1 00:00:03,200 --> 00:00:08,000 Speaker 1: This is Bloomberg Law with June Brusso from Bloomberg Radio. 2 00:00:10,240 --> 00:00:13,440 Speaker 2: Jack Smith should be considered mentally deranged and he should 3 00:00:13,440 --> 00:00:15,960 Speaker 2: be thrown out of the country. Somebody said, why don't 4 00:00:15,960 --> 00:00:18,320 Speaker 2: you be nice to him? I said, it wouldn't matter. 5 00:00:18,640 --> 00:00:22,200 Speaker 2: Wouldn't matter. This guy's a maniac. We wouldn't be under 6 00:00:22,480 --> 00:00:27,160 Speaker 2: investigation by deranged Jack Smith. He's a deranged human man. 7 00:00:27,240 --> 00:00:28,720 Speaker 2: You take a look at that face. You say that 8 00:00:28,760 --> 00:00:31,120 Speaker 2: guy is a sick man. There's something wrong with him. 9 00:00:31,680 --> 00:00:36,280 Speaker 3: Donald Trump has berated and ridiculed Special counsel Jack Smith 10 00:00:36,720 --> 00:00:39,800 Speaker 3: over and over again, so much so that many consider 11 00:00:39,920 --> 00:00:42,599 Speaker 3: Smith to be at the top of the president elect's 12 00:00:42,760 --> 00:00:46,560 Speaker 3: list of targets when he takes office. But Smith reportedly 13 00:00:46,800 --> 00:00:50,479 Speaker 3: intends to resign before that and a sort of cleaning 14 00:00:50,560 --> 00:00:54,760 Speaker 3: house before inauguration day. Today, he filed motions to drop 15 00:00:54,800 --> 00:00:58,120 Speaker 3: all federal charges against Trump in the case over his 16 00:00:58,200 --> 00:01:02,000 Speaker 3: effort to overturn the twenty two any presidential election and 17 00:01:02,160 --> 00:01:05,840 Speaker 3: the case over his mishandling of classified documents. Joining me 18 00:01:05,880 --> 00:01:09,320 Speaker 3: is Bloomberg Legal reporters Zoe Tillman. Did this come as 19 00:01:09,360 --> 00:01:11,840 Speaker 3: any surprise or were we expecting this? 20 00:01:13,240 --> 00:01:17,319 Speaker 1: We were expecting this in broad strokes, given the Justice 21 00:01:17,319 --> 00:01:21,640 Speaker 1: Department policy which is longstanding that sitting presidents can't be 22 00:01:21,920 --> 00:01:26,319 Speaker 1: charged or prosecuted. And you know, we had confirmation that 23 00:01:26,360 --> 00:01:29,120 Speaker 1: the Special Council would be winding down these prostitutions. I 24 00:01:29,160 --> 00:01:33,480 Speaker 1: think what was unclear was, you know, whether they would 25 00:01:33,880 --> 00:01:38,360 Speaker 1: let stand a lower court ruling finding the Special Council 26 00:01:38,400 --> 00:01:41,640 Speaker 1: and constitutional in the Classified Documents case, or whether they 27 00:01:41,680 --> 00:01:44,399 Speaker 1: would try to preserve some part of that appeal. And 28 00:01:44,440 --> 00:01:46,720 Speaker 1: we got that answer today, which is that they will 29 00:01:46,920 --> 00:01:50,000 Speaker 1: try to move forward with it for now. But you know, 30 00:01:50,080 --> 00:01:53,360 Speaker 1: once Trump takes office, he has the ability to shut 31 00:01:53,360 --> 00:01:56,120 Speaker 1: it down completely or to pardon his co defendants. So 32 00:01:56,880 --> 00:02:00,320 Speaker 1: there's not much more that can be done. But for now, 33 00:02:00,360 --> 00:02:03,520 Speaker 1: at least you know that part of the case is 34 00:02:03,520 --> 00:02:04,160 Speaker 1: still active. 35 00:02:04,520 --> 00:02:09,119 Speaker 3: So the Classified Documents case had already been dismissed by 36 00:02:09,280 --> 00:02:11,160 Speaker 3: a Florida judge, so. 37 00:02:11,480 --> 00:02:15,480 Speaker 1: He dropped the election interference indictment against Trump and also 38 00:02:15,720 --> 00:02:19,040 Speaker 1: said that they would no longer appeal the dismissal of 39 00:02:19,160 --> 00:02:23,000 Speaker 1: charges against Trump in the Classified Documents case. Lower court 40 00:02:23,080 --> 00:02:27,360 Speaker 1: judge in Florida, Judge Aalen Cannon had already dismissed that indictment. 41 00:02:27,600 --> 00:02:32,600 Speaker 1: Finding that Jacksmith's appointment and funding more unconstitutional. So prosecutors 42 00:02:32,600 --> 00:02:35,840 Speaker 1: were in the middle of appealing that decision. They're not 43 00:02:35,880 --> 00:02:39,079 Speaker 1: really dismissing the indictment because it was already dismissed by 44 00:02:39,080 --> 00:02:41,240 Speaker 1: a judge, but they're just saying we're not going to 45 00:02:41,280 --> 00:02:43,840 Speaker 1: appeal anymore. That's part of the case. 46 00:02:44,400 --> 00:02:48,920 Speaker 3: That decision by Judge Eileen Cannon finding the Special Council 47 00:02:49,080 --> 00:02:54,840 Speaker 3: unconstitutional was totally novel and went against all the precedents. 48 00:02:55,360 --> 00:02:58,680 Speaker 3: Do they really want that decision remaining on the books? 49 00:02:59,120 --> 00:03:01,960 Speaker 1: Well, see they right now they've said we are not 50 00:03:02,360 --> 00:03:05,959 Speaker 1: dismissing the appeal. As to Trump's co defendants, Walt Nauda 51 00:03:06,200 --> 00:03:09,880 Speaker 1: and Carlos the ala Vera, there's a reply brief from 52 00:03:09,919 --> 00:03:12,880 Speaker 1: the government in the next few days. If something, they 53 00:03:12,880 --> 00:03:15,840 Speaker 1: don't spile it today along with their notice. The Eleventh 54 00:03:15,840 --> 00:03:20,000 Speaker 1: Circuit hasn't set arguments yet, so it's still possible that 55 00:03:20,040 --> 00:03:22,959 Speaker 1: if the court wanted to move quickly before Trump is 56 00:03:23,000 --> 00:03:27,079 Speaker 1: sworn in on January twentieth, the Eleventh Circuit could hear 57 00:03:27,280 --> 00:03:31,200 Speaker 1: arguments and rule on the issue before he takes office. 58 00:03:31,240 --> 00:03:35,320 Speaker 1: It would be a very expedited schedule. But we've certainly 59 00:03:35,360 --> 00:03:39,560 Speaker 1: seen courts move quickly when asked to under certain circumstances. 60 00:03:39,560 --> 00:03:42,840 Speaker 1: So I think that's the one outstanding question is whether 61 00:03:43,720 --> 00:03:48,520 Speaker 1: prosecutors can you know, get more done on this in 62 00:03:48,560 --> 00:03:50,440 Speaker 1: the next months than a half or so. 63 00:03:51,160 --> 00:03:55,960 Speaker 3: Tell us what jack Smith said specifically, Did he say 64 00:03:55,960 --> 00:03:57,760 Speaker 3: anything about the strength of the case. 65 00:03:58,360 --> 00:03:59,880 Speaker 1: Yeah, so, you know, you could sort of describe it 66 00:03:59,880 --> 00:04:04,600 Speaker 1: as the grudging dismissal of the case in the election 67 00:04:04,680 --> 00:04:07,640 Speaker 1: obstruction case, at least in their notice that they were, 68 00:04:07,880 --> 00:04:10,880 Speaker 1: you know, asking the judge to dismiss it. On the 69 00:04:10,880 --> 00:04:14,680 Speaker 1: first page, Jacksmith says, you know, we stand fully behind 70 00:04:15,040 --> 00:04:17,440 Speaker 1: the strength of the case. This is not about the merits, 71 00:04:17,520 --> 00:04:20,120 Speaker 1: which we still think, you know, we're valid and should 72 00:04:20,120 --> 00:04:24,599 Speaker 1: have moved forward. But that gives Justice Department policy on 73 00:04:25,160 --> 00:04:28,760 Speaker 1: not prosecuting sitting presidents is categorical and sort of forced, 74 00:04:28,880 --> 00:04:32,120 Speaker 1: basically forced his hands, you know. The other thing to 75 00:04:32,240 --> 00:04:36,600 Speaker 1: note is that they asked Judge China Chutkin to dismiss 76 00:04:36,600 --> 00:04:39,719 Speaker 1: the indictment without prejudice, which sort of leaves the door 77 00:04:39,800 --> 00:04:44,880 Speaker 1: open to a future Justice Department four years from now 78 00:04:45,279 --> 00:04:49,799 Speaker 1: under whoever is president next, thinking about whether they would 79 00:04:49,800 --> 00:04:52,839 Speaker 1: want to try it again, which then raisesultsors of questions 80 00:04:52,839 --> 00:04:56,279 Speaker 1: about whether, you know, could Trump self pardon in the 81 00:04:56,320 --> 00:05:00,400 Speaker 1: White House to head off that possibility. It's just a 82 00:05:00,440 --> 00:05:03,600 Speaker 1: lot of uncertainty. But you know, notable that they didn't 83 00:05:03,680 --> 00:05:06,560 Speaker 1: say we're going to close the door on this altogether. 