1 00:00:03,200 --> 00:00:08,000 Speaker 1: This is Bloomberg Law with June Brusso from Bloomberg Radio. 2 00:00:10,400 --> 00:00:13,880 Speaker 1: The Supreme Court stepped into the twenty twenty four election 3 00:00:14,040 --> 00:00:17,479 Speaker 1: this week, allowing Virginia to carry out a purge of 4 00:00:17,560 --> 00:00:20,240 Speaker 1: residents from its voter rolls on the eve of the 5 00:00:20,280 --> 00:00:26,119 Speaker 1: election without any explanation. The Court's conservative justices overrode the 6 00:00:26,160 --> 00:00:29,640 Speaker 1: decision of a federal court and a unanimous appeals court, 7 00:00:29,800 --> 00:00:33,000 Speaker 1: which had found that the state's purge of about sixteen 8 00:00:33,120 --> 00:00:38,600 Speaker 1: hundred voters violated federal law. The National Voter Registration Act 9 00:00:38,840 --> 00:00:43,240 Speaker 1: prohibits systematic removals of voters in the ninety days before 10 00:00:43,280 --> 00:00:48,360 Speaker 1: an election. Republican Virginia Governor Glenn Younkin defended his order 11 00:00:48,440 --> 00:00:52,000 Speaker 1: for the purge, which was issued on August seventh, the 12 00:00:52,159 --> 00:00:56,160 Speaker 1: ninetieth day before the November fifth election here on CNN. 13 00:00:56,680 --> 00:01:00,800 Speaker 2: Because it is done on an individualized basis by person, 14 00:01:01,480 --> 00:01:05,479 Speaker 2: and because that person has in fact self identified as 15 00:01:05,520 --> 00:01:09,280 Speaker 2: a non citizen, this is not subject to the ninety 16 00:01:09,360 --> 00:01:11,040 Speaker 2: day blackout period in my view. 17 00:01:11,480 --> 00:01:15,720 Speaker 1: The three liberal justices dissented, joining me is Elections law 18 00:01:15,760 --> 00:01:19,120 Speaker 1: expert Richard brough Fault, a professor at Columbia Law School. 19 00:01:19,680 --> 00:01:24,160 Speaker 1: Were you surprised that the Supreme Court intervened to reverse 20 00:01:24,240 --> 00:01:26,839 Speaker 1: the Fourth Circuit and the District Court. 21 00:01:26,800 --> 00:01:29,959 Speaker 3: Judge, Yes, maybe I shouldn't have been, but yes I was. 22 00:01:30,080 --> 00:01:32,880 Speaker 3: So the case involves a state effort to purge people 23 00:01:32,920 --> 00:01:35,600 Speaker 3: from the roles on the claim that they're non citizens. 24 00:01:35,800 --> 00:01:38,760 Speaker 3: Non citizens are not entitled to vote. It's illegal, and 25 00:01:38,840 --> 00:01:41,160 Speaker 3: states are allowed to remove any non citizens that are 26 00:01:41,200 --> 00:01:43,360 Speaker 3: on the ballot. But there is a provision in federal 27 00:01:43,440 --> 00:01:47,120 Speaker 3: law National Voter Registration Act, that prohibits mass purchase so 28 00:01:47,200 --> 00:01:50,600 Speaker 3: called systematic purchase within ninety days before the election, because 29 00:01:50,760 --> 00:01:53,640 Speaker 3: it makes it two difficult. People may be purged by mistake, 30 00:01:53,760 --> 00:01:55,600 Speaker 3: and if it's a mass purge, it's actually difficult for 31 00:01:55,640 --> 00:01:57,760 Speaker 3: people to be aware of that and to respond. And 32 00:01:57,800 --> 00:02:00,520 Speaker 3: so that is illegal. But Virginia a conscious they adopted 33 00:02:00,520 --> 00:02:02,760 Speaker 3: such a program. The governor you shouldn't executive words to 34 00:02:02,800 --> 00:02:05,440 Speaker 3: that effect literally on the day that this so called 35 00:02:05,560 --> 00:02:08,480 Speaker 3: quiet or non virtually was supposed to begin, and basically 36 00:02:08,800 --> 00:02:12,680 Speaker 3: used some mix of DMV data and other databases to 37 00:02:12,880 --> 00:02:15,960 Speaker 3: conclude that people were not citizens DMV. When you get 38 00:02:15,960 --> 00:02:17,760 Speaker 3: a driver's license, you may be asked whether or not 39 00:02:17,760 --> 00:02:20,560 Speaker 3: you were a citizens. Some people checked non citizen by mistake, 40 00:02:20,760 --> 00:02:22,880 Speaker 3: some people check not aisms because they are not a 41 00:02:22,880 --> 00:02:25,280 Speaker 3: citizen when they get their driver's license, but some years 42 00:02:25,360 --> 00:02:29,080 Speaker 3: later become naturalized as citizens. So the state, using that 43 00:02:29,200 --> 00:02:32,040 Speaker 3: data and other data, went ahead and concluded that something 44 00:02:32,160 --> 00:02:35,640 Speaker 3: like sixteen hundred people were not citizens and needed to 45 00:02:35,639 --> 00:02:38,040 Speaker 3: be purged from the roles. And that was challenged on 46 00:02:38,080 --> 00:02:40,440 Speaker 3: the theory that violated the federal law. And also there 47 00:02:40,440 --> 00:02:42,360 Speaker 3: was evidence a number of these people who were bridge 48 00:02:42,360 --> 00:02:45,280 Speaker 3: were in fact citizens and were challenging th as individuals. 49 00:02:46,040 --> 00:02:49,400 Speaker 1: So that challenge went up the chain, so to speak, 50 00:02:49,800 --> 00:02:53,520 Speaker 1: to the federal district court and the appellate court tell 51 00:02:53,600 --> 00:02:54,520 Speaker 1: us what happened there. 52 00:02:54,800 --> 00:02:57,480 Speaker 3: The Federal District Court in Virginia concluded that this was 53 00:02:57,520 --> 00:03:00,320 Speaker 3: a pretty straightforward violation the federal law, that it was 54 00:03:00,360 --> 00:03:02,480 Speaker 3: going on in this so called quiet period, that it 55 00:03:02,520 --> 00:03:06,399 Speaker 3: was a systematic removal effort, not based on individualized information 56 00:03:06,400 --> 00:03:10,240 Speaker 3: about individual voters, but basically a massive database information that 57 00:03:10,280 --> 00:03:12,440 Speaker 3: they were loading from one database to another. And the 58 00:03:12,480 --> 00:03:16,200 Speaker 3: Fourth Circuit Court of Appeals agreed rather refused to overturn 59 00:03:16,400 --> 00:03:18,919 Speaker 3: the District Court's injunction. The Court of Appeals basically said 60 00:03:19,000 --> 00:03:20,720 Speaker 3: yes on the fact, it appears to us that this 61 00:03:20,840 --> 00:03:23,840 Speaker 3: is a violation of federal law and it should be stopped. 62 00:03:23,960 --> 00:03:27,160 Speaker 3: The Supreme Court rather quickly by well, I'm coming to 63 00:03:27,240 --> 00:03:29,360 Speaker 3: say six three, but you know that three liberal justices 64 00:03:29,400 --> 00:03:31,920 Speaker 3: dissented because it was just an order. It's not clear 65 00:03:31,960 --> 00:03:34,120 Speaker 3: that all six of the others agreed, but looks like 66 00:03:34,120 --> 00:03:36,880 Speaker 3: by pretty much a party line vote without an opinion, 67 00:03:37,080 --> 00:03:40,200 Speaker 3: basically reversed a fourth circuit and allowed this purge to 68 00:03:40,200 --> 00:03:44,000 Speaker 3: go forth. The purchase actually stopped, but the sixteen hundred 69 00:03:44,080 --> 00:03:48,280 Speaker 3: voters who were removed remain removed unless they can as 70 00:03:48,360 --> 00:03:52,600 Speaker 3: individuals go in and Virginia allows same day registration, go 71 00:03:52,840 --> 00:03:55,800 Speaker 3: in and prove that they are citizens and re register 72 00:03:55,920 --> 00:03:56,720 Speaker 3: and then vote. 73 00:03:56,960 --> 00:04:01,200 Speaker 1: Virginia made several arguments, and one was that the quiet 74 00:04:01,240 --> 00:04:06,120 Speaker 1: period doesn't apply to non citizens. Another was that courts 75 00:04:06,120 --> 00:04:09,040 Speaker 1: shouldn't get involved because of what's known as the personal 76 00:04:09,160 --> 00:04:11,440 Speaker 1: principle right, so taking. 