1 00:00:02,759 --> 00:00:07,000 Speaker 1: This is Bloomberg Law with June Grossel from Bloomberg Radio. 2 00:00:09,000 --> 00:00:13,119 Speaker 2: It will be an unprecedented legal battle that could reshape 3 00:00:13,119 --> 00:00:18,960 Speaker 2: the Federal Reserve's longstanding political independence. No president in history 4 00:00:19,040 --> 00:00:22,880 Speaker 2: has tried to fire a FED governor, but President Trump 5 00:00:22,960 --> 00:00:26,760 Speaker 2: is attempting to fire Lisa Cook, the first black woman 6 00:00:26,840 --> 00:00:30,520 Speaker 2: to serve as a FED governor. It's over allegations that 7 00:00:30,560 --> 00:00:34,600 Speaker 2: she committed mortgage fraud before she joined the Central Banks 8 00:00:34,640 --> 00:00:35,479 Speaker 2: Governing Board. 9 00:00:36,440 --> 00:00:40,000 Speaker 3: She seems to have had an infraction, and she can't 10 00:00:40,040 --> 00:00:43,720 Speaker 3: have an infraction, especially that infraction, because she's in charge of, 11 00:00:43,800 --> 00:00:46,560 Speaker 3: if you think about it, mortgages, and we need people 12 00:00:46,600 --> 00:00:48,400 Speaker 3: that are one hundred percent above board. 13 00:00:49,040 --> 00:00:53,159 Speaker 2: But Cook is fighting back by filing a lawsuit against Trump, 14 00:00:53,520 --> 00:00:56,240 Speaker 2: saying he doesn't have the power to remove her from 15 00:00:56,320 --> 00:00:59,960 Speaker 2: office and that he violated the federal law that allows 16 00:01:00,040 --> 00:01:03,720 Speaker 2: seem to remove a FED governor only for cause. This 17 00:01:03,880 --> 00:01:07,000 Speaker 2: is a major escalation in the growing clash between the 18 00:01:07,040 --> 00:01:10,720 Speaker 2: White House and the Fed, which has resisted Trump's demands 19 00:01:10,760 --> 00:01:14,839 Speaker 2: to lower interest rates. It presents novel issues and will 20 00:01:14,880 --> 00:01:19,000 Speaker 2: almost certainly end up before the Supreme Court. Joining me 21 00:01:19,080 --> 00:01:24,399 Speaker 2: is Elliott Stein, Bloomberg Intelligence senior litigation analyst Elliott tell 22 00:01:24,440 --> 00:01:27,000 Speaker 2: us about the big picture of Cook's lawsuit. 23 00:01:27,560 --> 00:01:29,640 Speaker 1: Sure, well, I mean, you know, the four cause is, 24 00:01:29,640 --> 00:01:34,080 Speaker 1: obviously if the central legal focus of her lawsuit, saying 25 00:01:34,120 --> 00:01:37,920 Speaker 1: that that standard hasn't been met, But bigger pictures, she's 26 00:01:38,040 --> 00:01:42,399 Speaker 1: arguing that the allegations of mortgage fraud are really a 27 00:01:42,440 --> 00:01:47,560 Speaker 1: pretext to get rid of her for policy disagreement purposes, 28 00:01:47,800 --> 00:01:51,440 Speaker 1: which you know goes against FED independence, which is why 29 00:01:51,480 --> 00:01:54,600 Speaker 1: you have a four cause removal restriction in the first place. 30 00:01:54,880 --> 00:01:58,000 Speaker 1: And you know that fits into the broader theme. And they, 31 00:01:58,040 --> 00:01:59,720 Speaker 1: you know, talk about all this as well in the 32 00:01:59,720 --> 00:02:04,120 Speaker 1: com how Trump has been pushing for lower interest rates 33 00:02:04,520 --> 00:02:08,679 Speaker 1: for a long time, has been critical of fedhare Powell 34 00:02:08,760 --> 00:02:12,200 Speaker 1: and initially was going after him for not lowering rates 35 00:02:12,320 --> 00:02:15,959 Speaker 1: quickly enough. And they tried to use allegations against him 36 00:02:16,200 --> 00:02:20,320 Speaker 1: of cost overruns related to the renovations of the Federal 37 00:02:20,360 --> 00:02:24,720 Speaker 1: Reserve building, And so you know, they tied allegations against POLICEA. 38 00:02:24,760 --> 00:02:27,400 Speaker 1: Cook into sort of that broader context. 39 00:02:27,680 --> 00:02:29,960 Speaker 2: Not only a lot of legal research went into this, 40 00:02:30,040 --> 00:02:32,760 Speaker 2: but a lot of factual research too about what's been 41 00:02:32,840 --> 00:02:36,640 Speaker 2: happening recently. So now let's talk about the center of 42 00:02:36,960 --> 00:02:41,280 Speaker 2: the legal fight, which is the four cause removal protection 43 00:02:41,600 --> 00:02:44,919 Speaker 2: in the Federal Reserve Act. The Act doesn't define what 44 00:02:45,040 --> 00:02:46,640 Speaker 2: cause means, how do they define it? 45 00:02:47,120 --> 00:02:51,240 Speaker 1: So that's exactly right. The Federal Reserve Act says that 46 00:02:51,320 --> 00:02:55,760 Speaker 1: the President can remove a Federal Reserve Board governor for cause, 47 00:02:56,040 --> 00:02:59,080 Speaker 1: but as you say, it doesn't say what cause means. 48 00:02:59,480 --> 00:03:03,240 Speaker 1: It doesn't give any examples of that. So the complaint says, 49 00:03:03,280 --> 00:03:06,239 Speaker 1: you know, when courts have had to grapple with this 50 00:03:06,320 --> 00:03:10,919 Speaker 1: question before, they usually point to the Humphreys Executor case 51 00:03:10,919 --> 00:03:13,120 Speaker 1: from nineteen thirty five, which is sort of the seminal 52 00:03:13,160 --> 00:03:17,000 Speaker 1: case about whether four cause removal restrictions are even constitutional. 