84 00:05:07,160 --> 00:05:12,320 Speaker 3: So this really shows how Trump's policy in all his 85 00:05:12,520 --> 00:05:16,279 Speaker 3: cases of delay, delay, delay, really worked for him. 86 00:05:16,760 --> 00:05:19,480 Speaker 1: It did, I think, there's no question about that. And 87 00:05:19,960 --> 00:05:22,599 Speaker 1: you know, from the beginning the move had been to 88 00:05:23,160 --> 00:05:25,480 Speaker 1: argue in favor of schedules. You know, first they were 89 00:05:25,520 --> 00:05:27,760 Speaker 1: saying there should be no trial to ask the election, 90 00:05:28,440 --> 00:05:31,880 Speaker 1: and no judge was on board with that, even in Florida, 91 00:05:32,320 --> 00:05:36,280 Speaker 1: where you know, Judge Cannon was seen as more accommodating 92 00:05:36,560 --> 00:05:39,480 Speaker 1: of you know, what the president elect was asking for. 93 00:05:39,560 --> 00:05:42,360 Speaker 1: But she Eden said, I'm not going to push this back, 94 00:05:42,520 --> 00:05:44,440 Speaker 1: you know, until after the election is and do that 95 00:05:44,520 --> 00:05:48,760 Speaker 1: kind of political calendar making. But in the end, you know, 96 00:05:49,120 --> 00:05:55,800 Speaker 1: he successfully pressed appeals that delayed. He raised issues that 97 00:05:56,000 --> 00:06:00,920 Speaker 1: just forced later deadlines by virtue of the rule criminal 98 00:06:01,000 --> 00:06:04,920 Speaker 1: rules of person jervis. He files motions that requires responses, 99 00:06:05,040 --> 00:06:07,919 Speaker 1: and everyone needs time to press the briefs and argue. 100 00:06:08,040 --> 00:06:11,080 Speaker 1: You know, Judge Chucklin and Washington tried very hard to 101 00:06:11,160 --> 00:06:13,640 Speaker 1: keep her case on track. But when there's a question 102 00:06:13,800 --> 00:06:17,919 Speaker 1: of presidential immunity, that is, and everyone agreed that is 103 00:06:17,960 --> 00:06:21,479 Speaker 1: immediately appealable up to the Supreme Court, and these things 104 00:06:21,640 --> 00:06:24,840 Speaker 1: just take time, so you know, to the extent, they 105 00:06:24,960 --> 00:06:29,480 Speaker 1: found ways to file motions that no one could really 106 00:06:29,640 --> 00:06:33,960 Speaker 1: argue would build in delays. They ran out the crocs successfully, and. 107 00:06:33,920 --> 00:06:38,000 Speaker 3: The Supreme Court helped out with its decision on presidential immunity. 108 00:06:38,279 --> 00:06:41,080 Speaker 1: I mean, the court did side with him. He prevailed 109 00:06:41,080 --> 00:06:43,680 Speaker 1: in that they didn't agree that he had absolute immunity 110 00:06:43,720 --> 00:06:46,560 Speaker 1: against the case, so it kept it alive. But certainly, 111 00:06:46,680 --> 00:06:49,560 Speaker 1: you know, the majority of justices agreed with him that 112 00:06:49,640 --> 00:06:51,960 Speaker 1: at least some of the indictment would be off limits, 113 00:06:52,000 --> 00:06:55,160 Speaker 1: the part dealing with his discussions with Justice Department officials, 114 00:06:55,200 --> 00:06:58,560 Speaker 1: anything that was sort of overtly part of business in 115 00:06:58,560 --> 00:07:01,680 Speaker 1: the White House. And then you know, said we're going 116 00:07:01,720 --> 00:07:03,720 Speaker 1: to send it back to a lower court judge to 117 00:07:03,720 --> 00:07:06,680 Speaker 1: do another round of determinations. So you know, in theory, 118 00:07:06,680 --> 00:07:08,400 Speaker 1: I guess the Supreme Court could have said, we're going 119 00:07:08,440 --> 00:07:11,480 Speaker 1: to resolve all these questions ourselves and put the case 120 00:07:11,480 --> 00:07:13,800 Speaker 1: back on track if they thought that any part of 121 00:07:13,840 --> 00:07:17,080 Speaker 1: it could survive, but didn't send it back to Judge Chuckkin, 122 00:07:17,760 --> 00:07:20,120 Speaker 1: who then had to set up schedule for more brief 123 00:07:20,240 --> 00:07:24,280 Speaker 1: And at that point it seems impossible that it could 124 00:07:24,320 --> 00:07:26,400 Speaker 1: be on track for a trial before election day. 125 00:07:26,880 --> 00:07:31,080 Speaker 3: So still Judge Chuckkin has to sign off on this. 126 00:07:31,520 --> 00:07:32,400 Speaker 4: She does yees. 127 00:07:32,640 --> 00:07:36,840 Speaker 1: Generally speaking, judges have very little discussion in these types 128 00:07:36,880 --> 00:07:39,640 Speaker 1: of situations if the government says we don't want to 129 00:07:39,640 --> 00:07:43,400 Speaker 1: pursue this case anymore, especially ahead of a trial. You know, 130 00:07:43,480 --> 00:07:47,360 Speaker 1: one instance where we saw judge put a hold on 131 00:07:47,560 --> 00:07:51,000 Speaker 1: cod trying to drop something within the case of Michael Flynn, 132 00:07:51,160 --> 00:07:54,640 Speaker 1: who was Trump's former national security advisor, and Flynn had 133 00:07:54,640 --> 00:07:58,360 Speaker 1: been prosecuted under a former Special Council and then spun 134 00:07:58,400 --> 00:08:02,080 Speaker 1: off to a US attorney office related to the Russian investigation. 135 00:08:02,400 --> 00:08:05,000 Speaker 1: But Michael Frinn had already had pleaded guilty. So the 136 00:08:05,080 --> 00:08:06,960 Speaker 1: judge in that case has said, you know, I'm not 137 00:08:07,040 --> 00:08:09,920 Speaker 1: sure if I can drop this right away if he's 138 00:08:09,920 --> 00:08:15,520 Speaker 1: already been factual findings about guilt and acceptance of responsibility, 139 00:08:15,560 --> 00:08:18,000 Speaker 1: et cetera, et cetera. But that's not the case here. 140 00:08:18,120 --> 00:08:21,320 Speaker 1: There's been no fact finding. It's much early. Even though 141 00:08:21,360 --> 00:08:23,960 Speaker 1: it feels like so much has happened, it's really much 142 00:08:24,000 --> 00:08:27,560 Speaker 1: earlier in the proceedings. So, you know, I don't think 143 00:08:27,600 --> 00:08:31,440 Speaker 1: there's an expectation that Judge Chuckkins would refuse to dismiss 144 00:08:31,480 --> 00:08:33,760 Speaker 1: it at this point. But whether she calls them in 145 00:08:34,240 --> 00:08:36,559 Speaker 1: for some other reason, you know, it's with final questions. 146 00:08:36,760 --> 00:08:38,600 Speaker 1: I guess we could wait and see that. It would 147 00:08:38,600 --> 00:08:40,720 Speaker 1: be very unusual to have her do that. 148 00:08:41,080 --> 00:08:43,800 Speaker 3: Now, what about Jack Smith? There are reports that he 149 00:08:43,920 --> 00:08:47,640 Speaker 3: is going to step down before Trump takes. 