WEBVTT - Weekend Law: Election Cases, Musk Sweepstakes & SBF Cooperator

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<v Speaker 1>This is Bloomberg Law with June Brusso from Bloomberg Radio.

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<v Speaker 1>The Supreme Court stepped into the twenty twenty four election

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<v Speaker 1>this week, allowing Virginia to carry out a purge of

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<v Speaker 1>residents from its voter rolls on the eve of the

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<v Speaker 1>election without any explanation. The Court's conservative justices overrode the

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<v Speaker 1>decision of a federal court and a unanimous appeals court,

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<v Speaker 1>which had found that the state's purge of about sixteen

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<v Speaker 1>hundred voters violated federal law. The National Voter Registration Act

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<v Speaker 1>prohibits systematic removals of voters in the ninety days before

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<v Speaker 1>an election. Republican Virginia Governor Glenn Younkin defended his order

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<v Speaker 1>for the purge, which was issued on August seventh, the

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<v Speaker 1>ninetieth day before the November fifth election here on CNN.

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<v Speaker 2>Because it is done on an individualized basis by person,

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<v Speaker 2>and because that person has in fact self identified as

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<v Speaker 2>a non citizen, this is not subject to the ninety

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<v Speaker 2>day blackout period in my view.

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<v Speaker 1>The three liberal justices dissented, joining me is Elections law

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<v Speaker 1>expert Richard brough Fault, a professor at Columbia Law School.

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<v Speaker 1>Were you surprised that the Supreme Court intervened to reverse

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<v Speaker 1>the Fourth Circuit and the District Court.

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<v Speaker 3>Judge, Yes, maybe I shouldn't have been, but yes I was.

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<v Speaker 3>So the case involves a state effort to purge people

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<v Speaker 3>from the roles on the claim that they're non citizens.

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<v Speaker 3>Non citizens are not entitled to vote. It's illegal, and

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<v Speaker 3>states are allowed to remove any non citizens that are

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<v Speaker 3>on the ballot. But there is a provision in federal

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<v Speaker 3>law National Voter Registration Act, that prohibits mass purchase so

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<v Speaker 3>called systematic purchase within ninety days before the election, because

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<v Speaker 3>it makes it two difficult. People may be purged by mistake,

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<v Speaker 3>and if it's a mass purge, it's actually difficult for

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<v Speaker 3>people to be aware of that and to respond. And

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<v Speaker 3>so that is illegal. But Virginia a conscious they adopted

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<v Speaker 3>such a program. The governor you shouldn't executive words to

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<v Speaker 3>that effect literally on the day that this so called

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<v Speaker 3>quiet or non virtually was supposed to begin, and basically

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<v Speaker 3>used some mix of DMV data and other databases to

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<v Speaker 3>conclude that people were not citizens DMV. When you get

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<v Speaker 3>a driver's license, you may be asked whether or not

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<v Speaker 3>you were a citizens. Some people checked non citizen by mistake,

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<v Speaker 3>some people check not aisms because they are not a

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<v Speaker 3>citizen when they get their driver's license, but some years

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<v Speaker 3>later become naturalized as citizens. So the state, using that

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<v Speaker 3>data and other data, went ahead and concluded that something

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<v Speaker 3>like sixteen hundred people were not citizens and needed to

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<v Speaker 3>be purged from the roles. And that was challenged on

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<v Speaker 3>the theory that violated the federal law. And also there

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<v Speaker 3>was evidence a number of these people who were bridge

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<v Speaker 3>were in fact citizens and were challenging th as individuals.

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<v Speaker 1>So that challenge went up the chain, so to speak,

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<v Speaker 1>to the federal district court and the appellate court tell

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<v Speaker 1>us what happened there.

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<v Speaker 3>The Federal District Court in Virginia concluded that this was

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<v Speaker 3>a pretty straightforward violation the federal law, that it was

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<v Speaker 3>going on in this so called quiet period, that it

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<v Speaker 3>was a systematic removal effort, not based on individualized information

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<v Speaker 3>about individual voters, but basically a massive database information that

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<v Speaker 3>they were loading from one database to another. And the

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<v Speaker 3>Fourth Circuit Court of Appeals agreed rather refused to overturn

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<v Speaker 3>the District Court's injunction. The Court of Appeals basically said

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<v Speaker 3>yes on the fact, it appears to us that this

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<v Speaker 3>is a violation of federal law and it should be stopped.

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<v Speaker 3>The Supreme Court rather quickly by well, I'm coming to

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<v Speaker 3>say six three, but you know that three liberal justices

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<v Speaker 3>dissented because it was just an order. It's not clear

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<v Speaker 3>that all six of the others agreed, but looks like

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<v Speaker 3>by pretty much a party line vote without an opinion,

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<v Speaker 3>basically reversed a fourth circuit and allowed this purge to

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<v Speaker 3>go forth. The purchase actually stopped, but the sixteen hundred

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<v Speaker 3>voters who were removed remain removed unless they can as

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<v Speaker 3>individuals go in and Virginia allows same day registration, go

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<v Speaker 3>in and prove that they are citizens and re register

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<v Speaker 3>and then vote.

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<v Speaker 1>Virginia made several arguments, and one was that the quiet

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<v Speaker 1>period doesn't apply to non citizens. Another was that courts

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<v Speaker 1>shouldn't get involved because of what's known as the personal

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<v Speaker 1>principle right, so taking.

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<v Speaker 3>Them in reverse order. The problem with the per cl

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<v Speaker 3>principle in this case is, I mean, the only basis

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<v Speaker 3>for judicial intervention is that the state has violated the

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<v Speaker 3>ninety day rule, So any effort to enforce the ninety

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<v Speaker 3>day rule would occur within ninety days before the election,

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<v Speaker 3>so it makes no sense to invoke the for cell

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<v Speaker 3>principle here. The only real question is did the plaintiffs

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<v Speaker 3>and the US government, which also participated, move quickly once

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<v Speaker 3>they became aware of what was going on, and the

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<v Speaker 3>lower courts degree that they did that there was no

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<v Speaker 3>delay once it became clear what the state was doing.

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<v Speaker 3>The lawsuit was brought in terms of whether or not

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<v Speaker 3>the quiet period applies to removal and non citizens. Nothing

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<v Speaker 3>in it any case that it doesn't. In other words,

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<v Speaker 3>the law is simply there to say that there should

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<v Speaker 3>be no removals based on a system and no systematic removals,

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<v Speaker 3>and it doesn't say no removal only for non residency.

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<v Speaker 3>It just has no removals that period. So there's nothing

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<v Speaker 3>in the law that limits the grounds of ineligibility to

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<v Speaker 3>something or other, such as to moving, and it does

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<v Speaker 3>permit removals for death. So it's not quite clear what

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<v Speaker 3>this law would be doing if it doesn't also apply

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<v Speaker 3>to removals on a theory that the individual is not

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<v Speaker 3>a citizen.

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<v Speaker 1>So, as you mentioned, we don't know why the justices

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<v Speaker 1>voted as they did, but the three liberal justices made

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<v Speaker 1>their public dissent clear. What does it tell you that

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<v Speaker 1>this was down ideological lines.

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<v Speaker 3>It's very troubling. It's very troubling. The lower court decision

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<v Speaker 3>was well reasoned. The Court of Appeals agreed with it,

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<v Speaker 3>and there is irreparable injury to those voters who might

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<v Speaker 3>be eligible to vote, who have been denied the right

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<v Speaker 3>to vote. Now, some of them will be able to

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<v Speaker 3>re establish their eligibility because they can re register in

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<v Speaker 3>the coming day. So it's possible some of them will

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<v Speaker 3>be back in, but you know, it takes time, it

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<v Speaker 3>takes efforts. Quite possible some of them will not.

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<v Speaker 1>Although Virginia is not a battleground state. This was based

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<v Speaker 1>on an order by the Republican governor and was backed

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<v Speaker 1>at the Supreme Court by the country's twenty six other

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<v Speaker 1>Republican state attorneys general, the Republican National Committee, and several

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<v Speaker 1>conservative groups. And it revolves around a flashpoint in Donald

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<v Speaker 1>Trump's campaign, yes, which is that you know, there's widespread

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<v Speaker 1>voting by non citizens.