77 00:04:11,200 --> 00:04:13,640 Speaker 3: Them in reverse order. The problem with the per cl 78 00:04:13,720 --> 00:04:16,680 Speaker 3: principle in this case is, I mean, the only basis 79 00:04:16,680 --> 00:04:19,960 Speaker 3: for judicial intervention is that the state has violated the 80 00:04:20,080 --> 00:04:23,559 Speaker 3: ninety day rule, So any effort to enforce the ninety 81 00:04:23,600 --> 00:04:26,280 Speaker 3: day rule would occur within ninety days before the election, 82 00:04:26,720 --> 00:04:29,080 Speaker 3: so it makes no sense to invoke the for cell 83 00:04:29,160 --> 00:04:32,120 Speaker 3: principle here. The only real question is did the plaintiffs 84 00:04:32,160 --> 00:04:35,200 Speaker 3: and the US government, which also participated, move quickly once 85 00:04:35,240 --> 00:04:37,279 Speaker 3: they became aware of what was going on, and the 86 00:04:37,320 --> 00:04:39,080 Speaker 3: lower courts degree that they did that there was no 87 00:04:39,160 --> 00:04:41,599 Speaker 3: delay once it became clear what the state was doing. 88 00:04:41,640 --> 00:04:43,919 Speaker 3: The lawsuit was brought in terms of whether or not 89 00:04:44,040 --> 00:04:47,920 Speaker 3: the quiet period applies to removal and non citizens. Nothing 90 00:04:48,040 --> 00:04:50,880 Speaker 3: in it any case that it doesn't. In other words, 91 00:04:50,960 --> 00:04:53,279 Speaker 3: the law is simply there to say that there should 92 00:04:53,279 --> 00:04:57,520 Speaker 3: be no removals based on a system and no systematic removals, 93 00:04:57,800 --> 00:05:01,640 Speaker 3: and it doesn't say no removal only for non residency. 94 00:05:01,760 --> 00:05:05,360 Speaker 3: It just has no removals that period. So there's nothing 95 00:05:05,440 --> 00:05:08,680 Speaker 3: in the law that limits the grounds of ineligibility to 96 00:05:08,880 --> 00:05:11,159 Speaker 3: something or other, such as to moving, and it does 97 00:05:11,240 --> 00:05:15,040 Speaker 3: permit removals for death. So it's not quite clear what 98 00:05:15,080 --> 00:05:17,400 Speaker 3: this law would be doing if it doesn't also apply 99 00:05:17,440 --> 00:05:19,680 Speaker 3: to removals on a theory that the individual is not 100 00:05:19,720 --> 00:05:20,240 Speaker 3: a citizen. 101 00:05:20,560 --> 00:05:23,480 Speaker 1: So, as you mentioned, we don't know why the justices 102 00:05:23,600 --> 00:05:28,279 Speaker 1: voted as they did, but the three liberal justices made 103 00:05:28,320 --> 00:05:32,520 Speaker 1: their public dissent clear. What does it tell you that 104 00:05:32,600 --> 00:05:34,800 Speaker 1: this was down ideological lines. 105 00:05:35,400 --> 00:05:38,400 Speaker 3: It's very troubling. It's very troubling. The lower court decision 106 00:05:38,839 --> 00:05:41,160 Speaker 3: was well reasoned. The Court of Appeals agreed with it, 107 00:05:41,320 --> 00:05:44,400 Speaker 3: and there is irreparable injury to those voters who might 108 00:05:44,440 --> 00:05:46,400 Speaker 3: be eligible to vote, who have been denied the right 109 00:05:46,440 --> 00:05:48,279 Speaker 3: to vote. Now, some of them will be able to 110 00:05:48,600 --> 00:05:52,360 Speaker 3: re establish their eligibility because they can re register in 111 00:05:52,400 --> 00:05:54,440 Speaker 3: the coming day. So it's possible some of them will 112 00:05:54,520 --> 00:05:56,680 Speaker 3: be back in, but you know, it takes time, it 113 00:05:56,680 --> 00:05:58,279 Speaker 3: takes efforts. Quite possible some of them will not. 114 00:05:58,600 --> 00:06:02,440 Speaker 1: Although Virginia is not a battleground state. This was based 115 00:06:02,480 --> 00:06:06,040 Speaker 1: on an order by the Republican governor and was backed 116 00:06:06,080 --> 00:06:09,479 Speaker 1: at the Supreme Court by the country's twenty six other 117 00:06:09,560 --> 00:06:14,159 Speaker 1: Republican state attorneys general, the Republican National Committee, and several 118 00:06:14,160 --> 00:06:19,560 Speaker 1: conservative groups. And it revolves around a flashpoint in Donald 119 00:06:19,560 --> 00:06:23,720 Speaker 1: Trump's campaign, yes, which is that you know, there's widespread 120 00:06:23,800 --> 00:06:26,640 Speaker 1: voting by non citizens. 121 00:06:26,200 --> 00:06:28,640 Speaker 3: Right, And for years he's been making that argument, even 122 00:06:28,680 --> 00:06:31,520 Speaker 3: when he won in twenty sixteen, although he lost the 123 00:06:31,560 --> 00:06:33,640 Speaker 3: popular vote, he says, well, I really won the popular 124 00:06:33,720 --> 00:06:36,440 Speaker 3: vote because Hillary Clinton's numbers were inflated by all the 125 00:06:36,440 --> 00:06:39,560 Speaker 3: non citizens. There is absolutely no evidence of more than 126 00:06:39,920 --> 00:06:42,520 Speaker 3: a minuscule number of non citizens voting, and you received 127 00:06:42,560 --> 00:06:45,640 Speaker 3: by mistake. It's illegal for non citizens to vote. There 128 00:06:45,640 --> 00:06:49,200 Speaker 3: are severe penalties. The number of non citizens who are 129 00:06:49,240 --> 00:06:53,039 Speaker 3: registered vote, who or actually vote is absolutely minusculine. It 130 00:06:53,160 --> 00:06:56,440 Speaker 3: is a non fact, but it's been used so heavily 131 00:06:56,600 --> 00:07:00,360 Speaker 3: by Republicans to try and undermine the legitimacy if there 132 00:07:00,440 --> 00:07:02,240 Speaker 3: was just no evidence that it occurs. 133 00:07:02,880 --> 00:07:06,279 Speaker 1: So do you think this lawsuit is to set the 134 00:07:06,360 --> 00:07:10,400 Speaker 1: stage or the groundwork for contesting election results? 135 00:07:10,720 --> 00:07:14,280 Speaker 3: Yes, I think anything that raises the issue of non citizens. Now. 136 00:07:14,280 --> 00:07:17,200 Speaker 3: Of course Republicans won this lawsuit, so they won't be 137 00:07:17,200 --> 00:07:20,320 Speaker 3: able to make this argument in Virginia now, but you know, 138 00:07:20,400 --> 00:07:22,640 Speaker 3: it is an issue they've been raising all over the country. 139 00:07:22,760 --> 00:07:25,679 Speaker 3: There was a similar student Alabama where the federal District 140 00:07:25,680 --> 00:07:28,240 Speaker 3: Court ordered the governor to stop the PERGE program in 141 00:07:28,320 --> 00:07:30,720 Speaker 3: Alabama and undo it there. I think about three thousand 142 00:07:30,720 --> 00:07:32,520 Speaker 3: people have been removed from the roles, and there was 143 00:07:32,560 --> 00:07:35,040 Speaker 3: evidence that it's often by a mistake. Again, they're using 144 00:07:35,120 --> 00:07:38,560 Speaker 3: old databases. Sometimes it's the wrong person. There may be 145 00:07:38,680 --> 00:07:41,120 Speaker 3: that the DMV numbers may indicate this person with a 146 00:07:41,120 --> 00:07:44,000 Speaker 3: certain name is a non citizen. Somebody with the same name, 147 00:07:44,200 --> 00:07:46,640 Speaker 3: but a different person might be removed from the roles 148 00:07:46,680 --> 00:07:49,440 Speaker 3: because their matching is pretty basic. Basically, if you have 149 00:07:49,480 --> 00:07:51,120 Speaker 3: the same first and last name as the person at 150 00:07:51,240 --> 00:07:53,360 Speaker 3: least been identified as a non citizen, you can be removed. 151 00:07:53,360 --> 00:07:56,679 Speaker 3: And that's not so uncommon. And it also again using 152 00:07:56,880 --> 00:07:59,840 Speaker 3: DMV data, since your driver's license can be good for 153 00:08:00,000 --> 00:08:02,640 Speaker 3: four years or more. In that time, you could have 154 00:08:02,760 --> 00:08:05,240 Speaker 3: naturalized from being a non citizen to a citizen, but 155 00:08:05,320 --> 00:08:07,880 Speaker 3: that naturalized person will be removed from the roles. And 156 00:08:07,960 --> 00:08:09,720 Speaker 3: so I think it's very much a way of keeping 157 00:08:09,760 --> 00:08:12,560 Speaker 3: the issue alive and in front of people all the time. 158 00:08:12,800 --> 00:08:15,119 Speaker 3: And indeed people will think, oh, there were sixteen hundred 159 00:08:15,280 --> 00:08:17,960 Speaker 3: non citizens voting in Virginia, but it's not clear that 160 00:08:18,040 --> 00:08:20,640 Speaker 3: any of them were non citizens. Certain names popped up 161 00:08:20,640 --> 00:08:23,280 Speaker 3: on databases, and certainly there are been individual cases in 162 00:08:23,320 --> 00:08:25,720 Speaker 3: the newspapers and people showing that they were not non citizens, 163 00:08:25,760 --> 00:08:28,280 Speaker 3: that they were citizens, some citizens from birth and some 164 00:08:28,360 --> 00:08:29,440 Speaker 3: naturalized citizens. 