150 00:08:47,400 --> 00:08:52,240 Speaker 1: Office, So our reporting has signaled that he is expected 151 00:08:52,280 --> 00:08:56,400 Speaker 1: to resign from his position as special counsel before Trump 152 00:08:56,480 --> 00:08:59,640 Speaker 1: is sworn in. Whether he would leave the Justice Department 153 00:09:00,080 --> 00:09:03,199 Speaker 1: all together, you know, sort of what form that takes exactly, 154 00:09:03,400 --> 00:09:05,679 Speaker 1: we're not sure and waiting to see sort of what 155 00:09:05,720 --> 00:09:08,280 Speaker 1: he announces he'll do. You know, we're waiting to also 156 00:09:08,320 --> 00:09:12,679 Speaker 1: see if he finishes a report on his investigation on 157 00:09:12,800 --> 00:09:15,800 Speaker 1: his work, what happens with that, so you know, today 158 00:09:15,800 --> 00:09:17,640 Speaker 1: it doesn't walk out the door and never come. 159 00:09:17,520 --> 00:09:18,280 Speaker 5: Back, you think. 160 00:09:18,559 --> 00:09:20,520 Speaker 1: So we're not quite sure. But you know, even if 161 00:09:20,520 --> 00:09:22,160 Speaker 1: he were to stay in the Justice Department in some 162 00:09:22,240 --> 00:09:25,400 Speaker 1: capacity in the next few weeks. There's little doubt that 163 00:09:25,400 --> 00:09:27,599 Speaker 1: Trump would fire him immediately. 164 00:09:27,960 --> 00:09:31,160 Speaker 3: Well, Trump has promised that, and he's also said that 165 00:09:31,320 --> 00:09:34,000 Speaker 3: Smith should be thrown out of the country. That seems 166 00:09:34,000 --> 00:09:37,080 Speaker 3: beyond even his power as a president. But isn't Smith 167 00:09:37,240 --> 00:09:41,600 Speaker 3: required to file a report on his charging decisions to 168 00:09:41,679 --> 00:09:44,240 Speaker 3: the Attorney General before he leaves office? 169 00:09:44,440 --> 00:09:46,599 Speaker 1: You know, I'd have to go back and check their regulations, 170 00:09:46,640 --> 00:09:50,160 Speaker 1: but the expectation is that you will write a report 171 00:09:51,040 --> 00:09:54,000 Speaker 1: and submit that to the Attorney General to close out 172 00:09:54,040 --> 00:09:57,400 Speaker 1: his office, sort of administrative task that he also has 173 00:09:57,440 --> 00:09:59,400 Speaker 1: to do. We'll get a final budget report as he 174 00:09:59,480 --> 00:10:02,040 Speaker 1: closes down on the office, you know. I guess another 175 00:10:02,200 --> 00:10:05,320 Speaker 1: unanswered question is if there were other investigative threads that 176 00:10:05,400 --> 00:10:08,960 Speaker 1: they were pursuing, whether they would send those files, you know, 177 00:10:09,080 --> 00:10:12,440 Speaker 1: send them off to a US attorney office for further investigation, 178 00:10:13,000 --> 00:10:16,800 Speaker 1: or to redirect them like we saw with Special Council Luller, 179 00:10:16,920 --> 00:10:20,800 Speaker 1: where you know, certain issues were redirected to US attorney 180 00:10:20,840 --> 00:10:24,440 Speaker 1: offices after he left. So, you know, I think this 181 00:10:24,520 --> 00:10:28,480 Speaker 1: is not little astically heard from Jacksmith. But I think 182 00:10:28,520 --> 00:10:31,840 Speaker 1: depending on timing, you know, he files his report before 183 00:10:31,840 --> 00:10:36,720 Speaker 1: inauguration and the pressure will be on Attorney General's Garland 184 00:10:37,080 --> 00:10:40,040 Speaker 1: to release that ice effect. But we just haven't heard 185 00:10:40,160 --> 00:10:42,320 Speaker 1: one way or the other sort of what's next, And 186 00:10:42,400 --> 00:10:42,640 Speaker 1: so we. 187 00:10:42,679 --> 00:10:46,000 Speaker 3: Tell us about the push from Texas to get access 188 00:10:46,240 --> 00:10:47,880 Speaker 3: to Smith's files. 189 00:10:48,040 --> 00:10:51,360 Speaker 1: There's a case pending from the Texas Attorney General's office. 190 00:10:51,440 --> 00:10:53,880 Speaker 1: Kim Paxton has been a long time ally of Trump, 191 00:10:54,200 --> 00:10:58,200 Speaker 1: trying to get Jacksmith's files and release more of his 192 00:10:58,320 --> 00:11:00,559 Speaker 1: work and what happened in that office. I think there's 193 00:11:00,600 --> 00:11:04,160 Speaker 1: also the next beat will be like the investigation into 194 00:11:04,600 --> 00:11:06,280 Speaker 1: the investigation of Jack Smith. 195 00:11:06,520 --> 00:11:08,720 Speaker 3: It seems to be never ending, and one has to 196 00:11:08,760 --> 00:11:13,160 Speaker 3: wonder about what parts of Jack Smith's investigation the Texas 197 00:11:13,160 --> 00:11:16,400 Speaker 3: Attorney General would release to the public. Some more to come, 198 00:11:16,600 --> 00:11:20,120 Speaker 3: Thanks so much, Zoe. That's Bloomberg Legal reporter Zoe Tillman. 199 00:11:20,360 --> 00:11:23,960 Speaker 3: Coming up next on the Bloomberg Law Show. Federal prosecutors 200 00:11:24,000 --> 00:11:27,440 Speaker 3: are presenting their case in the trial of the longest 201 00:11:27,480 --> 00:11:31,480 Speaker 3: serving House leader in the country, Michael Madigan. I'm June 202 00:11:31,480 --> 00:11:33,960 Speaker 3: Grosso and you're listening to Bloomberg Dan. 203 00:11:34,600 --> 00:11:38,800 Speaker 4: Yes, Mike Madigan speaker, How are you? I I'm good. 204 00:11:38,840 --> 00:11:42,600 Speaker 3: How are you? Michael Madigan, the longest serving House leader 205 00:11:42,720 --> 00:11:46,520 Speaker 3: of any state in US history. Is an almost mythical 206 00:11:46,600 --> 00:11:50,920 Speaker 3: figure in Illinois politics. His three decade rain earned him 207 00:11:50,920 --> 00:11:54,000 Speaker 3: the nickname the Velvet Hammer because of the way he 208 00:11:54,080 --> 00:11:58,200 Speaker 3: led the Illinois House and extracted fealty from its members. 209 00:11:58,720 --> 00:12:02,439 Speaker 4: If you can get near you, mind that your client 210 00:12:02,600 --> 00:12:03,960 Speaker 4: is only Mike Madigan. 211 00:12:04,240 --> 00:12:07,320 Speaker 3: Now, the eighty two year old Madigan is on trial 212 00:12:07,440 --> 00:12:12,199 Speaker 3: for bribery, extortion, and racketeering for allegedly running a criminal 213 00:12:12,400 --> 00:12:16,520 Speaker 3: enterprise to add to his vast political power, get business 214 00:12:16,559 --> 00:12:20,559 Speaker 3: for his private law firm and reward his friends and allies. 215 00:12:21,120 --> 00:12:25,240 Speaker 3: Government attorneys are building their case against him with witnesses 216 00:12:25,280 --> 00:12:29,560 Speaker 3: who've made plea deals and war wires, documents, emails, and 217 00:12:29,679 --> 00:12:32,800 Speaker 3: hundreds of wiretap conversations like these. 218 00:12:33,320 --> 00:12:35,680 Speaker 4: I generally never refer to the speaker. I just say 219 00:12:35,679 --> 00:12:37,480 Speaker 4: our friend. So if you could say our friend, no 220 00:12:37,520 --> 00:12:38,920 Speaker 4: one really knows what we're talking about. 221 00:12:39,360 --> 00:12:40,080 Speaker 5: Speak of that. 222 00:12:40,480 --> 00:12:43,840 Speaker 4: Hey, micaeh, Hey, will you tell the speaker I took 223 00:12:43,840 --> 00:12:46,840 Speaker 4: care of burials and Pennonovic Did you just throw away 224 00:12:46,880 --> 00:12:48,600 Speaker 4: that note? Yep. 225 00:12:48,920 --> 00:12:52,800 Speaker 3: For those outside of Illinois who don't know about Madigan, 226 00:12:53,200 --> 00:12:55,080 Speaker 3: you know, tell us a little bit about his background. 227 00:12:55,200 --> 00:12:57,240 Speaker 3: Why you was nicknamed the velvet hammer. 228 00:12:57,800 --> 00:13:01,760 Speaker 5: So Mike Madigan is the longest serving speaker of the 229 00:13:01,800 --> 00:13:06,400 Speaker 5: Illinois House in history, and in addition to the extraordinary 230 00:13:06,480 --> 00:13:10,679 Speaker 5: political power and influence that he wielded from that position, 231 00:13:11,440 --> 00:13:15,319 Speaker 5: he also had a private practice of laws. The indictment 232 00:13:15,400 --> 00:13:19,760 Speaker 5: charges that he used both of these positions to retain 233 00:13:19,920 --> 00:13:21,520 Speaker 5: and consolidate his power. 