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Speaker 1: This is Bloomberg Law with June Brusso from Bloomberg Radio.

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Speaker 2: That was a rigged election and it's a shame that

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Speaker 2: we had to go through and it's very bad for

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Speaker 2: our country.

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Speaker 3: We've heard that false claim from Donald Trump about the

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Speaker 3: twenty twenty presidential election over and over and over, despite

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Speaker 3: the fact that sixty court cases found no evidence of

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Speaker 3: fraud or illegality. It seems to be part of Trump's repertoire.

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Speaker 2: The election is being rigged by corrupt media, pushing false

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Speaker 2: allegations and outright lies in an effort to elect Hillary

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Speaker 2: Clinton president.

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Speaker 3: Of course he dropped those rigged election claims after you won,

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Speaker 3: but they're just below the surface of this year's election.

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Speaker 2: Republicans must win. We want to landslide. We wanted to

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Speaker 2: be too big, too rigg Will there.

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Speaker 3: Be a repeat this year of the litigation frenzy that

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Speaker 3: followed the twenty twenty election. Well, the election is still

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Speaker 3: six months away, but political groups are filing so many

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Speaker 3: lawsuits over voting rules that the numbers could reach the

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Speaker 3: records set in that bitterly contested twenty twenty election. The

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Speaker 3: Democratic and Republican parties have raised about forty one point

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Speaker 3: three million dollars to spend on court fights, and nonprofits,

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Speaker 3: including some dark money groups, have likely raised hundreds of

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Speaker 3: millions more. Joining me is elections law expert Derek Muller,

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Speaker 3: a professor.

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Speaker 4: At Notre Dame Law School.

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Speaker 3: Fighting over election rules in court is big business for

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Speaker 3: lawyers and the groups challenging them.

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Speaker 4: Just how big?

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Speaker 5: So we know that the political parties can collect significant

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Speaker 5: amounts of money ear mark designated for election expenses. So

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Speaker 5: the RNC and DNC have large pools of money, you

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Speaker 5: know that are upwards of one hundred million dollars a

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Speaker 5: year now to be thinking about these kinds of expenditure.

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Speaker 5: So they have significant funds that they can use to

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Speaker 5: involve themselves litigation, to start litigation, to intervene in litigation.

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Speaker 5: But it's not even just the parties. It's the growth

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Speaker 5: of additional five LL one C three's nonprofits organizations dedicated

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Speaker 5: to rooting out voter fraud or protecting democracy or whatever

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Speaker 5: we might label the organizations and those we don't even

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Speaker 5: have a sense of the scope and scale of these things.

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Speaker 5: So it's significant amounts of money coming into the system

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Speaker 5: specifically for litigation.

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Speaker 3: And you've done some research on the political party's legal expenses.

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Speaker 5: There are so many different ways of calculating the money.

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Speaker 5: So I did research this. I found that this fundraising

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Speaker 5: for the twenty twenty one and twenty twenty two election

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Speaker 5: cycle among Republicans and Democrats was one hundred and fifty

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Speaker 5: four million dollars. So it's a two year period for

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Speaker 5: both Republicans and Democrats and a significant sort of chunk.

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Speaker 5: It's an escalating figure. We won't have the figures for

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Speaker 5: this next cycle, you know, we only have the first

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Speaker 5: few months of this cycle right now now. But again,

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Speaker 5: that's a significant amount of money specifically designated exclusively for litigation.

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Speaker 4: Expenses, do we know?

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Speaker 3: And I believe that's about thirty times what the party's

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Speaker 3: legal expenses were back in two thousand and three. And

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Speaker 3: Congress played a role here, tell us what happened in

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Speaker 3: twenty fourteen.

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Speaker 5: Yes, So in twenty fourteen there was called KROM the BEUS,

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Speaker 5: a continuing Resolution omnibus bill that has a number of

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Speaker 5: provisions that people's eyes Mike lays over thinking about. But

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Speaker 5: as a part of that, one of the things that

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Speaker 5: they did was change some of the contribution limits to

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Speaker 5: the major political parties. The notion being right. Now, you

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Speaker 5: can only give thirty three hundred dollars for the primary,

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Speaker 5: thirty three hundred dollars for the general for presidential candidate

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Speaker 5: or senate candidate or whatever it might be. You can

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Speaker 5: also give fixed amounts of money to the parties themselves.

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Speaker 5: But the argument was, well, there's other money that we

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Speaker 5: could give to the parties that would help them with

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Speaker 5: their expenses. That doesn'tbody say risk of corruption, right, We're

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Speaker 5: worried when we contribute money to candidates or the party

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Speaker 5: it looks like it's for corruption. But what if we

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Speaker 5: have some kinds of earmarked expenses for instance, you know,

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Speaker 5: running the presidential nominating conventions. If you could just designate

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Speaker 5: an additional one hundred thousand dollars to the parties to

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Speaker 5: run their presidential nominating convention. So we added some contribution

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Speaker 5: limits ten years ago in this bill, and one of

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Speaker 5: those was an additional sort of designation for we count

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Speaker 5: or other litigation expenses. And at the time that was

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Speaker 5: one hundred and six thousand, five hundred dollars that gets

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Speaker 5: increased for inflation over the years. But I mean, you

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Speaker 5: can give about one hundred and twenty thousand dollars now

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Speaker 5: to a political party just to help it litigate, just

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Speaker 5: to help it engage in election related litigation. So there's

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Speaker 5: no question that for a very long time, from about

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Speaker 5: twenty three to twenty fourteen, as I tracked this, parties

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Speaker 5: would spend about three to five million dollars a year

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Speaker 5: on litigation expenses. And now we're just seeing the earmarks

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Speaker 5: the skybrocket because as the parties collect bigger and bigger

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Speaker 5: checks from donors, there's only so many places for the

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Speaker 5: money to go because there are other contribution limits. And

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Speaker 5: one of those places now that you can give and

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Speaker 5: give substantial amounts of money that you can only give

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Speaker 5: about six thousand dollars to a presidential candidate, but you

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Speaker 5: can give one hundred and twenty thousand dollars to the

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Speaker 5: candidate's lawyers. So it's a significant mismatch that is funding

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Speaker 5: this litigation.

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Speaker 3: And there are groups nonprofits where we don't know where

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Speaker 3: their money is coming from or how they're spending it.

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Speaker 5: So when it comes to the DNC or the RNC,

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Speaker 5: we know their donors, we know the individuals who have

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Speaker 5: contributed to these entities, so we don't have sort of

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Speaker 5: the so called dark money groups. You know, there are

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Speaker 5: limitations about what packs can contribute to parties, So we

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Speaker 5: have some transparency about where that money is coming from,

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Speaker 5: at least in terms of the direct contributions to the parties.

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Speaker 5: Where where we're label as dark money comes in would

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Speaker 5: be if there are other outside groups on the right

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Speaker 5: or the left who are starting litigation, engaged in litigation,

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Speaker 5: funding litigation, intervening litigation, who want to support or promote

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Speaker 5: certain kinds of laws or anticipate those ahead of the

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Speaker 5: twenty twenty four election. So you've seen some of these

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Speaker 5: organizations from you know, former government officials, you know, both

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Speaker 5: on the right and the left, to support Trump, who

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Speaker 5: oppose Trump. I think we often think of that those terms,

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Speaker 5: maybe rather than a Republican and Democrats these days. But

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Speaker 5: those organizations, you know, we don't necessarily know where their

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Speaker 5: funding's coming from, who's supporting them, are the reasons why

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Speaker 5: they're litigating. But when it comes to parties, at least

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Speaker 5: we have some pretty good transparency.

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Speaker 6: This, you know, sort of fierce challenging of election laws

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Speaker 6: and minution election laws. Did it start after bushby Gore

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Speaker 6: or did it start in twenty twenty.