53 00:03:17,400 --> 00:03:20,840 Speaker 1: And in that case, the removal restriction said that, you know, 54 00:03:20,880 --> 00:03:25,120 Speaker 1: an FTC commissioner could be removed for inefficiency or a 55 00:03:25,160 --> 00:03:30,400 Speaker 1: neglective duty or malfeasance in office. So the argument in 56 00:03:30,480 --> 00:03:33,680 Speaker 1: Lisa Cook's complaint is sort of twofold. One is that 57 00:03:33,800 --> 00:03:36,080 Speaker 1: it can't just be bare allegations. It has to be 58 00:03:36,440 --> 00:03:39,520 Speaker 1: some sort of malfeasance or some sort of you know, 59 00:03:39,640 --> 00:03:41,880 Speaker 1: neglect of duty. And then the other thing is that 60 00:03:41,920 --> 00:03:45,480 Speaker 1: it has to have occurred while she's been in office. 61 00:03:45,960 --> 00:03:48,880 Speaker 1: And you refer to some of the factual underpinnings of 62 00:03:48,920 --> 00:03:52,240 Speaker 1: the complaint related to that. They talk about how the 63 00:03:52,400 --> 00:03:56,000 Speaker 1: mortgage applications that are being accused of, you know, being 64 00:03:56,000 --> 00:03:59,440 Speaker 1: fraudulently completed, those were filled out in twenty twenty one, 65 00:03:59,480 --> 00:04:02,720 Speaker 1: and she wasn't even appointed and confirmed to the board 66 00:04:02,840 --> 00:04:06,480 Speaker 1: until the following year. So part of the argument is 67 00:04:06,960 --> 00:04:11,600 Speaker 1: that the four cause removal restriction really applies to misconduct 68 00:04:12,040 --> 00:04:14,240 Speaker 1: that took place while in office. 69 00:04:14,880 --> 00:04:17,520 Speaker 2: Let's take a step back and look at the allegations 70 00:04:17,680 --> 00:04:22,960 Speaker 2: of mortgage fraud. Trump claims that Cook fraudulently listed homes 71 00:04:23,000 --> 00:04:27,279 Speaker 2: in Michigan and Georgia as her primary residences when she 72 00:04:27,400 --> 00:04:32,119 Speaker 2: got mortgages in twenty twenty one. So explain where these 73 00:04:32,400 --> 00:04:36,840 Speaker 2: allegations of mortgage fraud came from. 74 00:04:37,279 --> 00:04:43,160 Speaker 1: They first appeared in social media posts by Bill Poulti, 75 00:04:43,240 --> 00:04:46,520 Speaker 1: who is the director of the Federal Housing Finance Agency, 76 00:04:46,560 --> 00:04:50,520 Speaker 1: the Fahferry, which is the conservator and essentially the regulator 77 00:04:50,600 --> 00:04:54,159 Speaker 1: for Fannie May, Freddie Mack, and the Federal Home Loan banks. 78 00:04:54,360 --> 00:04:57,840 Speaker 1: Poulty posted those on social media. He made a referral 79 00:04:57,880 --> 00:05:01,240 Speaker 1: to the Justice Department saying that these were indications of 80 00:05:01,360 --> 00:05:05,599 Speaker 1: mortgage fraud. The President then sort of adopted those allegations 81 00:05:05,640 --> 00:05:09,600 Speaker 1: as well and posted on his social media about them, 82 00:05:09,960 --> 00:05:14,800 Speaker 1: and then ultimately those documents were also used as justification 83 00:05:14,960 --> 00:05:19,520 Speaker 1: for the President's letter on August twenty fifth attempting to 84 00:05:19,560 --> 00:05:21,320 Speaker 1: fire Lisa Cook. 85 00:05:21,640 --> 00:05:25,640 Speaker 2: The complaint also refers to other criminal referrals that Poulty 86 00:05:25,800 --> 00:05:30,400 Speaker 2: made before, where he referred Adam Schiff, the Democratic Senator 87 00:05:30,400 --> 00:05:34,960 Speaker 2: from California, and Letitia James, the Democratic Attorney General of 88 00:05:35,040 --> 00:05:39,280 Speaker 2: New York, with similar allegations. And they say quote, each 89 00:05:39,320 --> 00:05:43,120 Speaker 2: of Director Poultice's criminal referrals have notably been, at one 90 00:05:43,160 --> 00:05:47,640 Speaker 2: time or another, political targets of President Trump's aire prior 91 00:05:47,680 --> 00:05:52,440 Speaker 2: to any mortgage fraud allegations. Both Schiff and James have 92 00:05:53,000 --> 00:05:57,040 Speaker 2: denied the allegations, and there have been no criminal charges 93 00:05:57,120 --> 00:06:00,920 Speaker 2: brought against either of them. And here with Cook, there 94 00:06:00,920 --> 00:06:03,280 Speaker 2: hasn't even been an investigation, has there. 95 00:06:03,960 --> 00:06:07,200 Speaker 1: That's exactly right. We don't know any more about these 96 00:06:07,240 --> 00:06:11,479 Speaker 1: documents than we've seen in Bill Polti's posts. And so 97 00:06:11,720 --> 00:06:15,000 Speaker 1: you know, in order for there to be fraud, you 98 00:06:15,080 --> 00:06:18,599 Speaker 1: need some sort of fraudulent intent, right, you have to 99 00:06:18,839 --> 00:06:22,840 Speaker 1: have intended to deceive another party, essentially, and that other 100 00:06:22,920 --> 00:06:27,760 Speaker 1: party has to have relied on your misrepresentations to their detriment. 101 00:06:27,920 --> 00:06:29,560 Speaker 1: We don't know any of that, right, I mean, we 102 00:06:29,560 --> 00:06:33,320 Speaker 1: don't even know if these documents are accurate or if 103 00:06:33,360 --> 00:06:35,719 Speaker 1: they're real. In this day and age, impossible to know 104 00:06:36,080 --> 00:06:38,600 Speaker 1: whether a social media post is real or made up. 105 00:06:38,640 --> 00:06:40,640 Speaker 1: But taking you know the director at his word that 106 00:06:40,680 --> 00:06:44,279 Speaker 1: these are accurate documents and reflect what's on them. We 107 00:06:44,360 --> 00:06:48,559 Speaker 1: don't know what Lisa Cook meant when she signed both 108 00:06:48,600 --> 00:06:51,200 Speaker 1: of them. We don't know if it was a clerical error, 109 00:06:51,240 --> 00:06:54,800 Speaker 1: which is what her complaint suggests. And we don't know 110 00:06:54,920 --> 00:06:57,800 Speaker 1: what kind of communications she may have had with the 111 00:06:57,839 --> 00:07:00,920 Speaker 1: mortgage lenders on the other side and whether they were 112 00:07:00,920 --> 00:07:04,279 Speaker 1: deceived or whether they were harmed, because you also need 113 00:07:04,279 --> 00:07:06,440 Speaker 1: that in order for there to be mortgage fraud. 