165 00:08:29,720 --> 00:08:32,760 Speaker 1: A lot of election experts have been saying that this 166 00:08:32,880 --> 00:08:36,280 Speaker 1: year's election won't be a repeat of Bush vy Gore, 167 00:08:36,480 --> 00:08:39,880 Speaker 1: the Supreme Court is unlikely to play a pivotal role. 168 00:08:40,120 --> 00:08:44,160 Speaker 1: But does this decision indicate differently that the Justices may 169 00:08:44,200 --> 00:08:44,880 Speaker 1: get involved. 170 00:08:45,040 --> 00:08:46,680 Speaker 3: Yes, I don't know why you would think that the 171 00:08:46,760 --> 00:08:48,880 Speaker 3: Justices will be uninvolved. It will turn on what the 172 00:08:48,920 --> 00:08:52,240 Speaker 3: issues are. And you know, I think Bush versus Gore 173 00:08:52,360 --> 00:08:55,040 Speaker 3: was unusual and that the issue the Supreme Court dealt 174 00:08:55,080 --> 00:08:58,480 Speaker 3: with was effect a post election issue. In other words, 175 00:08:58,559 --> 00:09:00,360 Speaker 3: how to take care of a recount to ord how 176 00:09:00,400 --> 00:09:02,960 Speaker 3: do take care of the counting of ballots in Florida 177 00:09:03,240 --> 00:09:06,080 Speaker 3: where it wasn't completely clear how people had voted, and 178 00:09:06,160 --> 00:09:08,600 Speaker 3: so that was an issue that could not have come 179 00:09:08,679 --> 00:09:11,160 Speaker 3: up before the election this time. I mean, I think 180 00:09:11,240 --> 00:09:14,880 Speaker 3: they're deciding issues that could be relevant to the election beforehand, 181 00:09:14,920 --> 00:09:17,560 Speaker 3: like this one. As for things after the election, there 182 00:09:17,559 --> 00:09:19,480 Speaker 3: may still be things that come up, so it's hard 183 00:09:19,520 --> 00:09:21,120 Speaker 3: to know. In some ways, you could argue that this 184 00:09:21,320 --> 00:09:24,040 Speaker 3: earlier this year on Trump's immunity in some sense plays 185 00:09:24,040 --> 00:09:25,960 Speaker 3: into the election, or he's getting on the ballot in 186 00:09:26,000 --> 00:09:28,600 Speaker 3: the first place. So I don't understand the argument as 187 00:09:28,600 --> 00:09:31,400 Speaker 3: to why anyone thinks that they would be more or 188 00:09:31,480 --> 00:09:34,760 Speaker 3: less engaged than in twenty or in twenty twenty, where 189 00:09:34,800 --> 00:09:36,640 Speaker 3: they did a bunch of things before the election, but 190 00:09:37,360 --> 00:09:38,720 Speaker 3: not so much after the election. 191 00:09:39,400 --> 00:09:43,240 Speaker 1: Well, some people are pointing to those cases as an 192 00:09:43,240 --> 00:09:46,839 Speaker 1: indication that the Supreme Court won't get involved, saying Donald 193 00:09:46,880 --> 00:09:51,000 Speaker 1: Trump and his allies brought around sixty cases challenging the 194 00:09:51,080 --> 00:09:54,000 Speaker 1: election in different ways, and the Supreme Court didn't take 195 00:09:54,080 --> 00:09:56,320 Speaker 1: up any appeals right right. 196 00:09:56,200 --> 00:10:00,000 Speaker 3: And including the original jurisdiction case that Texas brought against Pennsylvania, 197 00:10:00,000 --> 00:10:02,880 Speaker 3: it's not count Pennsylvania's vote sexist, joined by twenty other 198 00:10:02,920 --> 00:10:06,120 Speaker 3: Republican states. They didn't hear that. No, they stayed pretty 199 00:10:06,200 --> 00:10:08,440 Speaker 3: much out of it after the election in twenty twenty. 200 00:10:08,559 --> 00:10:10,839 Speaker 3: But you know, the result in twenty twenty was pretty clear. 201 00:10:11,160 --> 00:10:13,680 Speaker 3: It's hard to speculate about the Supreme Court, but this 202 00:10:13,840 --> 00:10:17,880 Speaker 3: decision is not a great sign about the courts wanting 203 00:10:17,920 --> 00:10:20,800 Speaker 3: to stay out of the election. This was an unnecessary decision. 204 00:10:21,080 --> 00:10:23,440 Speaker 3: The law was pretty strongly on the side of the plaintiffs, 205 00:10:23,600 --> 00:10:24,880 Speaker 3: the ones trying to stop the purge. 206 00:10:25,320 --> 00:10:27,679 Speaker 1: I do want to point out that on Tuesday, the 207 00:10:27,720 --> 00:10:32,480 Speaker 1: Supreme Court did refuse to order the removal of Robert F. 208 00:10:32,600 --> 00:10:39,160 Speaker 1: Kennedy Junior's name from presidential election ballots in Michigan and Wisconsin. 209 00:10:39,720 --> 00:10:42,880 Speaker 1: The officials there said his request came too late under 210 00:10:42,920 --> 00:10:46,760 Speaker 1: the laws of the two states where voting has already begun, 211 00:10:47,200 --> 00:10:49,320 Speaker 1: and the Supreme Court didn't get involved. 212 00:10:49,720 --> 00:10:51,560 Speaker 3: Yeah, I mean again, it's hard to figure out. It 213 00:10:51,559 --> 00:10:53,599 Speaker 3: could be that maybe they want to be deferring to 214 00:10:53,720 --> 00:10:56,600 Speaker 3: the states both ways. I mean, refusing to order the 215 00:10:56,600 --> 00:10:59,120 Speaker 3: removal is consistent with deferring to the state and in 216 00:10:59,160 --> 00:11:01,040 Speaker 3: this case, allowing them to go forward with the purchase 217 00:11:01,040 --> 00:11:03,560 Speaker 3: consistent with the differing of the state. Maybe that's part 218 00:11:03,559 --> 00:11:05,400 Speaker 3: of it, but I'm not even trying to tempt it 219 00:11:05,440 --> 00:11:07,000 Speaker 3: to say that there's a consistent logic. 220 00:11:07,200 --> 00:11:10,120 Speaker 1: It's hard to see it. A lot more election disputes 221 00:11:10,160 --> 00:11:13,640 Speaker 1: to be resolved in the courts before the election, and 222 00:11:14,000 --> 00:11:17,040 Speaker 1: I'm sure after the election as well. I'm glad I 223 00:11:17,080 --> 00:11:20,000 Speaker 1: have you on speed Die rich Thanks so much. That's 224 00:11:20,000 --> 00:11:23,680 Speaker 1: Professor Richard Brefault of Columbia Law School. Coming up next 225 00:11:23,720 --> 00:11:27,960 Speaker 1: on The Bloomberg Law Show. The Philadelphia District Attorney sues 226 00:11:28,080 --> 00:11:31,880 Speaker 1: Elon Musk over his one million dollar a day giveaway 227 00:11:31,960 --> 00:11:35,520 Speaker 1: to registered voters, but a judge in the battleground state 228 00:11:35,920 --> 00:11:39,120 Speaker 1: ends a hearing without ruling on the request to block it. 229 00:11:39,320 --> 00:11:43,320 Speaker 1: We'll tell you why. I'm June Grosso and this is Bloomberg. 230 00:11:44,320 --> 00:11:47,760 Speaker 4: Every day, every day from now and so the election. 231 00:11:48,760 --> 00:11:52,480 Speaker 4: We're giving out a million dollar prize, that is, and 232 00:11:52,520 --> 00:11:54,360 Speaker 4: all you have to do is sign a petition in 233 00:11:54,440 --> 00:11:59,240 Speaker 4: support of a constitution. It's very straightforward. You don't even 234 00:11:59,240 --> 00:11:59,640 Speaker 4: have to vote. 235 00:11:59,640 --> 00:12:00,920 Speaker 3: You don't have to vote. 236 00:12:00,920 --> 00:12:03,040 Speaker 4: You just have to sign a petition saying you believe 237 00:12:03,040 --> 00:12:05,640 Speaker 4: in the Constitution, which if you already believe in the Constitution, 238 00:12:06,040 --> 00:12:08,080 Speaker 4: you're just signing something you already believe. And you can 239 00:12:08,160 --> 00:12:08,920 Speaker 4: ruin a million dollars. 240 00:12:09,160 --> 00:12:09,800 Speaker 5: That's awesome. 241 00:12:10,920 --> 00:12:14,960 Speaker 1: But Elon Musk's one million dollars a day voter sweepstakes 242 00:12:15,600 --> 00:12:20,160 Speaker 1: doesn't seem to be the very straightforward proposition he's made 243 00:12:20,160 --> 00:12:23,160 Speaker 1: it out to be. In order to enter, you must 244 00:12:23,160 --> 00:12:26,920 Speaker 1: be registered to vote in one of seven swing states. 245 00:12:27,200 --> 00:12:30,400 Speaker 1: The Department of Justice has already worn Musk and his 246 00:12:30,559 --> 00:12:35,719 Speaker 1: pro Trump America pack that his sweepstakes might violate federal law, 247 00:12:35,920 --> 00:12:40,320 Speaker 1: and this week Philadelphia District Attorney Larry Krasner sued Musk 248 00:12:40,559 --> 00:12:44,880 Speaker 1: to stop the sweepstakes, saying it violates state lottery and 249 00:12:44,920 --> 00:12:49,480 Speaker 1: consumer protection laws. Joining me is election law expert Douglas Spencer, 250 00:12:49,760 --> 00:12:53,120 Speaker 1: a professor of law at the University of Colorado. Doug 251 00:12:53,160 --> 00:12:56,160 Speaker 1: tell us about the concerns about this sweepstakes. 