WEBVTT - NYC Mayor Adams Closer to Having Case Tossed

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<v Speaker 1>This is Bloomberg Law with June Grossel from Bloomberg Radio.

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<v Speaker 2>New York City Mayor Eric Adams was one of four

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<v Speaker 2>Democratic mayors of sanctuary cities who testified before the House

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<v Speaker 2>Oversight Committee last week as the White House threatens to

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<v Speaker 2>pull federal funding from Boston, Chicago, Denver, and New York.

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<v Speaker 2>But the criminal corruption case against Adams took center stage

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<v Speaker 2>as the mayor was grilled by several Democratic lawmakers about

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<v Speaker 2>the allegations that the Justice Department agreed to dismiss the

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<v Speaker 2>charges in return for helping the Trump administration with its

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<v Speaker 2>deportation efforts. Representative Robert Garcia, a Democrat from California, questioned Adams.

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<v Speaker 3>And Mayor Adams, I also want to be very clear,

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<v Speaker 3>are you selling out New Yorkers to save yourself from prosecution?

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<v Speaker 4>No deal, no quick pro qual and I did nothing

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<v Speaker 4>wrong and anything dealing with this case. At a deference

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<v Speaker 4>to Judge Hoe, who's now addressing it, I'm going to

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<v Speaker 4>refer to his actions.

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<v Speaker 3>Well, mister Mary, it appears to me at least that

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<v Speaker 3>you are selling New Yorkers out. It appears that you

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<v Speaker 3>are working with Tom Homan, who is clearly clearly focused

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<v Speaker 3>on family separation and deportations.

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<v Speaker 2>But it appears that Adams is a step closer to

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<v Speaker 2>getting the criminal charges dismissed. Paul Clement, the former US

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<v Speaker 2>Solicitor General appointed by Judge dale Hoe as a friend

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<v Speaker 2>of the Court to advise him, has recommended the case

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<v Speaker 2>be permanently dismissed. Joining me is former federal prosecutor Robert Mintz,

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<v Speaker 2>a partner maccarter In English, Bob explain why Judge Hoe

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<v Speaker 2>appointed Clement.

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<v Speaker 5>Judge dale Hoe took the very unusual step of appointing

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<v Speaker 5>Paul Clement, who had been the US Solicitor JAI during

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<v Speaker 5>the George W. Bush administration and has argued more than

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<v Speaker 5>one hundred cases before the Supreme Court, to give him

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<v Speaker 5>advice with regard to how to handle this dismissal motion,

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<v Speaker 5>essentially based upon his view that he was getting a

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<v Speaker 5>one sided argument. In other words, both the defense lawyer

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<v Speaker 5>and the government in this case were seeking to have

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<v Speaker 5>the indictment dismissed, and the judge wanted to hear the

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<v Speaker 5>other side of the argument. That's why he appointed Paul

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<v Speaker 5>Clement to give him advice as to what issues he

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<v Speaker 5>should be considering. Really, what his options were here. With

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<v Speaker 5>regard to this motion.

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<v Speaker 2>Clement wrote a thirty three page brief in response for

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<v Speaker 2>the judge. One important point was that the executive branch

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<v Speaker 2>is the one that chooses when to prosecute and when

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<v Speaker 2>not to prosecute.

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<v Speaker 5>You're exactly right that Paul Clement did not really get

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<v Speaker 5>into the merits of these arguments from both sides. If

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<v Speaker 5>you were called, the acting Deputy Attorney General had ordered

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<v Speaker 5>the Southern District to dismiss the case, and there were

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<v Speaker 5>a series of prosecutors, including the acting US Attorney at

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<v Speaker 5>the time, who resigned rather than follow that order, saying

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<v Speaker 5>that the reasons for the dismissal were improper, that it

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<v Speaker 5>was about politics and not about the merits of the case.

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<v Speaker 5>But ultimately, mister Clement concluded that the judge here doesn't

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<v Speaker 5>really have much in the way of options. That essentially,

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<v Speaker 5>if the executive branch, meaning the prosecution and the Department

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<v Speaker 5>of Justice, choose to dismiss the case, there's not much

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<v Speaker 5>the judge can do about it. He pointed out that ultimately,

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<v Speaker 5>even if the court were to order the case to

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<v Speaker 5>go forward, the government could simply run out the clock,

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<v Speaker 5>in other words, do nothing with the case. Until there

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<v Speaker 5>was what's called a speedy trial violation, and then the

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<v Speaker 5>defense would move to dismiss the case, so short of

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<v Speaker 5>appointing a special prosecutor, which is rarely done, as it's

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<v Speaker 5>possible that it's not even constitutional to do it. In

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<v Speaker 5>this circumstance, mister Clement recommended to the judge that there's

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<v Speaker 5>really nothing for him to do here but to grant

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<v Speaker 5>the dismissal. And that's why he didn't get into the

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<v Speaker 5>back and forth between the former Southern District prosecutors and

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<v Speaker 5>the Department of Justice as to the motivations behind this

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<v Speaker 5>motion to dismiss the indictment against Mayor Adam.

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<v Speaker 2>Clement didn't discuss the evidence against Adams, the strength of

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<v Speaker 2>the charges against him, he wrote, Private citizens and courts

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<v Speaker 2>can't force a prosecution, no matter how clearly someone has

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<v Speaker 2>violated a federal criminal statute. Of course, the Justice Department

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<v Speaker 2>didn't discuss the evidence when it first ordered the dismissal.

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<v Speaker 5>If you remember, it was made explicit by the acting

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<v Speaker 5>Deputy US Attorney Emo Beauvat that this directive to dismiss

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<v Speaker 5>the case was not done on the merits. He expressly

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<v Speaker 5>said that he was not looking at either the evidence

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<v Speaker 5>or the legal theory behind the case. Now, in a

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<v Speaker 5>more recent in filing by the Department of Justice last Friday,

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<v Speaker 5>they did mention the merits of the case, so they

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<v Speaker 5>have shifted slightly to argue in papers they filed before

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<v Speaker 5>the court that the legal arguments underpinning the bribery charges

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<v Speaker 5>against Mayor Adams, they said, was weak. That is something

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<v Speaker 5>that is within the scope of the Department of Justice

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<v Speaker 5>certainly to consider in deciding whether or not to continue

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<v Speaker 5>to pursue the case. But it really wasn't the driving force,

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<v Speaker 5>and they again reiterated the earlier statement that the prosecution

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<v Speaker 5>of Mayor Adams would interfere with his ability to cooperate

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<v Speaker 5>with this administration moved to crack down on illegal immigration,

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<v Speaker 5>and that really was the basis to seek could dismiss

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<v Speaker 5>the indictment at this time.

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<v Speaker 2>Danielle says Soon in her letter said she was confident

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<v Speaker 2>in the case that the charges against Adams could be

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<v Speaker 2>proved and that's unusual to hear from a prosecutor.

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<v Speaker 6>Yeah.

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<v Speaker 5>In the letter that daniel Soon, the former US Attorney

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<v Speaker 5>for the Southern justic wrote to the Department of Justice

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<v Speaker 5>in response to that directive. She did discuss the merits

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<v Speaker 5>of the case, which is highly unusual. Prosecutors generally do

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<v Speaker 5>not talk about the merits of the case outside of

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<v Speaker 5>the context of the courtum itself. They don't make these

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<v Speaker 5>extra judicial statements. They don't talk about where the case

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<v Speaker 5>might be going. They let all of their talking take

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<v Speaker 5>place inside the courtroom, during legal arguments or in their briefs.