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Speaker 5: It keeps rising. So there's lots of inflection points. Yeah,

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Speaker 5: So Professor rickhaps in his tracked how Bush versus Gore

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Speaker 5: was sort of the first wave of these things. Because

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Speaker 5: Bush versus Gore it's not just that, you know, a

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Speaker 5: very small margin to Florida could affect the outcome of

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Speaker 5: a presidential election. It also signified that the federal courts

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Speaker 5: were open for business about how you did a recount, right,

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Speaker 5: how your machines were counting ballots. So we see a

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Speaker 5: steady uptick in election litigation after the two thousand election.

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Speaker 5: But again, there are different inflection points that arise, you know,

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Speaker 5: throughout this period of time. As states introduce vhot identification

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Speaker 5: laws and those become a sort of rallying cry and

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Speaker 5: a challenging point for different groups or different legislatures. We

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Speaker 5: see just the significant uptake in litigation around those things.

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Speaker 5: Promnibus Bill twenty fourteen, twenty fifteen creates this mechanism for

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Speaker 5: more funding and elections. You know, after the twenty sixteen

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Speaker 5: election we see Green Party candidate joll Stein pressing for

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Speaker 5: recounts around the United States, and twenty twenty we see

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Speaker 5: the run up to the election is a lot of

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Speaker 5: changes due to COVID, and then there's just tons of

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Speaker 5: litigation being filed to challenge the rules or to request

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Speaker 5: accommodations from the rules, followed by all those challenges after

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Speaker 5: the twenty twenty election. So every cycle just seems to

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Speaker 5: be bringing its own new challenges, new crises, new rallying

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Speaker 5: points to fundraise off of. You know, a lot of

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Speaker 5: election laws that were enacted by legislators in the past

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Speaker 5: that might have been ignored or sort of just moved

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Speaker 5: beyond and party organizers would have accommoded them or handled

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Speaker 5: them now are being challenged. Almost any change to your

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Speaker 5: election machinery in very basic terms, from the buying of

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Speaker 5: a machine to the list maintenance of your voter roles

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Speaker 5: gets challenged by some group on the right or left.

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Speaker 5: So we're just seeing this escalation, and I think part

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Speaker 5: of it is the availability of funding, and maybe part

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Speaker 5: of it is the awareness that parties think that very

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Speaker 5: small differences can matter, and so they want to challenge

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Speaker 5: as much as they can, anticipating that a small change

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Speaker 5: might matter in their election.

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Speaker 6: And are the big groups that are challenging and defending

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Speaker 6: these laws, are they all tied to a party or

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Speaker 6: a candidate or any of them independent.

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Speaker 5: So a number are at least extensively independent, right, but

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Speaker 5: a number of them do tend to file on one

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Speaker 5: side or the other. So some of them will have

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Speaker 5: former Republican officials think about restoring integrity and trust and elections,

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Speaker 5: the Honest Elections Project or things like that, or some

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Speaker 5: of them will have former Democratic officials or of never

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Speaker 5: Trump officials who are participating. Some of them State United

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Speaker 5: Democracy Center, Protect Democracy, or some of these organizations tend

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Speaker 5: to file much more heavily on the Democratic side and

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Speaker 5: the Republican side, So you can trace what these organizations

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Speaker 5: are doing and see where their officials are. And they

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Speaker 5: can't formally coordinate with the parties because if you have

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Speaker 5: that coordination, it creates campaign finance problems. But it's that

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Speaker 5: they are going around. They're filing litigation again places maybe

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Speaker 5: where the party doesn't have the resources to do it,

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Speaker 5: or isn't aware of it, or wants another group rather

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Speaker 5: than the party to be involved. That said, the parties

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Speaker 5: do still have some significant involvement. I's the most significant

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Speaker 5: party level litigation right now. It's Democratic National Committee leading

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Speaker 5: a number of challenges to keep Robert F. Kennedy's name

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Speaker 5: off the ballot in a number of states, I think

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Speaker 5: viewing him as a third party threat. I think the

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Speaker 5: R and T might view him as a threat too,

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Speaker 5: but hasn't filed those challenges. So again, it's hard to

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Speaker 5: pin down exactly who's leading the litigation in some of

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Speaker 5: these places. It's following the headlines, seeing who's led on

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Speaker 5: the docket, what the lead party's name is, and then

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Speaker 5: trying to identify, you know, who they tend to support

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Speaker 5: or where their attorneys have come from.

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Speaker 3: Prominent Democratic lawyer Mark Elias said that some of these

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Speaker 3: new Republican groups are emerging to launch mass voter challenges

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Speaker 3: against unsuspecting voters, and he called the group's vigilantes.

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Speaker 5: Yeah. I mean, we can think about this in a

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Speaker 5: couple of different ways. And you know, I think attorneys

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Speaker 5: like mister Elias and others have long represented the Democratic Party,

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Speaker 5: but then they also represent private or civic organizations, right,

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Speaker 5: And there's no question that some of these organizations, like

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Speaker 5: the NAACP but the ACLU, have long been involved in

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Speaker 5: voting litigation. Now at the same time, there are other

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Speaker 5: organizations that, you know, they seem to be popping up

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Speaker 5: a new one almost every week. Right, there are lots

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Speaker 5: of individuals who believe that elections need to be run

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Speaker 5: or administered in a particular way. They think they have

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Speaker 5: the key to being able to set up the litigation.

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Speaker 5: They think that other organizations somehow are failing or have

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Speaker 5: not stepped into the breach, and they're able to set

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Speaker 5: up a pitch and maybe get donors to contribute and

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Speaker 5: provide the opportunity to litigate. And if you have these

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Speaker 5: organizations cropping up and they are going out and they

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Speaker 5: are challenging things that maybe wouldn't have been challenged in

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Speaker 5: the past, or an organization that is jumping up for

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Speaker 5: the first time and filing these lawsuits, and maybe they're

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Speaker 5: still considered and likely to lose, you know, I mean,

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Speaker 5: you can call them vigilantes step out there and step

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Speaker 5: into the At the same time, the courts are going

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Speaker 5: to have the final say. Right when you file the lawsuit.

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Speaker 5: It's not like you win. It's not like you get

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Speaker 5: the election law changed or struck down or the administrative

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Speaker 5: procedure adjusted. It does increase the amount of litigation we see.

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Speaker 5: It increases the screen on courts. Do you think it

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Speaker 5: increases some of the perceptions that the public might have

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Speaker 5: that these elections are just under constant scrutiny by the

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Speaker 5: courts and subject to judicial decrees, which I don't think

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Speaker 5: a situation we want to find ourselves in. But you know,

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Speaker 5: to the extent that the courts are open for business

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Speaker 5: and open to hearing these challenges, I think we're going

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Speaker 5: to continue to see more of them.

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Speaker 3: Coming up Next. Which state has the most unsettled questions

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Speaker 3: around its election procedures?

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Speaker 4: This is Bloomberg.

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Speaker 3: The twenty twenty four US election is already being fought

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Speaker 3: in the courts. Political group, some backed by anonymous donors,

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Speaker 3: are launching so many lawsuits over voting rules this year

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Speaker 3: that the numbers could approach the record set in the

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Speaker 3: bitterly contested election. I've been talking to elections law expert

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Speaker 3: Derek Muller, a professor.

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Speaker 4: At Notre Dame Law School.

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Speaker 3: Do you think that with all these lawsuits, the more

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Speaker 3: you have courts deciding these issues, the more voters think

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Speaker 3: that the fix is in or their vote doesn't count,

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Speaker 3: or you know, the system.

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Speaker 5: Is just screwed up, and it's very hard, right. I mean,

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Speaker 5: I think there's no question that a lot of voters

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Speaker 5: after two thousand, A lot of Democrats feel like the

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Speaker 5: court decided the election, and you know that they lost

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Speaker 5: at because of the judiciary. I think there are a

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Speaker 5: lot of Republicans after the twenty twenty election who say,

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Speaker 5: you know, we didn't get our chance, We didn't give

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Speaker 5: a chance to sort of present our evidence in the courts.