114 00:07:07,000 --> 00:07:10,360 Speaker 2: Now, the lawsuit doesn't provide an explanation for why she 115 00:07:10,640 --> 00:07:14,560 Speaker 2: might have listed two residences as her primary residence, but 116 00:07:14,680 --> 00:07:18,600 Speaker 2: it does suggest that she could have quote mislabeled a 117 00:07:18,680 --> 00:07:23,000 Speaker 2: home's purpose unintentionally, and that wasn't in the complaint, that 118 00:07:23,160 --> 00:07:27,400 Speaker 2: was in the motion for a tro So are they 119 00:07:27,440 --> 00:07:31,240 Speaker 2: trying to offer an innocent explanation and to blunt the 120 00:07:31,840 --> 00:07:32,880 Speaker 2: fraudulent intent. 121 00:07:33,520 --> 00:07:35,600 Speaker 1: Yeah, they're sort of hinting at that. You know, they're 122 00:07:35,760 --> 00:07:40,280 Speaker 1: sticking primarily to sort of the legal standard in this complaint, right, 123 00:07:40,320 --> 00:07:45,080 Speaker 1: that essentially the actual facts of what happened aren't necessary 124 00:07:45,080 --> 00:07:48,520 Speaker 1: at this point in order to allow Lisa Cook to 125 00:07:48,520 --> 00:07:54,520 Speaker 1: continue and to basically render ineffective President Trump's termination letter 126 00:07:54,800 --> 00:08:00,680 Speaker 1: there arguing in their complaint that on these unsubstantiated allegations alone, 127 00:08:01,440 --> 00:08:04,040 Speaker 1: that is not enough to meet the four cause standard. 128 00:08:04,440 --> 00:08:07,800 Speaker 1: You know, if the case does go forward in some 129 00:08:07,880 --> 00:08:13,000 Speaker 1: capacity to determine what cause means and whether at least 130 00:08:13,000 --> 00:08:16,600 Speaker 1: the Cook's conduct rises to that level, then I expect 131 00:08:17,120 --> 00:08:20,480 Speaker 1: development of the facts in a more fulsome way, in 132 00:08:20,480 --> 00:08:24,480 Speaker 1: which case we'll probably know more about, you know, what 133 00:08:24,560 --> 00:08:25,800 Speaker 1: happened with these documents. 134 00:08:26,000 --> 00:08:29,720 Speaker 2: The Trump administration is going to respond. I mean, would 135 00:08:29,760 --> 00:08:33,840 Speaker 2: one of their arguments be that the way for cause 136 00:08:33,960 --> 00:08:38,160 Speaker 2: is being described by Cook's lawyers is incorrect. 137 00:08:38,800 --> 00:08:41,640 Speaker 1: Yeah, I mean, they'll say, look, the statute only says 138 00:08:42,160 --> 00:08:46,760 Speaker 1: for cause when Congress inserted that language into the Federal 139 00:08:46,800 --> 00:08:49,640 Speaker 1: Reserve Act in nineteen thirty five, And the complaint talks 140 00:08:49,679 --> 00:08:53,280 Speaker 1: about this how they inserted that language after the Humphrey's 141 00:08:53,360 --> 00:08:55,960 Speaker 1: Executor decision right, sort of As a response to that, 142 00:08:56,240 --> 00:09:00,439 Speaker 1: the President's argument will be Congress knew that it could 143 00:09:00,559 --> 00:09:04,880 Speaker 1: have articulated what four cause means. It could have limited 144 00:09:04,920 --> 00:09:08,400 Speaker 1: it to inefficiency, neglect, and malfeasans, but it chose not to, 145 00:09:08,920 --> 00:09:12,120 Speaker 1: and as a result, what actually constitutes cause is broader 146 00:09:12,160 --> 00:09:14,960 Speaker 1: than just those three things. That is most likely what 147 00:09:14,960 --> 00:09:17,720 Speaker 1: the President is going to argue, And he's also going 148 00:09:17,760 --> 00:09:21,440 Speaker 1: to argue that it's within his discretion to determine what 149 00:09:21,640 --> 00:09:25,040 Speaker 1: cause is because he's the president and the statue gives 150 00:09:25,040 --> 00:09:29,439 Speaker 1: the president the power to remove a Federal Reserve Board 151 00:09:29,800 --> 00:09:33,760 Speaker 1: governor for cause. I think that's what the president's team 152 00:09:33,840 --> 00:09:34,959 Speaker 1: is going to argue. 153 00:09:35,200 --> 00:09:37,959 Speaker 2: After the lawsuit was filed, the White House said that 154 00:09:38,040 --> 00:09:41,880 Speaker 2: Trump was acting lawfully. Quote, the President determined there was 155 00:09:42,000 --> 00:09:45,360 Speaker 2: cause to remove a governor who was credibly accused of 156 00:09:45,520 --> 00:09:50,559 Speaker 2: lying in financial documents from a highly sensitive position overseeing 157 00:09:50,640 --> 00:09:52,280 Speaker 2: financial institutions. 158 00:09:52,920 --> 00:09:55,439 Speaker 1: Lisa Cook is obviously going to contest a lot of 159 00:09:55,720 --> 00:09:57,760 Speaker 1: what's in that statement. Right. He's going to say these 160 00:09:57,800 --> 00:10:00,880 Speaker 1: aren't credible accusations because you know, there's been no investigation 161 00:10:01,120 --> 00:10:03,920 Speaker 1: related to them. He's gonna take issue with the fact 162 00:10:03,920 --> 00:10:06,000 Speaker 1: that he's been accused of lying when there's been no 163 00:10:06,080 --> 00:10:10,400 Speaker 1: development or investigation to bolster that accusation. So we know 164 00:10:10,440 --> 00:10:14,160 Speaker 1: what each side is going to say. I think what's 165 00:10:14,200 --> 00:10:16,400 Speaker 1: going to be interesting is what the courts say, and 166 00:10:16,559 --> 00:10:19,000 Speaker 1: you know, eventually this will go up to the Supreme Court. 