Speaker 1: This is Bloomberg Law with June Grassoe from Bloomberg Radio.
Speaker 1: You may remember back in six when Prett Barrara, then
Speaker 1: the U S. Attorney for the Southern District of New York,
Speaker 1: issued a warning to Wall Street Today, tomorrow, next week,
Speaker 1: the week after cribbleged Wall Street insiders who are considering
Speaker 1: breaking the law will have to ask themselves an important
Speaker 1: question is law enforcement listening? A slew of insider trading
Speaker 1: convictions followed cementing Barrara's nickname as the Sheriff of Wall Street.
Speaker 1: But the sheriff is gone and the Trump administration is
Speaker 1: apparently not interested in filling the position. The prosecution of
Speaker 1: white collar crime has hidden all time low during the
Speaker 1: Trump administration, down thirty for Trump's first three years in
Speaker 1: office from the average under President Barack Obama, according to
Speaker 1: data from Syracuse University. Joining me is John Coffee, a
Speaker 1: professor Columbia Law School. His new book is Corporate Crime
Speaker 1: and Punishment, The Crisis of Under Enforcement. Jack, how would
Speaker 1: you characterize the drop in the white color crime numbers. Well,
Speaker 1: I think it's the enforcement. Generally. You can look at
Speaker 1: the number of dependants who are prosecuted way down. You
Speaker 1: can look at the fines that are imposed on corporations
Speaker 1: down by sevent You can look at new policies that
Speaker 1: say you don't have to do much to get credit
Speaker 1: for a compliance plan. It used to be, for example,
Speaker 1: that the Anti Trust pass in price fixing would only
Speaker 1: grant your leniency if you made a complete, in total
Speaker 1: confession and you were the first to confess. That's all
Speaker 1: been thrown out recently by the Trump administration. And as
Speaker 1: long as you adopt a reasonably credible compliance plan, you
Speaker 1: can get very substantial sentencing leniency, even for a crime
Speaker 1: like price fixing, which is extremely hard to detect. I
Speaker 1: can give you examples on all kinds of areas in
Speaker 1: terms of the numbers or in terms of the policy changes.
Speaker 1: But the government is going much much easier and softer,
Speaker 1: both criminally and civilly against corporations to commit on lawcal conduct.
Speaker 1: Do we blame the president for this or is it
Speaker 1: someone lower down in the chain? Well, that's a good question, man.
Speaker 1: I would tell you the first thing about organizational behavior
Speaker 1: corporations or other organizations is that the critical variable is
Speaker 1: tone at the top. And the United States governed today,
Speaker 1: the tone set by the top by the president is
Speaker 1: that law compliance isn't that important. It's a minor virtue
Speaker 1: at best, and don't get yourself hung up on it.
Speaker 1: Get the job done. So I think that there is
Speaker 1: an implicit signal from the top which lower levels always
Speaker 1: copy that law compliance is not the government's first concern.
Speaker 1: Let's look at a few different areas of white color crime,
Speaker 1: starting with securities fraud cases. Well, we're saying them go
Speaker 1: down and understand, for the last six months there has
Speaker 1: been the COVID nineteen crisis and most court houses are shut.
Speaker 1: So I do know that there are a number of cases,
Speaker 1: some of which I've worked with the prosecution on, which
Speaker 1: are delayed until the courts can reopen. That will create
Speaker 1: something of a statistical artifact. But in general, I think
Speaker 1: the government is reallocating troops away from securities fraud, any
Speaker 1: trust fraud, to things the government cares more about, such
Speaker 1: as immigration cases, alleged terrorism cases, other cases that they
Speaker 1: are concerned with the first three years of the Trump administration.
Speaker 1: This comes from data assembled by a group of Syracuse
Speaker 1: University with the number of white color dependence during the
Speaker 1: first three years spelled by that's a real decline because
Speaker 1: there had been a significant increase for a while under
Speaker 1: the Obama administration. Now, the Justice Department has criticized that
Speaker 1: tract data, saying it routinely differs from other reporting, for example,
Speaker 1: from the U. S. Attorney's Office, And they say that
Speaker 1: the Department hasn't eased up on white collar crime. Well, actually,
Speaker 1: the government's official statistics are only slightly different TRACK, which
Speaker 1: stands for Transactional Report Access Clearing Out. It's a watchdog
Speaker 1: looking at Justice Department, and they're not loved by Justice.