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Speaker 5: And you see this with other candidacies. It's Stacy Abrams

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Speaker 5: in Georgia and Kerry Lake and Arizona, and you can

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Speaker 5: go on down the line. You can find Democrats and Republicans,

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Speaker 5: for different reasons and with different degrees of legitimacy, arguing

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Speaker 5: that the election was stacked against them, or the charges

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Speaker 5: of the election was rigged in some way. You know,

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Speaker 5: it's not good rhetoric, it's not good language. It's not

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Speaker 5: good for the public to have those things being said

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Speaker 5: by officials, and then to have the courts that step in,

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Speaker 5: or they're even blamed when they don't step in. You know,

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Speaker 5: it leaves us in a pretty precarious spot in the

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Speaker 5: United States. Again, I think the presumption was, and you

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Speaker 5: can even think about this in two thousand, that when

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Speaker 5: an official loss, the official would concede and move on,

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Speaker 5: and we would sort of just prepare for the next election.

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Speaker 5: Now we realize there's tremendous fundraising power in rejecting election results,

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Speaker 5: in denying legitimacy of the winner, that voters actually get

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Speaker 5: motivated and encouraged by that by wanting to contribute to

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Speaker 5: candidates whose claim they've been wrong that an election has

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Speaker 5: been stolen. So it's a very precarious spot for us

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Speaker 5: as a democracy if we increasingly have a system where

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Speaker 5: the people believe that if their candidate loses, it's an

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Speaker 5: illegitimate election, and that when those words are spoken, actually

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Speaker 5: incentivizes them to contribute money to the political consultants who

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Speaker 5: are making those claims. It's not a good place for us.

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Speaker 5: And I don't know what's going to change that unless

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Speaker 5: we have a true sea change culture and how political

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Speaker 5: operations and litigation are being run in the United States.

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Speaker 5: And that's not im easy thing.

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Speaker 6: You know, when you read about the lawsuits, it seems

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Speaker 6: like the vast majority and maybe it's because these are

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Speaker 6: the ones that get attention are not helping to clarify things,

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Speaker 6: but they're attacking this minutia to deter the process.

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Speaker 5: Talking about this from kind of an economic standpoint, if

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Speaker 5: you have limited resources to challenge the rules governing elections,

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Speaker 5: you are going to challenge the things that you think

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Speaker 5: are the biggest deal right, the most important ones, the

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Speaker 5: ones that you think are really truly changing the game.

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Speaker 5: And that's also the case that if you didn't have

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Speaker 5: money earmarked for litigation as a campaign, you would have

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Speaker 5: to make a call, do I think this two hundred

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Speaker 5: and fifty thousand dollars is better spent on advertisements in

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Speaker 5: our district or on litigating you know, this absentee voter

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Speaker 5: rule or this drop box rule or whatever it is.

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Speaker 5: So in the past, you would focus your resources on

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Speaker 5: those things that were the most salient issues that you

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Speaker 5: thought had the highest likelihood of winning, and those things

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Speaker 5: that you thought were better uses of resources than sort

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Speaker 5: of ordinary political expenses. Now, when you earmark the funds,

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Speaker 5: you are saying this money is for only litigation. These

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Speaker 5: contributions can only be for litigation purposes, so you don't

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Speaker 5: have to make that trade off. And the more resources

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Speaker 5: you have, the more money you have to spend on litigation,

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Speaker 5: then the more things you can challenge, and the more

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Speaker 5: things you challenge, by definition, you are challenging weaker and

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Speaker 5: weaker claims, or more and more marginal claims, more and

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Speaker 5: more minutia of elections to say, you know, we're dealing

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Speaker 5: with a very small subset of what we think could

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Speaker 5: be at stake here, So we can say, you know,

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Speaker 5: at a very high level, of course, we want elections

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Speaker 5: to be run fairly and with integrity. We want every

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Speaker 5: eligible voter to have a reasonable opportunity to vote, and

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Speaker 5: we don't want that vote unreasonably burdened. But we now

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Speaker 5: expect a lot of things, even what we could describe

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Speaker 5: as fairly small things about how elections are run, in

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Speaker 5: terms of how counties are purchasing voting equipment or the

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Speaker 5: methods they use to tabulate ballots. They're just being routinely challenged.

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Speaker 5: So I take less and less back each day as

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Speaker 5: I read the headlines about a new lawsuit being filed,

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Speaker 5: because you know, many of these lawsuits just don't go anywhere.

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Speaker 5: They're not going to end up being successful, or even

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Speaker 5: if they're successful to the district court level, they're likely

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Speaker 5: to be reversed and appeal because I think the more

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Speaker 5: litigation we see just there's a lower likelihood of success

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Speaker 5: of each ensuing lawsuit. Well it's watching that escalation and

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Speaker 5: trying to calculate what's the actual added value at the

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Speaker 5: end of the day, how much of it is win

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Speaker 5: loss rate, and how much of it is convince donors

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Speaker 5: they're committing those of your fund raised from to say, hey,

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Speaker 5: we've filed a lawsuit, we're fighting. We're fighting the fight,

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Speaker 5: and then even if we lose, the point is we're fighting.

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Speaker 5: So that's been a change in the dynamic. I would

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Speaker 5: say over the last couple of decades, you think.

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Speaker 6: That Pennsylvania is the state with the most unsettled questions

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Speaker 6: around its election procedures. Hence we are coming close to

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Speaker 6: the election. What is unsettled in Pennsylvania.

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Speaker 5: Yeah, Pennsylvania is definitely the place I've been looking at

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Speaker 5: for years, and we saw it after twenty twenty, we

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Speaker 5: saw before twenty twenty, and we're seeing in the end

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Speaker 5: before twenty twenty four. It's a combination of factors. It's

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Speaker 5: a Republican controlled legislature with the Democratic governor, you know,

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Speaker 5: its own challenge in a number of places, but there

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Speaker 5: seems to be an unusual recalcitrance inside the state to

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Speaker 5: try to address a result some of these issues. It's

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Speaker 5: issues that have been known about how absentee ballots are

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Speaker 5: processed in the state, and especially if there's an uptick

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Speaker 5: in absentee ballots after the twenty twenty election, about what

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Speaker 5: kinds of information is required to count the ballot. Ambiguities

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Speaker 5: in the statutes that have left the State Supreme Court

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Speaker 5: in its own internal difficulties thinking about remedies, it advising

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Speaker 5: the legislature to provide some clarity, and again the legislature

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Speaker 5: refusing to provide that clarity. It's also the fact that

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Speaker 5: Pennsylvania is not just a closely contested state. You know,

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Speaker 5: there are many closely contested states. It's a large state,

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Speaker 5: so there are a number of electoral votes in play

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Speaker 5: for thinking about presidential election. And it's a state with

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Speaker 5: some of the most significant local discretion to election officials.

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Speaker 5: So you knowing about different systems where the Secretary of

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Speaker 5: State provides more guidance and that gives some uniform clarity

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Speaker 5: for how county officials do their job when the legislature

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Speaker 5: has created some ambiguities or left place for the administration

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Speaker 5: of laws, Pennsylvania you don't have that, So you have

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Speaker 5: a lot of counties doing individualized things in some places,

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Speaker 5: you know, there might be ten different standards across the

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Speaker 5: state about how they're supposed to handle a particular issue

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Speaker 5: that creates an equal protection problem. Similarly situated voters are

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Speaker 5: being treated differently across the state. That also spurs more

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Speaker 5: litigation to figure out what the uniform rule needs to

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Speaker 5: be or where there can be deviation. So these county

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Speaker 5: officials in the different jurisdictions have also sort of failed

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Speaker 5: to coordinate with each other and have very strongly held

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Speaker 5: views individually about how the elections should be administered. So

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Speaker 5: it's a series of issues that we have known for

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Speaker 5: several years that the legislature and it's really I think

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Speaker 5: the legislation and the governor have failed to lead and

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Speaker 5: failed to act in a way to protect the elections

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Speaker 5: in the state and to provide some clarity. And there's

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Speaker 5: no question I think Republicans, democratsm I think very differently

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Speaker 5: about how the election should be administered. But I think

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Speaker 5: to the extent that you can bargain for some agreement

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Speaker 5: about that and provide that guidance would go much much

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Speaker 5: farther to protecting the rights of everyone involved, rather than

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Speaker 5: sitting back waiting to see what happens, and if it's

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Speaker 5: close enough, litigating it and trying to stave off a disaster.