167 00:10:19,440 --> 00:10:22,200 Speaker 1: I think the Supreme Court's decision in May in the 168 00:10:22,240 --> 00:10:26,440 Speaker 1: Wilcox case, which concerned the termination of commissioners at the 169 00:10:26,520 --> 00:10:29,559 Speaker 1: National Labor Relations Board and the Merit Systems Protection Board, 170 00:10:29,720 --> 00:10:31,760 Speaker 1: I think that decision is going to be key because 171 00:10:32,240 --> 00:10:34,760 Speaker 1: there the Supreme Court sort of went out of its 172 00:10:34,800 --> 00:10:38,600 Speaker 1: way to distinguish the Federal Reserve from these other agencies. 173 00:10:39,000 --> 00:10:41,520 Speaker 1: Because for those other agencies, it seems like the Supreme 174 00:10:41,520 --> 00:10:45,040 Speaker 1: Court is leaning towards finding the four cause removal restrictions 175 00:10:45,040 --> 00:10:49,120 Speaker 1: in those statutes unconstitutional. But it seems like it distinguished 176 00:10:49,120 --> 00:10:53,360 Speaker 1: the Federal Reserve with the intent of allowing the Federal 177 00:10:53,400 --> 00:10:58,880 Speaker 1: Reserve Acts for cause removal restriction to be deemed constitutional. 178 00:10:59,240 --> 00:11:01,720 Speaker 1: And then you know, if you allow the President to 179 00:11:01,760 --> 00:11:05,720 Speaker 1: make that decision unilaterally as to what causes, you're really 180 00:11:06,559 --> 00:11:11,000 Speaker 1: rendering toothless and meaningless before cause removal restriction in the statute. 181 00:11:11,400 --> 00:11:13,800 Speaker 2: Coming up next on the Bloomberg Lawn Show. I'll continue 182 00:11:13,800 --> 00:11:19,199 Speaker 2: this conversation with Bloomberg Intelligence senior litigation analyst Elliot Stein. 183 00:11:19,760 --> 00:11:23,040 Speaker 2: Cook is asking a judge for an emergency injunction to 184 00:11:23,120 --> 00:11:26,839 Speaker 2: block her firing and confirm her status as a member 185 00:11:26,920 --> 00:11:30,320 Speaker 2: of the Fed's governing board. I'm June GROANSO, and this 186 00:11:30,480 --> 00:11:35,440 Speaker 2: is Bloomberg. No president in history has tried to fire 187 00:11:35,520 --> 00:11:39,320 Speaker 2: a FED governor, but President Trump is attempting to fire 188 00:11:39,400 --> 00:11:42,640 Speaker 2: Lisa Cook, the first black woman to serve as a 189 00:11:42,679 --> 00:11:46,880 Speaker 2: federal governor. It's over allegations that she committed mortgage fraud 190 00:11:47,200 --> 00:11:51,040 Speaker 2: before she joined the Central Bank's governing board by listing 191 00:11:51,080 --> 00:11:55,280 Speaker 2: homes in both Michigan and Georgia as her primary residences 192 00:11:55,600 --> 00:11:59,080 Speaker 2: when she got mortgages in twenty twenty one. Cook is 193 00:11:59,120 --> 00:12:02,400 Speaker 2: fighting back by by filing a lawsuit saying Trump doesn't 194 00:12:02,400 --> 00:12:05,280 Speaker 2: have the power to remove her from office and that 195 00:12:05,360 --> 00:12:08,400 Speaker 2: he violated the federal law that allows him to remove 196 00:12:08,440 --> 00:12:13,280 Speaker 2: a federal governor only for cause. It's an unprecedented legal 197 00:12:13,360 --> 00:12:18,719 Speaker 2: battle that could reshape the Federal Reserve's longstanding political independence. 198 00:12:19,080 --> 00:12:23,320 Speaker 2: Scott Alvarez, a former General counsel at the Federal Reserve Board, 199 00:12:23,520 --> 00:12:26,840 Speaker 2: expressed his concerns if the president is allowed to fire 200 00:12:27,240 --> 00:12:30,440 Speaker 2: a Federal Board member without proper cause. 201 00:12:30,840 --> 00:12:35,160 Speaker 3: It's definitely worse for the institution if the president can 202 00:12:35,200 --> 00:12:39,480 Speaker 3: fire a member of the Board at will or based 203 00:12:39,520 --> 00:12:44,400 Speaker 3: solely on an allegation that's unproven, undemonstrated. I think in 204 00:12:44,400 --> 00:12:48,120 Speaker 3: that situation, there really is no independence of the Federal 205 00:12:48,160 --> 00:12:50,800 Speaker 3: Reserve and its ability to act, and that's got to 206 00:12:50,920 --> 00:12:53,920 Speaker 3: set markets, make markets uneasy. 207 00:12:54,200 --> 00:12:58,680 Speaker 2: I've been talking to Bloomberg Intelligence senior litigation analyst Elliott Stein. 208 00:12:59,200 --> 00:13:03,199 Speaker 2: There's so many interlocking issues here. The complaint also says 209 00:13:03,280 --> 00:13:07,120 Speaker 2: that Trump violated Cook's right to due process and her 210 00:13:07,240 --> 00:13:10,400 Speaker 2: right to notice in hearing under the Federal Reserve Act. 211 00:13:11,160 --> 00:13:15,560 Speaker 1: That argument really revolves around the fact that she has 212 00:13:15,720 --> 00:13:18,720 Speaker 1: a property interest essentially in her role as a Federal 213 00:13:18,760 --> 00:13:22,439 Speaker 1: Reserve Board governor, and that by taking away that seat 214 00:13:22,480 --> 00:13:26,480 Speaker 1: from her without any notice or opportunity to be heard, 215 00:13:26,960 --> 00:13:29,440 Speaker 1: her due process rights are being violated. So that's a 216 00:13:29,440 --> 00:13:33,319 Speaker 1: constitutional argument. They also have a statutory argument related to that, 217 00:13:33,840 --> 