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<v Speaker 3>Right, And for years he's been making that argument, even

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<v Speaker 3>when he won in twenty sixteen, although he lost the

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<v Speaker 3>popular vote, he says, well, I really won the popular

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<v Speaker 3>vote because Hillary Clinton's numbers were inflated by all the

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<v Speaker 3>non citizens. There is absolutely no evidence of more than

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<v Speaker 3>a minuscule number of non citizens voting, and you received

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<v Speaker 3>by mistake. It's illegal for non citizens to vote. There

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<v Speaker 3>are severe penalties. The number of non citizens who are

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<v Speaker 3>registered vote, who or actually vote is absolutely minusculine. It

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<v Speaker 3>is a non fact, but it's been used so heavily

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<v Speaker 3>by Republicans to try and undermine the legitimacy if there

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<v Speaker 3>was just no evidence that it occurs.

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<v Speaker 1>So do you think this lawsuit is to set the

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<v Speaker 1>stage or the groundwork for contesting election results?

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<v Speaker 3>Yes, I think anything that raises the issue of non citizens. Now.

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<v Speaker 3>Of course Republicans won this lawsuit, so they won't be

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<v Speaker 3>able to make this argument in Virginia now, but you know,

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<v Speaker 3>it is an issue they've been raising all over the country.

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<v Speaker 3>There was a similar student Alabama where the federal District

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<v Speaker 3>Court ordered the governor to stop the PERGE program in

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<v Speaker 3>Alabama and undo it there. I think about three thousand

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<v Speaker 3>people have been removed from the roles, and there was

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<v Speaker 3>evidence that it's often by a mistake. Again, they're using

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<v Speaker 3>old databases. Sometimes it's the wrong person. There may be

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<v Speaker 3>that the DMV numbers may indicate this person with a

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<v Speaker 3>certain name is a non citizen. Somebody with the same name,

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<v Speaker 3>but a different person might be removed from the roles

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<v Speaker 3>because their matching is pretty basic. Basically, if you have

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<v Speaker 3>the same first and last name as the person at

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<v Speaker 3>least been identified as a non citizen, you can be removed.

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<v Speaker 3>And that's not so uncommon. And it also again using

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<v Speaker 3>DMV data, since your driver's license can be good for

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<v Speaker 3>four years or more. In that time, you could have

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<v Speaker 3>naturalized from being a non citizen to a citizen, but

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<v Speaker 3>that naturalized person will be removed from the roles. And

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<v Speaker 3>so I think it's very much a way of keeping

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<v Speaker 3>the issue alive and in front of people all the time.

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<v Speaker 3>And indeed people will think, oh, there were sixteen hundred

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<v Speaker 3>non citizens voting in Virginia, but it's not clear that

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<v Speaker 3>any of them were non citizens. Certain names popped up

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<v Speaker 3>on databases, and certainly there are been individual cases in

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<v Speaker 3>the newspapers and people showing that they were not non citizens,

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<v Speaker 3>that they were citizens, some citizens from birth and some

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<v Speaker 3>naturalized citizens.

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<v Speaker 1>A lot of election experts have been saying that this

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<v Speaker 1>year's election won't be a repeat of Bush vy Gore,

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<v Speaker 1>the Supreme Court is unlikely to play a pivotal role.

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<v Speaker 1>But does this decision indicate differently that the Justices may

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<v Speaker 1>get involved.

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<v Speaker 3>Yes, I don't know why you would think that the

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<v Speaker 3>Justices will be uninvolved. It will turn on what the

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<v Speaker 3>issues are. And you know, I think Bush versus Gore

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<v Speaker 3>was unusual and that the issue the Supreme Court dealt

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<v Speaker 3>with was effect a post election issue. In other words,

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<v Speaker 3>how to take care of a recount to ord how

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<v Speaker 3>do take care of the counting of ballots in Florida

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<v Speaker 3>where it wasn't completely clear how people had voted, and

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<v Speaker 3>so that was an issue that could not have come

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<v Speaker 3>up before the election this time. I mean, I think

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<v Speaker 3>they're deciding issues that could be relevant to the election beforehand,

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<v Speaker 3>like this one. As for things after the election, there

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<v Speaker 3>may still be things that come up, so it's hard

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<v Speaker 3>to know. In some ways, you could argue that this

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<v Speaker 3>earlier this year on Trump's immunity in some sense plays

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<v Speaker 3>into the election, or he's getting on the ballot in

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<v Speaker 3>the first place. So I don't understand the argument as

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<v Speaker 3>to why anyone thinks that they would be more or

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<v Speaker 3>less engaged than in twenty or in twenty twenty, where

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<v Speaker 3>they did a bunch of things before the election, but

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<v Speaker 3>not so much after the election.

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<v Speaker 1>Well, some people are pointing to those cases as an

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<v Speaker 1>indication that the Supreme Court won't get involved, saying Donald

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<v Speaker 1>Trump and his allies brought around sixty cases challenging the

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<v Speaker 1>election in different ways, and the Supreme Court didn't take

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<v Speaker 1>up any appeals right right.

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<v Speaker 3>And including the original jurisdiction case that Texas brought against Pennsylvania,

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<v Speaker 3>it's not count Pennsylvania's vote sexist, joined by twenty other

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<v Speaker 3>Republican states. They didn't hear that. No, they stayed pretty

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<v Speaker 3>much out of it after the election in twenty twenty.

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<v Speaker 3>But you know, the result in twenty twenty was pretty clear.

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<v Speaker 3>It's hard to speculate about the Supreme Court, but this

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<v Speaker 3>decision is not a great sign about the courts wanting

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<v Speaker 3>to stay out of the election. This was an unnecessary decision.

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<v Speaker 3>The law was pretty strongly on the side of the plaintiffs,

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<v Speaker 3>the ones trying to stop the purge.

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<v Speaker 1>I do want to point out that on Tuesday, the

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<v Speaker 1>Supreme Court did refuse to order the removal of Robert F.

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<v Speaker 1>Kennedy Junior's name from presidential election ballots in Michigan and Wisconsin.

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<v Speaker 1>The officials there said his request came too late under

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<v Speaker 1>the laws of the two states where voting has already begun,

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<v Speaker 1>and the Supreme Court didn't get involved.

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<v Speaker 3>Yeah, I mean again, it's hard to figure out. It

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<v Speaker 3>could be that maybe they want to be deferring to

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<v Speaker 3>the states both ways. I mean, refusing to order the

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<v Speaker 3>removal is consistent with deferring to the state and in

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<v Speaker 3>this case, allowing them to go forward with the purchase

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<v Speaker 3>consistent with the differing of the state. Maybe that's part

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<v Speaker 3>of it, but I'm not even trying to tempt it

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<v Speaker 3>to say that there's a consistent logic.

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<v Speaker 1>It's hard to see it. A lot more election disputes

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<v Speaker 1>to be resolved in the courts before the election, and

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<v Speaker 1>I'm sure after the election as well. I'm glad I

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<v Speaker 1>have you on speed Die rich Thanks so much. That's

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<v Speaker 1>Professor Richard Brefault of Columbia Law School. Coming up next

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<v Speaker 1>on The Bloomberg Law Show. The Philadelphia District Attorney sues

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<v Speaker 1>Elon Musk over his one million dollar a day giveaway

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<v Speaker 1>to registered voters, but a judge in the battleground state

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<v Speaker 1>ends a hearing without ruling on the request to block it.

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<v Speaker 1>We'll tell you why. I'm June Grosso and this is Bloomberg.

0:11:44.320 --> 0:11:47.760
<v Speaker 4>Every day, every day from now and so the election.

0:11:48.760 --> 0:11:52.480
<v Speaker 4>We're giving out a million dollar prize, that is, and

0:11:52.520 --> 0:11:54.360
<v Speaker 4>all you have to do is sign a petition in

0:11:54.440 --> 0:11:59.240
<v Speaker 4>support of a constitution. It's very straightforward. You don't even

0:11:59.240 --> 0:11:59.640
<v Speaker 4>have to vote.