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Speaker 5: But you know, I'm not in the legislature there, I'm

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Speaker 5: not in the governor's office. They're trying to figure out

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Speaker 5: what that looks like. It's a different political climate, but

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Speaker 5: it's the reality of what we see in a state

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Speaker 5: like Pennsylvania.

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Speaker 6: It sounds like it'll be a nightmare for twenty twenty four.

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Speaker 5: The election administrator's prayers for wide margins, right, the question is,

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Speaker 5: you know, if Pennsylvania is decided by five points, nobody cares. Right,

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Speaker 5: if it's decided by less than one percentage point, or

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Speaker 5: you know, whatever you view as sufficiently close, then you

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Speaker 5: have more and more litigation around it. So if there's

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Speaker 5: no question there's going to be significant attention to Pennsylvania

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Speaker 5: for how close the election is, the size of the

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Speaker 5: electoral votes at stake, and then of course you have

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Speaker 5: these decentralized issues that remain a constant source of litigation

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Speaker 5: at the state.

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Speaker 6: Arizona got a lot of attention after the twenty twenty

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Speaker 6: election with armed people intimidating voters.

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Speaker 4: You had the conspiracy theories.

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Speaker 6: And the recounts is that likely to happen again this year.

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Speaker 5: It's hard to know. So Carrie Lake, who lost the

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Speaker 5: governor's election twenty twenty two, is running for Senate. How

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Speaker 5: much has she learned her lesson about losing. How much

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Speaker 5: does she want to redouble those efforts. It's hard to know.

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Speaker 5: You know, I think there were some particularcerns that came

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Speaker 5: out of COVID, and a lot of changes about elections

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Speaker 5: during COVID, more absentee ballots, drop boxes, things like that.

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Speaker 5: And then again some people who you know, would sell

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Speaker 5: movies or books preying on people's fears without sort of

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Speaker 5: material evidence resulting. And yeah, a federal injunction against one

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Speaker 5: of these organizations that was providing armed surveillance at some

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Speaker 5: drop boxes in the state. You know, I think, you know,

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Speaker 5: we watched the primaries. We see if things are calmer

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Speaker 5: than as opposed to what they were in twenty twenty two,

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Speaker 5: we'll see how why the margins are. But you know,

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Speaker 5: I think the question for the Republican Party in Arizona is, look,

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Speaker 5: despite all this stuff, we've lost significantly. We've lost a

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Speaker 5: lot of offices in this state. We've lost both US

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Speaker 5: Senate seats, We've lost the state in the presidential election.

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Speaker 5: We've lost essentially all of the executive offices in the

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Speaker 5: state and the last election. Is it time to think

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Speaker 5: about a new playbook and thinking about encouraging voters rather

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Speaker 5: than telling our voters that the system is rigged. You know, again,

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Speaker 5: it's a lot of speculation about what kinds of fears

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Speaker 5: are going to be drummed up in these jurisdictions, what

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Speaker 5: kinds of people are trying to make a quick book

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Speaker 5: by selling people conspiracy theories, and at what point, you know,

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00:23:23,840 --> 00:23:27,600
Speaker 5: political organizations and say the Republican National Committee steps into

438
00:23:27,600 --> 00:23:31,520
Speaker 5: the state and says, look, you can't keep destroying our

439
00:23:31,600 --> 00:23:34,639
Speaker 5: own credibility in terms of how elections are administered, because

440
00:23:34,680 --> 00:23:38,000
Speaker 5: if you are constantly telling people that the election is rigged,

441
00:23:38,040 --> 00:23:40,680
Speaker 5: they won't show up and Republicans will lose. So we'll

442
00:23:40,680 --> 00:23:42,600
Speaker 5: see how much self interest is there as well. But

443
00:23:42,680 --> 00:23:45,320
Speaker 5: there's no question that some of the highest temperature was

444
00:23:45,320 --> 00:23:47,840
Speaker 5: in the state of Arizona, and we'll see if that

445
00:23:47,880 --> 00:23:49,160
Speaker 5: carries through in twenty twenty four.

446
00:23:49,600 --> 00:23:53,560
Speaker 6: Finally, could twenty twenty four be worse as far as

447
00:23:53,600 --> 00:23:58,679
Speaker 6: litigation election litigation than the endless litigation we saw after

448
00:23:58,840 --> 00:24:01,080
Speaker 6: the twenty twenty presidential election.

449
00:24:02,200 --> 00:24:04,920
Speaker 5: Well, it could be. It always depends on how close

450
00:24:04,960 --> 00:24:07,840
Speaker 5: it is, Right, the closer the margin, the more litigation.

451
00:24:08,080 --> 00:24:10,159
Speaker 5: Now we say that, you know, twenty twenty in a

452
00:24:10,200 --> 00:24:13,359
Speaker 5: way wasn't particularly close, because you would have had to

453
00:24:13,359 --> 00:24:18,800
Speaker 5: flip several states with somewhat significant margins of victory in

454
00:24:18,840 --> 00:24:23,080
Speaker 5: those jurisdictions, even after a recount in places like Georgia.

455
00:24:23,160 --> 00:24:25,399
Speaker 5: So we'll have to see, you know, if it's a

456
00:24:25,480 --> 00:24:29,200
Speaker 5: Republican loss or an apparent Republican loss. There are a

457
00:24:29,240 --> 00:24:32,720
Speaker 5: number of attorneys who promoted things in twenty twenty and

458
00:24:32,760 --> 00:24:35,960
Speaker 5: filed lawsuits who are facing sanctions or have been disbarred,

459
00:24:36,040 --> 00:24:37,720
Speaker 5: And I don't know if that's going to be sobering

460
00:24:37,800 --> 00:24:40,720
Speaker 5: for attorneys on the Republican side to think about the

461
00:24:40,840 --> 00:24:43,880
Speaker 5: quality of the claims they bring to be more limited

462
00:24:43,920 --> 00:24:46,679
Speaker 5: and constrained. And again, it depends on the size of

463
00:24:46,680 --> 00:24:48,879
Speaker 5: the loss, the scope of the loss. And many of

464
00:24:48,920 --> 00:24:52,399
Speaker 5: the strategies in twenty twenty turn on allegations that states

465
00:24:52,480 --> 00:24:55,159
Speaker 5: change their laws in the middle of the pandemic inappropriately.

466
00:24:55,280 --> 00:24:57,840
Speaker 5: You're not going to see that kind of dynamic effect

467
00:24:57,920 --> 00:25:00,919
Speaker 5: in twenty twenty four. And there are changes the electoral

468
00:25:00,960 --> 00:25:03,480
Speaker 5: account reformat to that sort of tighten some of the

469
00:25:03,480 --> 00:25:07,320
Speaker 5: deadlines and force governors to submit certificates in an earlier

470
00:25:07,320 --> 00:25:10,159
Speaker 5: and more timely fashion. So I think there's a decent

471
00:25:10,240 --> 00:25:13,480
Speaker 5: chance we would see less litigation on that front for

472
00:25:13,560 --> 00:25:16,080
Speaker 5: Democrats and a close loss. Again, it's hard to know

473
00:25:16,160 --> 00:25:18,400
Speaker 5: exactly what that would look like. You know, how many

474
00:25:18,400 --> 00:25:21,720
Speaker 5: resources would be focused on certain jurisdictions to allege their

475
00:25:21,800 --> 00:25:24,919
Speaker 5: violations of federal law. Again, I think it depends on

476
00:25:25,000 --> 00:25:28,960
Speaker 5: the kinds of jurisdictions Where places like Pennsylvania, where you