00:13:37,320 Speaker 1: which says that for roles where you have a fixed 218 00:13:37,360 --> 00:13:41,319 Speaker 1: number of years in service and you're terminated, that you're 219 00:13:41,440 --> 00:13:44,120 Speaker 1: entitled to some sort of notice and opportunity to be 220 00:13:44,160 --> 00:13:44,720 Speaker 1: heard as well. 221 00:13:45,040 --> 00:13:48,839 Speaker 2: Cook is seeking an emergency injunction to block her firing 222 00:13:49,080 --> 00:13:52,520 Speaker 2: and confirm her status as a member of the fed's 223 00:13:52,640 --> 00:13:57,440 Speaker 2: governing board, and DC Federal Judge Gia Cobb has scheduled 224 00:13:57,520 --> 00:14:02,439 Speaker 2: an emergency hearing for tomorrow. Explain the reasons Cook gives 225 00:14:02,520 --> 00:14:05,720 Speaker 2: for asking for a temporary restraining order. 226 00:14:06,040 --> 00:14:08,840 Speaker 1: So you know, right now, this is the question I 227 00:14:08,840 --> 00:14:11,680 Speaker 1: get from clients a lot is is she actually still 228 00:14:11,760 --> 00:14:14,560 Speaker 1: a Federal Reserve Board governor? You know, if there were 229 00:14:14,559 --> 00:14:17,760 Speaker 1: a meeting tomorrow, could she participate? You know, if you 230 00:14:17,840 --> 00:14:20,960 Speaker 1: asked the President, he would say, no, she's been fired. 231 00:14:21,080 --> 00:14:24,040 Speaker 1: If you asked her, she would say, you know, the 232 00:14:24,120 --> 00:14:27,560 Speaker 1: purport determination was improper. So yeah, void, I'm still a 233 00:14:27,560 --> 00:14:33,240 Speaker 1: Federal Reserve Board governor. This tro application is a way 234 00:14:33,280 --> 00:14:35,960 Speaker 1: to get the court to opine on that quickly. Right. 235 00:14:35,960 --> 00:14:40,720 Speaker 1: It's an emergency application essentially to say that President Trump's 236 00:14:40,800 --> 00:14:44,600 Speaker 1: termination letter on August twenty fifth has no effect. Right. 237 00:14:44,640 --> 00:14:46,720 Speaker 1: And you know what's interesting is that, in addition to 238 00:14:46,800 --> 00:14:50,120 Speaker 1: President Trump being named as a defendant, the Federal Reserve 239 00:14:50,280 --> 00:14:53,359 Speaker 1: Board is named as a defendant, as are the governors, 240 00:14:53,800 --> 00:14:57,960 Speaker 1: as is FED Chair Powell. Because part of Lisa Cook's 241 00:14:58,000 --> 00:15:03,600 Speaker 1: tro application is to stop the Federal Reserve Board from 242 00:15:03,640 --> 00:15:05,880 Speaker 1: effectuating President Trump's termination letter. 243 00:15:06,320 --> 00:15:08,600 Speaker 2: Who has the stronger argument for. 244 00:15:08,520 --> 00:15:12,480 Speaker 1: The TRO Well, I think Governor Cook got a very 245 00:15:12,480 --> 00:15:15,720 Speaker 1: good judicial draw so to speak. The judge, as you said, 246 00:15:15,800 --> 00:15:19,880 Speaker 1: is Biden appointee. I think it's likely that the judge 247 00:15:20,000 --> 00:15:24,800 Speaker 1: is going to view favorably Lisa Cook's arguments for FED 248 00:15:24,880 --> 00:15:28,960 Speaker 1: independence and going to view unfavorably President Trump's arguments, saying 249 00:15:29,000 --> 00:15:31,440 Speaker 1: that allegations alone are enough for cause and if the 250 00:15:31,440 --> 00:15:34,400 Speaker 1: president alone can make that determination. So I would not 251 00:15:34,440 --> 00:15:38,920 Speaker 1: be surprised to see Judge Cobb grant the tro potentially, 252 00:15:39,240 --> 00:15:40,840 Speaker 1: you know, as soon as the end of the hearing 253 00:15:40,920 --> 00:15:43,400 Speaker 1: tomorrow which starts at ten am, or perhaps later in 254 00:15:43,440 --> 00:15:47,520 Speaker 1: the day. Just given the magnitude of this case, I 255 00:15:47,640 --> 00:15:50,240 Speaker 1: think a very quick decision is warranted. 256 00:15:50,960 --> 00:15:55,880 Speaker 2: The Supreme Court in May block the reinstatement of NLRB 257 00:15:56,240 --> 00:16:00,400 Speaker 2: and Merit Systems Protection Board commissioners while their suits played out. 258 00:16:00,720 --> 00:16:04,600 Speaker 2: Did the same for Consumer Product Safety commission heads in July. 259 00:16:05,160 --> 00:16:06,960 Speaker 2: Might the Court do the same here? 260 00:16:07,360 --> 00:16:10,200 Speaker 1: I think this is where that decision in May is 261 00:16:10,200 --> 00:16:12,640 Speaker 1: so important, because the Supreme Court really went out of 262 00:16:12,680 --> 00:16:17,800 Speaker 1: its way to distinguish the Federal Reserve from these other agencies. 263 00:16:17,920 --> 00:16:20,000 Speaker 1: It wasn't a definitive rule in it was sort of 264 00:16:20,040 --> 00:16:22,800 Speaker 1: dicta but it didn't even need to include that language. 265 00:16:22,880 --> 00:16:26,600 Speaker 1: And when you talk about whether you know someone like 266 00:16:27,080 --> 00:16:30,080 Speaker 1: Lisa Cook or these other commissioners should serve while the 267 00:16:30,120 --> 00:16:32,920 Speaker 1: litigation plays out, you know, the factors you consider are 268 00:16:33,120 --> 00:16:36,480 Speaker 1: likelihood of success on the merits, whether there's irreparable harm 269 00:16:36,520 --> 00:16:38,480 Speaker 1: to either side, and you also look at the public 270 00:16:38,520 --> 00:16:42,160 Speaker 1: interest in terms of likelihood of success on the merits. 