252 00:12:56,360 --> 00:12:59,600 Speaker 6: The concern is that Elon Musk is using this lottery 253 00:12:59,640 --> 00:13:03,280 Speaker 6: to encourage voter registration and voting, which on its face 254 00:13:03,360 --> 00:13:06,120 Speaker 6: doesn't sound bad. We want more people to be registered 255 00:13:06,120 --> 00:13:08,800 Speaker 6: and to vote. It does promote democracy, but there are 256 00:13:08,840 --> 00:13:12,920 Speaker 6: federal laws that prevent people from paying or buying votes, 257 00:13:13,040 --> 00:13:16,479 Speaker 6: or paying people to register, and so there's been allegations 258 00:13:16,520 --> 00:13:19,560 Speaker 6: that this scheme that he has created is doing just that, 259 00:13:19,800 --> 00:13:24,240 Speaker 6: rewarding people for registering and then turning out to vote. 260 00:13:24,400 --> 00:13:27,920 Speaker 6: The da in Philadelphia is challenging this not just as 261 00:13:27,920 --> 00:13:30,280 Speaker 6: a violation of these federal laws, but there's also some 262 00:13:30,360 --> 00:13:34,880 Speaker 6: state laws about consumer protection and some other issues related 263 00:13:34,880 --> 00:13:38,920 Speaker 6: to fraud. There is some sense of seriousness about the 264 00:13:38,960 --> 00:13:41,680 Speaker 6: allegations that these federal laws are being violated with why 265 00:13:41,720 --> 00:13:45,120 Speaker 6: the Department's Justice itself has commenced an investigation. They haven't 266 00:13:45,200 --> 00:13:47,800 Speaker 6: charged him with any clime, but they see some of 267 00:13:47,840 --> 00:13:49,920 Speaker 6: the concerns about the way this program is being run 268 00:13:49,960 --> 00:13:50,960 Speaker 6: and they're investigating it. 269 00:13:51,360 --> 00:13:55,720 Speaker 1: So the DNA in Philadelphia is going on a different 270 00:13:56,120 --> 00:14:00,200 Speaker 1: kind of track. He's saying that this is a lot 271 00:14:00,880 --> 00:14:05,840 Speaker 1: and as such, it's illegal in Pennsylvania because all lotteries 272 00:14:05,920 --> 00:14:09,720 Speaker 1: have to be operated and administered by the state. So 273 00:14:10,160 --> 00:14:14,599 Speaker 1: he's trying to get around the questions about federal law. 274 00:14:14,640 --> 00:14:17,840 Speaker 6: That sounds right. There's been a concern about operating a lottery, 275 00:14:18,080 --> 00:14:21,360 Speaker 6: you know, and whether it's been regulated or registered or 276 00:14:21,400 --> 00:14:25,200 Speaker 6: as you said, as operated by the state itself. And 277 00:14:25,240 --> 00:14:27,680 Speaker 6: then also, at least in the statement that I read, 278 00:14:28,200 --> 00:14:31,320 Speaker 6: says that the lottery is being used to kind of 279 00:14:31,440 --> 00:14:35,640 Speaker 6: lull or dupe Philadelphians and Pennsylvanians into giving away their 280 00:14:35,880 --> 00:14:38,880 Speaker 6: personal data in exchange for money, which could be a 281 00:14:38,960 --> 00:14:42,920 Speaker 6: violation of you know, a state false advertising or consumer 282 00:14:42,960 --> 00:14:43,720 Speaker 6: protection law. 283 00:14:44,160 --> 00:14:46,240 Speaker 1: I mean, it would put it into a whole different 284 00:14:46,480 --> 00:14:50,520 Speaker 1: sphere because now he would have to follow all the 285 00:14:50,600 --> 00:14:55,600 Speaker 1: rules for sweep stakes in Pennsylvania and the other swing states. 286 00:14:55,880 --> 00:14:57,800 Speaker 6: That's right, And what I don't know is in the 287 00:14:57,880 --> 00:15:01,080 Speaker 6: state how to define a sweet steak or a lottery. 288 00:15:01,080 --> 00:15:05,760 Speaker 6: Because nobody's buying a ticket or giving musk any cash 289 00:15:05,920 --> 00:15:08,640 Speaker 6: in order to enter the lottery. They're entering the lottery 290 00:15:08,680 --> 00:15:12,880 Speaker 6: by signing a political petition, and so one, there could 291 00:15:12,920 --> 00:15:15,080 Speaker 6: be an argument that the active signing a petition is 292 00:15:15,120 --> 00:15:17,520 Speaker 6: different than buying a lottery ticket, which would distinguish this. 293 00:15:18,160 --> 00:15:20,600 Speaker 6: And secondly, the active signing a petition is a First 294 00:15:20,640 --> 00:15:23,800 Speaker 6: Amendment protected act that buying a lottery ticket is not. 295 00:15:24,000 --> 00:15:26,000 Speaker 6: And so you'd have to see the interaction of this 296 00:15:26,320 --> 00:15:29,400 Speaker 6: regulation of lotteries to the First Amendment. But if the 297 00:15:29,440 --> 00:15:33,040 Speaker 6: state defines sweepstakes as you know, entering yourself for a 298 00:15:33,120 --> 00:15:34,920 Speaker 6: chance to win a large sum of money based on 299 00:15:35,040 --> 00:15:38,440 Speaker 6: chance or random draw, then this lottery is in violation 300 00:15:38,480 --> 00:15:40,960 Speaker 6: of that state laws. He has not properly registered or 301 00:15:41,040 --> 00:15:43,240 Speaker 6: operating under those state regulations. 302 00:15:43,480 --> 00:15:47,000 Speaker 1: What's also interesting is that Musk said this is a 303 00:15:47,080 --> 00:15:51,200 Speaker 1: random draw, but the Philadelphia DA says that appears false 304 00:15:51,320 --> 00:15:55,120 Speaker 1: because multiple winners are people who have shown up at 305 00:15:55,200 --> 00:15:57,000 Speaker 1: Trump rallies in Pennsylvania. 306 00:15:57,080 --> 00:16:01,320 Speaker 6: Correct. So that's an allegation that in order to prove it, 307 00:16:01,400 --> 00:16:03,520 Speaker 6: if a judge is willing to take the case, then 308 00:16:03,560 --> 00:16:06,760 Speaker 6: one element of a lawsuit is what's called discovery, and 309 00:16:06,840 --> 00:16:09,240 Speaker 6: Elon Musk would have to provide some evidence of the 310 00:16:09,280 --> 00:16:13,520 Speaker 6: selection mechanism to prove that the decisions were being made randomly. 311 00:16:13,560 --> 00:16:15,320 Speaker 6: He'd have to have a record of the random number 312 00:16:15,440 --> 00:16:17,640 Speaker 6: generation or a video of him pulling a ping pong 313 00:16:17,680 --> 00:16:21,520 Speaker 6: ball out. And if he's not, then he's not actually 314 00:16:21,600 --> 00:16:25,440 Speaker 6: running a lottery, in which case he's falsely advertising what 315 00:16:25,480 --> 00:16:27,920 Speaker 6: he's actually doing. But at the same time, if he's 316 00:16:27,960 --> 00:16:30,560 Speaker 6: not randomly choosing people, then what he's doing may not 317 00:16:30,600 --> 00:16:32,320 Speaker 6: be a lottery, and that could cut in favor of 318 00:16:32,320 --> 00:16:34,800 Speaker 6: Elon Musk because then he can say, I'm not actually 319 00:16:34,880 --> 00:16:37,560 Speaker 6: violating the state's prohibition because I'm just giving money away 320 00:16:37,560 --> 00:16:39,160 Speaker 6: to the people that I want to give money away to. 321 00:16:39,640 --> 00:16:43,480 Speaker 1: Elon Musk obviously ignored the letter from the Justice Department. 322 00:16:44,000 --> 00:16:46,240 Speaker 1: I mean, what's the import of that letter if it 323 00:16:46,280 --> 00:16:47,680 Speaker 1: didn't stop the sweepstakes. 