234 00:13:22,480 --> 00:13:26,960 Speaker 3: So the prosecutors are alleging that he used his political 235 00:13:27,000 --> 00:13:30,400 Speaker 3: power in offices as a criminal enterprise. I mean, what 236 00:13:30,559 --> 00:13:32,240 Speaker 3: exactly are they charging there? 237 00:13:32,960 --> 00:13:37,439 Speaker 5: Yes, that's exactly right, a criminal enterprise which is casually 238 00:13:37,480 --> 00:13:42,400 Speaker 5: referred to as the Madigan enterprise. And in brief, it 239 00:13:42,559 --> 00:13:45,320 Speaker 5: boils down to what is at the heart of all 240 00:13:45,360 --> 00:13:50,680 Speaker 5: public corruption cases, which is precisely money and power, the 241 00:13:50,760 --> 00:13:54,400 Speaker 5: abuse of public office for private gain, and the abuse 242 00:13:54,480 --> 00:13:59,120 Speaker 5: of power to retain and consolidate power. The evidence that's 243 00:13:59,160 --> 00:14:03,440 Speaker 5: been introduced in the case so far focuses on Commed, 244 00:14:03,960 --> 00:14:09,920 Speaker 5: the public utility here in Illinois, and Madigan's essentially leveraging 245 00:14:10,360 --> 00:14:17,120 Speaker 5: commed dependence on his political power, depending on Madigan's support 246 00:14:17,320 --> 00:14:22,080 Speaker 5: for legislation and policy that are favorable to Commed in 247 00:14:22,240 --> 00:14:28,320 Speaker 5: exchange for a variety of things. This is one large 248 00:14:28,320 --> 00:14:29,680 Speaker 5: issue among others. 249 00:14:29,880 --> 00:14:34,480 Speaker 3: His co defendant, Mike McClain, And he's already been convicted 250 00:14:34,480 --> 00:14:37,600 Speaker 3: on public corruption charges. Why are they trying to show 251 00:14:37,600 --> 00:14:39,760 Speaker 3: that he's an agent of Madigan? 252 00:14:40,480 --> 00:14:43,520 Speaker 5: So Mike mclan, as you say, has already been convicted 253 00:14:43,560 --> 00:14:46,320 Speaker 5: in a separate trial. That trial is referred to as 254 00:14:46,360 --> 00:14:49,960 Speaker 5: the trial of the comment for in this instance, Mike 255 00:14:50,040 --> 00:14:53,320 Speaker 5: McLean is charged as a co defendant and an agent 256 00:14:54,160 --> 00:14:58,640 Speaker 5: of the former speaker Mike Madigan. And under an agency 257 00:14:58,680 --> 00:15:04,760 Speaker 5: theory of liabil Mike Madigan's knowledge, his criminal intent, and 258 00:15:04,840 --> 00:15:09,080 Speaker 5: the actions that he directs are all imputed to Mike 259 00:15:09,200 --> 00:15:12,880 Speaker 5: McLean as his agent. This is the theory of the prosecution. 260 00:15:13,120 --> 00:15:15,080 Speaker 5: Of course, mister McLean contests it. 261 00:15:15,440 --> 00:15:18,800 Speaker 3: Let's talk about the defense. Is the defense that this 262 00:15:18,840 --> 00:15:21,400 Speaker 3: is what politicians do? Is it that defense that we've 263 00:15:21,400 --> 00:15:23,720 Speaker 3: heard a million times? Or is there more to it? 264 00:15:24,120 --> 00:15:28,360 Speaker 5: That is essentially the defense. It is a defense that 265 00:15:28,600 --> 00:15:32,680 Speaker 5: has gained credence in recent years with a series of 266 00:15:32,800 --> 00:15:37,240 Speaker 5: Supreme Court rulings that have held in essence that federal 267 00:15:37,320 --> 00:15:41,880 Speaker 5: prosecutors have been overly ambitious with their interpretation of public 268 00:15:41,880 --> 00:15:49,640 Speaker 5: corruption laws and have swept into their prosecutions instances of 269 00:15:50,200 --> 00:15:56,360 Speaker 5: politics as usual constituent services, and the type of deal making, 270 00:15:57,040 --> 00:16:01,080 Speaker 5: which is how the sausage is made. And in the 271 00:16:01,120 --> 00:16:04,800 Speaker 5: words of Chief Justice John Roberts in the case of 272 00:16:05,040 --> 00:16:09,520 Speaker 5: the former Virginia governor Bob McDonald, it may be unseemly, 273 00:16:09,960 --> 00:16:11,680 Speaker 5: but that doesn't mean it's criminal. 274 00:16:12,400 --> 00:16:15,520 Speaker 3: The Supreme Court has been pairing back public corruption law 275 00:16:15,680 --> 00:16:21,320 Speaker 3: since the McDonald case, and last June, in the Snyder case, 276 00:16:21,800 --> 00:16:25,720 Speaker 3: the Justices undid the conviction of a former Indiana mayor 277 00:16:26,360 --> 00:16:30,480 Speaker 3: who received thirteen thousand dollars from a trucking company after 278 00:16:30,560 --> 00:16:34,200 Speaker 3: it was awarded city contracts. In this case, how are 279 00:16:34,240 --> 00:16:37,960 Speaker 3: the prosecutors getting around the Snyder decision? 280 00:16:39,200 --> 00:16:41,640 Speaker 5: Well, First of all, the Snyder case involved a very 281 00:16:41,640 --> 00:16:47,480 Speaker 5: particular statute. It involved a charge of illegal gratuities, which 282 00:16:47,520 --> 00:16:52,280 Speaker 5: the prosecution argued was included in eighteen US could six 283 00:16:52,320 --> 00:16:54,560 Speaker 5: sixty six, which is a federal law that applies to 284 00:16:54,640 --> 00:16:57,720 Speaker 5: state and local bribery. The Supreme Court Court ruled in 285 00:16:57,800 --> 00:17:02,080 Speaker 5: Snyder that that interpretation was in correct, that six sixty 286 00:17:02,120 --> 00:17:06,080 Speaker 5: six encompasses quid pro quol bribery, but not illegal gratuities, 287 00:17:06,119 --> 00:17:10,160 Speaker 5: which was the theory of liability in Snyder. The Madigan 288 00:17:10,240 --> 00:17:15,119 Speaker 5: case by contrast, is not a theory of illegal gratuities. Rather, 289 00:17:15,320 --> 00:17:19,600 Speaker 5: it is a criminal enterprise. So rico is charged along 290 00:17:19,640 --> 00:17:24,480 Speaker 5: with wire fraud and actual bribery. Bribery is considered one 291 00:17:24,480 --> 00:17:28,880 Speaker 5: of the necessary predicate offenses that can be used as 292 00:17:28,920 --> 00:17:31,480 Speaker 5: a basis to charge a racketeering enterprise. 293 00:17:32,160 --> 00:17:35,800 Speaker 3: Are quid pro quo allegations key to the government's case 294 00:17:35,840 --> 00:17:38,280 Speaker 3: against Madigan and McLain. 295 00:17:38,880 --> 00:17:43,679 Speaker 5: A theory of quid pro quo liability, yes, But the 296 00:17:43,760 --> 00:17:47,959 Speaker 5: reason that quid pro quo, although it's a commonly used 297 00:17:48,080 --> 00:17:52,280 Speaker 5: term in the vernacular for corruption, is not a legal 298 00:17:52,359 --> 00:17:57,120 Speaker 5: term of art, is because in truth, corrupt acts are 299 00:17:57,720 --> 00:18:01,840 Speaker 5: most often far more complex than the concepts of this 300 00:18:02,080 --> 00:18:05,280 Speaker 5: for that. So, in the case that's been brought by 301 00:18:05,320 --> 00:18:10,240 Speaker 5: the government against Madigan, what is alleged is that essentially 302 00:18:10,800 --> 00:18:15,960 Speaker 5: comed owed Mike Madigan. The company was indebted to him 303 00:18:16,400 --> 00:18:22,680 Speaker 5: for numerous times he had helped them benefit with legislation 304 00:18:23,359 --> 00:18:26,840 Speaker 5: that was favorable to the company. So you're in a 305 00:18:26,880 --> 00:18:34,480 Speaker 5: situation where the defendant already has influenced power, clout and leverage. 