Speaker 1: No one loves to be watched. They say the number
Speaker 1: of dependents is down by and the studies by the
Speaker 1: attorneys say it's down by not a huge difference. So
Speaker 1: is it that the FBI is not investigating these crimes anymore,
Speaker 1: they're just letting it go by. Well, I would say
Speaker 1: most of US attorneys use the FBI or other enforcement agencies,
Speaker 1: but they've got to allocate their own manpower. If at
Speaker 1: one point in time you had twenty people in the
Speaker 1: securities fraud Unit in the Southern District and you were
Speaker 1: to reduce it to ten, you're going to cut the
Speaker 1: manpower that can prosecute these cases by fifty percent, and
Speaker 1: there will be a decline, So it could be part
Speaker 1: of the FBI, but I think it's more the manpower
Speaker 1: and what they're given is their priority. Some observers say
Speaker 1: that though there's a downturn in white collar prosecutions, there's
Speaker 1: an optick in immigration prosecutions. Well, I agree with that,
Speaker 1: but that's because you're allocating the truths differently if you
Speaker 1: take your man power. Let's suppose the U. S Attorney
Speaker 1: has a hundred lawyers under his command, and when he
Speaker 1: started he had twenty five with him in white collar crime,
Speaker 1: and after two years he shifts well with them out
Speaker 1: and puts them over in immigration or terrorism cases. Are
Speaker 1: organized crime cases, you're going to have a consequent declimb
Speaker 1: because there are less people they're investigating, and you only
Speaker 1: prosecute what you investigate. What about money laundering, Well, there
Speaker 1: has been a decline of money laundering cases. Money laundering
Speaker 1: is unique because the prosecution can charge that pretty much
Speaker 1: when it wants. It's a very easy crime to allege
Speaker 1: if you found other felonies, and by eliminating money learning prosecutions,
Speaker 1: you are again being more lenient on incorporation and why
Speaker 1: Well that's speculative. It could well be the Trump administration
Speaker 1: believes that the stock market is the most important achievement
Speaker 1: they have and they don't want to prosecute public corporations.
Speaker 1: And because the market go down, that's all speculative. What
Speaker 1: I can tell you is they've changed their requirements and
Speaker 1: it is now much easier to get leniency. At the
Speaker 1: end of the Obama administration, they were somewhat embarrassed by
Speaker 1: the fact that no one at a senior level at
Speaker 1: a Wall Street firm was prosecuted during the two thousand
Speaker 1: eight or because of the two thousand eight What I
Speaker 1: can tell you is they've changed their requirements and it
Speaker 1: is now much easier to get leniency. At the end
Speaker 1: of the Obama administration, they were somewhat embarrassed by the
Speaker 1: fact that no one at a senior level at a
Speaker 1: Wall Street firm was prosecuted during the two thousand eight
Speaker 1: or because of the two thousand and eight crisis. So
Speaker 1: they adopted something called the Yates Memorandum, named after Sally Yates,
Speaker 1: who was the Deputy Attorney General, and it said we're
Speaker 1: no longer to give you a deferred prosecution agreement, which
Speaker 1: is a probation like discharge unless you do a complete
Speaker 1: study and identify absolutely everyone who was involved, so we'll
Speaker 1: know who the officers are that we can prosecute. And
Speaker 1: this was an all or nothing policy, identify everyone. Well,
Speaker 1: the Trump administration comes in and they change it and
Speaker 1: they say, you only have to identify people who are
Speaker 1: substantially involved in the crime. What does that mean. It
Speaker 1: means if there's an investigation by a private law firm
Speaker 1: hired by the company to see what happened and make
Speaker 1: a report to the government, they can say, well, the
Speaker 1: only people who paid the bribe for these assistant vice
Speaker 1: presidents overseas, and while maybe the CEO and maybe the
Speaker 1: chief financial officer knew something about this, they weren't substantially involved.
Speaker 1: And that's a very easy rationalization by which you can
Speaker 1: exclude the most senior people and thereby make sure that
Speaker 1: justice will stop at a half white point. It's a
Speaker 1: significant change that the Trump administration put into effectively unwanted
Speaker 1: in the Eighth Memorandum. They've done this in other areas too.