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<v Speaker 5>But she did mention that she believed that the case

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<v Speaker 5>against Mayor Adam was found. She pointed out that the

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<v Speaker 5>investigation had begun many, many years ago, before the outgoing

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<v Speaker 5>US Attorney, Damien Williams, had been involved in the case.

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<v Speaker 5>One of the things that the Department of Justice pointed

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<v Speaker 5>to was an op ed written by Damien Williams as

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<v Speaker 5>soon as he left the position of US Attorney for

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<v Speaker 5>the Southern District, in which he questioned the ethics of

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<v Speaker 5>the aministration. He didn't mention Mayor Adams by name, but

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<v Speaker 5>it was a clear reference to the current administration in

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<v Speaker 5>the sense that he made a comment about the current

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<v Speaker 5>administration having lost its moral compass. The Department of Justice,

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<v Speaker 5>in its filing on Friday, had gone through certain text

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<v Speaker 5>messages and emails from missus soon and from the prosecutor

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<v Speaker 5>who was leading the Adams case, where they commented upon

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<v Speaker 5>the op ed written by Damian Williams and how unhappy

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<v Speaker 5>they were with it, and they thought it was improper

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<v Speaker 5>and they wanted to distance themselves and the case from

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<v Speaker 5>those comments. And the Department of Justice pointed out that

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<v Speaker 5>even the prosecutors who are pursuing the case had some

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<v Speaker 5>questions about whether it was politically motivated, but in the end,

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<v Speaker 5>there was never really a discussion here, as you say,

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<v Speaker 5>about the merits of the case. The decision was made

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<v Speaker 5>simply based on the fact that they thought that the

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<v Speaker 5>prosecution would interfere with the mayor's ability to carry out

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<v Speaker 5>the administration immigration policy, and that that ultimately was enough

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<v Speaker 5>to dismiss the case.

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<v Speaker 2>The judge has concluded that Damian Williams hadn't violated any

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<v Speaker 2>professional obligations in writing the op ed. I mean that

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<v Speaker 2>was done after he left office, so I don't see

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<v Speaker 2>what relevance it has.

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<v Speaker 5>You're exactly right. The judge did conclude that mister Williams

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<v Speaker 5>hadn't violed any professional obligations. Clearly, as prosecutors, it's not

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<v Speaker 5>the kind of thing you want to see out there,

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<v Speaker 5>because it does inject an issue into your case that

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<v Speaker 5>you do not really want to deal with. But in

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<v Speaker 5>the end, as you said, Ms. Bethoon and the prosecutor

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<v Speaker 5>who is leading the case had no question in their

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<v Speaker 5>mind that this was a case that was found both

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<v Speaker 5>legally and based on the evidence, and the Department of

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<v Speaker 5>Justice has not really challenged that in any significant way.

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<v Speaker 5>Their position has been that it is appropriate for them

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<v Speaker 5>to have made the decision to dismiss the case. Now,

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<v Speaker 5>they asked for the case to be dismissed without presudice

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<v Speaker 5>so that it could possibly be reinstated after the election,

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<v Speaker 5>but they wanted the case dismissed so that Mayor Adams

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<v Speaker 5>could continue to focus on his ability to enforce the

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<v Speaker 5>Trump administration's immigration policy.

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<v Speaker 2>There is, i believe, just one line in the thirty

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<v Speaker 2>three pages where Clement says there's evidence that suggests the

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<v Speaker 2>decision to dismiss the indictment was undertaken in bad faith.

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<v Speaker 2>So that's one line dropped there, referring to, you know,

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<v Speaker 2>Emil Beauvey's order to dismiss the indictment being in bad faith.

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<v Speaker 2>Where does the judge weigh that.

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<v Speaker 5>Mister Clement did make mention that the evidence and he's

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<v Speaker 5>quoting here suggests the decision to dismiss the indictment was

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<v Speaker 5>undertaken in bad face. The Department of Justice has made

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<v Speaker 5>the argument that the prosecution was politically motivated. Ultimately, Paul

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<v Speaker 5>Klement decides that the judge does not have the weigh

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<v Speaker 5>in and it's unnecessary for him to determine whether or

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<v Speaker 5>not the case was politically motivated from the start, or

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<v Speaker 5>whether or not this dismissal was motivated by some kind

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<v Speaker 5>of improper political means. Mister Clement said, ultimately it was

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<v Speaker 5>unnecessary for Judge Hoe to settle that dispute.

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<v Speaker 1>Under either view.

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<v Speaker 5>He wrote, there was little justification for allowing a potential

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<v Speaker 5>reindictment of the mayor, and that's why he recommended to

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<v Speaker 5>the judge that he grant the motion to dismiss. But

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<v Speaker 5>unlike what was requested by the Department of Justice, he

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<v Speaker 5>said that that dismissal should be with prejudice. In other words,

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<v Speaker 5>it was going to be dismissed in a way that

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<v Speaker 5>the prosecution could never bring the case down the road,

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<v Speaker 5>and that would eliminate the potential for critics of this

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<v Speaker 5>decision to be able to argue that the Department of

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<v Speaker 5>Justice was trying to have it both ways, was trying

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<v Speaker 5>to have the case dismiss now, but leave the prospect

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<v Speaker 5>of bringing that indictment down the road in order to

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<v Speaker 5>try to continue to influence the mayor to cooperate with

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<v Speaker 5>the Trump administration's immigration policies.

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<v Speaker 2>Stay with me, Bob. Coming up next on the Bloomberg

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<v Speaker 2>Law Show is the judge likely to follow Clement's advice

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<v Speaker 2>and the new LA District Attorney does a one to

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<v Speaker 2>eighty on his predecessor in the Menendez brother's case. I'm

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<v Speaker 2>June Grosso and you're listening to Bloomberg. New York City

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<v Speaker 2>Mayor Eric Adams seems to be one step closer to

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<v Speaker 2>getting the criminal charges against him dismissed. That's because Paul Clement,

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<v Speaker 2>the former US Solicitor General appointed by the judge to

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<v Speaker 2>advise him on the dismissal motion, has recommended the case

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<v Speaker 2>be permanently dismissed. I've been talking to former federal prosecutor

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<v Speaker 2>Robert Mints of Macarter and English. Bob. Clement wrote that

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<v Speaker 2>if the charges weren't dismissed with prejudice, meaning they couldn't

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<v Speaker 2>be brought again, they would hang like the proverbial sort

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<v Speaker 2>of damocles over Adams. But if you have a public

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<v Speaker 2>official who's been charged with corruption and the chargers are

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<v Speaker 2>being dropped for political reasons, why should you give him

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<v Speaker 2>this free reign.

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<v Speaker 5>What I think what mister comment was getting at is

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<v Speaker 5>that one of the reasons that the Southern District Prosecutors

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<v Speaker 5>objected so strenuously to this dismissal is that they argue

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<v Speaker 5>that in meetings with the Defense Council there was discussions

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<v Speaker 5>that amounted to essentially a quid pro quo. In other words,

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<v Speaker 5>there were discussions about the mayor's ability to continue to

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<v Speaker 5>cooperate with the Trump administration in its immigration enforcement policies,

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<v Speaker 5>and whether or not the indictment and the trial that

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<v Speaker 5>would be upcoming would interfere as his ability to do that,

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<v Speaker 5>and in acknowledging that it would that obviously, any criminal

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<v Speaker 5>trial of an elected official is going to take away

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<v Speaker 5>their attention and their time from carrying out their public duties,

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<v Speaker 5>that that was a reason in order to dismiss the

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<v Speaker 5>indictment at this time, the Southern District prosecutor that that

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<v Speaker 5>was essentially a quid pro quot in agreement on the

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<v Speaker 5>part of the mayor to support the Trump administration in

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<v Speaker 5>exchange for a dismissal of the criminal charges, and the

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<v Speaker 5>Department of Justice, I think was responding to that by saying,

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<v Speaker 5>we're not asking for a dismissal that is permanent. We're

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<v Speaker 5>not asking to bar the prosecution forever. We're just saying

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<v Speaker 5>it should be dismissed at this time until after the election.