324 00:16:48,360 --> 00:16:50,760 Speaker 6: I think the letter from the Department of Justice does 325 00:16:51,280 --> 00:16:54,040 Speaker 6: two things. Once, it's to a public statement that lets 326 00:16:54,120 --> 00:16:56,320 Speaker 6: everyone in the public know that what Elon Musk is 327 00:16:56,320 --> 00:16:58,920 Speaker 6: doing may be a violation of the law, but under 328 00:16:58,960 --> 00:17:02,080 Speaker 6: the federal life of violation is punishable by a fine 329 00:17:02,120 --> 00:17:05,560 Speaker 6: up to ten thousand dollars unless you are knowingly and 330 00:17:05,600 --> 00:17:08,560 Speaker 6: willingly violating the law, in which case then you can 331 00:17:08,760 --> 00:17:11,440 Speaker 6: serve jail time up to five years. So I think 332 00:17:11,480 --> 00:17:14,680 Speaker 6: this letter from the DOJ puts the pack on notice 333 00:17:15,040 --> 00:17:18,440 Speaker 6: that you are doing something willfully and knowingly, even though 334 00:17:18,440 --> 00:17:21,520 Speaker 6: we've told you that what you're doing risks of violation, 335 00:17:22,160 --> 00:17:25,199 Speaker 6: so that the potential penalties which will come after the 336 00:17:25,200 --> 00:17:28,520 Speaker 6: election in any case, could be much more serious. Trying 337 00:17:28,560 --> 00:17:30,359 Speaker 6: to get them to change. I will note that the 338 00:17:30,520 --> 00:17:34,240 Speaker 6: lottery has changed a little bit since the DJ Center 339 00:17:34,240 --> 00:17:37,680 Speaker 6: its letter. It used to expire. Eligibility used to expire 340 00:17:38,240 --> 00:17:41,280 Speaker 6: on midnight October twenty first, which was the deadline for 341 00:17:41,359 --> 00:17:44,640 Speaker 6: voter registration in Pennsylvania, which was a really strong signal 342 00:17:44,880 --> 00:17:47,119 Speaker 6: that the motivation for this lottery was to pay people 343 00:17:47,119 --> 00:17:51,240 Speaker 6: to register, not something else. That deadline has now changed 344 00:17:51,359 --> 00:17:54,879 Speaker 6: until election day, so there was some recognition that that 345 00:17:55,080 --> 00:17:57,760 Speaker 6: was a problem for them, and they have changed their 346 00:17:57,800 --> 00:17:59,720 Speaker 6: tactics a little bit so they are aware in their 347 00:17:59,720 --> 00:18:03,720 Speaker 6: reading these letters, and the question will be after the facts, 348 00:18:03,920 --> 00:18:05,200 Speaker 6: if there's any accountability. 349 00:18:05,520 --> 00:18:07,639 Speaker 1: I mean, they also changed it a little bit, and 350 00:18:07,680 --> 00:18:10,159 Speaker 1: that he said at one of the giveaways, one of 351 00:18:10,160 --> 00:18:12,879 Speaker 1: the early ones, that all you have to do is 352 00:18:12,960 --> 00:18:15,840 Speaker 1: now be a spokesperson for us, so sort of making 353 00:18:15,880 --> 00:18:17,119 Speaker 1: it into a job offer. 354 00:18:17,160 --> 00:18:20,560 Speaker 6: I guess correct. He's trying lots of different ways. A 355 00:18:20,680 --> 00:18:22,920 Speaker 6: judge will have to determine whether or not they think 356 00:18:23,280 --> 00:18:26,840 Speaker 6: that's his true intent or not. If I pay you 357 00:18:26,880 --> 00:18:29,919 Speaker 6: to register to vote, but I also say that you 358 00:18:30,080 --> 00:18:33,200 Speaker 6: have to walk outside and breathe fresh air and then 359 00:18:33,400 --> 00:18:35,679 Speaker 6: you get the money, a judge will say, I know 360 00:18:35,840 --> 00:18:38,240 Speaker 6: you told me that you're paying these people for breathing 361 00:18:38,280 --> 00:18:40,399 Speaker 6: fresh air, but they also have to register. I just 362 00:18:40,440 --> 00:18:43,760 Speaker 6: think that's a scam. So the question is for somebody 363 00:18:43,800 --> 00:18:47,119 Speaker 6: signing a petition that doesn't ask for anything, just says 364 00:18:47,160 --> 00:18:49,639 Speaker 6: I think the First and Second Amendment are important. Is 365 00:18:49,640 --> 00:18:53,160 Speaker 6: that something that's a legitimate petition, or do we think 366 00:18:53,200 --> 00:18:55,440 Speaker 6: that the Musk has been using it as a way 367 00:18:55,480 --> 00:18:58,920 Speaker 6: to insulate himself from just out and out buying people 368 00:18:58,920 --> 00:19:01,679 Speaker 6: to register to vote. To make look somewhat differently, and 369 00:19:01,720 --> 00:19:04,760 Speaker 6: that will be a fact determination by a judge if 370 00:19:04,800 --> 00:19:07,360 Speaker 6: it gets to this litigation. They can look at emails 371 00:19:07,359 --> 00:19:10,760 Speaker 6: between Musk and his pack and other communications. They can 372 00:19:10,800 --> 00:19:14,720 Speaker 6: make determinations based on public statements where America Pack says 373 00:19:14,760 --> 00:19:16,800 Speaker 6: we want to get a million people registered to vote 374 00:19:16,800 --> 00:19:19,600 Speaker 6: in the Swing States, and they'll make a determination whether 375 00:19:19,680 --> 00:19:22,280 Speaker 6: or not that was the intent of this lottery, even 376 00:19:22,320 --> 00:19:24,879 Speaker 6: though there are facts that cut in different directions. 377 00:19:25,600 --> 00:19:27,639 Speaker 1: A lot of people are going to say this is 378 00:19:27,640 --> 00:19:33,480 Speaker 1: a move by a Democratic da against Musk who's spending 379 00:19:33,800 --> 00:19:36,160 Speaker 1: millions to get Trump elected. 380 00:19:36,920 --> 00:19:39,359 Speaker 6: I will say I think the political side of this 381 00:19:39,520 --> 00:19:42,159 Speaker 6: is as important as the legal side. So the Department 382 00:19:42,200 --> 00:19:46,040 Speaker 6: of Justice sending this letter does send a signal for voters, 383 00:19:46,040 --> 00:19:48,560 Speaker 6: whether or not there's an actual violation, that what they're 384 00:19:48,600 --> 00:19:52,000 Speaker 6: doing is a close violation of the law. And it 385 00:19:52,040 --> 00:19:54,960 Speaker 6: could be the same for a district attorney who wants 386 00:19:55,040 --> 00:19:58,280 Speaker 6: to make sure that this issue is framed in the 387 00:19:58,359 --> 00:20:02,600 Speaker 6: press and in the political sphere as a legal mumbo 388 00:20:02,720 --> 00:20:05,760 Speaker 6: jumbo as opposed to a really exciting money giveaway. So 389 00:20:05,800 --> 00:20:08,800 Speaker 6: there's a political aspect where bringing these charges changes the 390 00:20:08,840 --> 00:20:11,760 Speaker 6: news coverage, changes the dynamics, and that may be just 391 00:20:11,800 --> 00:20:14,080 Speaker 6: as important as any finding of guilt or innocence. And 392 00:20:14,160 --> 00:20:17,480 Speaker 6: so that's not something that the lawyers like me can 393 00:20:17,520 --> 00:20:19,720 Speaker 6: really comment on whether that's the right way to go 394 00:20:19,760 --> 00:20:22,639 Speaker 6: about it. But there's definitely a political angle to this. 395 00:20:22,960 --> 00:20:26,560 Speaker 1: Do you remember anything else like this in our history, 396 00:20:26,600 --> 00:20:28,439 Speaker 1: any kind of giveaways like this. 397 00:20:29,160 --> 00:20:32,680 Speaker 6: Not in our modern history. Way back in the seventeen 398 00:20:32,680 --> 00:20:35,600 Speaker 6: and eighteen hundreds, So this was before the ballot was secrets. 399 00:20:36,040 --> 00:20:39,440 Speaker 6: You'd have parties who would basically give away free booze 400 00:20:39,720 --> 00:20:41,879 Speaker 6: to people. You'd vote for their party, you'd get whiskey, 401 00:20:41,920 --> 00:20:45,040 Speaker 6: and it's very well known, and in part to avoid 402 00:20:45,080 --> 00:20:48,399 Speaker 6: that kind of bribery, we adopted the secret ballot and 403 00:20:48,440 --> 00:20:53,560 Speaker 6: since then nothing so open with payments. The parties, of course, 404 00:20:53,560 --> 00:20:55,960 Speaker 6: are always trying to incentivize and motivate people to get 405 00:20:55,960 --> 00:20:59,280 Speaker 6: out to vote. No lottery like this, specifically from a 406 00:20:59,320 --> 00:21:00,879 Speaker 6: wealthy buildaire either. 407 00:21:01,400 --> 00:21:04,200 Speaker 1: Thanks so much for joining me, Doug. That's Douglas Spencer, 408 00:21:04,240 --> 00:21:07,720 Speaker 1: a professor of law at the University of Colorado. In 409 00:21:07,920 --> 00:21:10,840 Speaker 1: just a few days, the case has bounced between state 410 00:21:10,960 --> 00:21:14,240 Speaker 1: and federal court and back again. On Thursday, there was 411 00:21:14,240 --> 00:21:17,320 Speaker 1: a hearing before a state court judge over Musk's motion 412 00:21:17,600 --> 00:21:20,679 Speaker 1: to move the case to federal court. Bloomberg Legal reporter 413 00:21:20,800 --> 00:21:24,600 Speaker 1: Chris Dolmesh was at the hearing, So Chris, the state 414 00:21:24,680 --> 00:21:28,080 Speaker 1: judge did send the case over to federal court for 415 00:21:28,160 --> 00:21:32,600 Speaker 1: a determination. Was there any discussion about the merits of 416 00:21:32,720 --> 00:21:34,760 Speaker 1: the DA's lawsuit at the hearing? 