Speaker 1: For the last seventy years, the US government has had
Speaker 1: a special policy towards any trust price fixing. Any trust
Speaker 1: price fixing is very hard to detect, but it always
Speaker 1: involves the conspiracy. One firm can't do it alone. And
Speaker 1: so the positive for seventy years is we will give
Speaker 1: you leniency, but only if you make a complete confession,
Speaker 1: and you are the first to confess. The business community
Speaker 1: always disliked that, but companies did make those complete confessions
Speaker 1: and god immunity for themselves and their officers. Well, the
Speaker 1: Trump administration has abolished that. They will now say that
Speaker 1: while you can still get complete credit, will give you
Speaker 1: substantial sentencing leniency, great credit if you just adopt a
Speaker 1: credible compliance plan, not the substantial watering down. It means
Speaker 1: that price fixing cases are less likely to begin with
Speaker 1: corporate confessions. We can go through half a dozen of
Speaker 1: these things. Just to give you one more. It used
Speaker 1: to be that there were deferred execution agreements, and the
Speaker 1: defense bar wanted more. So they pushed for something called
Speaker 1: non prosecution agreements, under which no court is involved. You
Speaker 1: just agree with the prosecution that they won't prosecute you.
Speaker 1: And now they've gone one step further. There's something called
Speaker 1: declinations with discouragement. And here the government sort of salute you,
Speaker 1: y say, we think your cooperation was so terrific, so
Speaker 1: wonderful that we're going to decline to prosecute you. We
Speaker 1: will require you to pay back the ill, not gains
Speaker 1: to discoorge them. But that's sort of a lesser disposition,
Speaker 1: which the government salute you for your cooperation. That's new
Speaker 1: with Trump. I can give you two or three more,
Speaker 1: but you're getting the picture. Yes, Absolutely, cracking down on
Speaker 1: financial fraud led to reforms and increase corporate compliance. What
Speaker 1: is this, uh, non prosecution leading to Well, again, there
Speaker 1: were two steps to bird prosecution. Non prosecution, which has
Speaker 1: been around for six or seven years and not not
Speaker 1: unique to Trump, but Trump is using it much more.
Speaker 1: It's a lesser disposition under which you don't have to
Speaker 1: admit guilt, you don't have any public document, you have
Speaker 1: no court or judge involved, and both of those things
Speaker 1: mean a little bit more accountability. Uh. It used to
Speaker 1: be under deferred prosecution agreements, it was normal that the
Speaker 1: government would require you to put to appoint a monitor,
Speaker 1: some outside expert who would review the area of misbehavior
Speaker 1: and constantly surveil and tell the government who found that
Speaker 1: there was any sign of continuing activity, that anyone illegal
Speaker 1: conduct or suspicious conduct. The Trump administration has said monitors
Speaker 1: are no longer required, and they are disappearing. I don't
Speaker 1: think there ever were a perfect solution, but there were
Speaker 1: one more little step that's gone. I'm wondering, is there
Speaker 1: any effect to be seen yet our corporations engaging in
Speaker 1: more criminal behavior because there's no enforcement. No, of course,
Speaker 1: no one's going to confess to that. No one's going
Speaker 1: to say, of course, we're engaging a more criminal behavior.
Speaker 1: But they think the government's behaving much more reasonably. And
Speaker 1: when dependants think the prosecutor is being reasonable, I think
Speaker 1: it means it's a very light touch and we're not
Speaker 1: getting the harder attitude that we saw at various points
Speaker 1: back under the Obama administration. Now, how much is dependent
Speaker 1: on who the U. S. Attorney is in the Southern District,
Speaker 1: particularly where there's a lot of white color prosecutions, because
Speaker 1: of course, you remember pret Berrara, the sheriff, so called
Speaker 1: Sheriff of Wall Street, who cracked down on insider trading.
Speaker 1: Nothing did. We don't see anything like that anymore. He
Speaker 1: deserves great credit. But actually there's been a long tradition
Speaker 1: in the Southern district. In fact, other use attorneys call
Speaker 1: them the sovereign District in New York because they always
Speaker 1: resisted main justice and followed their own very aggressive policies.