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<v Speaker 5>And that's why the Department of Justice was asking for

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<v Speaker 5>the dismissal without prejudice. But mister Clement said that the

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<v Speaker 5>quid pro quot that was hanging over this whole dismissal

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<v Speaker 5>was something that could only be eliminated if the dismissal

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<v Speaker 5>was with prejudice, and that way, the argument that the

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<v Speaker 5>mayor would be taking any actions in order to curry

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<v Speaker 5>favor with the Trump administration would be removed because there

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<v Speaker 5>would be no possibility that the Department of Justice could

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<v Speaker 5>indict him down the road if you failed to cooperate

0:13:54.080 --> 0:13:56.679
<v Speaker 5>with the Trump administration's immigration policies.

0:13:56.880 --> 0:13:58.959
<v Speaker 2>I mean talk about a get out of jail free

0:13:59.000 --> 0:14:02.640
<v Speaker 2>card for Adam because he was accused of agreeing to

0:14:02.679 --> 0:14:05.160
<v Speaker 2>a quid pro quote. Now the whole case is going

0:14:05.160 --> 0:14:07.560
<v Speaker 2>to be dropped against him. It doesn't seem like justice

0:14:08.000 --> 0:14:08.880
<v Speaker 2>is being done.

0:14:09.200 --> 0:14:11.079
<v Speaker 5>Well, that's a great question, and I think a lot

0:14:11.080 --> 0:14:14.559
<v Speaker 5>of people are very troubled by this whole scenario. Ultimately,

0:14:14.679 --> 0:14:18.800
<v Speaker 5>mister Clement concluded that the judge's hands were tied, that

0:14:18.920 --> 0:14:22.720
<v Speaker 5>he really had no ability to fight the dismissal. If

0:14:22.720 --> 0:14:26.600
<v Speaker 5>the Department of Justice had decided, almost for whatever reason,

0:14:26.920 --> 0:14:30.120
<v Speaker 5>to dismiss the case, the judge had no choice but

0:14:30.280 --> 0:14:33.160
<v Speaker 5>to do that, but to follow through and to dismiss

0:14:33.200 --> 0:14:37.600
<v Speaker 5>the case. And he even advised against an extensive judicial

0:14:37.680 --> 0:14:41.800
<v Speaker 5>investigation into the Department of Justice and actions. In other words,

0:14:41.920 --> 0:14:44.600
<v Speaker 5>he didn't even think it was necessary for the judge

0:14:44.640 --> 0:14:48.760
<v Speaker 5>to delve into the motivations behind the Department of Justice

0:14:48.760 --> 0:14:52.760
<v Speaker 5>to seek the dismissal, or likewise, the motivation for the

0:14:52.880 --> 0:14:57.280
<v Speaker 5>former Southern District prosecutors for refusing to follow that directive.

0:14:57.760 --> 0:15:01.320
<v Speaker 5>Mister Clement wrote in his submission to the judge, when

0:15:01.360 --> 0:15:06.120
<v Speaker 5>the publicly available information is sufficient to inform judicial decision making,

0:15:06.480 --> 0:15:10.600
<v Speaker 5>there are sound reasons to avoid further inquiries. So he

0:15:10.680 --> 0:15:14.720
<v Speaker 5>basically concluded that nothing good could come of digging into

0:15:14.760 --> 0:15:18.120
<v Speaker 5>this further, and that the judge did not have discretion

0:15:18.280 --> 0:15:21.280
<v Speaker 5>here to refuse to dismiss the case, and there was

0:15:21.400 --> 0:15:24.720
<v Speaker 5>really no reason to get into this dispute between the

0:15:24.760 --> 0:15:28.600
<v Speaker 5>former Southern District prosecutors and the Department of Justice about

0:15:28.800 --> 0:15:32.240
<v Speaker 5>who was right, who was wrong, who was insubordinate, and

0:15:32.360 --> 0:15:36.200
<v Speaker 5>who was acting properly within ethical guidelines and who was

0:15:36.240 --> 0:15:38.200
<v Speaker 5>acting based upon political motivations.

0:15:38.640 --> 0:15:43.200
<v Speaker 2>Adams and his attorneys agreed to sign a paper that

0:15:43.280 --> 0:15:47.400
<v Speaker 2>the charges could be brought against him again, so, in

0:15:47.400 --> 0:15:50.360
<v Speaker 2>other words, that the charges were going to be dismissed

0:15:50.680 --> 0:15:54.440
<v Speaker 2>without prejudice. But now his attorneys have come forward and

0:15:54.520 --> 0:15:59.080
<v Speaker 2>said no, they wanted to be dismissed with prejudice. So

0:15:59.400 --> 0:16:03.040
<v Speaker 2>they're going against what they promised the Justice Department.

0:16:03.640 --> 0:16:06.920
<v Speaker 5>Well, sure. What initially happened was the Department of Justice said,

0:16:06.960 --> 0:16:11.440
<v Speaker 5>we'll dismiss the case against their clients without prejudice, and

0:16:11.560 --> 0:16:14.560
<v Speaker 5>any defense lawyer is going to take that. They'd prefer

0:16:14.640 --> 0:16:17.200
<v Speaker 5>to have it be dismissed with prejudice, but if they

0:16:17.200 --> 0:16:20.080
<v Speaker 5>can only get a dismissal without prejudice, they'll take that

0:16:20.200 --> 0:16:22.880
<v Speaker 5>ruther than have the case go forward. What the Adams

0:16:22.880 --> 0:16:28.080
<v Speaker 5>defense team thereafter argued was that in the fallout from

0:16:28.120 --> 0:16:31.880
<v Speaker 5>this dismissal order, where the Southern District prosecutors had made

0:16:31.960 --> 0:16:35.840
<v Speaker 5>comments about the strength of the case and where the

0:16:35.920 --> 0:16:38.800
<v Speaker 5>Department of Justice had attacked the strength of the case,

0:16:39.040 --> 0:16:41.840
<v Speaker 5>that all of that was highly prejudicial to their clients.

0:16:42.160 --> 0:16:45.000
<v Speaker 5>And now the situation had changed and there was no

0:16:45.080 --> 0:16:47.360
<v Speaker 5>way for Mayor Adams to get a fair trial here,

0:16:47.520 --> 0:16:50.240
<v Speaker 5>and that's why they were seeking dismissal with prejudice.

0:16:50.520 --> 0:16:56.440
<v Speaker 2>So now Judge Ho doesn't have to take Paul Clement's suggestion, right,

0:16:56.480 --> 0:16:57.960
<v Speaker 2>he could decide something else.