417 00:21:35,320 --> 00:21:39,359 Speaker 7: Not specifically, Essentially, the DA's lawyer kind of launched into 418 00:21:39,560 --> 00:21:42,640 Speaker 7: a bit of a soliloquy at some point on why 419 00:21:42,800 --> 00:21:45,399 Speaker 7: you know this shouldn't be removed to federal court. But 420 00:21:45,520 --> 00:21:47,879 Speaker 7: the judge clearly from the beginning was not going to 421 00:21:47,880 --> 00:21:50,520 Speaker 7: discuss the merits, just given it's kind of an automatic 422 00:21:50,640 --> 00:21:52,840 Speaker 7: move when they removed the federal court to at least 423 00:21:52,880 --> 00:21:55,800 Speaker 7: have the federal judge determined as a threshold matter whether 424 00:21:55,840 --> 00:21:57,000 Speaker 7: it's a matter of federal law. 425 00:21:57,520 --> 00:22:00,879 Speaker 1: So explain what their grounds are for removing this to 426 00:22:00,920 --> 00:22:01,600 Speaker 1: federal court. 427 00:22:01,920 --> 00:22:05,880 Speaker 7: They're saying it's essentially a quintessential matter of election law, 428 00:22:06,000 --> 00:22:09,800 Speaker 7: even though the DA's claims are essentially state law claims 429 00:22:09,880 --> 00:22:14,399 Speaker 7: under the Pennsylvania's lottery laws and consumer protection laws. So 430 00:22:15,040 --> 00:22:17,399 Speaker 7: they say, look, this is an election dispute, it should 431 00:22:17,400 --> 00:22:20,280 Speaker 7: be heard in federal court. They classify it as you know, 432 00:22:20,520 --> 00:22:23,679 Speaker 7: he's trying to stage a show ahead of the election 433 00:22:24,000 --> 00:22:26,720 Speaker 7: because he disagrees with Musk and trying to suppress his 434 00:22:26,840 --> 00:22:27,720 Speaker 7: First Amendment rights. 435 00:22:28,040 --> 00:22:30,920 Speaker 1: And what's the response of the Philadelphia DA. 436 00:22:31,440 --> 00:22:33,639 Speaker 7: Now, the DA says it's a state law case. He 437 00:22:33,840 --> 00:22:37,400 Speaker 7: argued that while it touches on elements of federal election law, 438 00:22:37,560 --> 00:22:40,399 Speaker 7: he argues that there are plenty of disputes that are 439 00:22:40,440 --> 00:22:42,720 Speaker 7: related to the election that are heard in state court. 440 00:22:42,880 --> 00:22:47,320 Speaker 1: And Chris, we have seen this removal to federal court 441 00:22:47,680 --> 00:22:48,760 Speaker 1: gambit before. 442 00:22:49,240 --> 00:22:52,679 Speaker 7: Yes, in many cases, it's a typical move. That's one 443 00:22:52,720 --> 00:22:55,080 Speaker 7: of the reasons a lot of times when you see 444 00:22:55,240 --> 00:22:58,760 Speaker 7: civil litigation between state corporations, a lot of the time 445 00:22:58,840 --> 00:23:02,240 Speaker 7: they have an automatic law that determines where the case 446 00:23:02,280 --> 00:23:04,359 Speaker 7: will be heard if there is a dispute, you know, 447 00:23:04,400 --> 00:23:06,920 Speaker 7: that kind of eliminates that problem from the beginning. 448 00:23:07,680 --> 00:23:10,879 Speaker 1: This is a really serious issue, but from reading about 449 00:23:10,880 --> 00:23:13,560 Speaker 1: it, it seemed to me like the hearing was pretty lighthearted. 450 00:23:14,000 --> 00:23:16,280 Speaker 7: Yeah, there are a lot of laughs. It was when 451 00:23:16,280 --> 00:23:19,200 Speaker 7: the DA noted that Elon wasn't there and looked around 452 00:23:19,200 --> 00:23:21,479 Speaker 7: the room. His lawyer said, he can't just show up 453 00:23:21,480 --> 00:23:24,800 Speaker 7: anywhere on you know, a moment's notice. And then the 454 00:23:24,920 --> 00:23:27,840 Speaker 7: DA got up and said, well, as to that notion, 455 00:23:28,119 --> 00:23:30,400 Speaker 7: he owned SpaceX. And then the judge kind of shot 456 00:23:30,440 --> 00:23:32,240 Speaker 7: that down real quick. He's like, he can't land a 457 00:23:32,280 --> 00:23:34,439 Speaker 7: rocket on top of the building. Let's be serious, And 458 00:23:34,480 --> 00:23:35,439 Speaker 7: that got some laughs. 459 00:23:35,520 --> 00:23:35,719 Speaker 3: You know. 460 00:23:35,800 --> 00:23:38,120 Speaker 7: The judge was clearly in a kind of jovial mood, 461 00:23:38,160 --> 00:23:40,080 Speaker 7: and one assumes because he knew he wasn't gonna have 462 00:23:40,119 --> 00:23:41,320 Speaker 7: to do anything with it that day. 463 00:23:41,640 --> 00:23:44,320 Speaker 1: But now the ball is back in his court since 464 00:23:44,359 --> 00:23:47,760 Speaker 1: the federal judge ruled that there was no issue of 465 00:23:47,800 --> 00:23:51,480 Speaker 1: federal law involved in the case. Well see what happens next. 466 00:23:51,600 --> 00:23:55,719 Speaker 1: Thanks so much, Chris. That's Bloomberg Legal reporter Chris don Mesh. 467 00:23:55,800 --> 00:23:59,520 Speaker 1: In other election news related to Pennsylvania, on Friday, the 468 00:24:00,160 --> 00:24:04,160 Speaker 1: court refused to intervene in a clash over provisional ballots 469 00:24:04,160 --> 00:24:08,520 Speaker 1: in the state, rejecting a Republican emergency appeal. This leaves 470 00:24:08,560 --> 00:24:12,159 Speaker 1: in place a state Supreme Court ruling that elections officials 471 00:24:12,240 --> 00:24:15,879 Speaker 1: must count provisional ballots cast by voters whose mail in 472 00:24:16,000 --> 00:24:20,760 Speaker 1: ballots were rejected. Coming up, Sam Bankman Fried's former lieutenant 473 00:24:20,800 --> 00:24:23,840 Speaker 1: is the first to avoid prison in the FTX case. 474 00:24:24,200 --> 00:24:26,560 Speaker 1: I'm June Grosso and you're listening to Bloomberg. 475 00:24:29,320 --> 00:24:34,520 Speaker 7: I call it the wheel. I don't think so. 476 00:24:34,960 --> 00:24:38,280 Speaker 3: What does it do the rules? Yeah, so does a bagel? 477 00:24:38,359 --> 00:24:39,280 Speaker 7: Okay, a bengel. 478 00:24:39,320 --> 00:24:39,840 Speaker 6: You can eat. 479 00:24:40,800 --> 00:24:42,280 Speaker 3: One of the worst ideas I've ever heard. 480 00:24:42,640 --> 00:24:44,879 Speaker 2: Like I was saying, it's FTX, it's a safe and 481 00:24:44,920 --> 00:24:45,919 Speaker 2: easy way to get into crypto. 482 00:24:48,160 --> 00:24:48,760 Speaker 7: I don't think so. 483 00:24:49,560 --> 00:24:51,240 Speaker 4: And I'm never wrong about this stuff. 484 00:24:51,720 --> 00:24:57,320 Speaker 1: Never remember back when FTX was the world's most popular 485 00:24:57,400 --> 00:25:02,359 Speaker 1: cryptocurrency exchange with select britty endorsements and a Super Bowl ad. 486 00:25:02,880 --> 00:25:06,440 Speaker 1: Of course, that was before a gaping hole in customer 487 00:25:06,480 --> 00:25:12,040 Speaker 1: deposits was exposed and FTX collapsed into bankruptcy. Federal indictments 488 00:25:12,040 --> 00:25:15,879 Speaker 1: followed a founder, Sam Bankman Freed, and his top executives, 489 00:25:16,080 --> 00:25:19,439 Speaker 1: and it didn't take long for three of those executives 490 00:25:19,600 --> 00:25:23,920 Speaker 1: to turn on Bankman Freed, accepting plea deals in return 491 00:25:24,040 --> 00:25:29,639 Speaker 1: for cooperating with prosecutors and testifying against him. Bankman Freed 492 00:25:29,760 --> 00:25:33,360 Speaker 1: is serving twenty five years in prison after a jury 493 00:25:33,400 --> 00:25:36,880 Speaker 1: found him guilty of the multi billion dollar fraud late 494 00:25:36,960 --> 00:25:40,840 Speaker 1: last year, and now the three cooperators are learning what 495 00:25:40,880 --> 00:25:45,600 Speaker 1: the consequences will be for them. In September, the prosecution's 496 00:25:45,680 --> 00:25:50,800 Speaker 1: star witness, Caroline Ellison, a top executive and Bankman Freed's 497 00:25:50,880 --> 00:25:54,800 Speaker 1: on again, off again girlfriend, was sentenced to two years 498 00:25:54,800 --> 00:25:58,880 Speaker 1: in prison. In October, Ryan Slome, one of Bankman Freed's 499 00:25:58,960 --> 00:26:03,679 Speaker 1: top lieutenants FTX, who did not testify against him, was 500 00:26:03,760 --> 00:26:06,679 Speaker 1: sentenced to seven and a half years in prison. But 501 00:26:06,800 --> 00:26:12,640 Speaker 1: on Wednesday, former FTX chief engineer Nashad Singh walked out 502 00:26:12,640 --> 00:26:16,879 Speaker 1: of Judge Lewis Kaplan's courtroom a free man. Why a 503 00:26:16,960 --> 00:26:19,960 Speaker 1: get out of jail free card for Singh when Judge 504 00:26:20,040 --> 00:26:23,640 Speaker 1: Caplan sentenced the others to prison time. Here to explain 505 00:26:23,720 --> 00:26:27,400 Speaker 1: is Bloomberg Legal reporter Eva Benny Morrison, who covered bankman 506 00:26:27,480 --> 00:26:31,639 Speaker 1: Fried's trial as well as singh sentencing. Ava tell us 507 00:26:31,680 --> 00:26:32,840 Speaker 1: a little about Singh. 