0:11:59.640 --> 0:12:00.920
<v Speaker 3>You don't have to vote.

0:12:00.920 --> 0:12:03.040
<v Speaker 4>You just have to sign a petition saying you believe

0:12:03.040 --> 0:12:05.640
<v Speaker 4>in the Constitution, which if you already believe in the Constitution,

0:12:06.040 --> 0:12:08.080
<v Speaker 4>you're just signing something you already believe. And you can

0:12:08.160 --> 0:12:08.920
<v Speaker 4>ruin a million dollars.

0:12:09.160 --> 0:12:09.800
<v Speaker 5>That's awesome.

0:12:10.920 --> 0:12:14.960
<v Speaker 1>But Elon Musk's one million dollars a day voter sweepstakes

0:12:15.600 --> 0:12:20.160
<v Speaker 1>doesn't seem to be the very straightforward proposition he's made

0:12:20.160 --> 0:12:23.160
<v Speaker 1>it out to be. In order to enter, you must

0:12:23.160 --> 0:12:26.920
<v Speaker 1>be registered to vote in one of seven swing states.

0:12:27.200 --> 0:12:30.400
<v Speaker 1>The Department of Justice has already worn Musk and his

0:12:30.559 --> 0:12:35.719
<v Speaker 1>pro Trump America pack that his sweepstakes might violate federal law,

0:12:35.920 --> 0:12:40.320
<v Speaker 1>and this week Philadelphia District Attorney Larry Krasner sued Musk

0:12:40.559 --> 0:12:44.880
<v Speaker 1>to stop the sweepstakes, saying it violates state lottery and

0:12:44.920 --> 0:12:49.480
<v Speaker 1>consumer protection laws. Joining me is election law expert Douglas Spencer,

0:12:49.760 --> 0:12:53.120
<v Speaker 1>a professor of law at the University of Colorado. Doug

0:12:53.160 --> 0:12:56.160
<v Speaker 1>tell us about the concerns about this sweepstakes.

0:12:56.360 --> 0:12:59.600
<v Speaker 6>The concern is that Elon Musk is using this lottery

0:12:59.640 --> 0:13:03.280
<v Speaker 6>to encourage voter registration and voting, which on its face

0:13:03.360 --> 0:13:06.120
<v Speaker 6>doesn't sound bad. We want more people to be registered

0:13:06.120 --> 0:13:08.800
<v Speaker 6>and to vote. It does promote democracy, but there are

0:13:08.840 --> 0:13:12.920
<v Speaker 6>federal laws that prevent people from paying or buying votes,

0:13:13.040 --> 0:13:16.479
<v Speaker 6>or paying people to register, and so there's been allegations

0:13:16.520 --> 0:13:19.560
<v Speaker 6>that this scheme that he has created is doing just that,

0:13:19.800 --> 0:13:24.240
<v Speaker 6>rewarding people for registering and then turning out to vote.

0:13:24.400 --> 0:13:27.920
<v Speaker 6>The da in Philadelphia is challenging this not just as

0:13:27.920 --> 0:13:30.280
<v Speaker 6>a violation of these federal laws, but there's also some

0:13:30.360 --> 0:13:34.880
<v Speaker 6>state laws about consumer protection and some other issues related

0:13:34.880 --> 0:13:38.920
<v Speaker 6>to fraud. There is some sense of seriousness about the

0:13:38.960 --> 0:13:41.680
<v Speaker 6>allegations that these federal laws are being violated with why

0:13:41.720 --> 0:13:45.120
<v Speaker 6>the Department's Justice itself has commenced an investigation. They haven't

0:13:45.200 --> 0:13:47.800
<v Speaker 6>charged him with any clime, but they see some of

0:13:47.840 --> 0:13:49.920
<v Speaker 6>the concerns about the way this program is being run

0:13:49.960 --> 0:13:50.960
<v Speaker 6>and they're investigating it.

0:13:51.360 --> 0:13:55.720
<v Speaker 1>So the DNA in Philadelphia is going on a different

0:13:56.120 --> 0:14:00.200
<v Speaker 1>kind of track. He's saying that this is a lot

0:14:00.880 --> 0:14:05.840
<v Speaker 1>and as such, it's illegal in Pennsylvania because all lotteries

0:14:05.920 --> 0:14:09.720
<v Speaker 1>have to be operated and administered by the state. So

0:14:10.160 --> 0:14:14.599
<v Speaker 1>he's trying to get around the questions about federal law.

0:14:14.640 --> 0:14:17.840
<v Speaker 6>That sounds right. There's been a concern about operating a lottery,

0:14:18.080 --> 0:14:21.360
<v Speaker 6>you know, and whether it's been regulated or registered or

0:14:21.400 --> 0:14:25.200
<v Speaker 6>as you said, as operated by the state itself. And

0:14:25.240 --> 0:14:27.680
<v Speaker 6>then also, at least in the statement that I read,

0:14:28.200 --> 0:14:31.320
<v Speaker 6>says that the lottery is being used to kind of

0:14:31.440 --> 0:14:35.640
<v Speaker 6>lull or dupe Philadelphians and Pennsylvanians into giving away their

0:14:35.880 --> 0:14:38.880
<v Speaker 6>personal data in exchange for money, which could be a

0:14:38.960 --> 0:14:42.920
<v Speaker 6>violation of you know, a state false advertising or consumer

0:14:42.960 --> 0:14:43.720
<v Speaker 6>protection law.

0:14:44.160 --> 0:14:46.240
<v Speaker 1>I mean, it would put it into a whole different

0:14:46.480 --> 0:14:50.520
<v Speaker 1>sphere because now he would have to follow all the

0:14:50.600 --> 0:14:55.600
<v Speaker 1>rules for sweep stakes in Pennsylvania and the other swing states.

0:14:55.880 --> 0:14:57.800
<v Speaker 6>That's right, And what I don't know is in the

0:14:57.880 --> 0:15:01.080
<v Speaker 6>state how to define a sweet steak or a lottery.

0:15:01.080 --> 0:15:05.760
<v Speaker 6>Because nobody's buying a ticket or giving musk any cash

0:15:05.920 --> 0:15:08.640
<v Speaker 6>in order to enter the lottery. They're entering the lottery

0:15:08.680 --> 0:15:12.880
<v Speaker 6>by signing a political petition, and so one, there could

0:15:12.920 --> 0:15:15.080
<v Speaker 6>be an argument that the active signing a petition is

0:15:15.120 --> 0:15:17.520
<v Speaker 6>different than buying a lottery ticket, which would distinguish this.

0:15:18.160 --> 0:15:20.600
<v Speaker 6>And secondly, the active signing a petition is a First

0:15:20.640 --> 0:15:23.800
<v Speaker 6>Amendment protected act that buying a lottery ticket is not.

0:15:24.000 --> 0:15:26.000
<v Speaker 6>And so you'd have to see the interaction of this

0:15:26.320 --> 0:15:29.400
<v Speaker 6>regulation of lotteries to the First Amendment. But if the

0:15:29.440 --> 0:15:33.040
<v Speaker 6>state defines sweepstakes as you know, entering yourself for a

0:15:33.120 --> 0:15:34.920
<v Speaker 6>chance to win a large sum of money based on

0:15:35.040 --> 0:15:38.440
<v Speaker 6>chance or random draw, then this lottery is in violation

0:15:38.480 --> 0:15:40.960
<v Speaker 6>of that state laws. He has not properly registered or

0:15:41.040 --> 0:15:43.240
<v Speaker 6>operating under those state regulations.

0:15:43.480 --> 0:15:47.000
<v Speaker 1>What's also interesting is that Musk said this is a

0:15:47.080 --> 0:15:51.200
<v Speaker 1>random draw, but the Philadelphia DA says that appears false

0:15:51.320 --> 0:15:55.120
<v Speaker 1>because multiple winners are people who have shown up at

0:15:55.200 --> 0:15:57.000
<v Speaker 1>Trump rallies in Pennsylvania.