0:16:58.720 --> 0:17:01.760
<v Speaker 5>Absolutely, Judge Ho was not legally bound to accept mister

0:17:01.800 --> 0:17:06.120
<v Speaker 5>Clement's recommendation, but he did independently seek out his guidance,

0:17:06.480 --> 0:17:08.920
<v Speaker 5>and it seems likely that he's going to follow the

0:17:09.000 --> 0:17:12.159
<v Speaker 5>recommendation of mister Clement, certainly to the extent that he

0:17:12.240 --> 0:17:16.320
<v Speaker 5>ultimately dismisses the case with prejudice. And I think again

0:17:16.440 --> 0:17:20.240
<v Speaker 5>that resolves the question of the Trump administration or the

0:17:20.280 --> 0:17:24.159
<v Speaker 5>Department of Justice using this dismissal as sort of a

0:17:24.200 --> 0:17:27.879
<v Speaker 5>cudgel hanging over the mayor's head to stay to the mayor,

0:17:27.920 --> 0:17:31.000
<v Speaker 5>in so many words, if you don't follow our directive

0:17:31.080 --> 0:17:33.639
<v Speaker 5>and if you don't cooperate with the immigration policies of

0:17:33.680 --> 0:17:38.000
<v Speaker 5>his administration. There's always the possibility that this indictment comes

0:17:38.040 --> 0:17:40.560
<v Speaker 5>back again, that it gets reinstated, and that you're once

0:17:40.600 --> 0:17:44.680
<v Speaker 5>again facing criminal charges. By dismissing the case with prejudice,

0:17:44.960 --> 0:17:48.160
<v Speaker 5>that threat is essentially eliminated now.

0:17:48.240 --> 0:17:53.439
<v Speaker 2>A watchdog organization, Campaign for Accountability, is calling for an

0:17:53.480 --> 0:17:58.680
<v Speaker 2>investigation into the acting Deputy Attorney General Emil Beauvet's order

0:17:59.080 --> 0:18:03.480
<v Speaker 2>to dismiss the charges, citing potential violations of New York

0:18:03.520 --> 0:18:07.720
<v Speaker 2>Attorney ethics rules and DOJ policies. But that complaint's been

0:18:07.760 --> 0:18:13.639
<v Speaker 2>found with the Office of Professional Responsibility, which Bovey oversees.

0:18:13.760 --> 0:18:17.600
<v Speaker 5>As complicated and unprecedented. As this whole dispute is, I

0:18:17.640 --> 0:18:20.359
<v Speaker 5>don't think it's ultimately going to be resolved in the

0:18:20.359 --> 0:18:24.040
<v Speaker 5>world of ethics complaints. It's something that really goes beyond

0:18:24.119 --> 0:18:29.160
<v Speaker 5>that and really palls into question what motivations and what

0:18:29.280 --> 0:18:33.400
<v Speaker 5>considerations are appropriate for the Department of Justice to take

0:18:33.440 --> 0:18:37.040
<v Speaker 5>into account when deciding whether to prosecute a case in

0:18:37.080 --> 0:18:40.880
<v Speaker 5>the first place, or whether to dismiss an existing prosecution.

0:18:41.840 --> 0:18:47.080
<v Speaker 5>Bear in mind, the prosecutors do routinely engage in a

0:18:47.200 --> 0:18:50.639
<v Speaker 5>quid pro quote in the sense that prosecutors will often

0:18:50.720 --> 0:18:53.840
<v Speaker 5>turn to a defendant who's facing multiple charges and say,

0:18:54.280 --> 0:18:57.040
<v Speaker 5>if you cooperate with us, we will recommend a lesser

0:18:57.119 --> 0:19:00.800
<v Speaker 5>sentence to the court, or we will dismiss nine of

0:19:00.840 --> 0:19:04.600
<v Speaker 5>the ten charges against you. That is, in some sense

0:19:04.800 --> 0:19:07.520
<v Speaker 5>a quid pro quo, and that you're saying that if

0:19:07.560 --> 0:19:11.400
<v Speaker 5>you cooperate in the criminal investigation, which means provide evidence

0:19:11.440 --> 0:19:14.879
<v Speaker 5>about other crimes about other individuals, agree to testify at

0:19:14.880 --> 0:19:18.480
<v Speaker 5>the trial. In some cases it amounts to wearing a

0:19:18.560 --> 0:19:22.879
<v Speaker 5>wire and recording conversations. That is a tool prosecutors used

0:19:23.080 --> 0:19:27.720
<v Speaker 5>all the time. It is incredibly common and almost invariably

0:19:27.760 --> 0:19:31.680
<v Speaker 5>happens in every criminal case where there is a cooperating witness.

0:19:31.800 --> 0:19:33.840
<v Speaker 5>That could be somebody who agrees to cooperate at the

0:19:33.840 --> 0:19:36.760
<v Speaker 5>beginning of an investigation, or it could be somebody who

0:19:36.800 --> 0:19:40.800
<v Speaker 5>only agrees to cooperate after they're facing criminal charges themselves.

0:19:40.960 --> 0:19:44.280
<v Speaker 5>But the difference between what's happened here and that type

0:19:44.280 --> 0:19:47.239
<v Speaker 5>of quid pro quo arrangement, if you want to call it,

0:19:47.280 --> 0:19:51.679
<v Speaker 5>that is that the cooperation is limited to the ability

0:19:51.840 --> 0:19:54.800
<v Speaker 5>of the defendant or the person who might be charged

0:19:55.160 --> 0:19:59.400
<v Speaker 5>to further the interests of the investigation itself. It's their

0:19:59.440 --> 0:20:03.440
<v Speaker 5>ability to to help prosecutors make their case or expand

0:20:03.480 --> 0:20:06.639
<v Speaker 5>their prosecution. What we're seeing here is a Department of

0:20:06.800 --> 0:20:10.159
<v Speaker 5>Justice staying to a defendant that we are willing to

0:20:10.280 --> 0:20:13.639
<v Speaker 5>trade away a criminal case, not because you confer the

0:20:13.680 --> 0:20:18.600
<v Speaker 5>criminal investigation, but for some other political reason that advances

0:20:18.640 --> 0:20:22.320
<v Speaker 5>the ends of the administration. That's something we've really never

0:20:22.359 --> 0:20:24.840
<v Speaker 5>seen before, and we're now going to have to see

0:20:24.840 --> 0:20:28.119
<v Speaker 5>whether that becomes commonplace for the Department of Justice in

0:20:28.240 --> 0:20:30.359
<v Speaker 5>handling political corruption prosecution.

0:20:31.080 --> 0:20:36.119
<v Speaker 2>Do you think Clement's recommendation was more about practicalities than

0:20:36.200 --> 0:20:36.920
<v Speaker 2>about the law.

0:20:37.720 --> 0:20:42.600
<v Speaker 5>Ultimately, mister Clement's recommendation to the judge was really more

0:20:42.680 --> 0:20:46.040
<v Speaker 5>practical than it was legal, in the sense that each

0:20:46.119 --> 0:20:49.880
<v Speaker 5>side got something of a partial victory. The government will

0:20:49.880 --> 0:20:55.000
<v Speaker 5>get its dismissal, albeit with prejudice. And those who were

0:20:55.040 --> 0:20:59.760
<v Speaker 5>concerned about the threat that reindictment might mean for the

0:20:59.800 --> 0:21:03.520
<v Speaker 5>man and how that might color his political decisions and

0:21:03.600 --> 0:21:05.879
<v Speaker 5>how he serves his constituents as the mayor of New

0:21:05.960 --> 0:21:08.720
<v Speaker 5>York going forward, whether or not to cooperate with the

0:21:08.800 --> 0:21:13.280
<v Speaker 5>Trump administration's immigration policies or not. They get a victory

0:21:13.359 --> 0:21:17.520
<v Speaker 5>because that has been removed by the dismissal with prejudice.