508 00:26:33,359 --> 00:26:36,920 Speaker 5: Nishad Singh was one of three top executives at FTX 509 00:26:37,280 --> 00:26:39,879 Speaker 5: who turned on Sam Banks and Freed and signed up 510 00:26:39,920 --> 00:26:43,720 Speaker 5: his corporating witnesses to the government. They all testified at 511 00:26:43,840 --> 00:26:47,679 Speaker 5: Stateman Fred's broad trial and eventually helped land his conviction 512 00:26:47,800 --> 00:26:51,399 Speaker 5: to statement. Freed's currently serving twenty five years in jail, 513 00:26:51,640 --> 00:26:54,520 Speaker 5: and after his sentenced, it was time for the corporators 514 00:26:54,520 --> 00:26:57,040 Speaker 5: to face their own punishment for their role in the 515 00:26:57,080 --> 00:27:00,520 Speaker 5: collapse and the years on board at FTX. Mad Scene 516 00:27:00,800 --> 00:27:03,199 Speaker 5: turned up in court and we heard some pretty compelling 517 00:27:03,280 --> 00:27:08,000 Speaker 5: arguments from his attorney about why he should avoid spending 518 00:27:08,040 --> 00:27:10,760 Speaker 5: a day in prison. Only a couple of months ago, 519 00:27:10,880 --> 00:27:15,520 Speaker 5: Caroline Ellison, the foremost CEO of Alimenta Research, was sentenced 520 00:27:15,520 --> 00:27:19,640 Speaker 5: to two years in jail. This is unusual. Most cooperators 521 00:27:19,760 --> 00:27:23,159 Speaker 5: end up avoiding any jail time whatsoever. But fortunately for 522 00:27:23,280 --> 00:27:26,800 Speaker 5: Nishad Singh, that was what happened. Judge Lewis Caplan found 523 00:27:26,840 --> 00:27:30,240 Speaker 5: that he deserved more corporation credit than Caroline Ellison and 524 00:27:30,280 --> 00:27:33,120 Speaker 5: he was essentially less culpable than the flord at FTX 525 00:27:33,160 --> 00:27:34,119 Speaker 5: than Ellison. 526 00:27:34,600 --> 00:27:39,840 Speaker 1: Singh's lawyers apparently succeeded in setting him apart from Ellison 527 00:27:39,960 --> 00:27:43,560 Speaker 1: and Gary Wang, who's yet to be sentenced. Was a 528 00:27:43,600 --> 00:27:47,320 Speaker 1: factor also that Singh was involved in the front for 529 00:27:47,359 --> 00:27:48,760 Speaker 1: a shorter period of time. 530 00:27:49,080 --> 00:27:52,600 Speaker 5: Judge Chaplin certainly seemed to focus on the amount of 531 00:27:52,640 --> 00:27:56,600 Speaker 5: time Mischad sing knew about the fraud, so Nishad, who 532 00:27:56,720 --> 00:28:00,919 Speaker 5: was the chief engineer at FTX, only found out of 533 00:28:01,000 --> 00:28:05,560 Speaker 5: twenty twenty two that STX had been sending customer funds 534 00:28:05,560 --> 00:28:08,360 Speaker 5: billions of dollars worth for customer funds to Alimtor Research. 535 00:28:08,800 --> 00:28:12,600 Speaker 5: In contrast, Caroline Allison knew about this for years and 536 00:28:13,240 --> 00:28:17,160 Speaker 5: was an accomplice to Sam bankman Bridge and Caplan found 537 00:28:17,160 --> 00:28:20,600 Speaker 5: that this certainly helped Mishad Thing's case, the fact that 538 00:28:20,640 --> 00:28:22,160 Speaker 5: he only knew about it for a couple of months 539 00:28:22,200 --> 00:28:25,119 Speaker 5: before STX collapsed. You know the poe. The prosecution and 540 00:28:25,160 --> 00:28:28,359 Speaker 5: the defense did admit even when Mishad things found out 541 00:28:28,400 --> 00:28:31,840 Speaker 5: about this massive board and that STX couldn't afford to 542 00:28:31,880 --> 00:28:35,000 Speaker 5: cover the whole and customer deposits, he continued to allow 543 00:28:35,119 --> 00:28:38,560 Speaker 5: campaign donations to be made in his name and forged 544 00:28:38,600 --> 00:28:43,120 Speaker 5: ahead with a purchase of a beautiful house in Washington State, 545 00:28:43,320 --> 00:28:46,400 Speaker 5: something that his lawyer said he will forever be ashamed. 546 00:28:46,120 --> 00:28:48,760 Speaker 1: Of three point seven million dollar house. 547 00:28:49,480 --> 00:28:51,720 Speaker 5: Yes, that's right. It was worth three point seven million 548 00:28:51,760 --> 00:28:54,400 Speaker 5: dollars and he bought it with his friends. Was a 549 00:28:54,440 --> 00:28:56,520 Speaker 5: place to go and when he could relax and go 550 00:28:56,600 --> 00:29:00,680 Speaker 5: on holidays. This was kind of the only luxury, maybe 551 00:29:00,880 --> 00:29:03,880 Speaker 5: indulge in purchase that Mishad Seine had made when he 552 00:29:03,960 --> 00:29:07,000 Speaker 5: was FTX. His lawyers, you know, really stressed that he 553 00:29:07,120 --> 00:29:10,240 Speaker 5: was a true believer in effect of altruism, his philosophy 554 00:29:10,360 --> 00:29:12,600 Speaker 5: that drew a lot of the STX and alimed to 555 00:29:12,640 --> 00:29:15,360 Speaker 5: research folks together this idea that you could earn a 556 00:29:15,360 --> 00:29:17,200 Speaker 5: lot of money and give most of your way to 557 00:29:17,240 --> 00:29:20,200 Speaker 5: make the world better place. Miss shadd was very interested 558 00:29:20,240 --> 00:29:22,720 Speaker 5: in charity. You know, he's been involved in giving away 559 00:29:22,960 --> 00:29:25,959 Speaker 5: a lot of concernings since he was in college and 560 00:29:26,040 --> 00:29:29,320 Speaker 5: his lawyers really tried to push that point that this was, 561 00:29:29,560 --> 00:29:31,800 Speaker 5: you know, yeah, a big purchase, but it didn't look 562 00:29:31,960 --> 00:29:33,480 Speaker 5: like his philosophies. 563 00:29:34,040 --> 00:29:36,920 Speaker 1: And he's been working all this time, unlike Caroline Ellison. 564 00:29:37,320 --> 00:29:40,520 Speaker 5: In Caroline Ellison's case, her lawyers had said that she 565 00:29:40,640 --> 00:29:45,800 Speaker 5: was really struggling to find an employment after the STS collapse, 566 00:29:46,280 --> 00:29:49,600 Speaker 5: mainly because of the reputational damage that came and being 567 00:29:49,600 --> 00:29:53,720 Speaker 5: associated with STX and elem to research. She had been 568 00:29:54,120 --> 00:29:57,160 Speaker 5: working on writing a non fiction book and a math 569 00:29:57,200 --> 00:30:01,640 Speaker 5: book that Mishad Seine had been lucky enough to find 570 00:30:01,840 --> 00:30:04,240 Speaker 5: a job. He's been working as a software engineer for 571 00:30:04,320 --> 00:30:07,960 Speaker 5: a firm in California since FPX collapsed, and he's also 572 00:30:08,000 --> 00:30:11,320 Speaker 5: been volunteering at a homeless shelter not far from his 573 00:30:11,400 --> 00:30:14,680 Speaker 5: house in the Bay Area, and at night he's working 574 00:30:14,720 --> 00:30:18,640 Speaker 5: on code for a affordable housing project. So this certainly 575 00:30:18,960 --> 00:30:22,480 Speaker 5: went towards his argument for someone that is trying to 576 00:30:22,480 --> 00:30:25,680 Speaker 5: build his life back up again and certainly doesn't have 577 00:30:25,720 --> 00:30:28,560 Speaker 5: any interest in getting involved in a multi billion dollar 578 00:30:28,640 --> 00:30:29,080 Speaker 5: thought again. 579 00:30:29,560 --> 00:30:33,560 Speaker 1: Sing addressed the judge before he was sentenced, saying, quote, 580 00:30:33,640 --> 00:30:37,080 Speaker 1: I strayed so far from my values and words can 581 00:30:37,280 --> 00:30:40,760 Speaker 1: express how sorry I am how did he come across. 