271 00:16:42,400 --> 00:16:46,440 Speaker 1: I think Lisa Cook has very good arguments that the 272 00:16:46,480 --> 00:16:51,240 Speaker 1: four cause provision can't be satisfied by mere allegations alone, 273 00:16:51,280 --> 00:16:56,720 Speaker 1: because then that really again renders meaningless the standard because 274 00:16:56,720 --> 00:17:00,680 Speaker 1: anyone could drum up accusations in terms of mobile harm. 275 00:17:00,920 --> 00:17:04,400 Speaker 1: I think it's important that again, in the May ruling, 276 00:17:04,640 --> 00:17:09,600 Speaker 1: the Supreme Court essentially carved out the Federal Reserve from 277 00:17:09,680 --> 00:17:14,520 Speaker 1: the executive branch in the sense that it suggested strongly 278 00:17:14,560 --> 00:17:18,240 Speaker 1: that the Federal Reserve is quasi private. It has a 279 00:17:18,359 --> 00:17:22,320 Speaker 1: unique historical structure, and as a result, it doesn't really 280 00:17:22,359 --> 00:17:26,800 Speaker 1: wield executive authority like other agencies do. So in terms 281 00:17:27,200 --> 00:17:32,560 Speaker 1: of the president's executive authority being harmed by her continuing 282 00:17:32,600 --> 00:17:35,639 Speaker 1: to serve on the board. I think it's unlikely that 283 00:17:35,680 --> 00:17:37,720 Speaker 1: the court is going to say that he is suffering 284 00:17:38,240 --> 00:17:41,760 Speaker 1: harm like it did in the Wilcox case. And then 285 00:17:41,760 --> 00:17:43,680 Speaker 1: in terms of the public interest, you know, I think 286 00:17:43,840 --> 00:17:47,200 Speaker 1: the Supreme Court is likely to consider things like Federal 287 00:17:47,200 --> 00:17:50,639 Speaker 1: Reserve independence very strongly, and so all these things I 288 00:17:50,680 --> 00:17:53,240 Speaker 1: think wigh in favor of Lisa Cook's arguments. 289 00:17:53,720 --> 00:17:57,119 Speaker 2: Elliott tell us what the Fed's response to the lawsuit 290 00:17:57,160 --> 00:17:57,600 Speaker 2: has been. 291 00:17:58,200 --> 00:18:02,679 Speaker 1: The FED is sort of staying silent and not picking 292 00:18:02,720 --> 00:18:06,440 Speaker 1: aside and saying they'll abide by any court decision, which 293 00:18:06,480 --> 00:18:10,520 Speaker 1: is why Lisa Cook's complaint names the Federal Reserve Board 294 00:18:10,560 --> 00:18:13,960 Speaker 1: governors both collectively and in their individual capacity as defendants, 295 00:18:14,000 --> 00:18:16,520 Speaker 1: along with FED Chair Jpwell explain. 296 00:18:16,240 --> 00:18:19,120 Speaker 2: Why timing might be important for Trump here. 297 00:18:19,119 --> 00:18:21,480 Speaker 1: In the near term. You have an SOMC meeting in 298 00:18:21,560 --> 00:18:25,200 Speaker 1: mid September, right where everyone's expecting some sort of rate cuts. 299 00:18:25,200 --> 00:18:27,760 Speaker 1: It seems I actually don't think that's the most important 300 00:18:27,880 --> 00:18:31,000 Speaker 1: date because for that date, Lisa Cook is just one 301 00:18:31,520 --> 00:18:34,800 Speaker 1: seat on the FMC out of twelve. In July when 302 00:18:34,800 --> 00:18:37,240 Speaker 1: they met, and they did at lower rates. You only 303 00:18:37,240 --> 00:18:39,800 Speaker 1: had two dissenting votes, so I don't think her vote 304 00:18:39,840 --> 00:18:43,480 Speaker 1: is necessarily going to sway anything in September. But to me, 305 00:18:43,600 --> 00:18:46,199 Speaker 1: the more important dates to keep in mind are the 306 00:18:46,359 --> 00:18:50,119 Speaker 1: end of February, when the Federal Reserve Board gets to 307 00:18:50,240 --> 00:18:55,280 Speaker 1: reappoint or block reappointment of the regional Federal Reserve Bank 308 00:18:55,480 --> 00:19:02,200 Speaker 1: presidents who rotate onto the FMC. The President can elst 309 00:19:02,320 --> 00:19:06,919 Speaker 1: least a cook. By February, he essentially on the Federal 310 00:19:06,960 --> 00:19:10,560 Speaker 1: Reserve Board will have three sympathetic votes. You'll have Waller 311 00:19:11,080 --> 00:19:17,320 Speaker 1: Bowman and presumably Stephen Merron, who is probably going to 312 00:19:17,359 --> 00:19:20,560 Speaker 1: start his confirmation process next week to replace the Adrianna 313 00:19:20,600 --> 00:19:23,840 Speaker 1: Kugler who resigned earlier in August. And on the other side, 314 00:19:23,880 --> 00:19:28,760 Speaker 1: you'd have three votes you know that probably don't align 315 00:19:28,800 --> 00:19:32,240 Speaker 1: with the President Powell, Michael Barr, and Vice Jared Jefferson, 316 00:19:32,560 --> 00:19:35,000 Speaker 1: And you wouldn't have all these other Regional Reserve Bank 317 00:19:35,040 --> 00:19:38,679 Speaker 1: presidents who for the most part have been voting consistently 318 00:19:38,840 --> 00:19:42,879 Speaker 1: with Jay Powell against lowering rates. So you know, FEDRUAR 319 00:19:43,000 --> 00:19:47,840 Speaker 1: is important because it starts to potentially change the composition 320 00:19:48,040 --> 00:19:51,280 Speaker 1: of the FOMC in a direction that's more favorable to 321 00:19:51,320 --> 00:19:52,600 Speaker 1: President Trump, and. 322 00:19:52,520 --> 00:19:56,680 Speaker 2: Trump is continuing to fire board members. We learned that 323 00:19:56,720 --> 00:20:00,280 Speaker 2: Trump has fired one of two Democratic members of the 324 00:20:00,400 --> 00:20:03,840 Speaker 2: US Service Transportation Board to break a two to two 325 00:20:03,960 --> 00:20:08,359 Speaker 2: tie before the board considers the largest railroad merger ever. 326 00:20:08,400 --> 00:20:12,560 Speaker 2: Proposed Board member Roger E. Primus was the only