0:15:57.080 --> 0:16:01.320
<v Speaker 6>Correct. So that's an allegation that in order to prove it,

0:16:01.400 --> 0:16:03.520
<v Speaker 6>if a judge is willing to take the case, then

0:16:03.560 --> 0:16:06.760
<v Speaker 6>one element of a lawsuit is what's called discovery, and

0:16:06.840 --> 0:16:09.240
<v Speaker 6>Elon Musk would have to provide some evidence of the

0:16:09.280 --> 0:16:13.520
<v Speaker 6>selection mechanism to prove that the decisions were being made randomly.

0:16:13.560 --> 0:16:15.320
<v Speaker 6>He'd have to have a record of the random number

0:16:15.440 --> 0:16:17.640
<v Speaker 6>generation or a video of him pulling a ping pong

0:16:17.680 --> 0:16:21.520
<v Speaker 6>ball out. And if he's not, then he's not actually

0:16:21.600 --> 0:16:25.440
<v Speaker 6>running a lottery, in which case he's falsely advertising what

0:16:25.480 --> 0:16:27.920
<v Speaker 6>he's actually doing. But at the same time, if he's

0:16:27.960 --> 0:16:30.560
<v Speaker 6>not randomly choosing people, then what he's doing may not

0:16:30.600 --> 0:16:32.320
<v Speaker 6>be a lottery, and that could cut in favor of

0:16:32.320 --> 0:16:34.800
<v Speaker 6>Elon Musk because then he can say, I'm not actually

0:16:34.880 --> 0:16:37.560
<v Speaker 6>violating the state's prohibition because I'm just giving money away

0:16:37.560 --> 0:16:39.160
<v Speaker 6>to the people that I want to give money away to.

0:16:39.640 --> 0:16:43.480
<v Speaker 1>Elon Musk obviously ignored the letter from the Justice Department.

0:16:44.000 --> 0:16:46.240
<v Speaker 1>I mean, what's the import of that letter if it

0:16:46.280 --> 0:16:47.680
<v Speaker 1>didn't stop the sweepstakes.

0:16:48.360 --> 0:16:50.760
<v Speaker 6>I think the letter from the Department of Justice does

0:16:51.280 --> 0:16:54.040
<v Speaker 6>two things. Once, it's to a public statement that lets

0:16:54.120 --> 0:16:56.320
<v Speaker 6>everyone in the public know that what Elon Musk is

0:16:56.320 --> 0:16:58.920
<v Speaker 6>doing may be a violation of the law, but under

0:16:58.960 --> 0:17:02.080
<v Speaker 6>the federal life of violation is punishable by a fine

0:17:02.120 --> 0:17:05.560
<v Speaker 6>up to ten thousand dollars unless you are knowingly and

0:17:05.600 --> 0:17:08.560
<v Speaker 6>willingly violating the law, in which case then you can

0:17:08.760 --> 0:17:11.440
<v Speaker 6>serve jail time up to five years. So I think

0:17:11.480 --> 0:17:14.680
<v Speaker 6>this letter from the DOJ puts the pack on notice

0:17:15.040 --> 0:17:18.440
<v Speaker 6>that you are doing something willfully and knowingly, even though

0:17:18.440 --> 0:17:21.520
<v Speaker 6>we've told you that what you're doing risks of violation,

0:17:22.160 --> 0:17:25.199
<v Speaker 6>so that the potential penalties which will come after the

0:17:25.200 --> 0:17:28.520
<v Speaker 6>election in any case, could be much more serious. Trying

0:17:28.560 --> 0:17:30.359
<v Speaker 6>to get them to change. I will note that the

0:17:30.520 --> 0:17:34.240
<v Speaker 6>lottery has changed a little bit since the DJ Center

0:17:34.240 --> 0:17:37.680
<v Speaker 6>its letter. It used to expire. Eligibility used to expire

0:17:38.240 --> 0:17:41.280
<v Speaker 6>on midnight October twenty first, which was the deadline for

0:17:41.359 --> 0:17:44.640
<v Speaker 6>voter registration in Pennsylvania, which was a really strong signal

0:17:44.880 --> 0:17:47.119
<v Speaker 6>that the motivation for this lottery was to pay people

0:17:47.119 --> 0:17:51.240
<v Speaker 6>to register, not something else. That deadline has now changed

0:17:51.359 --> 0:17:54.879
<v Speaker 6>until election day, so there was some recognition that that

0:17:55.080 --> 0:17:57.760
<v Speaker 6>was a problem for them, and they have changed their

0:17:57.800 --> 0:17:59.720
<v Speaker 6>tactics a little bit so they are aware in their

0:17:59.720 --> 0:18:03.720
<v Speaker 6>reading these letters, and the question will be after the facts,

0:18:03.920 --> 0:18:05.200
<v Speaker 6>if there's any accountability.

0:18:05.520 --> 0:18:07.639
<v Speaker 1>I mean, they also changed it a little bit, and

0:18:07.680 --> 0:18:10.159
<v Speaker 1>that he said at one of the giveaways, one of

0:18:10.160 --> 0:18:12.879
<v Speaker 1>the early ones, that all you have to do is

0:18:12.960 --> 0:18:15.840
<v Speaker 1>now be a spokesperson for us, so sort of making

0:18:15.880 --> 0:18:17.119
<v Speaker 1>it into a job offer.

0:18:17.160 --> 0:18:20.560
<v Speaker 6>I guess correct. He's trying lots of different ways. A

0:18:20.680 --> 0:18:22.920
<v Speaker 6>judge will have to determine whether or not they think

0:18:23.280 --> 0:18:26.840
<v Speaker 6>that's his true intent or not. If I pay you

0:18:26.880 --> 0:18:29.919
<v Speaker 6>to register to vote, but I also say that you

0:18:30.080 --> 0:18:33.200
<v Speaker 6>have to walk outside and breathe fresh air and then

0:18:33.400 --> 0:18:35.679
<v Speaker 6>you get the money, a judge will say, I know

0:18:35.840 --> 0:18:38.240
<v Speaker 6>you told me that you're paying these people for breathing

0:18:38.280 --> 0:18:40.399
<v Speaker 6>fresh air, but they also have to register. I just

0:18:40.440 --> 0:18:43.760
<v Speaker 6>think that's a scam. So the question is for somebody

0:18:43.800 --> 0:18:47.119
<v Speaker 6>signing a petition that doesn't ask for anything, just says

0:18:47.160 --> 0:18:49.639
<v Speaker 6>I think the First and Second Amendment are important. Is

0:18:49.640 --> 0:18:53.160
<v Speaker 6>that something that's a legitimate petition, or do we think

0:18:53.200 --> 0:18:55.440
<v Speaker 6>that the Musk has been using it as a way

0:18:55.480 --> 0:18:58.920
<v Speaker 6>to insulate himself from just out and out buying people

0:18:58.920 --> 0:19:01.679
<v Speaker 6>to register to vote. To make look somewhat differently, and

0:19:01.720 --> 0:19:04.760
<v Speaker 6>that will be a fact determination by a judge if

0:19:04.800 --> 0:19:07.360
<v Speaker 6>it gets to this litigation. They can look at emails

0:19:07.359 --> 0:19:10.760
<v Speaker 6>between Musk and his pack and other communications. They can

0:19:10.800 --> 0:19:14.720
<v Speaker 6>make determinations based on public statements where America Pack says

0:19:14.760 --> 0:19:16.800
<v Speaker 6>we want to get a million people registered to vote

0:19:16.800 --> 0:19:19.600
<v Speaker 6>in the Swing States, and they'll make a determination whether

0:19:19.680 --> 0:19:22.280
<v Speaker 6>or not that was the intent of this lottery, even

0:19:22.320 --> 0:19:24.879
<v Speaker 6>though there are facts that cut in different directions.

0:19:25.600 --> 0:19:27.639
<v Speaker 1>A lot of people are going to say this is

0:19:27.640 --> 0:19:33.480
<v Speaker 1>a move by a Democratic da against Musk who's spending

0:19:33.800 --> 0:19:36.160
<v Speaker 1>millions to get Trump elected.