Speaker 1: But note that the last two duly appointed House Attorneys,
Speaker 1: both Preeperhara and his Republican successor, have been fired by
Speaker 1: President Trump. That's a pretty strong signal that you can't
Speaker 1: remain into and you can't go your own way. No,
Speaker 1: I don't know any place else where the government has
Speaker 1: fired two successive U S attorneys. One of the former
Speaker 1: prosecutors in the Antitrust and Fraud Division said that a
Speaker 1: lot of this non enforcement is because veterans. Veteran attorneys
Speaker 1: have left that division, and then there are younger lawyers
Speaker 1: there who really don't know yet how to put a
Speaker 1: case together. Do you think that's a valid explanation. I
Speaker 1: can't reject it. I don't know that do we have
Speaker 1: in the people in the Justice Department with the Usttorney's Office,
Speaker 1: they usually get the very best people, Supreme Court perks
Speaker 1: and the others. But it takes a while to learn
Speaker 1: your job. You can't do it fully on day one.
Speaker 1: But notice if they are leaving, why are they leaving?
Speaker 1: It might be they have been demoralized by the new policies,
Speaker 1: the new restraints, and the lack of commitment to strong enforcement.
Speaker 1: I would think I wouldn't personally as a young aggressive
Speaker 1: U S attorney or says new attorney, I don't think
Speaker 1: I'd be happy working under the Trump leadership, and I
Speaker 1: might find other employment. What is the message of your book, Well,
Speaker 1: we need to be more aggressive in different ways. The
Speaker 1: number one problem is we don't have the resources to
Speaker 1: adequately investigate all these cases. That's the principal reason why
Speaker 1: people that Leahmen and other firms were not investigated. They
Speaker 1: weren't just not prosecuted, they weren't investigated. And I think
Speaker 1: we've got to both get more resources and find ways
Speaker 1: to make the corporation much more eager to settle. Today,
Speaker 1: we have a system under which we sort of trade up.
Speaker 1: We start at the lowest level and find the lowest
Speaker 1: person and hope you'll implicate the next person, and we
Speaker 1: climb the ladder with everybody turning on the person above them.
Speaker 1: That works to a degree, but it never gets you
Speaker 1: to the very top. I think one of the things
Speaker 1: we have to do is to start at the top
Speaker 1: and tell the board of directors or its art committee
Speaker 1: that they have to take control of this investor asient
Speaker 1: and its decisions, and we will threaten you with the
Speaker 1: equivalent of a bankrupting penalty unless you identify for us
Speaker 1: who were the responsible officers, going back to identify everyone.
Speaker 1: So I think you have to negotiate from both levels,
Speaker 1: from the top down in the bottom up, trying to
Speaker 1: get the entity to identify their responsible officers. I'm a
Speaker 1: believer that we really have to get individuals held responsible
Speaker 1: and prosecuting. The corporation is a very second bad substitute.
Speaker 1: And you mentioned before the financial crisis, where you know,
Speaker 1: people kept saying and what are we going to see
Speaker 1: people in handcuffs who are really responsible? And we never did.
Speaker 1: Has there been a time in our history when's the
Speaker 1: last time prosecutors have gotten to the top? Go back
Speaker 1: and think of and Run and Worldcome two thousand one
Speaker 1: to two th three. The CEOs of both of those
Speaker 1: firms we went to prison, and the CEO of World
Speaker 1: Come was only released after twenty five years. He was
Speaker 1: terminally ill about a couple of months ago. So we
Speaker 1: have often prosecuted senior executives and around the world common
Speaker 1: it does other companies and their CEO is criminally prosecuted
Speaker 1: in jail. And that's the same thing during the Savings
Speaker 1: Bank crisis. Bank in the nineteen eighties, something like the
Speaker 1: five hundred senior bank officers went to prison for failures
Speaker 1: of small stating banks that took ridiculous risks. And in
Speaker 1: the details, the problem is the very large corporation. It's
Speaker 1: going to be a massive inqueror before you can get
Speaker 1: all the data. Sometimes thousands of people are involved in
Speaker 1: a broad policy, and that is forbidding to the government.