0:21:17.640 --> 0:21:21.119
<v Speaker 5>So no longer is there the continuing threat to reindict

0:21:21.160 --> 0:21:24.160
<v Speaker 5>the mayor if he doesn't cooperate. So what mister Clment

0:21:24.280 --> 0:21:28.000
<v Speaker 5>really did here is he told the judge number one,

0:21:28.040 --> 0:21:31.280
<v Speaker 5>you've got no practical solution here but to follow the

0:21:31.320 --> 0:21:35.040
<v Speaker 5>Department of Justices requests that the case be dismissed. But

0:21:35.160 --> 0:21:38.560
<v Speaker 5>in terms of how you effectuate that dismissal, we're going

0:21:38.600 --> 0:21:41.360
<v Speaker 5>to do something that really gives each side a bit

0:21:41.400 --> 0:21:44.880
<v Speaker 5>of victory. The government gets this dismissal. Those who are

0:21:44.880 --> 0:21:48.240
<v Speaker 5>concerned about the quid pro core arrangement no longer has

0:21:48.240 --> 0:21:51.400
<v Speaker 5>to worry about that because that threat has effectively been

0:21:51.440 --> 0:21:53.920
<v Speaker 5>removed by the dismissal with prejudice.

0:21:54.000 --> 0:21:58.399
<v Speaker 2>This case got very complicated, very fast. Thanks so much, Bob.

0:21:58.800 --> 0:22:02.080
<v Speaker 2>That's Robert mens I'm maccarter and English. In other legal

0:22:02.119 --> 0:22:06.080
<v Speaker 2>news today, the new district attorney in Los Angeles is

0:22:06.119 --> 0:22:09.399
<v Speaker 2>doing a one to eighty on his predecessor. He's not

0:22:09.680 --> 0:22:14.000
<v Speaker 2>advocating for the resentencing of Eric and Lyle Menendez. The

0:22:14.000 --> 0:22:17.199
<v Speaker 2>Menendez brothers have served more than thirty five years of

0:22:17.240 --> 0:22:19.800
<v Speaker 2>a life sentence for the murder of their parents.

0:22:20.359 --> 0:22:20.600
<v Speaker 6>D A.

0:22:20.760 --> 0:22:24.399
<v Speaker 2>Nathan Hackman said he believes the Menendez brothers do not

0:22:24.520 --> 0:22:27.840
<v Speaker 2>meet the threshold to be released from prison, and that

0:22:27.880 --> 0:22:31.520
<v Speaker 2>they've lied numerous times about the case and the timeline

0:22:31.680 --> 0:22:33.360
<v Speaker 2>leading up to their parents' murders.

0:22:34.119 --> 0:22:38.639
<v Speaker 6>While the Menendez brothers persist in telling these lies for

0:22:38.720 --> 0:22:42.480
<v Speaker 6>the last over thirty years about their self defense defense

0:22:43.080 --> 0:22:46.680
<v Speaker 6>and persist in insisting that they did not suborn any

0:22:46.760 --> 0:22:50.760
<v Speaker 6>perjury or attempt to suborn perjury, then they do not

0:22:50.960 --> 0:22:54.280
<v Speaker 6>meet the standards for Reed's sentencingke.

0:22:54.480 --> 0:22:58.359
<v Speaker 2>Hawkman also said the brothers pose an unreasonable risk of

0:22:58.480 --> 0:23:02.240
<v Speaker 2>danger to the community, but if they come clean, he'll

0:23:02.280 --> 0:23:03.200
<v Speaker 2>reconsider his.

0:23:03.200 --> 0:23:09.119
<v Speaker 6>Position unequivocal sincere acknowledgments of all the lives they have

0:23:09.280 --> 0:23:11.840
<v Speaker 6>told for the past over thirty years.

0:23:12.359 --> 0:23:16.880
<v Speaker 2>Family members of the brothers criticized Hawkmann's assertion that they

0:23:17.000 --> 0:23:21.359
<v Speaker 2>don't meet the standards for resentencing Tomorrow. Goodall is a cousin.

0:23:21.800 --> 0:23:25.159
<v Speaker 4>They have always taken ownership of what they chose to

0:23:25.200 --> 0:23:28.360
<v Speaker 4>do given the circumstances of what went on in their

0:23:28.359 --> 0:23:30.159
<v Speaker 4>household as they grow up as a family.

0:23:30.200 --> 0:23:31.720
<v Speaker 1>We believe that they have served their time.

0:23:32.160 --> 0:23:36.040
<v Speaker 2>The resentencing hearing granted by the judge will go forward

0:23:36.160 --> 0:23:41.000
<v Speaker 2>later in March. In addition to pursuing resentencing, the Menendez

0:23:41.040 --> 0:23:45.639
<v Speaker 2>brothers have also submitted a clemency plea to California Governor

0:23:45.680 --> 0:23:48.800
<v Speaker 2>Gavin Newsom. Coming up next on the Bloomberg Law Show,

0:23:49.359 --> 0:23:53.720
<v Speaker 2>a courtroom showdown between Pirella Weinberg Partners and a group

0:23:53.760 --> 0:23:57.640
<v Speaker 2>of former partners who were fired a decade ago. I'm

0:23:57.720 --> 0:24:02.520
<v Speaker 2>June Grosso. When you're listening to Bloomberg. The courtrooms showdown

0:24:02.560 --> 0:24:06.800
<v Speaker 2>between Parrella Weinberg Partners and a group of former partners

0:24:06.880 --> 0:24:10.119
<v Speaker 2>who were fired a decade ago has shown the gulf

0:24:10.160 --> 0:24:14.800
<v Speaker 2>between M and A bankers and restructuring bankers. Parrella Weinberg

0:24:14.920 --> 0:24:19.040
<v Speaker 2>claims that Michael Kramer and three others violated their partnership

0:24:19.080 --> 0:24:23.320
<v Speaker 2>agreement by soliciting most of its restructuring group to leave

0:24:23.440 --> 0:24:27.480
<v Speaker 2>in twenty fifteen, and subsequently launched the firm of Dussera,

0:24:28.119 --> 0:24:31.879
<v Speaker 2>costing it tens of millions in lost fees. Kramer and

0:24:31.920 --> 0:24:36.000
<v Speaker 2>his team claimed they were unjustly fired and denied sixty

0:24:36.000 --> 0:24:39.600
<v Speaker 2>million dollars in with hell compensation. Joining me is Bloomberg

0:24:39.680 --> 0:24:43.800
<v Speaker 2>legal reporter chrys Do Mesh tell us about Joseph Perella

0:24:43.960 --> 0:24:47.959
<v Speaker 2>and Peter Weinberg. You described them as two Harvard Business

0:24:47.960 --> 0:24:51.320
<v Speaker 2>School graduates who became Wall Street Royalty.

0:24:52.480 --> 0:24:56.760
<v Speaker 1>I don't think a lot of people are necessarily aware of,

0:24:57.040 --> 0:25:00.439
<v Speaker 1>you know, how important some of these boutique investments are.

0:25:01.640 --> 0:25:04.040
<v Speaker 1>You know, even though they don't have a real high profile,

0:25:05.160 --> 0:25:08.160
<v Speaker 1>they have their hands in a lot of deals. They're

0:25:08.200 --> 0:25:12.040
<v Speaker 1>well known, and you know, they just know a lot

0:25:12.119 --> 0:25:15.879
<v Speaker 1>about Wall Street in terms of what's going on with business,

0:25:16.200 --> 0:25:18.640
<v Speaker 1>who's making deals, you know, who's in trouble, that sort

0:25:18.680 --> 0:25:22.040
<v Speaker 1>of thing. They're advising on M and A and restructuring.