0:19:36.920 --> 0:19:39.359
<v Speaker 6>I will say I think the political side of this

0:19:39.520 --> 0:19:42.159
<v Speaker 6>is as important as the legal side. So the Department

0:19:42.200 --> 0:19:46.040
<v Speaker 6>of Justice sending this letter does send a signal for voters,

0:19:46.040 --> 0:19:48.560
<v Speaker 6>whether or not there's an actual violation, that what they're

0:19:48.600 --> 0:19:52.000
<v Speaker 6>doing is a close violation of the law. And it

0:19:52.040 --> 0:19:54.960
<v Speaker 6>could be the same for a district attorney who wants

0:19:55.040 --> 0:19:58.280
<v Speaker 6>to make sure that this issue is framed in the

0:19:58.359 --> 0:20:02.600
<v Speaker 6>press and in the political sphere as a legal mumbo

0:20:02.720 --> 0:20:05.760
<v Speaker 6>jumbo as opposed to a really exciting money giveaway. So

0:20:05.800 --> 0:20:08.800
<v Speaker 6>there's a political aspect where bringing these charges changes the

0:20:08.840 --> 0:20:11.760
<v Speaker 6>news coverage, changes the dynamics, and that may be just

0:20:11.800 --> 0:20:14.080
<v Speaker 6>as important as any finding of guilt or innocence. And

0:20:14.160 --> 0:20:17.480
<v Speaker 6>so that's not something that the lawyers like me can

0:20:17.520 --> 0:20:19.720
<v Speaker 6>really comment on whether that's the right way to go

0:20:19.760 --> 0:20:22.639
<v Speaker 6>about it. But there's definitely a political angle to this.

0:20:22.960 --> 0:20:26.560
<v Speaker 1>Do you remember anything else like this in our history,

0:20:26.600 --> 0:20:28.439
<v Speaker 1>any kind of giveaways like this.

0:20:29.160 --> 0:20:32.680
<v Speaker 6>Not in our modern history. Way back in the seventeen

0:20:32.680 --> 0:20:35.600
<v Speaker 6>and eighteen hundreds, So this was before the ballot was secrets.

0:20:36.040 --> 0:20:39.440
<v Speaker 6>You'd have parties who would basically give away free booze

0:20:39.720 --> 0:20:41.879
<v Speaker 6>to people. You'd vote for their party, you'd get whiskey,

0:20:41.920 --> 0:20:45.040
<v Speaker 6>and it's very well known, and in part to avoid

0:20:45.080 --> 0:20:48.399
<v Speaker 6>that kind of bribery, we adopted the secret ballot and

0:20:48.440 --> 0:20:53.560
<v Speaker 6>since then nothing so open with payments. The parties, of course,

0:20:53.560 --> 0:20:55.960
<v Speaker 6>are always trying to incentivize and motivate people to get

0:20:55.960 --> 0:20:59.280
<v Speaker 6>out to vote. No lottery like this, specifically from a

0:20:59.320 --> 0:21:00.879
<v Speaker 6>wealthy buildaire either.

0:21:01.400 --> 0:21:04.200
<v Speaker 1>Thanks so much for joining me, Doug. That's Douglas Spencer,

0:21:04.240 --> 0:21:07.720
<v Speaker 1>a professor of law at the University of Colorado. In

0:21:07.920 --> 0:21:10.840
<v Speaker 1>just a few days, the case has bounced between state

0:21:10.960 --> 0:21:14.240
<v Speaker 1>and federal court and back again. On Thursday, there was

0:21:14.240 --> 0:21:17.320
<v Speaker 1>a hearing before a state court judge over Musk's motion

0:21:17.600 --> 0:21:20.679
<v Speaker 1>to move the case to federal court. Bloomberg Legal reporter

0:21:20.800 --> 0:21:24.600
<v Speaker 1>Chris Dolmesh was at the hearing, So Chris, the state

0:21:24.680 --> 0:21:28.080
<v Speaker 1>judge did send the case over to federal court for

0:21:28.160 --> 0:21:32.600
<v Speaker 1>a determination. Was there any discussion about the merits of

0:21:32.720 --> 0:21:34.760
<v Speaker 1>the DA's lawsuit at the hearing?

0:21:35.320 --> 0:21:39.359
<v Speaker 7>Not specifically, Essentially, the DA's lawyer kind of launched into

0:21:39.560 --> 0:21:42.640
<v Speaker 7>a bit of a soliloquy at some point on why

0:21:42.800 --> 0:21:45.399
<v Speaker 7>you know this shouldn't be removed to federal court. But

0:21:45.520 --> 0:21:47.879
<v Speaker 7>the judge clearly from the beginning was not going to

0:21:47.880 --> 0:21:50.520
<v Speaker 7>discuss the merits, just given it's kind of an automatic

0:21:50.640 --> 0:21:52.840
<v Speaker 7>move when they removed the federal court to at least

0:21:52.880 --> 0:21:55.800
<v Speaker 7>have the federal judge determined as a threshold matter whether

0:21:55.840 --> 0:21:57.000
<v Speaker 7>it's a matter of federal law.

0:21:57.520 --> 0:22:00.879
<v Speaker 1>So explain what their grounds are for removing this to

0:22:00.920 --> 0:22:01.600
<v Speaker 1>federal court.

0:22:01.920 --> 0:22:05.880
<v Speaker 7>They're saying it's essentially a quintessential matter of election law,

0:22:06.000 --> 0:22:09.800
<v Speaker 7>even though the DA's claims are essentially state law claims

0:22:09.880 --> 0:22:14.399
<v Speaker 7>under the Pennsylvania's lottery laws and consumer protection laws. So

0:22:15.040 --> 0:22:17.399
<v Speaker 7>they say, look, this is an election dispute, it should

0:22:17.400 --> 0:22:20.280
<v Speaker 7>be heard in federal court. They classify it as you know,

0:22:20.520 --> 0:22:23.679
<v Speaker 7>he's trying to stage a show ahead of the election

0:22:24.000 --> 0:22:26.720
<v Speaker 7>because he disagrees with Musk and trying to suppress his

0:22:26.840 --> 0:22:27.720
<v Speaker 7>First Amendment rights.

0:22:28.040 --> 0:22:30.920
<v Speaker 1>And what's the response of the Philadelphia DA.

0:22:31.440 --> 0:22:33.639
<v Speaker 7>Now, the DA says it's a state law case. He

0:22:33.840 --> 0:22:37.400
<v Speaker 7>argued that while it touches on elements of federal election law,

0:22:37.560 --> 0:22:40.399
<v Speaker 7>he argues that there are plenty of disputes that are

0:22:40.440 --> 0:22:42.720
<v Speaker 7>related to the election that are heard in state court.

0:22:42.880 --> 0:22:47.320
<v Speaker 1>And Chris, we have seen this removal to federal court

0:22:47.680 --> 0:22:48.760
<v Speaker 1>gambit before.

0:22:49.240 --> 0:22:52.679
<v Speaker 7>Yes, in many cases, it's a typical move. That's one

0:22:52.720 --> 0:22:55.080
<v Speaker 7>of the reasons a lot of times when you see

0:22:55.240 --> 0:22:58.760
<v Speaker 7>civil litigation between state corporations, a lot of the time

0:22:58.840 --> 0:23:02.240
<v Speaker 7>they have an automatic law that determines where the case

0:23:02.280 --> 0:23:04.359
<v Speaker 7>will be heard if there is a dispute, you know,

0:23:04.400 --> 0:23:06.920
<v Speaker 7>that kind of eliminates that problem from the beginning.

0:23:07.680 --> 0:23:10.879
<v Speaker 1>This is a really serious issue, but from reading about

0:23:10.880 --> 0:23:13.560
<v Speaker 1>it, it seemed to me like the hearing was pretty lighthearted.