Speaker 1: They don't have the resources, and we've got to find
Speaker 1: ways to give them resources. One of the things I propose,
Speaker 1: which the SEC won't like at all, is the SEC
Speaker 1: is also resource constraint, and sometimes they should hire private
Speaker 1: law firms, very good private law firms on a contingency
Speaker 1: the basis to sue the dependence because the SEC and
Speaker 1: have enough manpower. But if you told a Planets law
Speaker 1: firm that they could handle this case under the direction
Speaker 1: of the SEC und the total control of the SEC,
Speaker 1: and they would get twenty five percent the recovery as
Speaker 1: their contingent fee, I think that would solve some of
Speaker 1: the resource constraints that we are now facing. That's just
Speaker 1: one of the examples. There are others. Thanks Jack. That's
Speaker 1: professor John Coffee at Columbia Law School. His new book
Speaker 1: is entitled Corporate Crime and Punishment, The Crisis of under Enforcement.
Speaker 1: President Trump is facing a battle over a set of
Speaker 1: executive actions he issued on Saturday, providing economic relief measures
Speaker 1: during the pandemic, including weekly federal unemployment payments, student loan relief,
Speaker 1: and efforts to protect tenants from eviction. With those actions,
Speaker 1: is Trump trying to rest core powers away from Congress
Speaker 1: after weeks of discussions over a second pandemic rescue package stalled.
Speaker 1: Joining me is Matt Dalla, a professor at Washington University's
Speaker 1: Graduate School of Political Management. Our President Trump's orders unprecedented
Speaker 1: in our history, Well, they're highly unusual. I wouldn't say
Speaker 1: that they're totally unprecedented in that, you know, Trump himself
Speaker 1: has created a kind of precedent for them. So for example,
Speaker 1: when he is hued at one of his first executive
Speaker 1: orders out of Blue with the travel band early on
Speaker 1: into the so called Muslim Band, that was an executive
Speaker 1: order that actually he had to revise multiple times. And
Speaker 1: that's so chaoff at airports across the country. I think
Speaker 1: that there are also uh, He's also set a precedent
Speaker 1: when is a failure to reach an accommodation with Congress
Speaker 1: on his wall. After weeks of trying to negotiate and
Speaker 1: then failing to reach an agreement, he issued an emergency
Speaker 1: declaration and tried to repurpose the money from the Defense
Speaker 1: Department in other places to build the wall. So, you know,
Speaker 1: even though the circumstances are a bit different, I think
Speaker 1: that what he's done with these four, both memos and
Speaker 1: executive orders, are of a piece of how he has
Speaker 1: issued orders during his administration. But yes, before Trump, I
Speaker 1: think that, you know, as controversial as executive orders has been,
Speaker 1: you know, Trump has has really pushed the boundaries of
Speaker 1: them in ways that are highly a circumspect and unusual,
Speaker 1: and the courts haven't stopped him. The Supreme Court ended
Speaker 1: up approving the final Muslim ban, and and the Supreme
Speaker 1: Court has let Trump continue to use military funds to
Speaker 1: build the wall until that lawsuit reaches them. And we
Speaker 1: don't know what they'll do with that suit. Yeah, so
Speaker 1: we don't we don't know what they're gonna do with
Speaker 1: shoot over the wall and It's true the Supreme Court
Speaker 1: did a pold but it was a much revised band
Speaker 1: and it took quite a long time for it to
Speaker 1: work its way to the courts. And I think the
Speaker 1: Muggle band had to be revised at least a couple
Speaker 1: of times. And remember it also evoked this withering descent
Speaker 1: from Justice Sonia. So the Mayor too, I believe, likened
Speaker 1: it to the treatment of Japanese Americans during World War two,
Speaker 1: sort of a religious discrimination. Letting that stand. So you know,
Speaker 1: these are highly controversial and looks the executive orders having
Speaker 1: controversial in the past. I do think what Trump has done,
Speaker 1: in particular with the executive order about building the wall
Speaker 1: in the national emergency, and also with these recent orders
Speaker 1: and memos, is to start to infringe on the congressional
Speaker 1: power of the purse. And Congress has the constitutional authority
Speaker 1: to appropriate money, and the Trump has begun to, I think,
Speaker 1: infringe on that when he's been unable to reach these fields.