0:25:22.440 --> 0:25:25.960
<v Speaker 1>You know, the two founders of the company are pretty

0:25:26.040 --> 0:25:29.040
<v Speaker 1>legendary bankers. I mean, Joe Perella was he was head

0:25:29.080 --> 0:25:34.040
<v Speaker 1>of of Morgan's Stanley's, you know, investment banking at one point,

0:25:34.240 --> 0:25:37.280
<v Speaker 1>and Peter Weinberg was HEO Goldman Sachs. So these are

0:25:37.320 --> 0:25:40.680
<v Speaker 1>you know, these guys came from very large banks. But

0:25:40.840 --> 0:25:43.760
<v Speaker 1>around two thousand and six they set up their own

0:25:44.240 --> 0:25:47.719
<v Speaker 1>boutique kind of firm together that you know, and almost

0:25:47.720 --> 0:25:51.920
<v Speaker 1>immediately they bought this firm, Kramer Capital, which is the

0:25:52.440 --> 0:25:56.120
<v Speaker 1>firm of Mike Kramer, who they later fired in twenty fifteen,

0:25:56.240 --> 0:25:59.880
<v Speaker 1>for allegedly starting, you know, conspiring to form his own

0:26:00.280 --> 0:26:02.720
<v Speaker 1>with a bunch of bankers from Parola Weinberg, and that's

0:26:02.760 --> 0:26:03.840
<v Speaker 1>what led to this trial.

0:26:04.920 --> 0:26:10.159
<v Speaker 2>Were these sort of two separate businesses within the firm.

0:26:10.000 --> 0:26:12.200
<v Speaker 1>Not really they were all partners, but you know, some

0:26:12.280 --> 0:26:14.919
<v Speaker 1>partners were responsible for certain areas of the business and

0:26:14.960 --> 0:26:17.600
<v Speaker 1>some were responsible for others. Mike Kramer was brought in

0:26:18.400 --> 0:26:22.520
<v Speaker 1>surely as a restructuring banker really because he knew that business.

0:26:22.880 --> 0:26:25.400
<v Speaker 1>He had done it at other places like cool Hand

0:26:25.480 --> 0:26:29.720
<v Speaker 1>and Green Hill, and you know, he was he was

0:26:29.760 --> 0:26:33.119
<v Speaker 1>well known in that that niche kind of business. So

0:26:33.640 --> 0:26:35.359
<v Speaker 1>in effect it was kind of a hedge in a

0:26:35.359 --> 0:26:37.480
<v Speaker 1>lot of ways, because you know, there's the m and

0:26:37.520 --> 0:26:41.640
<v Speaker 1>a business where you know, they consult companies on companies

0:26:41.640 --> 0:26:45.920
<v Speaker 1>they're buying and acquisitions, and you know, everybody gets together

0:26:46.000 --> 0:26:48.440
<v Speaker 1>and congratulates so other when it's done. But they also

0:26:48.560 --> 0:26:51.160
<v Speaker 1>have on the other hand, these restructuring bankers who put

0:26:51.200 --> 0:26:54.080
<v Speaker 1>the company's really in trouble. You know, they come along

0:26:54.119 --> 0:26:55.840
<v Speaker 1>and they roll up their sleeves and they kind of

0:26:55.840 --> 0:26:59.600
<v Speaker 1>helped them along. So they are distinct pieces of the business.

0:26:59.760 --> 0:27:02.240
<v Speaker 1>But you know, they all kind of are contributing to

0:27:02.280 --> 0:27:02.960
<v Speaker 1>the same pot.

0:27:03.800 --> 0:27:08.840
<v Speaker 2>So Kramer when he testified, said that the restructuring team

0:27:08.960 --> 0:27:12.520
<v Speaker 2>was a revenue engine that was subsidizing the M and

0:27:12.560 --> 0:27:13.000
<v Speaker 2>A group.

0:27:13.320 --> 0:27:15.480
<v Speaker 1>Yeah, so they felt that in some of the lean

0:27:15.600 --> 0:27:18.399
<v Speaker 1>times when M and A wasn't as big, you know,

0:27:18.600 --> 0:27:21.720
<v Speaker 1>especially after the financial crisis and things like that, the

0:27:22.240 --> 0:27:27.120
<v Speaker 1>restructuring group was bringing in lots of money and helping

0:27:27.240 --> 0:27:30.080
<v Speaker 1>shore up the revenues in a way that the M

0:27:30.119 --> 0:27:32.920
<v Speaker 1>and A wasn't bringing in. And I think the way

0:27:33.040 --> 0:27:35.000
<v Speaker 1>that the restructuring group looked at it in a lot

0:27:35.000 --> 0:27:38.639
<v Speaker 1>of ways that they were kind of scrappy entrepreneur like,

0:27:38.720 --> 0:27:40.760
<v Speaker 1>you know, they had built up the business at a

0:27:40.880 --> 0:27:43.560
<v Speaker 1>small shop. They were willing to go in and get

0:27:43.560 --> 0:27:45.879
<v Speaker 1>their hands dirty, and a lot of these kind of partners,

0:27:46.880 --> 0:27:50.440
<v Speaker 1>you know, weren't driven by production. The results didn't necessarily

0:27:51.040 --> 0:27:53.960
<v Speaker 1>line up with what, at least Kramer thought that they should.

0:27:54.400 --> 0:27:56.920
<v Speaker 1>So he was always constantly trying to get the business

0:27:56.920 --> 0:27:59.480
<v Speaker 1>to improve, trying to get more revenue in, trying to

0:27:59.480 --> 0:28:02.480
<v Speaker 1>find new ways of getting business in. And he had

0:28:02.520 --> 0:28:03.040
<v Speaker 1>a lot to.

0:28:03.040 --> 0:28:05.199
<v Speaker 2>Say, you know, I thought it was interesting that he

0:28:05.480 --> 0:28:10.359
<v Speaker 2>talked about the different attitudes of the two groups, right.

0:28:10.280 --> 0:28:12.480
<v Speaker 1>I mean, you know, these are guys who go in

0:28:12.560 --> 0:28:15.119
<v Speaker 1>when companies are in a lot of trouble, you know,

0:28:15.240 --> 0:28:19.600
<v Speaker 1>talk frank to them. They're well respected for their ability

0:28:19.680 --> 0:28:22.800
<v Speaker 1>to kind of counsel these companies through very troubled times.

0:28:23.000 --> 0:28:25.399
<v Speaker 1>You know, things are very tense. It's you have to

0:28:25.440 --> 0:28:28.160
<v Speaker 1>be able to kind of talk to these guys when

0:28:28.200 --> 0:28:31.240
<v Speaker 1>they're in that position. And you know, they had the

0:28:31.280 --> 0:28:34.639
<v Speaker 1>former general counsel of Montanto come in and say he

0:28:34.720 --> 0:28:37.919
<v Speaker 1>had hired them kind of exclusively to get access to

0:28:38.000 --> 0:28:40.840
<v Speaker 1>Mike Kramer and his group, and he was pretty upset

0:28:40.880 --> 0:28:43.479
<v Speaker 1>that they had gotten rid of them. So, you know,

0:28:43.520 --> 0:28:47.440
<v Speaker 1>it's a very interesting relationship when it comes to the

0:28:47.480 --> 0:28:50.440
<v Speaker 1>way that they do restructuring and how they speak to

0:28:50.480 --> 0:28:52.960
<v Speaker 1>these companies because they're in big trouble when when they

0:28:53.000 --> 0:28:53.880
<v Speaker 1>generally are there.

0:28:54.440 --> 0:28:56.920
<v Speaker 2>Did Kramer say they had different backgrounds?