board 327 00:20:12,600 --> 00:20:17,679 Speaker 2: member to oppose Canada Pacific's acquisition of Kansas City's Southern 328 00:20:17,800 --> 00:20:20,520 Speaker 2: Railroad when it was approved two years ago. 329 00:20:20,840 --> 00:20:23,520 Speaker 1: You know, I think the hallmark of this investigation when 330 00:20:23,560 --> 00:20:27,520 Speaker 1: the history books are written, is its efforts to expand 331 00:20:27,600 --> 00:20:32,040 Speaker 1: executive authority over almost every aspect of the government. You know, 332 00:20:32,280 --> 00:20:34,760 Speaker 1: we do have this Supreme Court decision in May that 333 00:20:34,840 --> 00:20:37,560 Speaker 1: suggested the Federal Reserve is a little different. We'll sort 334 00:20:37,600 --> 00:20:38,760 Speaker 1: of see how that plays out. 335 00:20:39,000 --> 00:20:42,560 Speaker 2: We'll certainly be watching this closely. Thanks so much, Elliott. 336 00:20:43,119 --> 00:20:48,120 Speaker 2: That's Bloomberg Intelligence Senior litigation analyst Elliott Stein coming up 337 00:20:48,119 --> 00:20:51,720 Speaker 2: next on the Bloomberg Law Show. President Trump wants to 338 00:20:51,760 --> 00:20:55,280 Speaker 2: get rid of cashless bail and I'm June Grosso. When 339 00:20:55,320 --> 00:20:59,919 Speaker 2: you're listening to Bloomberg, President Trump has signed an executive 340 00:21:00,240 --> 00:21:04,320 Speaker 2: order threatening to revoke federal funding to local and state 341 00:21:04,440 --> 00:21:08,480 Speaker 2: governments that allow cashless bail, arguing that it's a threat 342 00:21:08,520 --> 00:21:11,320 Speaker 2: to public safety cashless bail. 343 00:21:11,600 --> 00:21:14,120 Speaker 3: They thought it was discriminatory to make people put up 344 00:21:14,800 --> 00:21:17,520 Speaker 3: money because they just killed three people lying on the street. 345 00:21:18,880 --> 00:21:22,760 Speaker 3: Any street all over the country. Cashless bail. We're ending it, 346 00:21:23,080 --> 00:21:24,920 Speaker 3: but we're starting by ending it in DC. 347 00:21:25,640 --> 00:21:30,600 Speaker 2: But defense attorneys and criminal justice advocates say ending cashless 348 00:21:30,600 --> 00:21:35,360 Speaker 2: bail will negatively impact lower income defendants who could be 349 00:21:35,359 --> 00:21:40,160 Speaker 2: behind bars unlawfully, and Washington DC Mayor Muriel Bowser points 350 00:21:40,160 --> 00:21:43,040 Speaker 2: out that this is not a new policy for many 351 00:21:43,080 --> 00:21:43,840 Speaker 2: of these cities. 352 00:21:44,960 --> 00:21:48,080 Speaker 1: Cashless bail is not a new phenomenon in the district. 353 00:21:48,240 --> 00:21:51,440 Speaker 4: I think it's been in place since the mid nineties. 354 00:21:52,480 --> 00:21:55,840 Speaker 2: My guest is Vita Johnson, a professor at Georgetown Law 355 00:21:56,240 --> 00:22:00,199 Speaker 2: and co director of the school's Criminal Justice Clinic, is 356 00:22:00,240 --> 00:22:03,920 Speaker 2: formally a public defender in DC. Vita, will you explain 357 00:22:04,359 --> 00:22:06,399 Speaker 2: what is cashless bail? Exactly? 358 00:22:07,920 --> 00:22:08,240 Speaker 1: Sure. 359 00:22:08,440 --> 00:22:14,800 Speaker 4: So, DC's bail system is identical to the federal bail statute, 360 00:22:15,640 --> 00:22:19,360 Speaker 4: and what it does is it takes a person's ability 361 00:22:19,440 --> 00:22:23,280 Speaker 4: to pay out of the equation in deciding whether someone 362 00:22:23,400 --> 00:22:29,800 Speaker 4: should be held before trial or not. So DC's system, 363 00:22:30,040 --> 00:22:32,879 Speaker 4: just like the federal one, is based on whether someone 364 00:22:33,000 --> 00:22:37,920 Speaker 4: is a danger or risk of flight, and that helps 365 00:22:37,960 --> 00:22:41,159 Speaker 4: a judge determine whether or not someone should be held 366 00:22:41,640 --> 00:22:43,639 Speaker 4: rather than the amount of money in their bank account. 367 00:22:44,160 --> 00:22:48,040 Speaker 4: So if the person is charged with a dangerous crime 368 00:22:48,960 --> 00:22:52,600 Speaker 4: or a violent crime, the judge can hold them. So 369 00:22:53,000 --> 00:22:57,480 Speaker 4: it's a way of helping the judge make a decision 370 00:22:57,560 --> 00:23:02,840 Speaker 4: that is most closely related to public welfare while still 371 00:23:02,920 --> 00:23:07,240 Speaker 4: preserving the accused person's presumption of innocence. There are other 372 00:23:07,280 --> 00:23:09,920 Speaker 4: ways that a person can be held if they are 373 00:23:10,000 --> 00:23:14,359 Speaker 4: on probation or parole or supervisor release for another matter, 374 00:23:14,600 --> 00:23:17,119 Speaker 4: or if they have a pending case, they can be 375 00:23:17,200 --> 00:23:21,040 Speaker 4: held without bond. So again, money is not part of 376 00:23:21,080 --> 00:23:26,359 Speaker 4: the equation because in DC we've decided that it is 377 00:23:26,400 --> 00:23:31,040 Speaker 4: important to make a determination about fail based on the 378 00:23:31,080 --> 00:23:36,080 Speaker 4: accusations and the person's history and characteristics rather than their 379 00:23:36,359 --> 00:23:37,320 Speaker 4: ability to pay. 380 00:23:38,119 --> 00:23:42,080 Speaker 2: Was DC the model for other states and cities who 381 00:23:42,160 --> 00:23:44,080 Speaker 2: have cashless bail. 382 00:23:44,080 --> 00:23:47,119 Speaker 4: Yes, absolutely, and we've had this since the nineties, so 383 00:23:47,200 --> 00:23:50,679 Speaker 4: it's not anything new and it has truly been the 384 00:23:50,760 --> 00:23:56,240 Speaker 4: model for you know, criminal legal reform. Again, we don't 385 00:23:56,320 --> 00:24:00,159 Speaker 4: want a system where rich people, you know, get to 386 00:24:00,480 --> 00:24:03,480 Speaker 4: wait for their trial in the luxury of their homes, 387 00:24:03,960 --> 00:24:08,679 Speaker 4: while poor people are held a taxpayer expense no less 388 00:24:09,040 --> 00:24:12,080 Speaker 4: at the jail just because they don't have bail money. 