the most part, it was almost 0:21:56.000 --> 0:22:01.240 like if they were very discreet, they did not get 0:22:01.320 --> 0:22:04.360 kicked off the jury for cause. You know, there's peremptory 0:22:04.440 --> 0:22:07.800 challenges where both sides get to object to a certain 0:22:08.080 --> 0:22:10.480