0:28:57.240 --> 0:28:59.200
<v Speaker 1>I mean, that wasn't like the whole focus, but there

0:28:59.240 --> 0:29:02.640
<v Speaker 1>was definitely a thread that you know, there were these

0:29:02.720 --> 0:29:05.920
<v Speaker 1>kind of pedigreed bankers who had worked at these big

0:29:05.960 --> 0:29:08.720
<v Speaker 1>places on Wall Street, you know, and didn't really come

0:29:08.760 --> 0:29:12.320
<v Speaker 1>from this kind of entrepreneurial roll your sleeves up and

0:29:12.400 --> 0:29:14.760
<v Speaker 1>kind of work with the company's kind of attitude That

0:29:14.920 --> 0:29:17.720
<v Speaker 1>was definitely something that they felt like. Kramer went to

0:29:17.760 --> 0:29:21.880
<v Speaker 1>cal State Northridge. You know, he's he's well known at

0:29:21.880 --> 0:29:25.480
<v Speaker 1>that school for being, you know, an unusual for going

0:29:25.480 --> 0:29:28.400
<v Speaker 1>to Wall Street and being such a prominent deal maker.

0:29:29.080 --> 0:29:31.280
<v Speaker 1>So I think there was just a little bit of

0:29:32.120 --> 0:29:35.880
<v Speaker 1>tension between you know, what they did and you know,

0:29:36.040 --> 0:29:39.880
<v Speaker 1>having these big names on the door and being in

0:29:39.920 --> 0:29:40.760
<v Speaker 1>conflict with them.

0:29:41.320 --> 0:29:43.800
<v Speaker 2>Was Kramer unhappy with the amount of money that he

0:29:43.960 --> 0:29:47.600
<v Speaker 2>was making, because apparently he made one hundred million dollars

0:29:47.680 --> 0:29:50.600
<v Speaker 2>during his time at the firm, which was less than

0:29:50.640 --> 0:29:51.520
<v Speaker 2>ten years.

0:29:52.040 --> 0:29:54.480
<v Speaker 1>What he said was he never asked for more money.

0:29:54.520 --> 0:29:58.000
<v Speaker 1>He said he was not necessarily happy with his compensation.

0:29:58.120 --> 0:30:00.120
<v Speaker 1>He felt like he should have been paid more. He

0:30:00.240 --> 0:30:02.360
<v Speaker 1>clearly wanted to be a bigger part of the firm.

0:30:02.520 --> 0:30:05.600
<v Speaker 1>He was at one point co head of the advisory business,

0:30:05.600 --> 0:30:08.160
<v Speaker 1>but they took him out of several managerial positions because

0:30:08.160 --> 0:30:11.680
<v Speaker 1>they kind of felt that his personality kind of graded

0:30:11.720 --> 0:30:15.160
<v Speaker 1>on others at the firm. But to his team, that

0:30:15.280 --> 0:30:18.440
<v Speaker 1>personality was necessary for the way he did business and

0:30:19.040 --> 0:30:22.000
<v Speaker 1>necessary to do restructuring and that kind of nitty gritty

0:30:22.120 --> 0:30:23.440
<v Speaker 1>kind of corporate work.

0:30:23.800 --> 0:30:26.480
<v Speaker 2>What did Perella and Weinberg say when they were on

0:30:26.520 --> 0:30:27.880
<v Speaker 2>the stand, So.

0:30:27.880 --> 0:30:31.000
<v Speaker 1>Weinberg was first. He was pretty matter of fact, he

0:30:31.080 --> 0:30:33.960
<v Speaker 1>was very upset, you know, at learning that they had

0:30:34.000 --> 0:30:38.560
<v Speaker 1>had a meeting at Kramer's house in January twenty fifteen.

0:30:39.160 --> 0:30:43.600
<v Speaker 1>Pirella Weinberg says that meeting was ostensibly to form the

0:30:43.600 --> 0:30:46.520
<v Speaker 1>new firm, to decide on, you know, how the revenue

0:30:46.520 --> 0:30:49.480
<v Speaker 1>would be distributed in equity and that sort of thing.

0:30:50.000 --> 0:30:52.720
<v Speaker 1>Kramer and the others testified that this was more of

0:30:52.760 --> 0:30:56.120
<v Speaker 1>a gripe session just because they were all so unhappy

0:30:56.120 --> 0:30:58.800
<v Speaker 1>at the end of the year in twenty fourteen. So

0:30:58.960 --> 0:31:01.360
<v Speaker 1>really what happened that meaning is kind of the heart

0:31:01.400 --> 0:31:04.280
<v Speaker 1>of what the judge has to decide here. He didn't

0:31:04.280 --> 0:31:06.520
<v Speaker 1>necessarily tip his hand, you know, you have to be

0:31:06.560 --> 0:31:10.160
<v Speaker 1>careful about the way you interpret judges comments during a

0:31:10.200 --> 0:31:13.240
<v Speaker 1>trial or before they've put out an opinion. But he

0:31:13.320 --> 0:31:15.800
<v Speaker 1>clearly said that he thought that Mike Kramer kind of

0:31:15.840 --> 0:31:19.720
<v Speaker 1>had a greater duty as a partner and as head

0:31:19.760 --> 0:31:24.120
<v Speaker 1>of this group to kind of avoid having meetings like

0:31:24.160 --> 0:31:27.680
<v Speaker 1>that that at the very least the appearance of it

0:31:27.840 --> 0:31:30.320
<v Speaker 1>was problematic is the word he used.

0:31:30.520 --> 0:31:34.560
<v Speaker 2>They fired him for cause what was the cause.

0:31:35.080 --> 0:31:40.000
<v Speaker 1>The cause was violating the solicitation the non solicitation covenants

0:31:40.080 --> 0:31:43.720
<v Speaker 1>of his contract with the firm. He was not supposed

0:31:43.760 --> 0:31:48.840
<v Speaker 1>to solicit any clients or any other employees of the firm.

0:31:49.120 --> 0:31:50.640
<v Speaker 1>If he was fired for cause, he would have had

0:31:50.640 --> 0:31:53.000
<v Speaker 1>garden leave, which would have taken, you know, probably up

0:31:53.000 --> 0:31:55.160
<v Speaker 1>to a year or something like that. They say he

0:31:55.320 --> 0:31:58.040
<v Speaker 1>was soliciting employees all the way back in October of

0:31:58.040 --> 0:31:59.080
<v Speaker 1>twenty fourteen.

0:31:59.400 --> 0:32:02.280
<v Speaker 2>How many were fired with him.

0:32:02.040 --> 0:32:05.440
<v Speaker 1>So terminated for cause. There were three others, two partners

0:32:05.480 --> 0:32:08.800
<v Speaker 1>and a managing director who had worked on the thing,

0:32:09.240 --> 0:32:12.560
<v Speaker 1>all of whom went to his new firm eventually, and

0:32:12.640 --> 0:32:15.360
<v Speaker 1>a bunch of managing directors quit right after they were

0:32:15.440 --> 0:32:18.920
<v Speaker 1>terminated for cause, most of whom also went to his

0:32:18.960 --> 0:32:22.560
<v Speaker 1>new firm. Parella is suing Essentially, they want to keep

0:32:23.160 --> 0:32:26.240
<v Speaker 1>the deferred compensation and equity that was taken from them,

0:32:26.400 --> 0:32:30.120
<v Speaker 1>but they also want damages above and beyond that. But

0:32:30.200 --> 0:32:33.960
<v Speaker 1>they also want punitive damages. But that does not seem

0:32:34.000 --> 0:32:37.000
<v Speaker 1>to be something the judge is considering, given that he

0:32:37.120 --> 0:32:40.479
<v Speaker 1>said a lot of this was of the firm' zone creation.

0:32:40.840 --> 0:32:46.360
<v Speaker 1>The other side claims defamation interference with prospective employment prospects.

0:32:46.680 --> 0:32:47.280
<v Speaker 5>Is it just.