Speaker 1: Has Congress over the decades, not just during Trump, has
Speaker 1: Congress been giving more and more authority to the executive
Speaker 1: by seating more of its authority. Is that how we
Speaker 1: got to this point? Well, yeah, that's a that's a
Speaker 1: big and complicated question. But in an era of nuclear weaponry,
Speaker 1: and after two world wars, and during the Cold War,
Speaker 1: and then after nine eleven, certainly on matters of national
Speaker 1: security and foreign policy, the trend for many decades has
Speaker 1: been to seed to the president a much much greater
Speaker 1: authority and and even to the extent where Congress has
Speaker 1: voted on whether or not authorize a war, it has
Speaker 1: not been a formal declaration of war as the Constitution demands.
Speaker 1: It's been a resolution, you know, a resolution, for example,
Speaker 1: to authorize the Youth of Force Interact in two thousand,
Speaker 1: in two four, after nine eleven, the resolution to authorize
Speaker 1: a Youth of Force against Terrorism, which I believe it's
Speaker 1: still enforced and has been used to justify all sorts
Speaker 1: of military activities overseas. The other point I would make
Speaker 1: is it in a narror of partisan polarization, when Congress
Speaker 1: has been unable to reach deals, and when Congress's approval
Speaker 1: ratings are maybe at fifteen percent or sometimes even in
Speaker 1: the single digits, presidents have, you know, as Barack Obama said,
Speaker 1: after being frustrated repeatedly by Republicans in Congress, he's got
Speaker 1: a phone and a pen, and the pat of course
Speaker 1: refers to using executive orders and other executive actions. So Congress,
Speaker 1: by defaults in a way, by being unable to enact
Speaker 1: or pass major legislation, has seeded I think, uh much
Speaker 1: of it unwittingly seated much of this authority to uh
Speaker 1: to presidents and has opened the door for the kind
Speaker 1: of misshif I think that uh, and and what I
Speaker 1: think many are you unconstitutional actions by President plump. Republican
Speaker 1: Senator Ben Says said the pen and phone theory of
Speaker 1: executive lawmaking is unconstitutional slap, but he was one of
Speaker 1: very few Republicans to criticize this move. And so what
Speaker 1: are the Republicans saying by letting the president go ahead
Speaker 1: with moving military funds to a board a wall, and
Speaker 1: here redirecting funds from FEMA. The first thing is that
Speaker 1: it's the height of hypocrisy, right that the Republicans spent
Speaker 1: many years railing a President Obama for acting like a
Speaker 1: king and issuing these sorts of unconstitutional orders that were
Speaker 1: supposedly destroying freedom and individual liberty. I think what we're
Speaker 1: seeing though, now, of course, is the shoes on the
Speaker 1: other foot, and and in particular, the Republicans are headed
Speaker 1: into a very trust election year. The president is on
Speaker 1: the ballot, and I think most Republicans at the federal
Speaker 1: level feel like politically they have no choice, right that
Speaker 1: that their faith and really the power that they have
Speaker 1: in Washington and in the country. Uh and to point
Speaker 1: Supreme Court justices for example, that all that is riding
Speaker 1: on this election. And you know what, they come out
Speaker 1: like Ben Fast did and start criticizing Trump. I think
Speaker 1: that they worry that the party is going to be
Speaker 1: even further divided and it will depress their votes. Then
Speaker 1: it's Fast. Interestingly, who's up for re election. I believe
Speaker 1: in November he's already won his primer, and you know,
Speaker 1: he doesn't have a even close to competitive race, so
Speaker 1: you know, he's a little bit more politically free to
Speaker 1: issue a criticism. But yeah, I mean Republicans have really
Speaker 1: and you can say that about you know, a hundred
Speaker 1: and one different issues over the past four years where
Speaker 1: Republicans have just kind of washed their hands up. What
Speaker 1: they have said is there are their principles and seated
Speaker 1: the stage and the policies and programs the Trump even
Speaker 1: if it violates their own beliefs, we're President Obama's executive
Speaker 1: orders substantially similar to President Trump's. In other words, did
Speaker 1: he ever divert money in executive orders from one project
Speaker 1: to another, Not that I'm aware of, Not in the
Speaker 1: way that Trump is using. Uh. These orders. Now, you know,
Speaker 1: almost alt executive orders require almost by definition, the use
Speaker 1: of some funds, because of course you're telling federal agency
Speaker 1: to prioritize one issue over another. So, for example, when
Speaker 1: President Obama think his first executive order, one of his
Speaker 1: first was to authorize the closure one ton of obey.
Speaker 1: Now that never happened, but certainly there was some funding involved, right,
Speaker 1: and getting the federal government to focus on that project.