582 00:30:41,280 --> 00:30:44,000 Speaker 5: Something that struck me about Michadd in court was that 583 00:30:44,080 --> 00:30:47,880 Speaker 5: he remained very calm and very composed the entire time. 584 00:30:48,320 --> 00:30:50,920 Speaker 5: When he got up to speak to Judge Kaplan, we 585 00:30:51,000 --> 00:30:53,680 Speaker 5: approached the lectern with a piece of paper with his 586 00:30:53,760 --> 00:30:56,400 Speaker 5: written words on it in his hand and said how 587 00:30:56,480 --> 00:31:00,160 Speaker 5: remorseful he was and how gutted he was about the 588 00:31:00,680 --> 00:31:03,560 Speaker 5: harm that he caused to so many innocent people. He 589 00:31:03,640 --> 00:31:07,160 Speaker 5: spoke about wanting to prove to not only the judge 590 00:31:07,200 --> 00:31:10,240 Speaker 5: but others that he was on the path to redemption, 591 00:31:10,440 --> 00:31:13,080 Speaker 5: and he wanted to do good and be a forced 592 00:31:13,200 --> 00:31:15,840 Speaker 5: good in the world since being part of the calamity 593 00:31:15,880 --> 00:31:16,400 Speaker 5: at Aps. 594 00:31:16,840 --> 00:31:19,640 Speaker 1: And what was the reaction when he learned that he 595 00:31:19,720 --> 00:31:21,120 Speaker 1: wasn't going to have to go to prison. 596 00:31:21,360 --> 00:31:24,160 Speaker 5: I think the big question mark was whether Judge Caplan 597 00:31:24,320 --> 00:31:28,680 Speaker 5: was going to send Mishad's prison or save him from that, 598 00:31:28,880 --> 00:31:30,960 Speaker 5: especially after the two years Tent said he handed to 599 00:31:31,000 --> 00:31:34,720 Speaker 5: Caroline Elepent. So when he got to the pointing end 600 00:31:34,920 --> 00:31:38,480 Speaker 5: of delivering his judgment, michhad was standing between his two 601 00:31:38,560 --> 00:31:42,320 Speaker 5: lawyers and Judge Caplan said, I order you to report 602 00:31:42,400 --> 00:31:45,560 Speaker 5: to the Attorney General of the United States for time served, 603 00:31:45,920 --> 00:31:48,840 Speaker 5: and at that point Shad seeing barely reacted. There was 604 00:31:49,200 --> 00:31:52,280 Speaker 5: a very saint smile that came across his face. While 605 00:31:52,320 --> 00:31:55,280 Speaker 5: his family, of which there were many, seated in the 606 00:31:55,320 --> 00:31:59,760 Speaker 5: public gallery behind him, augaf his Beyonce Claire put a 607 00:31:59,840 --> 00:32:02,680 Speaker 5: hand and over her mouth. His mother kissed his fiance 608 00:32:02,840 --> 00:32:05,800 Speaker 5: on the cheek and they held hands and you could 609 00:32:05,800 --> 00:32:08,240 Speaker 5: see that how emotional that they were. They were crying, 610 00:32:08,640 --> 00:32:11,000 Speaker 5: but you could just sense the kind of utter relief 611 00:32:11,160 --> 00:32:12,480 Speaker 5: that was borught across support room. 612 00:32:12,960 --> 00:32:16,560 Speaker 1: What seemed a little unusual is that the judge addressed 613 00:32:16,800 --> 00:32:21,200 Speaker 1: Singh's parents and said, I don't see anything you did wrong. 614 00:32:21,480 --> 00:32:22,440 Speaker 1: Tell us what led to that. 615 00:32:23,160 --> 00:32:27,160 Speaker 5: That's right. As part of seeing sentencing, his parents, along 616 00:32:27,200 --> 00:32:30,200 Speaker 5: with his brother and other friends and former colleagues that FTX, 617 00:32:30,360 --> 00:32:34,400 Speaker 5: submitted letters in support of him. And his parents' letters 618 00:32:34,440 --> 00:32:38,160 Speaker 5: were pretty heartbreaking. They spoke about raising their sons as 619 00:32:38,200 --> 00:32:40,840 Speaker 5: best as they could, spoke about how intelligent and talented 620 00:32:40,880 --> 00:32:43,400 Speaker 5: he was, and then discovering that he had been caught 621 00:32:43,480 --> 00:32:45,960 Speaker 5: up and explored at FTX, And there were some pretty 622 00:32:45,960 --> 00:32:49,000 Speaker 5: harrowing parts in there about the impact that the FTX 623 00:32:49,040 --> 00:32:51,120 Speaker 5: collapse had had on the Shad and how he had 624 00:32:51,360 --> 00:32:55,080 Speaker 5: contemplated suicide in the weeks and months after FTX. His 625 00:32:55,200 --> 00:32:58,320 Speaker 5: parents spoke about the impact on his mental health, and 626 00:32:58,560 --> 00:33:02,280 Speaker 5: Mishad's lawyerly made a point of saying, you know, every 627 00:33:02,320 --> 00:33:05,280 Speaker 5: time Chad flew over from California to New York to 628 00:33:05,320 --> 00:33:07,760 Speaker 5: meet with us at our offices, his father was there 629 00:33:07,760 --> 00:33:10,040 Speaker 5: in the conference room sitting across from him, or his 630 00:33:10,120 --> 00:33:13,160 Speaker 5: younger brother was there. So he had the unwavering support 631 00:33:13,200 --> 00:33:15,600 Speaker 5: of his family. And that was very clear from the 632 00:33:15,640 --> 00:33:17,400 Speaker 5: amount of people that turned up in the court yard. 633 00:33:17,640 --> 00:33:20,200 Speaker 5: And the judge addressed that at the end of his sentence, 634 00:33:20,280 --> 00:33:22,280 Speaker 5: after he told the Shad that he wouldn't have to 635 00:33:22,280 --> 00:33:25,320 Speaker 5: serve danger and he said, you know, I'd like to 636 00:33:25,360 --> 00:33:28,200 Speaker 5: just address this thing's parents on a personal note, and 637 00:33:28,240 --> 00:33:30,080 Speaker 5: he said, there is nothing I can see that you 638 00:33:30,160 --> 00:33:32,480 Speaker 5: did wrong, and then he walked out of the courtroom. 639 00:33:32,600 --> 00:33:34,760 Speaker 5: And I think that was there was quite an emotional 640 00:33:34,800 --> 00:33:37,920 Speaker 5: moment in the courtroom, especially I from the Shad parents 641 00:33:38,040 --> 00:33:40,640 Speaker 5: could see that they were I think quite receptive to 642 00:33:40,680 --> 00:33:43,360 Speaker 5: what he said and almost grateful because you can imagine 643 00:33:43,440 --> 00:33:45,600 Speaker 5: the impact that he's had on his family. 644 00:33:46,400 --> 00:33:49,600 Speaker 1: So this case is over. What's the next sentencing. Is 645 00:33:49,600 --> 00:33:51,680 Speaker 1: that the final sentencing in this case. 646 00:33:52,560 --> 00:33:56,400 Speaker 5: Yes, we've got one final sentencing hearing left in this 647 00:33:57,040 --> 00:34:00,600 Speaker 5: FTX saga, and that is of Gary Wong. Gary Wong 648 00:34:00,800 --> 00:34:03,040 Speaker 5: was the co founder at STX and helped build the 649 00:34:03,080 --> 00:34:06,960 Speaker 5: exchange with Sam Bak mcfreed. He became the chief technology 650 00:34:07,000 --> 00:34:10,160 Speaker 5: officer and he was also a corporating witness and get 651 00:34:10,200 --> 00:34:13,279 Speaker 5: testimony at Sam's trial. He's due to be sentenced at 652 00:34:13,320 --> 00:34:16,000 Speaker 5: the end of November, so it'll be interesting to see 653 00:34:16,040 --> 00:34:20,120 Speaker 5: where Judge Kaplan puts him on the culpability scale because 654 00:34:20,200 --> 00:34:25,120 Speaker 5: he knew about the that before STX and Animator Research 655 00:34:25,280 --> 00:34:28,560 Speaker 5: a little bit earlier than Mishad Thing did. But from 656 00:34:28,600 --> 00:34:30,600 Speaker 5: the evidence that we heard a trial, he wasn't as 657 00:34:30,600 --> 00:34:33,680 Speaker 5: deeply involved as Caroline Ellison was. 658 00:34:33,880 --> 00:34:36,440 Speaker 1: So the judge will have to balance all that out. 659 00:34:36,680 --> 00:34:38,920 Speaker 1: I know you'll be there for that, Ava, Thanks so 660 00:34:39,040 --> 00:34:42,680 Speaker 1: much for bringing us inside the courtroom. That's Bloomberg Legal 661 00:34:42,719 --> 00:34:46,000 Speaker 1: reporter Eva Benny Morrison, and that's it for this edition 662 00:34:46,040 --> 00:34:49,080 Speaker 1: of the Bloomberg Law Podcast. Remember you've can always get 663 00:34:49,120 --> 00:34:51,799 Speaker 1: the latest legal news by subscribing and listening to the 664 00:34:51,840 --> 00:34:55,920 Speaker 1: show on Apple Podcasts, Spotify and at Bloomberg dot Com, 665 00:34:55,920 --> 00:35:00,200 Speaker 1: slash podcast, slash Law. I'm June Grosso and this is 666 00:35:00,239 --> 00:35:02,160 Speaker 1: Bloomberg