0:32:47.280 --> 0:32:51.080
<v Speaker 2>About this particular incident or does it show anything larger

0:32:51.160 --> 0:32:54.280
<v Speaker 2>about you know, boutique investment banks.

0:32:54.320 --> 0:32:57.280
<v Speaker 1>And I think it kind of opens a window and

0:32:57.400 --> 0:33:00.000
<v Speaker 1>kind of just you know, the turmoil that can take place,

0:33:00.800 --> 0:33:05.040
<v Speaker 1>you know, when there are difficult you know, compensation conversations

0:33:05.520 --> 0:33:10.080
<v Speaker 1>and conversations about you know, between partners and management about

0:33:10.320 --> 0:33:13.120
<v Speaker 1>who's gonna run what. It doesn't really matter whether it's

0:33:13.120 --> 0:33:16.440
<v Speaker 1>an investment a big investment bank or a boutique. You know,

0:33:16.520 --> 0:33:19.800
<v Speaker 1>on Wall Street, you have big personalities. They clash and

0:33:19.840 --> 0:33:23.920
<v Speaker 1>when they clash like that, things get tense and can

0:33:24.000 --> 0:33:26.040
<v Speaker 1>kind of break down a little bit. And this is

0:33:26.120 --> 0:33:30.200
<v Speaker 1>like an extreme example of you know, you can see

0:33:30.240 --> 0:33:32.760
<v Speaker 1>a ten year old fight that in terms of the

0:33:32.800 --> 0:33:35.960
<v Speaker 1>amount of money here and you know, Wall Street, this

0:33:36.080 --> 0:33:38.920
<v Speaker 1>is not this is not a huge chunk of change, right.

0:33:39.040 --> 0:33:41.680
<v Speaker 1>I mean, we talk about a lot of money on

0:33:41.720 --> 0:33:45.280
<v Speaker 1>Wall Street all the time. But what's most interesting about

0:33:45.280 --> 0:33:48.360
<v Speaker 1>this is that these people are so upset with each

0:33:48.360 --> 0:33:52.320
<v Speaker 1>other that they are willing to, you know, over a

0:33:52.400 --> 0:33:56.640
<v Speaker 1>month without a jewelry. Ten years after the fact, still

0:33:56.720 --> 0:34:00.640
<v Speaker 1>their gripes on the stand. And you know whether or

0:34:00.720 --> 0:34:03.920
<v Speaker 1>not one side wins or loses. I don't know, you know,

0:34:04.040 --> 0:34:06.600
<v Speaker 1>I'm sure they will claim victory. But in the end,

0:34:06.920 --> 0:34:10.920
<v Speaker 1>like this is, this is a feud, and this finally

0:34:11.040 --> 0:34:13.719
<v Speaker 1>kind of gave them both sides. I mean, look, of

0:34:13.719 --> 0:34:15.400
<v Speaker 1>course both sides are going to say they want to

0:34:15.400 --> 0:34:17.160
<v Speaker 1>win the case. Of course they wouldn't win the case.

0:34:17.719 --> 0:34:20.680
<v Speaker 1>But in a lot of ways you could just see,

0:34:21.280 --> 0:34:24.400
<v Speaker 1>you know that these both sides of this wanted to

0:34:24.560 --> 0:34:26.520
<v Speaker 1>clear the air and at least, you know, get up

0:34:26.560 --> 0:34:29.919
<v Speaker 1>in public and make their you know, make their side known.

0:34:30.440 --> 0:34:32.800
<v Speaker 2>Why did it take ten years to come to trial?

0:34:33.480 --> 0:34:36.520
<v Speaker 1>Well, that's a that's a story of New York State

0:34:36.600 --> 0:34:41.680
<v Speaker 1>Court and a judge that there was another judge that

0:34:41.800 --> 0:34:45.280
<v Speaker 1>was on it. There are a number of appellate rulings

0:34:45.320 --> 0:34:48.080
<v Speaker 1>in the case. It can just take a long time

0:34:49.000 --> 0:34:52.000
<v Speaker 1>for these cases to go to trial. And it would

0:34:52.000 --> 0:34:54.920
<v Speaker 1>have gone to trial actually last year and kind of

0:34:55.040 --> 0:34:58.239
<v Speaker 1>the last minute. The partners Kramer and all wanted a

0:34:58.440 --> 0:35:01.040
<v Speaker 1>wanted a jury trial, and that eventually was shut down.

0:35:01.520 --> 0:35:03.359
<v Speaker 1>So now it's just up to Judge Robert Reid.

0:35:04.600 --> 0:35:07.160
<v Speaker 2>How did they shoot down the jury trail? As far

0:35:07.200 --> 0:35:10.000
<v Speaker 2>as the testimony over a month, what was the testimony

0:35:10.040 --> 0:35:11.120
<v Speaker 2>that struck you the most.

0:35:11.600 --> 0:35:14.920
<v Speaker 1>You know, it was all very interesting. Mike Ramer's was

0:35:15.000 --> 0:35:18.760
<v Speaker 1>probably the most informative of you know. Of course, Perrella

0:35:18.880 --> 0:35:21.719
<v Speaker 1>will claim that he lied throughout the time on the

0:35:21.760 --> 0:35:24.279
<v Speaker 1>stand that this was, you know, an effort to form

0:35:24.320 --> 0:35:29.239
<v Speaker 1>a new firm. Mike consistently said, no, we were just unhappy.

0:35:29.400 --> 0:35:32.799
<v Speaker 1>You know, we hadn't taken any of the real necessary

0:35:32.840 --> 0:35:34.960
<v Speaker 1>steps to form a new firm, like setting up an

0:35:35.160 --> 0:35:37.280
<v Speaker 1>LLC or any of the you know, kind of technical

0:35:37.360 --> 0:35:39.800
<v Speaker 1>things that needed to be done. But there was clearly

0:35:40.160 --> 0:35:43.200
<v Speaker 1>moves being made of some sort. Whether or not they

0:35:43.280 --> 0:35:46.759
<v Speaker 1>violated the four corners of their contract, you know, it's

0:35:46.840 --> 0:35:49.759
<v Speaker 1>really goes as to whether or not they actually violated

0:35:49.840 --> 0:35:52.719
<v Speaker 1>this clause or this provision, and that's that's a very

0:35:52.760 --> 0:35:55.160
<v Speaker 1>difficult question that really has to be done with an

0:35:55.160 --> 0:35:56.440
<v Speaker 1>analysis of the document.

0:35:56.760 --> 0:36:00.200
<v Speaker 2>And the trial ends with closing arguments on Friday, then

0:36:00.200 --> 0:36:03.360
<v Speaker 2>it will be up to the judge. Thanks so much, Chris.

0:36:03.560 --> 0:36:06.880
<v Speaker 2>That's Bloomberg Legal reporter Chris dol Mesh, And that's it

0:36:06.920 --> 0:36:09.520
<v Speaker 2>for this edition of the Bloomberg Law Show. Remember you

0:36:09.520 --> 0:36:12.000
<v Speaker 2>can always get the latest legal news on our Bloomberg

0:36:12.080 --> 0:36:15.719
<v Speaker 2>Law podcast. You can find them on Apple Podcasts, Spotify,

0:36:15.920 --> 0:36:20.919
<v Speaker 2>and at www dot bloomberg dot com, slash podcast, Slash Law,

0:36:21.360 --> 0:36:23.920
<v Speaker 2>and remember to tune into The Bloomberg Law Show every

0:36:23.960 --> 0:36:27.880
<v Speaker 2>weeknight at ten pm Wall Street Time. I'm June Grosso

0:36:28.000 --> 0:36:29.600
<v Speaker 2>and you're listening to Bloomberg