477
00:25:29,080 --> 00:25:33,440
Speaker 5: have more disparate methods in how ballots are counted across counties,

478
00:25:33,520 --> 00:25:36,399
Speaker 5: you have more opportunities to bring those challenges and to

479
00:25:36,440 --> 00:25:39,280
Speaker 5: try to get more absentie you other kinds of ballots counted,

480
00:25:39,320 --> 00:25:42,879
Speaker 5: which might redound to the benefits of whichever candidate is

481
00:25:42,920 --> 00:25:45,440
Speaker 5: trailing at the time trying to bring these challenges. But

482
00:25:45,680 --> 00:25:48,800
Speaker 5: it's a high degree of uncertainty. We might see more

483
00:25:49,000 --> 00:25:51,639
Speaker 5: in twenty twenty four. And you know, I go back

484
00:25:51,680 --> 00:25:53,840
Speaker 5: to twenty twenty, we didn't see a lot of states

485
00:25:53,840 --> 00:25:56,520
Speaker 5: with litigation. We just saw a lot of litigation concentrated

486
00:25:56,520 --> 00:25:58,520
Speaker 5: in one state. Now it did culminate in one case

487
00:25:58,520 --> 00:26:01,160
Speaker 5: Bush versus Gore, but there's still a lot of litigation

488
00:26:01,359 --> 00:26:03,480
Speaker 5: happening there. I think the thing about twenty twenty that

489
00:26:03,560 --> 00:26:05,960
Speaker 5: was more remarkable with seeing how diffuse and spread out

490
00:26:06,000 --> 00:26:08,919
Speaker 5: the litigation was, and I think that's less likely to

491
00:26:08,960 --> 00:26:11,440
Speaker 5: see that that kind of litigation spread out. But if

492
00:26:11,640 --> 00:26:14,800
Speaker 5: the election turns on a close result in one or

493
00:26:14,800 --> 00:26:17,280
Speaker 5: two states and not just four or five states, I

494
00:26:17,280 --> 00:26:19,840
Speaker 5: would not be surprised to see a significant uptaken litigation.

495
00:26:20,400 --> 00:26:22,800
Speaker 3: I guess we should all hope then for wide margins.

496
00:26:23,240 --> 00:26:26,520
Speaker 3: Thanks so much, Derek. That's Professor Derek Muller of Notre

497
00:26:26,600 --> 00:26:30,359
Speaker 3: Dame Law School coming up next. Why Trump's social media

498
00:26:30,480 --> 00:26:34,520
Speaker 3: company is a wash in legal cases. I'm June Grosso

499
00:26:34,560 --> 00:26:39,760
Speaker 3: and you're listening to Bloomberg. Donald Trump's newly public social

500
00:26:39,800 --> 00:26:44,560
Speaker 3: media company is entangled in many legal cases. The bulk

501
00:26:44,600 --> 00:26:48,240
Speaker 3: of them involves suspected misdeeds by the executives who help

502
00:26:48,320 --> 00:26:51,359
Speaker 3: set the company up and merge it with a public entity,

503
00:26:51,800 --> 00:26:56,439
Speaker 3: and by the former president himself. The cases are entangled

504
00:26:56,520 --> 00:26:59,920
Speaker 3: and very confusing. Here to help us sort it all out,

505
00:27:00,040 --> 00:27:03,560
Speaker 3: he is Bloomberg Legal reporter Greg Ferrell. Greg start where

506
00:27:03,560 --> 00:27:05,280
Speaker 3: it started truth Social.

507
00:27:05,840 --> 00:27:09,159
Speaker 1: So after the election, after Trump lost, after the January

508
00:27:09,280 --> 00:27:12,679
Speaker 1: sixth riots on Capitol Hill, Trump found that he was

509
00:27:12,960 --> 00:27:15,919
Speaker 1: no longer welcome at most of the major social media sites,

510
00:27:16,320 --> 00:27:19,040
Speaker 1: especially Twitter, and he decided in the aftermath of that

511
00:27:19,080 --> 00:27:22,440
Speaker 1: to set up his own company, his own social media platform,

512
00:27:22,640 --> 00:27:26,160
Speaker 1: truth Social, as it's known, and to take it public

513
00:27:26,520 --> 00:27:29,679
Speaker 1: and turn it into a source of wealth would be

514
00:27:29,680 --> 00:27:32,600
Speaker 1: difficult on its own, but as you know, and as

515
00:27:32,640 --> 00:27:35,439
Speaker 1: we've written a lot about here at Bloomberg, SPACs had

516
00:27:35,480 --> 00:27:37,960
Speaker 1: become very popular a few years ago around this time,

517
00:27:38,200 --> 00:27:41,679
Speaker 1: and a SPAC, a special purpose acquisition company, is a

518
00:27:41,800 --> 00:27:47,560
Speaker 1: vehicle a wait for investors investment companies to take companies

519
00:27:47,600 --> 00:27:51,840
Speaker 1: public without going through the usual process of filing with

520
00:27:51,880 --> 00:27:56,320
Speaker 1: the Securities and Exchange Commission themselves and subjecting themselves to

521
00:27:56,520 --> 00:28:00,480
Speaker 1: all sorts of internal disclosures about a company. Removes that

522
00:28:00,560 --> 00:28:03,800
Speaker 1: by I'm simplifying here, but it removes that process by

523
00:28:03,800 --> 00:28:08,359
Speaker 1: one step, allowing a blank check company essentially to raise

524
00:28:08,400 --> 00:28:10,880
Speaker 1: money and say, you know, if you invest with us,

525
00:28:10,880 --> 00:28:13,040
Speaker 1: we will use your money to buy at least one

526
00:28:13,200 --> 00:28:16,199
Speaker 1: or more companies, and we have a track record of

527
00:28:16,240 --> 00:28:19,000
Speaker 1: investments and if you trust us, we'll go find something

528
00:28:19,000 --> 00:28:22,040
Speaker 1: and take it public, and your investment in US will increase,

529
00:28:22,200 --> 00:28:25,120
Speaker 1: you know, doubles but whatever, but we will increase. So

530
00:28:25,480 --> 00:28:28,560
Speaker 1: the special purpose acquisition companies are the ones that go public.

531
00:28:29,000 --> 00:28:31,560
Speaker 1: So once Trump announced he was going to have his

532
00:28:31,600 --> 00:28:35,359
Speaker 1: own social media company, that was obviously a desirable target,

533
00:28:35,720 --> 00:28:39,160
Speaker 1: you know, for any special purpose acquisition company because you know,

534
00:28:39,480 --> 00:28:42,800
Speaker 1: name recognition, the former president of the United States, possibly

535
00:28:42,880 --> 00:28:45,600
Speaker 1: future president of the United States. It was very attractive.

536
00:28:45,840 --> 00:28:50,040
Speaker 1: So Digital World Acquisition Corporation was established by a guy

537
00:28:50,120 --> 00:28:54,080
Speaker 1: named Patrick Orlando, and it went public in September twenty

538
00:28:54,160 --> 00:28:59,320
Speaker 1: twenty one, and its statements, according to filings to potential investors,

539
00:28:59,440 --> 00:29:01,920
Speaker 1: it had not entered into any discussions with any entity.

540
00:29:01,960 --> 00:29:03,560
Speaker 1: It was a blank check company that was going to

541
00:29:03,760 --> 00:29:06,360
Speaker 1: scan the horizon and look for good investments. And when

542
00:29:06,360 --> 00:29:09,440
Speaker 1: public as was successful, and shortly thereafter there was an

543
00:29:09,440 --> 00:29:12,800
Speaker 1: announcement that it was going to bring Trump Media Technology

544
00:29:12,880 --> 00:29:15,520
Speaker 1: Group public. So that's the origin story in twenty twenty

545
00:29:15,560 --> 00:29:17,360
Speaker 1: one of what we're now seeing playing out.

546
00:29:17,520 --> 00:29:19,760
Speaker 4: Let's talk about some of the lawsuits.