0:23:14.000 --> 0:23:16.280
<v Speaker 7>Yeah, there are a lot of laughs. It was when

0:23:16.280 --> 0:23:19.200
<v Speaker 7>the DA noted that Elon wasn't there and looked around

0:23:19.200 --> 0:23:21.479
<v Speaker 7>the room. His lawyer said, he can't just show up

0:23:21.480 --> 0:23:24.800
<v Speaker 7>anywhere on you know, a moment's notice. And then the

0:23:24.920 --> 0:23:27.840
<v Speaker 7>DA got up and said, well, as to that notion,

0:23:28.119 --> 0:23:30.400
<v Speaker 7>he owned SpaceX. And then the judge kind of shot

0:23:30.440 --> 0:23:32.240
<v Speaker 7>that down real quick. He's like, he can't land a

0:23:32.280 --> 0:23:34.439
<v Speaker 7>rocket on top of the building. Let's be serious, And

0:23:34.480 --> 0:23:35.439
<v Speaker 7>that got some laughs.

0:23:35.520 --> 0:23:35.719
<v Speaker 3>You know.

0:23:35.800 --> 0:23:38.120
<v Speaker 7>The judge was clearly in a kind of jovial mood,

0:23:38.160 --> 0:23:40.080
<v Speaker 7>and one assumes because he knew he wasn't gonna have

0:23:40.119 --> 0:23:41.320
<v Speaker 7>to do anything with it that day.

0:23:41.640 --> 0:23:44.320
<v Speaker 1>But now the ball is back in his court since

0:23:44.359 --> 0:23:47.760
<v Speaker 1>the federal judge ruled that there was no issue of

0:23:47.800 --> 0:23:51.480
<v Speaker 1>federal law involved in the case. Well see what happens next.

0:23:51.600 --> 0:23:55.719
<v Speaker 1>Thanks so much, Chris. That's Bloomberg Legal reporter Chris don Mesh.

0:23:55.800 --> 0:23:59.520
<v Speaker 1>In other election news related to Pennsylvania, on Friday, the

0:24:00.160 --> 0:24:04.160
<v Speaker 1>court refused to intervene in a clash over provisional ballots

0:24:04.160 --> 0:24:08.520
<v Speaker 1>in the state, rejecting a Republican emergency appeal. This leaves

0:24:08.560 --> 0:24:12.159
<v Speaker 1>in place a state Supreme Court ruling that elections officials

0:24:12.240 --> 0:24:15.879
<v Speaker 1>must count provisional ballots cast by voters whose mail in

0:24:16.000 --> 0:24:20.760
<v Speaker 1>ballots were rejected. Coming up, Sam Bankman Fried's former lieutenant

0:24:20.800 --> 0:24:23.840
<v Speaker 1>is the first to avoid prison in the FTX case.

0:24:24.200 --> 0:24:26.560
<v Speaker 1>I'm June Grosso and you're listening to Bloomberg.

0:24:29.320 --> 0:24:34.520
<v Speaker 7>I call it the wheel. I don't think so.

0:24:34.960 --> 0:24:38.280
<v Speaker 3>What does it do the rules? Yeah, so does a bagel?

0:24:38.359 --> 0:24:39.280
<v Speaker 7>Okay, a bengel.

0:24:39.320 --> 0:24:39.840
<v Speaker 6>You can eat.

0:24:40.800 --> 0:24:42.280
<v Speaker 3>One of the worst ideas I've ever heard.

0:24:42.640 --> 0:24:44.879
<v Speaker 2>Like I was saying, it's FTX, it's a safe and

0:24:44.920 --> 0:24:45.919
<v Speaker 2>easy way to get into crypto.

0:24:48.160 --> 0:24:48.760
<v Speaker 7>I don't think so.

0:24:49.560 --> 0:24:51.240
<v Speaker 4>And I'm never wrong about this stuff.

0:24:51.720 --> 0:24:57.320
<v Speaker 1>Never remember back when FTX was the world's most popular

0:24:57.400 --> 0:25:02.359
<v Speaker 1>cryptocurrency exchange with select britty endorsements and a Super Bowl ad.

0:25:02.880 --> 0:25:06.440
<v Speaker 1>Of course, that was before a gaping hole in customer

0:25:06.480 --> 0:25:12.040
<v Speaker 1>deposits was exposed and FTX collapsed into bankruptcy. Federal indictments

0:25:12.040 --> 0:25:15.879
<v Speaker 1>followed a founder, Sam Bankman Freed, and his top executives,

0:25:16.080 --> 0:25:19.439
<v Speaker 1>and it didn't take long for three of those executives

0:25:19.600 --> 0:25:23.920
<v Speaker 1>to turn on Bankman Freed, accepting plea deals in return

0:25:24.040 --> 0:25:29.639
<v Speaker 1>for cooperating with prosecutors and testifying against him. Bankman Freed

0:25:29.760 --> 0:25:33.360
<v Speaker 1>is serving twenty five years in prison after a jury

0:25:33.400 --> 0:25:36.880
<v Speaker 1>found him guilty of the multi billion dollar fraud late

0:25:36.960 --> 0:25:40.840
<v Speaker 1>last year, and now the three cooperators are learning what

0:25:40.880 --> 0:25:45.600
<v Speaker 1>the consequences will be for them. In September, the prosecution's

0:25:45.680 --> 0:25:50.800
<v Speaker 1>star witness, Caroline Ellison, a top executive and Bankman Freed's

0:25:50.880 --> 0:25:54.800
<v Speaker 1>on again, off again girlfriend, was sentenced to two years

0:25:54.800 --> 0:25:58.880
<v Speaker 1>in prison. In October, Ryan Slome, one of Bankman Freed's

0:25:58.960 --> 0:26:03.679
<v Speaker 1>top lieutenants FTX, who did not testify against him, was

0:26:03.760 --> 0:26:06.679
<v Speaker 1>sentenced to seven and a half years in prison. But

0:26:06.800 --> 0:26:12.640
<v Speaker 1>on Wednesday, former FTX chief engineer Nashad Singh walked out

0:26:12.640 --> 0:26:16.879
<v Speaker 1>of Judge Lewis Kaplan's courtroom a free man. Why a

0:26:16.960 --> 0:26:19.960
<v Speaker 1>get out of jail free card for Singh when Judge

0:26:20.040 --> 0:26:23.640
<v Speaker 1>Caplan sentenced the others to prison time. Here to explain

0:26:23.720 --> 0:26:27.400
<v Speaker 1>is Bloomberg Legal reporter Eva Benny Morrison, who covered bankman

0:26:27.480 --> 0:26:31.639
<v Speaker 1>Fried's trial as well as singh sentencing. Ava tell us

0:26:31.680 --> 0:26:32.840
<v Speaker 1>a little about Singh.

0:26:33.359 --> 0:26:36.920
<v Speaker 5>Nishad Singh was one of three top executives at FTX

0:26:37.280 --> 0:26:39.879
<v Speaker 5>who turned on Sam Banks and Freed and signed up

0:26:39.920 --> 0:26:43.720
<v Speaker 5>his corporating witnesses to the government. They all testified at

0:26:43.840 --> 0:26:47.679
<v Speaker 5>Stateman Fred's broad trial and eventually helped land his conviction

0:26:47.800 --> 0:26:51.399
<v Speaker 5>to statement. Freed's currently serving twenty five years in jail,

0:26:51.640 --> 0:26:54.520
<v Speaker 5>and after his sentenced, it was time for the corporators

0:26:54.520 --> 0:26:57.040
<v Speaker 5>to face their own punishment for their role in the

0:26:57.080 --> 0:27:00.520
<v Speaker 5>collapse and the years on board at FTX. Mad Scene

0:27:00.800 --> 0:27:03.199
<v Speaker 5>turned up in court and we heard some pretty compelling

0:27:03.280 --> 0:27:08.000
<v Speaker 5>arguments from his attorney about why he should avoid spending

0:27:08.040 --> 0:27:10.760
<v Speaker 5>a day in prison. Only a couple of months ago,

0:27:10.880 --> 0:27:15.520
<v Speaker 5>Caroline Ellison, the foremost CEO of Alimenta Research, was sentenced

0:27:15.520 --> 0:27:19.640
<v Speaker 5>to two years in jail. This is unusual. Most cooperators

0:27:19.760 --> 0:27:23.159
<v Speaker 5>end up avoiding any jail time whatsoever. But fortunately for

0:27:23.280 --> 0:27:26.800
<v Speaker 5>Nishad Singh, that was what happened. Judge Lewis Caplan found

0:27:26.840 --> 0:27:30.240
<v Speaker 5>that he deserved more corporation credit than Caroline Ellison and

0:27:30.280 --> 0:27:33.120
<v Speaker 5>he was essentially less culpable than the flord at FTX

0:27:33.160 --> 0:27:34.119
<v Speaker 5>than Ellison.