306 00:18:35,080 --> 00:18:37,960 Speaker 5: What is alleged is that Mike Madgan in turn then 307 00:18:38,280 --> 00:18:44,000 Speaker 5: use that to demand favors from coned, So it is 308 00:18:44,040 --> 00:18:47,199 Speaker 5: a quid pro quo, but it's not a simple or 309 00:18:47,240 --> 00:18:48,520 Speaker 5: isolated transaction. 310 00:18:49,400 --> 00:18:53,880 Speaker 3: So the government has all kinds of evidence. People who 311 00:18:54,000 --> 00:18:58,679 Speaker 3: wore wires, the wire tapped, they have documents. What do 312 00:18:58,720 --> 00:19:02,840 Speaker 3: you see as the longest evidence they have so far. 313 00:19:03,440 --> 00:19:07,879 Speaker 5: All of the government's evidence has strengths, and it also 314 00:19:08,040 --> 00:19:12,480 Speaker 5: has ways in which it can be attacked by defense counsel, 315 00:19:12,680 --> 00:19:16,879 Speaker 5: and it is being attacked by defense counsel. Government witnesses 316 00:19:16,920 --> 00:19:21,560 Speaker 5: who are so called cooperating witnesses, including those who have 317 00:19:21,720 --> 00:19:26,040 Speaker 5: negotiated flea deals, of course, have received the benefit from 318 00:19:26,080 --> 00:19:30,080 Speaker 5: the government. These are individuals who have negotiated a flee 319 00:19:30,080 --> 00:19:33,679 Speaker 5: deal in exchange for their cooperation with the government, and 320 00:19:33,760 --> 00:19:38,360 Speaker 5: they have an expectation of a reduced sentence. Therefore, Council 321 00:19:38,440 --> 00:19:42,360 Speaker 5: for the Defense will be cross examining them on their bias, 322 00:19:42,359 --> 00:19:46,280 Speaker 5: on their incentive to curry favor with the government, and 323 00:19:46,680 --> 00:19:49,600 Speaker 5: arguably what they will certainly argue to the jury is 324 00:19:49,640 --> 00:19:54,439 Speaker 5: that those witnesses are therefore not credible, not to be believed. Recordings, 325 00:19:54,760 --> 00:19:58,160 Speaker 5: of course, are not of witnesses who may or may 326 00:19:58,200 --> 00:20:01,439 Speaker 5: not have an incentive to shade the truth on the 327 00:20:01,480 --> 00:20:05,680 Speaker 5: witness stand. A famous Chicago defense attorney once said, you 328 00:20:05,720 --> 00:20:10,080 Speaker 5: don't need to believe me, Just believe mister Panasonic. You 329 00:20:10,200 --> 00:20:14,239 Speaker 5: press play, and the recording speaks for itself. Now, in 330 00:20:14,280 --> 00:20:20,400 Speaker 5: some instances, these recordings are grainy, of lower quality, may 331 00:20:20,440 --> 00:20:24,960 Speaker 5: not be the smoking gun that they have been made 332 00:20:24,960 --> 00:20:27,879 Speaker 5: out to be. And so I am certain that the 333 00:20:28,000 --> 00:20:34,080 Speaker 5: jury is listening very carefully when the videos and audio 334 00:20:34,119 --> 00:20:38,159 Speaker 5: recordings are played to see if the content actually lines 335 00:20:38,240 --> 00:20:41,600 Speaker 5: up with what the government promised the evidence would show 336 00:20:41,840 --> 00:20:45,320 Speaker 5: in its opening statement, because you can bet that if 337 00:20:45,359 --> 00:20:50,159 Speaker 5: it doesn't, when the defense makes its closing argument, it 338 00:20:50,200 --> 00:20:52,880 Speaker 5: will point out the ways in which the government's case 339 00:20:52,920 --> 00:20:53,520 Speaker 5: fell short. 340 00:20:54,119 --> 00:20:58,760 Speaker 3: Some of the recordings seemed pretty stunning, one where MacLean said, 341 00:20:59,160 --> 00:21:02,680 Speaker 3: your client is only mag Madigan. It's not the Democratic Party, 342 00:21:02,720 --> 00:21:05,440 Speaker 3: it's not anybody who hired you, it's not your mom 343 00:21:05,480 --> 00:21:09,199 Speaker 3: and dad. But the defense, I assume, can frame that 344 00:21:09,280 --> 00:21:10,160 Speaker 3: in a different. 345 00:21:09,880 --> 00:21:13,800 Speaker 5: Way, certainly, and you can see both sides of that coin. 346 00:21:14,720 --> 00:21:19,399 Speaker 5: On the one hand, it speaks to Speaker Madigan's really 347 00:21:19,520 --> 00:21:25,760 Speaker 5: extraordinary influence in a way that certainly undermines a democratic 348 00:21:25,880 --> 00:21:30,639 Speaker 5: or meritocratic process. On the other hand, you can say, well, yeah, 349 00:21:31,080 --> 00:21:34,840 Speaker 5: who is the leading Democrat in Illinois. He was conflated 350 00:21:35,359 --> 00:21:39,320 Speaker 5: with the Democratic Party, and MacLean is just making clear 351 00:21:39,359 --> 00:21:43,760 Speaker 5: that Madigan's agenda is the overwhelming agenda that we'll get 352 00:21:43,800 --> 00:21:46,560 Speaker 5: through in Springfield, and indeed, for many years that was 353 00:21:46,600 --> 00:21:47,040 Speaker 5: the case. 354 00:21:47,200 --> 00:21:50,120 Speaker 3: Is there any indication that Madigan might take the stand. 355 00:21:50,520 --> 00:21:54,600 Speaker 5: There has been no indication as of yet. He will 356 00:21:54,640 --> 00:21:58,080 Speaker 5: need to make that decision when the government rests its case. 357 00:21:58,280 --> 00:22:01,400 Speaker 5: The government is still, of course presenting its case in chief, 358 00:22:02,080 --> 00:22:05,600 Speaker 5: and the burden of proof remains with the government at 359 00:22:05,640 --> 00:22:10,040 Speaker 5: all times. The Speaker, of course, is entitled to a 360 00:22:10,119 --> 00:22:13,720 Speaker 5: presumption of innocence and also entitled to a right to 361 00:22:13,800 --> 00:22:17,440 Speaker 5: remain silent. So if he chooses not to take the stand, 362 00:22:18,000 --> 00:22:20,800 Speaker 5: the jury must draw no inference from that, and the 363 00:22:20,840 --> 00:22:25,680 Speaker 5: government cannot comment on it. Speaker Madigan is obviously an 364 00:22:25,680 --> 00:22:30,320 Speaker 5: intelligent and shrewd person, and I imagine that he's listening 365 00:22:30,440 --> 00:22:34,760 Speaker 5: very closely along with his skilled defense counsel as the 366 00:22:34,880 --> 00:22:39,560 Speaker 5: evidence comes in. If you're asking me to place a wager, 367 00:22:39,760 --> 00:22:42,600 Speaker 5: I will wager that he is not going to take 368 00:22:42,640 --> 00:22:43,119 Speaker 5: a stand. 369 00:22:43,560 --> 00:22:46,960 Speaker 3: The prosecution would certainly have a lot to cross examine 370 00:22:47,040 --> 00:22:50,080 Speaker 3: him on if he did. As you mentioned, there were 371 00:22:50,080 --> 00:22:54,159 Speaker 3: guilty verdicts against Commed's former top executive and three of 372 00:22:54,160 --> 00:22:57,840 Speaker 3: its former lobbyists. We're conspiring to bribe Madigan. But then 373 00:22:57,960 --> 00:23:01,440 Speaker 3: a trial on charges at form At and t Illinois 374 00:23:01,520 --> 00:23:06,520 Speaker 3: President Paul Lacchiatza illegally influenced the X speaker resulted in 375 00:23:06,560 --> 00:23:09,879 Speaker 3: a hung jury. Was there a problem in that later 376 00:23:10,000 --> 00:23:14,520 Speaker 3: trial that the government might encounter in a Madigan trial? 377 00:23:14,680 --> 00:23:17,520 Speaker 5: So the problem with that case is the problem with 378 00:23:17,640 --> 00:23:21,000 Speaker 5: all public corruption and indeed white collar cases. These are 379 00:23:21,040 --> 00:23:26,040 Speaker 5: specific intent crimes, and the government must prove corrupt intent 380 00:23:26,359 --> 00:23:31,040 Speaker 5: beyond a reasonable doubt. So not just the actions themselves, 381 00:23:31,200 --> 00:23:35,600 Speaker 5: but the individual's state of mind. And when one can 382 00:23:35,800 --> 00:23:39,360 Speaker 5: argue that a state of mind is politics as usual, 383 00:23:39,520 --> 00:23:42,240 Speaker 5: and you do hear that line in the Madigan trial 384 00:23:42,280 --> 00:23:45,000 Speaker 5: as well. This is how things are done in Illinois. 