547
00:29:20,520 --> 00:29:24,480
Speaker 3: Several involve Patrick Orlando, the x CEO and I think

548
00:29:24,560 --> 00:29:27,040
Speaker 3: still current director of Digital World.

549
00:29:26,760 --> 00:29:30,560
Speaker 1: Acquisition now it's DJT. It's Trump Media Technology Group, but

550
00:29:30,600 --> 00:29:33,719
Speaker 1: it's it's trading tickers DJT on the terminal, were they

551
00:29:34,360 --> 00:29:38,120
Speaker 1: and everything so right? When d WAK went public. When

552
00:29:38,120 --> 00:29:41,320
Speaker 1: the Digital World Acquisition Company went public, it's primary sponsor

553
00:29:41,760 --> 00:29:45,440
Speaker 1: was a fund called ARC Global Investments. But our Global

554
00:29:45,440 --> 00:29:49,840
Speaker 1: Investments is basically Patrick Orlando's fund. He's the managing partner

555
00:29:49,880 --> 00:29:53,960
Speaker 1: in it. So he was the principal investor that helped

556
00:29:53,960 --> 00:29:58,080
Speaker 1: bring Digital World Acquisition public, and therefore he became, after

557
00:29:58,360 --> 00:30:01,840
Speaker 1: it succeeded in its IPO, the chairman and chief executive officer.

558
00:30:01,960 --> 00:30:04,920
Speaker 1: He lasted in that job until early twenty twenty three

559
00:30:05,280 --> 00:30:08,080
Speaker 1: when he was fired, and he was fired because the

560
00:30:08,240 --> 00:30:11,960
Speaker 1: Securities and Exchange Commission was investigating him and Digital World

561
00:30:11,960 --> 00:30:16,360
Speaker 1: Acquisition Company because it had uncovered evidence that Patrick Orlando,

562
00:30:16,440 --> 00:30:19,719
Speaker 1: before de WAC went public, had been negotiating or at

563
00:30:19,760 --> 00:30:23,160
Speaker 1: least expressed interest in buying Trump Media Technology Group. And

564
00:30:23,640 --> 00:30:26,080
Speaker 1: it's not so much that that was doing something wrong

565
00:30:26,360 --> 00:30:29,840
Speaker 1: as much as in its disclosures in order to go public,

566
00:30:30,080 --> 00:30:31,840
Speaker 1: d WACK had said it had not committed to anything

567
00:30:31,880 --> 00:30:34,920
Speaker 1: or any discussions with any other party, you know, but

568
00:30:35,160 --> 00:30:37,680
Speaker 1: invest here and then we will go find after this,

569
00:30:38,080 --> 00:30:41,280
Speaker 1: you know, go seek out acquisitions. And that was patently

570
00:30:41,320 --> 00:30:44,120
Speaker 1: false because he had in fact negotiated or at least

571
00:30:44,120 --> 00:30:47,680
Speaker 1: had discussions with the Trump Media Organization to take that public.

572
00:30:47,760 --> 00:30:50,640
Speaker 1: So the SEC investigation led to an eighteen million dollars

573
00:30:50,640 --> 00:30:53,400
Speaker 1: settlement with the company. Patrick Orlando was outed a CEO,

574
00:30:53,640 --> 00:30:56,480
Speaker 1: but not as a board member. He got to stay

575
00:30:56,520 --> 00:30:58,760
Speaker 1: on and he was going to stay on, and the

576
00:30:58,840 --> 00:31:01,520
Speaker 1: plan was until such time as d WAC did in

577
00:31:01,520 --> 00:31:04,080
Speaker 1: fact make an acquisition, and after a couple of years

578
00:31:04,080 --> 00:31:07,560
Speaker 1: it finally close this spring. On March twenty second was

579
00:31:07,600 --> 00:31:11,840
Speaker 1: the date for shareholders, including our global investments, to vote

580
00:31:11,840 --> 00:31:14,360
Speaker 1: whether or not to approve the deal with Trump Media

581
00:31:14,400 --> 00:31:16,400
Speaker 1: Technology Group. So that's step two.

582
00:31:16,720 --> 00:31:19,040
Speaker 4: That was a drop dead date, March twenty second.

583
00:31:19,320 --> 00:31:21,720
Speaker 1: Yes, right, And there's some leverage here on several of

584
00:31:21,720 --> 00:31:24,520
Speaker 1: the parties here. If the vote didn't occur, or if

585
00:31:24,560 --> 00:31:27,600
Speaker 1: it went the wrong way, then Digital World Acquisition Group

586
00:31:27,960 --> 00:31:30,600
Speaker 1: would be obligated to liquidate, in other words, would turn

587
00:31:30,640 --> 00:31:34,000
Speaker 1: the funds to investors. These special purpose acquisition companies don't

588
00:31:34,000 --> 00:31:36,960
Speaker 1: go on forever. When they go public and raise money,

589
00:31:37,080 --> 00:31:39,280
Speaker 1: they have a timetable and it's much shorter than the

590
00:31:39,280 --> 00:31:41,640
Speaker 1: period here, but there were several delays that extended it,

591
00:31:41,880 --> 00:31:44,440
Speaker 1: and if nothing happened by March twenty second, then d

592
00:31:44,560 --> 00:31:47,920
Speaker 1: WAC would have to basically return share funds to his

593
00:31:48,120 --> 00:31:51,200
Speaker 1: investing partners and miss out in this opportunity to take

594
00:31:51,240 --> 00:31:52,720
Speaker 1: Trump Media public.

595
00:31:53,200 --> 00:31:56,760
Speaker 3: Now, at this point, as you write in your piece,

596
00:31:57,160 --> 00:31:58,760
Speaker 3: the lawsuits began to fly.

597
00:32:00,000 --> 00:32:02,520
Speaker 4: One of the lawsuits stopped the merger.

598
00:32:03,040 --> 00:32:06,560
Speaker 1: Correct As this date was approaching, several lawsuits were filed.

599
00:32:06,920 --> 00:32:10,240
Speaker 1: Several of them involved Patrick Orlando. So for one, Digital

600
00:32:10,240 --> 00:32:14,240
Speaker 1: World Acquisition Corps sued him because it was clear that

601
00:32:14,440 --> 00:32:17,480
Speaker 1: in his role as director. According to d Whack, they

602
00:32:17,520 --> 00:32:22,959
Speaker 1: claimed that he was basically subverting the acquisition process, not

603
00:32:23,080 --> 00:32:25,440
Speaker 1: jettising it, but subverting it in such a way as

604
00:32:25,480 --> 00:32:28,120
Speaker 1: to favor himself. He wanted a better you know, set

605
00:32:28,120 --> 00:32:31,400
Speaker 1: of shares or a better conversion ratio for our Global

606
00:32:31,400 --> 00:32:35,960
Speaker 1: Investments holdings in d WHAC. In the post conversion deal

607
00:32:36,120 --> 00:32:39,280
Speaker 1: with Trump Media, d WHAC had determined that at least

608
00:32:39,520 --> 00:32:41,840
Speaker 1: from day one, once the vote went through and then

609
00:32:41,920 --> 00:32:45,560
Speaker 1: the acquisition occurred, that holders including our Global would get

610
00:32:45,560 --> 00:32:48,760
Speaker 1: one point three to four shares in the new company

611
00:32:48,920 --> 00:32:51,880
Speaker 1: what became DJT for every one share they already held

612
00:32:51,880 --> 00:32:54,720
Speaker 1: in d WHACK, or Orlando had signaled as a board member

613
00:32:54,720 --> 00:32:56,600
Speaker 1: that he thought you'd much higher, as high as one

614
00:32:56,640 --> 00:32:58,800
Speaker 1: point eight. So there was clearly going to be a

615
00:32:58,800 --> 00:33:01,080
Speaker 1: battle over this in the last weeks leading up to

616
00:33:01,120 --> 00:33:05,560
Speaker 1: the vote. So d WAC suit him preemptively in Florida