0:27:34.600 --> 0:27:39.840
<v Speaker 1>Singh's lawyers apparently succeeded in setting him apart from Ellison

0:27:39.960 --> 0:27:43.560
<v Speaker 1>and Gary Wang, who's yet to be sentenced. Was a

0:27:43.600 --> 0:27:47.320
<v Speaker 1>factor also that Singh was involved in the front for

0:27:47.359 --> 0:27:48.760
<v Speaker 1>a shorter period of time.

0:27:49.080 --> 0:27:52.600
<v Speaker 5>Judge Chaplin certainly seemed to focus on the amount of

0:27:52.640 --> 0:27:56.600
<v Speaker 5>time Mischad sing knew about the fraud, so Nishad, who

0:27:56.720 --> 0:28:00.919
<v Speaker 5>was the chief engineer at FTX, only found out of

0:28:01.000 --> 0:28:05.560
<v Speaker 5>twenty twenty two that STX had been sending customer funds

0:28:05.560 --> 0:28:08.360
<v Speaker 5>billions of dollars worth for customer funds to Alimtor Research.

0:28:08.800 --> 0:28:12.600
<v Speaker 5>In contrast, Caroline Allison knew about this for years and

0:28:13.240 --> 0:28:17.160
<v Speaker 5>was an accomplice to Sam bankman Bridge and Caplan found

0:28:17.160 --> 0:28:20.600
<v Speaker 5>that this certainly helped Mishad Thing's case, the fact that

0:28:20.640 --> 0:28:22.160
<v Speaker 5>he only knew about it for a couple of months

0:28:22.200 --> 0:28:25.119
<v Speaker 5>before STX collapsed. You know the poe. The prosecution and

0:28:25.160 --> 0:28:28.359
<v Speaker 5>the defense did admit even when Mishad things found out

0:28:28.400 --> 0:28:31.840
<v Speaker 5>about this massive board and that STX couldn't afford to

0:28:31.880 --> 0:28:35.000
<v Speaker 5>cover the whole and customer deposits, he continued to allow

0:28:35.119 --> 0:28:38.560
<v Speaker 5>campaign donations to be made in his name and forged

0:28:38.600 --> 0:28:43.120
<v Speaker 5>ahead with a purchase of a beautiful house in Washington State,

0:28:43.320 --> 0:28:46.400
<v Speaker 5>something that his lawyer said he will forever be ashamed.

0:28:46.120 --> 0:28:48.760
<v Speaker 1>Of three point seven million dollar house.

0:28:49.480 --> 0:28:51.720
<v Speaker 5>Yes, that's right. It was worth three point seven million

0:28:51.760 --> 0:28:54.400
<v Speaker 5>dollars and he bought it with his friends. Was a

0:28:54.440 --> 0:28:56.520
<v Speaker 5>place to go and when he could relax and go

0:28:56.600 --> 0:29:00.680
<v Speaker 5>on holidays. This was kind of the only luxury, maybe

0:29:00.880 --> 0:29:03.880
<v Speaker 5>indulge in purchase that Mishad Seine had made when he

0:29:03.960 --> 0:29:07.000
<v Speaker 5>was FTX. His lawyers, you know, really stressed that he

0:29:07.120 --> 0:29:10.240
<v Speaker 5>was a true believer in effect of altruism, his philosophy

0:29:10.360 --> 0:29:12.600
<v Speaker 5>that drew a lot of the STX and alimed to

0:29:12.640 --> 0:29:15.360
<v Speaker 5>research folks together this idea that you could earn a

0:29:15.360 --> 0:29:17.200
<v Speaker 5>lot of money and give most of your way to

0:29:17.240 --> 0:29:20.200
<v Speaker 5>make the world better place. Miss shadd was very interested

0:29:20.240 --> 0:29:22.720
<v Speaker 5>in charity. You know, he's been involved in giving away

0:29:22.960 --> 0:29:25.959
<v Speaker 5>a lot of concernings since he was in college and

0:29:26.040 --> 0:29:29.320
<v Speaker 5>his lawyers really tried to push that point that this was,

0:29:29.560 --> 0:29:31.800
<v Speaker 5>you know, yeah, a big purchase, but it didn't look

0:29:31.960 --> 0:29:33.480
<v Speaker 5>like his philosophies.

0:29:34.040 --> 0:29:36.920
<v Speaker 1>And he's been working all this time, unlike Caroline Ellison.

0:29:37.320 --> 0:29:40.520
<v Speaker 5>In Caroline Ellison's case, her lawyers had said that she

0:29:40.640 --> 0:29:45.800
<v Speaker 5>was really struggling to find an employment after the STS collapse,

0:29:46.280 --> 0:29:49.600
<v Speaker 5>mainly because of the reputational damage that came and being

0:29:49.600 --> 0:29:53.720
<v Speaker 5>associated with STX and elem to research. She had been

0:29:54.120 --> 0:29:57.160
<v Speaker 5>working on writing a non fiction book and a math

0:29:57.200 --> 0:30:01.640
<v Speaker 5>book that Mishad Seine had been lucky enough to find

0:30:01.840 --> 0:30:04.240
<v Speaker 5>a job. He's been working as a software engineer for

0:30:04.320 --> 0:30:07.960
<v Speaker 5>a firm in California since FPX collapsed, and he's also

0:30:08.000 --> 0:30:11.320
<v Speaker 5>been volunteering at a homeless shelter not far from his

0:30:11.400 --> 0:30:14.680
<v Speaker 5>house in the Bay Area, and at night he's working

0:30:14.720 --> 0:30:18.640
<v Speaker 5>on code for a affordable housing project. So this certainly

0:30:18.960 --> 0:30:22.480
<v Speaker 5>went towards his argument for someone that is trying to

0:30:22.480 --> 0:30:25.680
<v Speaker 5>build his life back up again and certainly doesn't have

0:30:25.720 --> 0:30:28.560
<v Speaker 5>any interest in getting involved in a multi billion dollar

0:30:28.640 --> 0:30:29.080
<v Speaker 5>thought again.

0:30:29.560 --> 0:30:33.560
<v Speaker 1>Sing addressed the judge before he was sentenced, saying, quote,

0:30:33.640 --> 0:30:37.080
<v Speaker 1>I strayed so far from my values and words can

0:30:37.280 --> 0:30:40.760
<v Speaker 1>express how sorry I am how did he come across.

0:30:41.280 --> 0:30:44.000
<v Speaker 5>Something that struck me about Michadd in court was that

0:30:44.080 --> 0:30:47.880
<v Speaker 5>he remained very calm and very composed the entire time.

0:30:48.320 --> 0:30:50.920
<v Speaker 5>When he got up to speak to Judge Kaplan, we

0:30:51.000 --> 0:30:53.680
<v Speaker 5>approached the lectern with a piece of paper with his

0:30:53.760 --> 0:30:56.400
<v Speaker 5>written words on it in his hand and said how

0:30:56.480 --> 0:31:00.160
<v Speaker 5>remorseful he was and how gutted he was about the

0:31:00.680 --> 0:31:03.560
<v Speaker 5>harm that he caused to so many innocent people. He

0:31:03.640 --> 0:31:07.160
<v Speaker 5>spoke about wanting to prove to not only the judge

0:31:07.200 --> 0:31:10.240
<v Speaker 5>but others that he was on the path to redemption,

0:31:10.440 --> 0:31:13.080
<v Speaker 5>and he wanted to do good and be a forced

0:31:13.200 --> 0:31:15.840
<v Speaker 5>good in the world since being part of the calamity

0:31:15.880 --> 0:31:16.400
<v Speaker 5>at Aps.

0:31:16.840 --> 0:31:19.640
<v Speaker 1>And what was the reaction when he learned that he

0:31:19.720 --> 0:31:21.120
<v Speaker 1>wasn't going to have to go to prison.