385 00:23:45,119 --> 00:23:49,280 Speaker 5: This is politics as usual that can undermine evidence that 386 00:23:49,400 --> 00:23:53,280 Speaker 5: goes to corrupt intent, especially when it is circumstantial evidence. 387 00:23:53,280 --> 00:23:58,840 Speaker 5: And that's another point. These individuals are smart, they are sophisticated. 388 00:23:59,359 --> 00:24:02,800 Speaker 5: You will never here then use the term quid pro quo. 389 00:24:03,359 --> 00:24:06,880 Speaker 5: You will never hear then use the word bribe. And 390 00:24:07,000 --> 00:24:13,239 Speaker 5: so frequently the evidence in corruption cases is circumstantial, and 391 00:24:13,359 --> 00:24:17,320 Speaker 5: jurors are asked to draw reasonable inferences from the evidence. 392 00:24:17,640 --> 00:24:21,200 Speaker 5: So access the prostitutions of public corruption cases are hard? 393 00:24:21,720 --> 00:24:24,800 Speaker 3: Are they harder in Illinois? Because the city is known 394 00:24:24,880 --> 00:24:28,840 Speaker 3: from the days of mayor daily and you've had several 395 00:24:29,160 --> 00:24:33,560 Speaker 3: I think Illinois governors who've been prosecuted. I mean, are 396 00:24:33,600 --> 00:24:38,440 Speaker 3: the citizens of Chicago sort of inord to it? You know? 397 00:24:38,480 --> 00:24:40,680 Speaker 3: Are they just sort of stealed against it? 398 00:24:40,960 --> 00:24:45,439 Speaker 5: Well, the social science literature related to popular perceptions of 399 00:24:45,520 --> 00:24:50,720 Speaker 5: corruption indicates the opposite. Actually, public corruption is deeply unpopular 400 00:24:51,720 --> 00:24:55,960 Speaker 5: with ordinary citizens, and indeed it is something that motivates 401 00:24:56,240 --> 00:24:59,680 Speaker 5: people when it comes to casting votes to seek in 402 00:24:59,760 --> 00:25:03,520 Speaker 5: coll change. I'm not in a position to say whether 403 00:25:03,720 --> 00:25:08,199 Speaker 5: public corruption prosecutions are harder or easier in Illinois, but 404 00:25:08,400 --> 00:25:10,359 Speaker 5: I would tend to doubt that they would be harder. 405 00:25:10,600 --> 00:25:12,840 Speaker 3: A long way to go in this one, yet, Thanks 406 00:25:12,880 --> 00:25:17,280 Speaker 3: so much, Juliet. That's Professor Juliet Sorenson of Loyola University 407 00:25:17,359 --> 00:25:20,720 Speaker 3: Chicago Law School coming up the Supreme Court today. This 408 00:25:20,840 --> 00:25:24,800 Speaker 3: is Bloomberg. The Supreme Court released its calendar for the 409 00:25:24,840 --> 00:25:30,200 Speaker 3: February argument session. The justices will hear cases on reverse discrimination, 410 00:25:30,760 --> 00:25:35,600 Speaker 3: nuclear fuel storage, post conviction DNA testing, and whether the 411 00:25:35,640 --> 00:25:40,240 Speaker 3: Mexican government can sue US gun manufacturers. And today the 412 00:25:40,520 --> 00:25:43,360 Speaker 3: Justices announced that they'll weigh a new line of attack 413 00:25:43,520 --> 00:25:48,480 Speaker 3: on federal administrative power, agreeing to consider the constitutionality of 414 00:25:48,560 --> 00:25:52,600 Speaker 3: the decades old Universal Service Fund. Joining me is Bloomberg 415 00:25:52,640 --> 00:25:56,400 Speaker 3: Supreme Court reporter Greg store So, Greg tell us about 416 00:25:56,400 --> 00:26:00,760 Speaker 3: the Universal Service Fund, which some people may not know about, 417 00:26:00,800 --> 00:26:04,040 Speaker 3: but there's a charge on there wireless phone bills for 418 00:26:04,160 --> 00:26:04,919 Speaker 3: it every month. 419 00:26:05,320 --> 00:26:08,720 Speaker 6: So this is an eight billion dollar program. And what 420 00:26:08,760 --> 00:26:11,280 Speaker 6: it is at the standpoint of a consumer, on your 421 00:26:11,320 --> 00:26:14,520 Speaker 6: monthly phone bill, there's a charge for there's a Universal 422 00:26:14,560 --> 00:26:18,480 Speaker 6: Service Fund, and that is used to subsidize the cost 423 00:26:18,600 --> 00:26:23,440 Speaker 6: of phone and internet service for poor people in rural areas, 424 00:26:23,480 --> 00:26:27,679 Speaker 6: for schools and libraries. And that program has been around 425 00:26:27,720 --> 00:26:31,000 Speaker 6: since nineteen ninety six tele Communications Act. But now it 426 00:26:31,080 --> 00:26:35,160 Speaker 6: is being challenged as exceeding both Congress's authority and the 427 00:26:35,200 --> 00:26:37,800 Speaker 6: Federal Communications Commission's authority. 428 00:26:38,280 --> 00:26:41,320 Speaker 3: So this was a circuit split, I mean, basically, was 429 00:26:41,320 --> 00:26:45,640 Speaker 3: the Fifth Circuit, which is often an outliers circuit, extremely conservative, 430 00:26:45,840 --> 00:26:47,159 Speaker 3: And what did the Fifth. 431 00:26:46,880 --> 00:26:50,359 Speaker 6: Circuit do with Fifth Circuit declared it invalid. That caused 432 00:26:50,359 --> 00:26:52,520 Speaker 6: a split with two other appeals courts that had said 433 00:26:52,720 --> 00:26:56,040 Speaker 6: it was constitutional, and the Fifth Circuit said it was 434 00:26:56,080 --> 00:26:58,879 Speaker 6: invalid sort of for a combination of reasons. There is 435 00:26:58,960 --> 00:27:02,240 Speaker 6: this doctrine that is known as the non delegation doctrine 436 00:27:02,280 --> 00:27:04,639 Speaker 6: that the Supreme Court hasn't invoked since the New Deal. 437 00:27:05,000 --> 00:27:08,200 Speaker 6: But the idea is that Congress can't just hand off 438 00:27:08,280 --> 00:27:13,520 Speaker 6: its legislative power to a federal agency. And then there's 439 00:27:13,560 --> 00:27:17,440 Speaker 6: also this related notion as the private non delegation doctrine, 440 00:27:17,480 --> 00:27:20,479 Speaker 6: which is that the agency can't just hand over its 441 00:27:20,480 --> 00:27:25,280 Speaker 6: authority to some private entity. And this circuit said that 442 00:27:25,440 --> 00:27:28,199 Speaker 6: this program was set up in a way where the 443 00:27:28,240 --> 00:27:30,760 Speaker 6: Congress gave an awful lot of authority to the SEC 444 00:27:30,920 --> 00:27:33,120 Speaker 6: to set the amounts of that charge on your phone bill, 445 00:27:33,400 --> 00:27:35,960 Speaker 6: and then the SEC in turn gave a private entity 446 00:27:36,000 --> 00:27:39,000 Speaker 6: a lot of power to determine exactly what that charge 447 00:27:39,000 --> 00:27:41,960 Speaker 6: would be. And the combination of those two issues made 448 00:27:42,000 --> 00:27:46,280 Speaker 6: it unconstitutional, a violation of the separation of powers. 449 00:27:46,640 --> 00:27:50,600 Speaker 3: Are people anticipating that the Supreme Court may use this 450 00:27:50,800 --> 00:27:54,920 Speaker 3: case to cut back further on agency powers. 451 00:27:55,440 --> 00:27:58,439 Speaker 6: It's certainly a possibility now I don't want to read 452 00:27:58,520 --> 00:28:00,520 Speaker 6: too much into the fact that they took this case. 453 00:28:00,560 --> 00:28:03,280 Speaker 6: They didn't have a whole lot of choice, given that 454 00:28:03,480 --> 00:28:06,000 Speaker 6: the Fifth Circuit had said this program is invalid, and 455 00:28:06,000 --> 00:28:08,399 Speaker 6: two other appeal sports had gone the other way. But 456 00:28:08,960 --> 00:28:11,639 Speaker 6: this notion of the non delegation doctrine is sort of 457 00:28:11,840 --> 00:28:14,400 Speaker 6: the last big thing. Let me, I shouldn't ay last 458 00:28:14,400 --> 00:28:17,120 Speaker 6: big thing, but the next big thing for people who 459 00:28:17,160 --> 00:28:20,720 Speaker 6: want to reduce administrative power. So the Supreme Court a 460 00:28:20,760 --> 00:28:23,920 Speaker 6: few years ago establish the thing called the Major Questions 461 00:28:23,960 --> 00:28:26,480 Speaker 6: Doctrine that said Congress has to be super clear if 462 00:28:26,480 --> 00:28:29,560 Speaker 6: it's going to delegate a major question to an agency. 