617
00:33:05,600 --> 00:33:09,160
Speaker 1: in mid February. He responded by filing your countersuit, if

618
00:33:09,200 --> 00:33:12,400
Speaker 1: you will in Delaware by the end of February, saying no,

619
00:33:12,440 --> 00:33:14,280
Speaker 1: it should be one point seven eight to one. You

620
00:33:14,280 --> 00:33:17,120
Speaker 1: guys have miscalculated. You made misstatements about me, et cetera,

621
00:33:17,120 --> 00:33:20,440
Speaker 1: et cetera. So that's the beginning of this. Patrick Orlando

622
00:33:20,560 --> 00:33:23,760
Speaker 1: sued d WHAC for payment of legal fees because he

623
00:33:23,800 --> 00:33:26,360
Speaker 1: was racking up legal bills because of the SEC investigation,

624
00:33:26,800 --> 00:33:28,840
Speaker 1: and it was clear from one of d WAC's lawsuits

625
00:33:28,880 --> 00:33:31,920
Speaker 1: that the SEC was going to investigate and quite possibly

626
00:33:32,040 --> 00:33:35,280
Speaker 1: bring a civil charge against Orlando for making those misstatements

627
00:33:35,360 --> 00:33:37,800
Speaker 1: about Trump media and the run up to the IPO,

628
00:33:38,360 --> 00:33:42,200
Speaker 1: and that was resolved beforehand, so presumably de WHAC did

629
00:33:42,440 --> 00:33:45,560
Speaker 1: pay much, if not all, of the legal expenses that

630
00:33:45,640 --> 00:33:48,680
Speaker 1: Patrick Orlando incurred as the director of d WHAC for

631
00:33:48,720 --> 00:33:49,880
Speaker 1: the SEC investigation.

632
00:33:50,120 --> 00:33:53,240
Speaker 3: So the suit by the Trump Media co founders, the

633
00:33:53,440 --> 00:33:56,120
Speaker 3: former contestants on The Apprentice.

634
00:33:55,600 --> 00:33:57,760
Speaker 4: Yes, was that part of the d WAC suit.

635
00:33:57,840 --> 00:34:01,200
Speaker 3: I mean it's also about contention. Is that Trump was

636
00:34:01,240 --> 00:34:02,800
Speaker 3: trying to dilute their stake.

637
00:34:03,280 --> 00:34:05,360
Speaker 1: Yes, it's related insofar as there was going to be

638
00:34:05,400 --> 00:34:08,160
Speaker 1: a transition. You know, they helped found this company in

639
00:34:08,160 --> 00:34:10,600
Speaker 1: twenty twenty one, so they thought their stake was worth

640
00:34:10,800 --> 00:34:13,440
Speaker 1: x or that was their understanding in early documents. But

641
00:34:13,640 --> 00:34:16,000
Speaker 1: over time, you know, as the company got a little

642
00:34:16,000 --> 00:34:19,920
Speaker 1: more mature or approached this date of acquisition, they learned

643
00:34:19,920 --> 00:34:22,280
Speaker 1: that their shares were worth less than what they believed.

644
00:34:22,560 --> 00:34:25,040
Speaker 1: So they sued. And again, part of this was not

645
00:34:25,080 --> 00:34:28,320
Speaker 1: only to get a larger cut of the share to

646
00:34:28,360 --> 00:34:31,520
Speaker 1: which they felt they deserved, but with the deal coming up,

647
00:34:31,600 --> 00:34:34,000
Speaker 1: it's a potential point of leverage that we want more

648
00:34:34,600 --> 00:34:36,600
Speaker 1: or else. I'm not sure they could you know, undermined

649
00:34:36,719 --> 00:34:40,080
Speaker 1: or they could get it delayed further. So that was

650
00:34:40,160 --> 00:34:44,000
Speaker 1: resolved that the Delaware Chance re Court judge overseeing that matter. No,

651
00:34:44,160 --> 00:34:47,520
Speaker 1: he was not going to postpone or force this March

652
00:34:47,560 --> 00:34:51,640
Speaker 1: twenty second vote to be rescheduled, but would simply sort

653
00:34:51,680 --> 00:34:53,920
Speaker 1: out the issue of ownership afterwards, because there'd be a

654
00:34:54,000 --> 00:34:56,799
Speaker 1: large chunk of unallocated shares in the wake of the

655
00:34:56,800 --> 00:34:58,640
Speaker 1: March twenty second acquisition.

656
00:34:58,960 --> 00:35:02,560
Speaker 3: So now Trump has countersuit, but in Florida. And here's

657
00:35:02,600 --> 00:35:06,759
Speaker 3: my favorite part. The judge Samuel Glascock the third said

658
00:35:06,800 --> 00:35:11,239
Speaker 3: he was gobsmacked to learn of Trump's Florida suit, which

659
00:35:11,239 --> 00:35:14,040
Speaker 3: he filed there instead of bringing counter claims in the

660
00:35:14,120 --> 00:35:17,760
Speaker 3: Delaware suit, and that he would consider possible sanctions against

661
00:35:17,800 --> 00:35:19,040
Speaker 3: the former president.

662
00:35:19,480 --> 00:35:23,040
Speaker 1: Yes, Judge Glascock, I've seen him. He's excellent. And there's

663
00:35:23,080 --> 00:35:26,920
Speaker 1: real rules regarding Delaware chance record and a pattern of

664
00:35:27,000 --> 00:35:29,840
Speaker 1: the way you prosecute or litigate things. And this was

665
00:35:29,840 --> 00:35:32,960
Speaker 1: clearly stepping out of something that was brought in chance record,

666
00:35:33,000 --> 00:35:35,120
Speaker 1: trying to drag it down to Florida. So we'll see

667
00:35:35,120 --> 00:35:38,680
Speaker 1: what happens. But he did not earn any favors Trump's

668
00:35:38,719 --> 00:35:42,520
Speaker 1: lawyers by suing Florida rather than taking this or dealing

669
00:35:42,520 --> 00:35:43,560
Speaker 1: with this in chance record.

670
00:35:44,120 --> 00:35:48,839
Speaker 3: And then also there's an insider trading case.

671
00:35:48,640 --> 00:35:51,040
Speaker 1: Where yes, if that weren't enough, exactly.

672
00:35:51,280 --> 00:35:52,120
Speaker 4: It's crazy.

673
00:35:52,440 --> 00:35:56,960
Speaker 3: There's civil litigation between the parties, the sec bringing suits

674
00:35:57,600 --> 00:36:01,000
Speaker 3: and the Manhattan US attorney bringing a criminal.

675
00:36:00,640 --> 00:36:04,560
Speaker 1: Case, so over and above the current spat, you know,

676
00:36:04,840 --> 00:36:07,520
Speaker 1: different legal questions about who owns how much of the

677
00:36:07,600 --> 00:36:11,640
Speaker 1: now the new company DJT. Is this other fact that

678
00:36:11,960 --> 00:36:15,600
Speaker 1: one of the early investors, Bruce Corellik, who was affiliated

679
00:36:15,600 --> 00:36:19,239
Speaker 1: with Rocket Mortgage, learned and was aware of before the

680
00:36:19,239 --> 00:36:22,160
Speaker 1: public became aware of d wax interest in doing a

681
00:36:22,200 --> 00:36:24,960
Speaker 1: deal with Trump Media. Now that's valuable information. If you've

682
00:36:25,000 --> 00:36:27,160
Speaker 1: got a blank check company and they haven't decided where

683
00:36:27,200 --> 00:36:30,200
Speaker 1: to spend their money, it's worth whatever it's worth. If

684
00:36:30,239 --> 00:36:32,520
Speaker 1: you happen to know before it's announced that no, they're

685
00:36:32,520 --> 00:36:35,000
Speaker 1: going to do a deal for Donald Trump's media company,

686
00:36:35,160 --> 00:36:38,600
Speaker 1: a very high profile, almost can't miss kind of bat,