Speaker 1: Same thing one President Obama issued the DOCTA order. You're
Speaker 1: telling the immigration services in the federal government to focus
Speaker 1: on particular priorities and find being closed as a result
Speaker 1: of that. What I think makes Trump's orders different is that, uh,
Speaker 1: and again with both the border wall and the avlates
Speaker 1: executive orders, is that after leaks of negotiations with Congress
Speaker 1: then failed over the power of the purse, which is
Speaker 1: constitutional powers that Congress has, Trump has issued an order
Speaker 1: to circumvent that and to change vending policy, and to
Speaker 1: appropriate essentially new funds for purposes not authorized by Congress,
Speaker 1: and also in this case, to change tax law unilaterally
Speaker 1: and in a way not authorized by Congress. So, you know,
Speaker 1: these are I think there's a reason why so many
Speaker 1: constitutional scholars are looking at this and saying that this
Speaker 1: is dubious. Transactions are dubious at best. And you know
Speaker 1: President Obama is I would say most aggressive executive orders
Speaker 1: had to do with immigration, one of them DOCTA for
Speaker 1: the children who came to the country as undocumented immigrants,
Speaker 1: and then the other with a more sweeping executive order.
Speaker 1: One of those withstood scrutiny in the courts, the other
Speaker 1: did not. But I don't think President Obama or other
Speaker 1: presidents have explicitly with their orders tried to stop invent
Speaker 1: the power of the person that Congress enjoyed. Well, when
Speaker 1: he was announcing these orders, President Trump said basically, well,
Speaker 1: we're going to be sued on this. I think the
Speaker 1: question is who would sue to stop these Well, yeah,
Speaker 1: that's what's That's always the question in these things, right,
Speaker 1: who's going to do the stopping? And also how long
Speaker 1: will the stop and take? Even if the Democrats and
Speaker 1: Congress don't to. It's conceivable that some state and state
Speaker 1: attorney general will to because in this unemployment order or
Speaker 1: memo that Trump has issued, he has requiring the states
Speaker 1: I think, to shift in a hundred dollars to make
Speaker 1: it to four hundred dollars a week for people who
Speaker 1: are unemployment. And the States are saying, look, you know,
Speaker 1: work and too bankrupt. We can't take on this added
Speaker 1: expenditure at a time when we're going to have to
Speaker 1: make these major cuts. So you could see the states doing.
Speaker 1: You could see nonprofit organizations that um in part to
Speaker 1: send Congress or or see their jobs. Is sort of
Speaker 1: promoting the separation of powers. Trying to sue and the course,
Speaker 1: for course tapped aside who has standing, just as the
Speaker 1: court had to decide this question in the emoluments cases
Speaker 1: where President Trump was being sued about his properties and
Speaker 1: whether his government was unconstitutionally essentially accepting payments from foreign entities.
Speaker 1: The problem that that I think the Democrats have, of course,
Speaker 1: and that's been true with any number of cases with
Speaker 1: Trump visit. You know, the courses we've seen are slow,
Speaker 1: and they're often divided, and even in this case of
Speaker 1: some tastes which have still never been revealed. So you know,
Speaker 1: we see the limits, uh, the from both Congress and
Speaker 1: the courts, I think in uh in this instance as well.
Speaker 1: At a press conference yesterday, Trump said that he was
Speaker 1: going to issue an executive order to ensure that insurance
Speaker 1: covers pre existing conditions, even though it was pointed out
Speaker 1: that that is already part of the law known as
Speaker 1: Obamacare that his administration is fighting. So I'm wondering if
Speaker 1: all these things are just for show and he doesn't
Speaker 1: really care if it goes through or not. Yeah, well,
Speaker 1: let's yeah, I mean, let's just kind of cut to
Speaker 1: the chase, right. Um, Both that order right that he's
Speaker 1: going to use to protect pre existing conditions, and the
Speaker 1: other orders in demos about payroll taxes and unemployee insurance.