0:31:21.360 --> 0:31:24.160
<v Speaker 5>I think the big question mark was whether Judge Caplan

0:31:24.320 --> 0:31:28.680
<v Speaker 5>was going to send Mishad's prison or save him from that,

0:31:28.880 --> 0:31:30.960
<v Speaker 5>especially after the two years Tent said he handed to

0:31:31.000 --> 0:31:34.720
<v Speaker 5>Caroline Elepent. So when he got to the pointing end

0:31:34.920 --> 0:31:38.480
<v Speaker 5>of delivering his judgment, michhad was standing between his two

0:31:38.560 --> 0:31:42.320
<v Speaker 5>lawyers and Judge Caplan said, I order you to report

0:31:42.400 --> 0:31:45.560
<v Speaker 5>to the Attorney General of the United States for time served,

0:31:45.920 --> 0:31:48.840
<v Speaker 5>and at that point Shad seeing barely reacted. There was

0:31:49.200 --> 0:31:52.280
<v Speaker 5>a very saint smile that came across his face. While

0:31:52.320 --> 0:31:55.280
<v Speaker 5>his family, of which there were many, seated in the

0:31:55.320 --> 0:31:59.760
<v Speaker 5>public gallery behind him, augaf his Beyonce Claire put a

0:31:59.840 --> 0:32:02.680
<v Speaker 5>hand and over her mouth. His mother kissed his fiance

0:32:02.840 --> 0:32:05.800
<v Speaker 5>on the cheek and they held hands and you could

0:32:05.800 --> 0:32:08.240
<v Speaker 5>see that how emotional that they were. They were crying,

0:32:08.640 --> 0:32:11.000
<v Speaker 5>but you could just sense the kind of utter relief

0:32:11.160 --> 0:32:12.480
<v Speaker 5>that was borught across support room.

0:32:12.960 --> 0:32:16.560
<v Speaker 1>What seemed a little unusual is that the judge addressed

0:32:16.800 --> 0:32:21.200
<v Speaker 1>Singh's parents and said, I don't see anything you did wrong.

0:32:21.480 --> 0:32:22.440
<v Speaker 1>Tell us what led to that.

0:32:23.160 --> 0:32:27.160
<v Speaker 5>That's right. As part of seeing sentencing, his parents, along

0:32:27.200 --> 0:32:30.200
<v Speaker 5>with his brother and other friends and former colleagues that FTX,

0:32:30.360 --> 0:32:34.400
<v Speaker 5>submitted letters in support of him. And his parents' letters

0:32:34.440 --> 0:32:38.160
<v Speaker 5>were pretty heartbreaking. They spoke about raising their sons as

0:32:38.200 --> 0:32:40.840
<v Speaker 5>best as they could, spoke about how intelligent and talented

0:32:40.880 --> 0:32:43.400
<v Speaker 5>he was, and then discovering that he had been caught

0:32:43.480 --> 0:32:45.960
<v Speaker 5>up and explored at FTX, And there were some pretty

0:32:45.960 --> 0:32:49.000
<v Speaker 5>harrowing parts in there about the impact that the FTX

0:32:49.040 --> 0:32:51.120
<v Speaker 5>collapse had had on the Shad and how he had

0:32:51.360 --> 0:32:55.080
<v Speaker 5>contemplated suicide in the weeks and months after FTX. His

0:32:55.200 --> 0:32:58.320
<v Speaker 5>parents spoke about the impact on his mental health, and

0:32:58.560 --> 0:33:02.280
<v Speaker 5>Mishad's lawyerly made a point of saying, you know, every

0:33:02.320 --> 0:33:05.280
<v Speaker 5>time Chad flew over from California to New York to

0:33:05.320 --> 0:33:07.760
<v Speaker 5>meet with us at our offices, his father was there

0:33:07.760 --> 0:33:10.040
<v Speaker 5>in the conference room sitting across from him, or his

0:33:10.120 --> 0:33:13.160
<v Speaker 5>younger brother was there. So he had the unwavering support

0:33:13.200 --> 0:33:15.600
<v Speaker 5>of his family. And that was very clear from the

0:33:15.640 --> 0:33:17.400
<v Speaker 5>amount of people that turned up in the court yard.

0:33:17.640 --> 0:33:20.200
<v Speaker 5>And the judge addressed that at the end of his sentence,

0:33:20.280 --> 0:33:22.280
<v Speaker 5>after he told the Shad that he wouldn't have to

0:33:22.280 --> 0:33:25.320
<v Speaker 5>serve danger and he said, you know, I'd like to

0:33:25.360 --> 0:33:28.200
<v Speaker 5>just address this thing's parents on a personal note, and

0:33:28.240 --> 0:33:30.080
<v Speaker 5>he said, there is nothing I can see that you

0:33:30.160 --> 0:33:32.480
<v Speaker 5>did wrong, and then he walked out of the courtroom.

0:33:32.600 --> 0:33:34.760
<v Speaker 5>And I think that was there was quite an emotional

0:33:34.800 --> 0:33:37.920
<v Speaker 5>moment in the courtroom, especially I from the Shad parents

0:33:38.040 --> 0:33:40.640
<v Speaker 5>could see that they were I think quite receptive to

0:33:40.680 --> 0:33:43.360
<v Speaker 5>what he said and almost grateful because you can imagine

0:33:43.440 --> 0:33:45.600
<v Speaker 5>the impact that he's had on his family.

0:33:46.400 --> 0:33:49.600
<v Speaker 1>So this case is over. What's the next sentencing. Is

0:33:49.600 --> 0:33:51.680
<v Speaker 1>that the final sentencing in this case.

0:33:52.560 --> 0:33:56.400
<v Speaker 5>Yes, we've got one final sentencing hearing left in this

0:33:57.040 --> 0:34:00.600
<v Speaker 5>FTX saga, and that is of Gary Wong. Gary Wong

0:34:00.800 --> 0:34:03.040
<v Speaker 5>was the co founder at STX and helped build the

0:34:03.080 --> 0:34:06.960
<v Speaker 5>exchange with Sam Bak mcfreed. He became the chief technology

0:34:07.000 --> 0:34:10.160
<v Speaker 5>officer and he was also a corporating witness and get

0:34:10.200 --> 0:34:13.279
<v Speaker 5>testimony at Sam's trial. He's due to be sentenced at

0:34:13.320 --> 0:34:16.000
<v Speaker 5>the end of November, so it'll be interesting to see

0:34:16.040 --> 0:34:20.120
<v Speaker 5>where Judge Kaplan puts him on the culpability scale because

0:34:20.200 --> 0:34:25.120
<v Speaker 5>he knew about the that before STX and Animator Research

0:34:25.280 --> 0:34:28.560
<v Speaker 5>a little bit earlier than Mishad Thing did. But from

0:34:28.600 --> 0:34:30.600
<v Speaker 5>the evidence that we heard a trial, he wasn't as

0:34:30.600 --> 0:34:33.680
<v Speaker 5>deeply involved as Caroline Ellison was.

0:34:33.880 --> 0:34:36.440
<v Speaker 1>So the judge will have to balance all that out.

0:34:36.680 --> 0:34:38.920
<v Speaker 1>I know you'll be there for that, Ava, Thanks so

0:34:39.040 --> 0:34:42.680
<v Speaker 1>much for bringing us inside the courtroom. That's Bloomberg Legal

0:34:42.719 --> 0:34:46.000
<v Speaker 1>reporter Eva Benny Morrison, and that's it for this edition

0:34:46.040 --> 0:34:49.080
<v Speaker 1>of the Bloomberg Law Podcast. Remember you've can always get

0:34:49.120 --> 0:34:51.799
<v Speaker 1>the latest legal news by subscribing and listening to the

0:34:51.840 --> 0:34:55.920
<v Speaker 1>show on Apple Podcasts, Spotify and at Bloomberg dot Com,

0:34:55.920 --> 0:35:00.200
<v Speaker 1>slash podcast, slash Law. I'm June Grosso and this is

0:35:00.239 --> 0:35:02.160
<v Speaker 1>Bloomberg