687
00:36:38,880 --> 00:36:42,799
Speaker 1: then that's worth something. And the Justice Department accused him

688
00:36:43,120 --> 00:36:46,560
Speaker 1: and a couple of confederates who we knew through Rocket Mortgage,

689
00:36:46,600 --> 00:36:51,799
Speaker 1: the Schwartzmann brothers, of insider trading, misappropriating the information about this,

690
00:36:52,480 --> 00:36:54,840
Speaker 1: sharing it with friends, and then trading on it, buying

691
00:36:54,960 --> 00:36:56,879
Speaker 1: more de wax shares, and then selling the de Wax

692
00:36:56,920 --> 00:36:59,960
Speaker 1: shares wants. The news about its plan to acquire Trump

693
00:37:00,400 --> 00:37:04,040
Speaker 1: Technology Group came out and all three you know, were

694
00:37:04,040 --> 00:37:06,719
Speaker 1: determined to fight it. They pled not guilty. But you know,

695
00:37:06,920 --> 00:37:09,360
Speaker 1: just last week or two weeks ago, the Schwarzman brothers

696
00:37:09,360 --> 00:37:12,960
Speaker 1: both changed their pleat guilty, So you know, Gorillic hasn't.

697
00:37:13,000 --> 00:37:15,480
Speaker 1: But now he's in a little bit of trouble. Not

698
00:37:15,520 --> 00:37:17,560
Speaker 1: only has he been charged with the inside of trading,

699
00:37:17,880 --> 00:37:21,560
Speaker 1: but two men who the government alleges he shared this with,

700
00:37:21,760 --> 00:37:24,400
Speaker 1: have both pled guilty. So we'll see what happens with

701
00:37:24,440 --> 00:37:27,520
Speaker 1: his case. But yes, it has nothing directly to do

702
00:37:27,560 --> 00:37:30,000
Speaker 1: with Trump, but it's it's not a good fact pattern

703
00:37:30,239 --> 00:37:32,279
Speaker 1: if you're trying to launch a company that this has

704
00:37:32,320 --> 00:37:34,640
Speaker 1: happened in the background, and this helped delay the launch

705
00:37:34,680 --> 00:37:35,240
Speaker 1: of the company.

706
00:37:35,600 --> 00:37:37,800
Speaker 4: And just what is DJT word?

707
00:37:37,920 --> 00:37:42,160
Speaker 3: There have been these wild swings in the shares and

708
00:37:42,320 --> 00:37:45,960
Speaker 3: it's a company that's never generated a profit yet it's

709
00:37:46,000 --> 00:37:46,880
Speaker 3: worth billions.

710
00:37:47,719 --> 00:37:51,120
Speaker 1: Not only no profit, but it's barely generated any revenue

711
00:37:51,120 --> 00:37:53,640
Speaker 1: and it's created losses. That's what we've seen in its

712
00:37:53,640 --> 00:37:57,279
Speaker 1: first public filings after this acquisition. But you know, you

713
00:37:57,320 --> 00:37:59,359
Speaker 1: and I grew up in a world where people who

714
00:37:59,400 --> 00:38:02,359
Speaker 1: pick stocks, you know, obsessed over the fundamentals, how much

715
00:38:02,400 --> 00:38:04,439
Speaker 1: money you would generate, and you know this is why

716
00:38:04,440 --> 00:38:07,080
Speaker 1: you bought a company and had a brand value, et cetera.

717
00:38:07,280 --> 00:38:09,560
Speaker 1: We're in a different world now of meme stocks, and

718
00:38:09,920 --> 00:38:12,359
Speaker 1: I think this is actually ingenious. You know, on Trump's half,

719
00:38:12,600 --> 00:38:15,000
Speaker 1: he has a bunch of MAGA supporters. You know, his

720
00:38:15,000 --> 00:38:17,520
Speaker 1: his real ardent fans who do put their money with

721
00:38:17,560 --> 00:38:20,040
Speaker 1: their mouth is they buy his merchandise, They support him,

722
00:38:20,040 --> 00:38:21,560
Speaker 1: they give him money. And this is a way of

723
00:38:21,640 --> 00:38:23,759
Speaker 1: giving money to him as well, whether or not they

724
00:38:23,760 --> 00:38:25,839
Speaker 1: can keep the stock up at its level even though

725
00:38:25,840 --> 00:38:28,719
Speaker 1: it doesn't have the underlying revenues to justify it at

726
00:38:28,760 --> 00:38:31,200
Speaker 1: this time. I remember, growing up in the Boston area,

727
00:38:31,200 --> 00:38:33,680
Speaker 1: at some point in the nineteen eighties, a group of

728
00:38:33,719 --> 00:38:37,520
Speaker 1: investors took the Boston Celtics public. Now, the Celtics were

729
00:38:37,840 --> 00:38:40,120
Speaker 1: at the height of their fame and success in the

730
00:38:40,160 --> 00:38:43,520
Speaker 1: nineteen eighties with Larry Bird, and it was a stock play, like,

731
00:38:43,680 --> 00:38:45,840
Speaker 1: you know, let's get a lot of Boston Celtics fans

732
00:38:45,880 --> 00:38:49,120
Speaker 1: and Boston sports fans, you know, get them to buy

733
00:38:49,160 --> 00:38:52,480
Speaker 1: into it. It was not ultimately a success, but I

734
00:38:52,560 --> 00:38:54,880
Speaker 1: see on a much larger scale sort of a similar

735
00:38:55,400 --> 00:38:58,080
Speaker 1: enticement here. You know, Trump has tens of millions of

736
00:38:58,120 --> 00:39:01,880
Speaker 1: passionate supporters and ask to buy sheriff stock for forty

737
00:39:01,960 --> 00:39:05,239
Speaker 1: or fifty bucks or whatever. Who knows. If he mobilizes them,

738
00:39:05,360 --> 00:39:06,920
Speaker 1: you know what he could get them to do.

739
00:39:07,280 --> 00:39:09,640
Speaker 3: Well, they want to buy his four hundred dollars sneakers.

740
00:39:09,640 --> 00:39:13,440
Speaker 3: They're sold out. They buy the mugs, the T shirts

741
00:39:13,440 --> 00:39:15,680
Speaker 3: and everything else. So we shall see.

742
00:39:15,800 --> 00:39:18,319
Speaker 1: This is interesting. This gets us away from, like I say,

743
00:39:18,600 --> 00:39:23,279
Speaker 1: fundamental stock analysis and what the return on investment be too, Like, no,

744
00:39:23,480 --> 00:39:26,879
Speaker 1: this is what you know. Frump's passionate supporters might run up.

745
00:39:27,440 --> 00:39:29,440
Speaker 1: We'll see. This will be an interesting test case. There

746
00:39:29,440 --> 00:39:32,080
Speaker 1: will be some kind of a business school case study

747
00:39:32,120 --> 00:39:34,080
Speaker 1: probably and.

748
00:39:34,040 --> 00:39:35,200
Speaker 4: Maybe law school too.

749
00:39:35,320 --> 00:39:37,640
Speaker 1: We'll see, yes, yes, maybe, Thanks.

750
00:39:37,480 --> 00:39:41,240
Speaker 3: So much, Greg for unraveling all these lawsuits. That's Bloomberg

751
00:39:41,320 --> 00:39:44,160
Speaker 3: Legal reporter Greg Ferrell, and that's it for this edition

752
00:39:44,200 --> 00:39:47,239
Speaker 3: of the Bloomberg Law Podcast. Remember you can always get

753
00:39:47,239 --> 00:39:49,920
Speaker 3: the latest legal news by subscribing and listening to the

754
00:39:50,000 --> 00:39:54,040
Speaker 3: show on Apple Podcasts, Spotify, and at Bloomberg dot com,

755
00:39:54,040 --> 00:39:55,920
Speaker 3: slash podcast, slash Law.

756
00:39:56,239 --> 00:40:00,120
Speaker 4: I'm June Grosso and this is Bloomberg f