Speaker 1: I mean, these are essentially efforts to call on people
Speaker 1: and to think that he's actually doing something, um, and
Speaker 1: to create the illusion that he is taking action now
Speaker 1: in the preexisting order prexisting conditions. Um. I mean it's
Speaker 1: absurd on its face because he aspects his entire presidency
Speaker 1: basically trying to abolish Obamacare and abolish that provision, which
Speaker 1: is at the heart of Obamacare. And you know, remember
Speaker 1: he tried a couple of times through Congress to um
Speaker 1: to enact a law or well basically told defined and
Speaker 1: abolish Obamacare and to abolish the prexisting conditions. And his
Speaker 1: administration is still supporting a lawsuits uh, that would do
Speaker 1: exactly that. And so that executive order is really I think, um,
Speaker 1: you know, it's gonna affect to reality. Uh. And then
Speaker 1: on these other orders, yeah, I mean this unemployment bump
Speaker 1: that he says that he's going to give, Um, the
Speaker 1: states are already saying it's unworkable. And apparently what he
Speaker 1: has done is he's trying to create a new kind
Speaker 1: of program. The funds apparently would only laugh for five
Speaker 1: weeks for people. Well, um, but it may take weeks
Speaker 1: for months to kind of stand up the program. And uh.
Speaker 1: And the states, I think that it's just for a
Speaker 1: lot of states at least, think that it's just unworkable, right,
Speaker 1: that it's not it's not feasible. Uh. And and so
Speaker 1: it is unclear whether any money that he says he's
Speaker 1: gonna give to people are ever going to reach their hands.
Speaker 1: But it is a way of trying to cover up
Speaker 1: the reality that you know, Democrats have to fill in
Speaker 1: the House to continue the six hundred dollar a week
Speaker 1: supplemental unemployment insurance for people across the country hit by
Speaker 1: the pandemic UM. The Republicans and Democrats failed to reach
Speaker 1: an agreement. The Senate Republicans couldn't past their own bill,
Speaker 1: and so Trump, I think, is trying to kind of
Speaker 1: cover up for that and cover up for this, you know,
Speaker 1: real political weakness that he has heading into the fall elections. Okay, cool, Well,
Speaker 1: before I let you go, what are executive order is
Speaker 1: supposed to be used for? We've seen a lot of
Speaker 1: misuse over the years. What are they supposed to be
Speaker 1: used for? Well, look, there's no one definition. UM. Historically
Speaker 1: they have been used for issues such as promoting UM
Speaker 1: uh uh anti discrimination, putting an anti discrimination clauses, fighting
Speaker 1: racial discrimination in federal contracting UM, setting up for example,
Speaker 1: the Fair Employment Practices a Commission during World War Two
Speaker 1: for promoting a formative action UH and empty in the
Speaker 1: nineteen sixties, in particular with respect to federal contracting and
Speaker 1: federal hiring. There has been also executive orders abridging civil liberties,
Speaker 1: directing creating security measures in the Departments, State, and the
Speaker 1: National Security apparatus. Uh. We have seen executive orders around
Speaker 1: public health, so stem cells research, which was a controversial issue,
Speaker 1: and remember President George W. Bush I think it was
Speaker 1: the first order he signed, or one of them, executive
Speaker 1: orders limiting stem cell research, and Barack Obama listed those
Speaker 1: restrictions as soon as he got in the office. They
Speaker 1: are also generally a way the I mean more broadly,
Speaker 1: there's a way that the president can use these orders
Speaker 1: to attempt to tell the federal agencies and federal bureaucracy
Speaker 1: that the president runs uh how to prioritize the works
Speaker 1: that they do, and also how to interpret the laws
Speaker 1: that Congress has passed. So there are but there are
Speaker 1: also significant limits on them. And what we have seen,
Speaker 1: UH is that executive orders are also pretty easy once
Speaker 1: the other party gets in the past to overturn unless
Speaker 1: they're very popular. So President Obama used an executive order
Speaker 1: to create the h Deferred Action program for Dreamers, and
Speaker 1: President Trump presended that So, um, you know, they tend
Speaker 1: to lead to a far more chaostic approach to governing,
Speaker 1: and they tend to UH and and they're also vulnerable
Speaker 1: to being overturned by opponents once they get in the office.
Speaker 1: That's Matt Dalek of Washington University's Graduate School of Political Management.
Speaker 1: And that's it for this edition of the Bloomberg Law Show.
Speaker 1: I'm June Grasso. Thanks so much for listening. Catch us
Speaker 1: every weeknight at ten pm Eastern on Bloomberg Radio.