463 00:28:30,000 --> 00:28:33,480 Speaker 6: Then the Court last term overturned the so called Chevron 464 00:28:33,600 --> 00:28:36,000 Speaker 6: doctrine that gave agency is an awful lot of discretion 465 00:28:36,520 --> 00:28:39,520 Speaker 6: to interpret ambiguous statutes. And this is sort of the 466 00:28:39,520 --> 00:28:43,440 Speaker 6: next thing. It would potentially limit what Congress can do. 467 00:28:43,880 --> 00:28:46,720 Speaker 6: It would say there are constitutional limits to what Congress 468 00:28:46,720 --> 00:28:50,880 Speaker 6: can hand off to the agency. In terms of legislative power. 469 00:28:50,960 --> 00:28:53,640 Speaker 6: Congress has to be the one to make these decisions 470 00:28:53,760 --> 00:28:56,479 Speaker 6: like say how big this this charge is that's going 471 00:28:56,480 --> 00:28:57,320 Speaker 6: to be on your phone bill? 472 00:28:57,440 --> 00:29:02,000 Speaker 3: Greg The arguments will take place when Trump has already 473 00:29:02,280 --> 00:29:05,640 Speaker 3: taken office, so there'll be a new solicitor general. I mean, 474 00:29:05,760 --> 00:29:10,560 Speaker 3: might the Trump administration reverse course and disagree with the 475 00:29:10,560 --> 00:29:11,520 Speaker 3: Biden administration. 476 00:29:11,960 --> 00:29:15,360 Speaker 6: It's certainly possible, and it's worth watching. This is not 477 00:29:15,560 --> 00:29:19,760 Speaker 6: one of those things that this fund. The criticisms about 478 00:29:19,800 --> 00:29:25,240 Speaker 6: this fund have tended to be more about what businesses 479 00:29:25,320 --> 00:29:27,960 Speaker 6: are in charge of collecting it. And so right now, 480 00:29:28,040 --> 00:29:29,400 Speaker 6: I said that this is the charge that shows up 481 00:29:29,440 --> 00:29:32,120 Speaker 6: in your phone bill, so that the telecom companies that 482 00:29:32,240 --> 00:29:34,560 Speaker 6: are sort of on the hook to collect it from 483 00:29:34,600 --> 00:29:37,120 Speaker 6: you and then pay into the fund. And a lot 484 00:29:37,160 --> 00:29:40,240 Speaker 6: of folks think internet companies should be doing that, they 485 00:29:40,280 --> 00:29:43,600 Speaker 6: should be carrying some of the load as well, And 486 00:29:44,040 --> 00:29:45,720 Speaker 6: that tends to be the sort of thing one might 487 00:29:45,760 --> 00:29:49,240 Speaker 6: expect the Trump administration to weigh in on and say, 488 00:29:49,720 --> 00:29:52,040 Speaker 6: you know, we want to change how the fee is 489 00:29:52,360 --> 00:29:55,920 Speaker 6: put together, rather than knocking out the fund altogether, because 490 00:29:56,480 --> 00:29:59,880 Speaker 6: as I said, it does cover an awful lot of people, 491 00:30:00,400 --> 00:30:03,880 Speaker 6: poor people, people in rural areas. A lot of them are, 492 00:30:04,200 --> 00:30:08,320 Speaker 6: frankly the folks who voted Donald Trump for president. And 493 00:30:08,640 --> 00:30:11,400 Speaker 6: it may not be top of the list of things 494 00:30:11,400 --> 00:30:14,560 Speaker 6: that the Trump administration wants to do when it starts 495 00:30:14,600 --> 00:30:16,880 Speaker 6: trying to eliminate regulations. 496 00:30:17,400 --> 00:30:20,440 Speaker 3: So the court decided not to take a case from 497 00:30:20,520 --> 00:30:26,160 Speaker 3: the tobacco industry. The tobacco industry is fighting putting these 498 00:30:26,440 --> 00:30:30,240 Speaker 3: really graphic pictures on cigarette packs. 499 00:30:30,800 --> 00:30:34,200 Speaker 6: Yes, this has been a long time coming. There's eleven 500 00:30:34,240 --> 00:30:36,360 Speaker 6: of these warnings are supposed to be on the top 501 00:30:36,400 --> 00:30:39,520 Speaker 6: half of a package of cigarette. One of them is 502 00:30:39,600 --> 00:30:42,520 Speaker 6: a woman with this baseball sized bulge in her neck 503 00:30:42,560 --> 00:30:45,880 Speaker 6: and with a thing that says warning, smoking causes head 504 00:30:45,920 --> 00:30:50,520 Speaker 6: and neck cancer. And the tobacco companies basically made the argument, 505 00:30:51,000 --> 00:30:53,800 Speaker 6: led by our Jo Reynolds, basically made the argument that 506 00:30:54,160 --> 00:30:57,400 Speaker 6: this is a free speech violation. You're compelling us to 507 00:30:57,920 --> 00:31:01,479 Speaker 6: say something we don't want to say. And in this 508 00:31:01,560 --> 00:31:05,240 Speaker 6: case a lower court federal appeals court said the Fifth 509 00:31:05,240 --> 00:31:09,680 Speaker 6: Circuit actually said, know what this is. It's akin to 510 00:31:10,320 --> 00:31:14,560 Speaker 6: regulation of deceptive advertisement. As long as the company is 511 00:31:14,560 --> 00:31:17,240 Speaker 6: only being forced to say something that is purely factual 512 00:31:17,280 --> 00:31:21,880 Speaker 6: and uncontroversial, that is okay. That phrases from a nineteen 513 00:31:21,920 --> 00:31:25,680 Speaker 6: eighty five Supreme Court decision. So the Fifth Circuit rejected 514 00:31:25,720 --> 00:31:28,320 Speaker 6: the free speech challenge. The tobacco companies turned to the 515 00:31:28,360 --> 00:31:31,840 Speaker 6: Supreme Court, and the Supreme Court said, no, we're not 516 00:31:31,880 --> 00:31:32,760 Speaker 6: going to take your case. 517 00:31:33,440 --> 00:31:36,880 Speaker 3: And I mean when I say graphic, these pictures a 518 00:31:36,960 --> 00:31:40,080 Speaker 3: lot of them are really hard to look at, which 519 00:31:40,160 --> 00:31:43,160 Speaker 3: I suppose is the point. But is there anything left 520 00:31:43,160 --> 00:31:45,840 Speaker 3: for the tobacco industry to do well? 521 00:31:46,800 --> 00:31:50,560 Speaker 6: There is, of course a new administration coming in that 522 00:31:50,760 --> 00:31:55,200 Speaker 6: is potentially one one avenue. This was something that Congress 523 00:31:55,240 --> 00:31:58,280 Speaker 6: told the FBA, the Food and Drug Administration to do 524 00:31:58,440 --> 00:32:01,320 Speaker 6: to put these sorts of advertisements together. Now, these exact 525 00:32:01,360 --> 00:32:04,160 Speaker 6: pictures that you're talking about that are so graphic, and 526 00:32:04,320 --> 00:32:06,480 Speaker 6: go to Bloomberg dot com and find find the story, 527 00:32:06,480 --> 00:32:09,280 Speaker 6: you'll see some of those, yeah images, But it is 528 00:32:09,280 --> 00:32:12,719 Speaker 6: something that Congress Commerce asked for in these very very 529 00:32:12,760 --> 00:32:16,200 Speaker 6: graphic warnings as well, very descriptive warnings about what smoking 530 00:32:16,280 --> 00:32:19,800 Speaker 6: does also the sort of thing that Congress required. So 531 00:32:20,120 --> 00:32:23,320 Speaker 6: it's possible that to really prevent this from happening, we 532 00:32:23,480 --> 00:32:26,520 Speaker 6: need new legislation. But I could certainly imagine that the 533 00:32:27,040 --> 00:32:28,960 Speaker 6: back of companies will try to get the FDA a 534 00:32:28,960 --> 00:32:32,160 Speaker 6: reverse course once the Trump presidency resumes. 535 00:32:32,320 --> 00:32:37,120 Speaker 3: So now, last Friday, the Court dismissed a case that 536 00:32:37,200 --> 00:32:43,040 Speaker 3: had been argued Facebook's appeal of the shareholder lawsuit against it. 537 00:32:43,440 --> 00:32:47,640 Speaker 6: Yeah, so this stems from the data harvesting scandal involving 538 00:32:47,680 --> 00:32:52,800 Speaker 6: the political consulting firm Cambridge Analytic, and essentially in these 539 00:32:52,840 --> 00:32:58,520 Speaker 6: shareholders are claiming that Facebook inflated share prices by misleading 540 00:32:58,520 --> 00:33:03,360 Speaker 6: shareholders about the risk that scandal would cause a misuse 541 00:33:03,400 --> 00:33:06,920 Speaker 6: of user data. And there are various points along the 542 00:33:06,960 --> 00:33:10,959 Speaker 6: timeline where the shareholders say, you knew more than you 543 00:33:11,120 --> 00:33:15,680 Speaker 6: told us. A federal appeals court fed the lawsuit against 544 00:33:15,720 --> 00:33:20,360 Speaker 6: Facebook could go forward. The Supreme Court in June agreed 545 00:33:20,400 --> 00:33:25,200 Speaker 6: to consider the appeal by Meta Meta is the new 546 00:33:25,280 --> 00:33:28,360 Speaker 6: name for Facebook hurt arguments in the case actually the 547 00:33:28,440 --> 00:33:32,880 Speaker 6: day after the election, and then for reasons that it 548 00:33:32,920 --> 00:33:36,320 Speaker 6: did not describe, decided we're not going to decide this case. 549 00:33:36,640 --> 00:33:38,960 Speaker 6: We're going to drop it. And so that is the 550 00:33:39,000 --> 00:33:42,120 Speaker 6: first quote opinion of the Supreme Court's term to not 551 00:33:42,280 --> 00:33:44,040 Speaker 6: decide this Facebook appeal. 552 00:33:44,360 --> 00:33:48,440 Speaker 3: There were also oral arguments in a sort of similar case, 553 00:33:49,040 --> 00:33:53,840 Speaker 3: an appeal by Nvidia of a shareholder's lawsuit against it. 554 00:33:54,240 --> 00:33:57,920 Speaker 3: And I'm wondering if the same thing might happen to 555 00:33:58,280 --> 00:34:03,000 Speaker 3: the Nvidia case, that they might dismiss it as improvidently granted, 556 00:34:03,000 --> 00:34:05,640 Speaker 3: because I remember that some of the justices were saying, 557 00:34:05,640 --> 00:34:07,120 Speaker 3: I don't know why we took this case. 558 00:34:07,680 --> 00:34:10,759 Speaker 6: Yeah, there were, by my account for justices who said 559 00:34:10,840 --> 00:34:13,680 Speaker 6: I don't know why we took this case. And to 560 00:34:13,719 --> 00:34:16,239 Speaker 6: be honest with you, that was what I thought we 561 00:34:16,239 --> 00:34:18,839 Speaker 6: were going to beginning on Friday instead of the Facebook case, 562 00:34:18,880 --> 00:34:22,520 Speaker 6: because oftentimes when there's an argument and a number of 563 00:34:22,640 --> 00:34:26,760 Speaker 6: justices start saying things like that, the court will dismiss 564 00:34:26,800 --> 00:34:30,360 Speaker 6: an appeal. That case is a very different issue in 565 00:34:30,440 --> 00:34:33,839 Speaker 6: terms of securities law. It's all about what kind of 566 00:34:33,880 --> 00:34:37,919 Speaker 6: specificity you need in your lawsuit, in your complaint for 567 00:34:38,360 --> 00:34:42,400 Speaker 6: a case to go forward. This is a case involving 568 00:34:42,800 --> 00:34:47,840 Speaker 6: whether the video was forthcoming enough about where its revenue 569 00:34:47,920 --> 00:34:51,319 Speaker 6: was coming from. The shareholders say, you were actually more 570 00:34:51,360 --> 00:34:55,720 Speaker 6: dependent on crypto mining revenue to being used for crypto 571 00:34:55,800 --> 00:34:58,759 Speaker 6: mining than you let on. And that's a bad thing 572 00:34:58,840 --> 00:35:02,719 Speaker 6: because everybody knows the crypto industry is very volatile, and 573 00:35:02,800 --> 00:35:06,239 Speaker 6: so crypto industry took a big dip. That meant that 574 00:35:06,280 --> 00:35:10,839 Speaker 6: in videos, shares also dipped because you eventually had to 575 00:35:10,960 --> 00:35:14,000 Speaker 6: reveal that sales were down any of that date. The 576 00:35:14,040 --> 00:35:17,359 Speaker 6: Supreme Court did suggest during arguments. As I said that 577 00:35:17,760 --> 00:35:21,800 Speaker 6: this did not present deserved broad legal issue that would 578 00:35:21,960 --> 00:35:24,759 Speaker 6: be a good candidate for a Supreme Court ruling. But 579 00:35:24,920 --> 00:35:27,040 Speaker 6: from the time being, at least, it looks like the 580 00:35:27,040 --> 00:35:30,040 Speaker 6: Court is going to go ahead and decide that case. 581 00:35:30,640 --> 00:35:33,320 Speaker 3: And in the Facebook case, back to Facebook for a minute, 582 00:35:33,560 --> 00:35:36,799 Speaker 3: there were comments that once you let the case go 583 00:35:37,040 --> 00:35:41,360 Speaker 3: forward to the discovery phase where they're exchanging documents, I 584 00:35:41,360 --> 00:35:44,439 Speaker 3: think it was just as Kavanaugh that said game over, 585 00:35:44,920 --> 00:35:49,680 Speaker 3: because then it almost forces the companies to settle the cases. 586 00:35:50,320 --> 00:35:52,759 Speaker 3: And what are the estimates of a settlement in the 587 00:35:52,760 --> 00:35:53,640 Speaker 3: Facebook case. 588 00:35:54,160 --> 00:35:57,839 Speaker 6: Matt Settenhelm, is an analyst at Bloomberg Intelligence, says that 589 00:35:57,880 --> 00:36:00,640 Speaker 6: potentially in the Facebook case, we're talking about billion with 590 00:36:00,760 --> 00:36:06,640 Speaker 6: a B dollars because the amount of the market drop 591 00:36:07,040 --> 00:36:10,839 Speaker 6: was something like two hundred billion dollars, and geralders say 592 00:36:11,280 --> 00:36:15,400 Speaker 6: that was caused in large part by these misleading disclosures, 593 00:36:15,600 --> 00:36:18,880 Speaker 6: So it is potentially a very large sum of money. 594 00:36:19,200 --> 00:36:21,719 Speaker 6: You know, Facebook is such a big company that two 595 00:36:21,719 --> 00:36:23,960 Speaker 6: billion dollars means a little less to them than it 596 00:36:24,000 --> 00:36:27,279 Speaker 6: does to you and me. But that is what you 597 00:36:27,440 --> 00:36:31,239 Speaker 6: hear all the time from the companies that yes, once 598 00:36:31,280 --> 00:36:33,680 Speaker 6: you get past that stage in litigation, once you get 599 00:36:33,680 --> 00:36:36,359 Speaker 6: to the discovery phaise, once the planks have a right 600 00:36:36,400 --> 00:36:40,560 Speaker 6: to start demanding documents and other evidence from you, that's 601 00:36:40,600 --> 00:36:43,800 Speaker 6: when litigation gets really, really expensive, and that's when companies 602 00:36:44,200 --> 00:36:47,360 Speaker 6: have a real incentive to go ahead and settle. 603 00:36:47,719 --> 00:36:51,000 Speaker 3: So we'll wait for Nvidia next. Thanks so much, Greg. 604 00:36:51,200 --> 00:36:55,040 Speaker 3: That's Bloomberg Supreme Court Reporter Greg Store and that's it 605 00:36:55,080 --> 00:36:57,680 Speaker 3: for this edition of the Bloomberg Law Show. Remember you 606 00:36:57,680 --> 00:37:01,239 Speaker 3: can always get the latest legal news on our bloom podcasts. 607 00:37:01,360 --> 00:37:04,399 Speaker 3: You can find them on Apple Podcasts, Spotify, and at 608 00:37:04,560 --> 00:37:09,600 Speaker 3: www dot Bloomberg dot com, slash podcast, Slash Law. I'm 609 00:37:09,640 --> 00:37:12,120 Speaker 3: June Grosso and you're listening to Bloomberg