389 00:24:12,280 --> 00:24:15,800 Speaker 2: President Trump has talked a lot about cash list bail 390 00:24:15,880 --> 00:24:18,679 Speaker 2: and how it's the problem leading to crime in the 391 00:24:18,720 --> 00:24:22,640 Speaker 2: Democratic led cities. And he said, no cash come back 392 00:24:22,680 --> 00:24:24,600 Speaker 2: in a couple of months, will give you a trial, 393 00:24:24,680 --> 00:24:26,240 Speaker 2: you never see the person again. 394 00:24:26,720 --> 00:24:32,240 Speaker 4: That's just not true. I mean, the bail system looks 395 00:24:32,320 --> 00:24:35,280 Speaker 4: at whether someone has a history of failing to appear 396 00:24:35,760 --> 00:24:39,760 Speaker 4: in deciding whether or not someone should be held before trial. 397 00:24:40,080 --> 00:24:44,160 Speaker 4: Remember that someone who's accused of a crime is presumed innocent. 398 00:24:44,280 --> 00:24:47,760 Speaker 4: That's something our whole criminal legal system is based on 399 00:24:47,920 --> 00:24:53,040 Speaker 4: that premise, and so when you hold someone prior to trial, 400 00:24:53,359 --> 00:24:58,639 Speaker 4: it really undermines that presumption. Normally that it can truly 401 00:24:58,760 --> 00:25:04,440 Speaker 4: ruin a person. Let's say someone's falsely accused of a shoplifting, 402 00:25:04,920 --> 00:25:07,280 Speaker 4: but they don't have a lot of money and so 403 00:25:07,400 --> 00:25:11,400 Speaker 4: they can't pay the bail. Should that person lose their 404 00:25:11,440 --> 00:25:15,160 Speaker 4: housing because they're not home to pay the rent. Should 405 00:25:15,160 --> 00:25:18,360 Speaker 4: they lose their job because they're at the jail and 406 00:25:18,600 --> 00:25:21,400 Speaker 4: can't work, Should they lose the custody of their children, 407 00:25:21,880 --> 00:25:25,280 Speaker 4: based just solely on the government say so, I think 408 00:25:25,359 --> 00:25:30,639 Speaker 4: most people would think absolutely not. And imagine the cost 409 00:25:30,840 --> 00:25:33,680 Speaker 4: to the taxpayer of holding someone on a really low 410 00:25:33,800 --> 00:25:38,439 Speaker 4: level offense like that at the jail. It's a tremendous expense. 411 00:25:38,480 --> 00:25:41,159 Speaker 4: It costs, you know, hundreds of dollars every day to 412 00:25:41,200 --> 00:25:44,760 Speaker 4: hold someone pre trial. And so DC, just like the 413 00:25:44,800 --> 00:25:47,840 Speaker 4: federal system, has decided that for you know, for someone 414 00:25:47,880 --> 00:25:51,639 Speaker 4: who with no record, who's accused of a non dangerous 415 00:25:51,680 --> 00:25:55,159 Speaker 4: crime and has no history of not appearing in court, 416 00:25:55,280 --> 00:25:57,840 Speaker 4: that they should be released pending trial. 417 00:25:58,280 --> 00:26:01,040 Speaker 2: One of the things that led to New York passing 418 00:26:01,520 --> 00:26:05,399 Speaker 2: cashless bail was a Bronx High school student who was 419 00:26:05,520 --> 00:26:09,240 Speaker 2: accused of stealing a backpack and was in prison for 420 00:26:09,359 --> 00:26:13,440 Speaker 2: three years on Rikers Island awaiting trial because his family 421 00:26:13,480 --> 00:26:16,639 Speaker 2: couldn't afford the bail, which was three thousand dollars, and 422 00:26:17,119 --> 00:26:21,040 Speaker 2: he attempted suicide at Rikers and committed suicide after he 423 00:26:21,119 --> 00:26:21,760 Speaker 2: was released. 424 00:26:22,480 --> 00:26:25,679 Speaker 4: Yes, absolutely, and we just don't want those kinds of 425 00:26:25,720 --> 00:26:29,320 Speaker 4: tragedies because someone just couldn't pay or their family couldn't 426 00:26:29,359 --> 00:26:30,520 Speaker 4: afford to pay the bail. 427 00:26:31,160 --> 00:26:35,320 Speaker 2: What's the other side, Why are people so determined to 428 00:26:35,320 --> 00:26:36,760 Speaker 2: get rid of cashless bail. 429 00:26:37,880 --> 00:26:43,800 Speaker 4: Well, the reason that prosecutors want people held before trial 430 00:26:44,080 --> 00:26:48,360 Speaker 4: is because it coerces pleased from people. So a prosecutor 431 00:26:48,880 --> 00:26:53,320 Speaker 4: would love for everyone to be held before trial if 432 00:26:53,359 --> 00:26:57,080 Speaker 4: they don't want to have a trial. Right, So let's 433 00:26:57,080 --> 00:27:00,480 Speaker 4: take that shoplifting. That innocent person accuse of a sh uplifting. 434 00:27:00,720 --> 00:27:04,320 Speaker 4: If they're held at the jail at risk of losing 435 00:27:05,040 --> 00:27:08,399 Speaker 4: everything in their life, their home, their children, their job, 436 00:27:09,040 --> 00:27:12,200 Speaker 4: when the government offers them a plea to a time served, 437 00:27:12,800 --> 00:27:16,400 Speaker 4: even if they're innocent, there's going to be a strong 438 00:27:17,200 --> 00:27:20,680 Speaker 4: motive for that person to take that plea offer, right 439 00:27:20,720 --> 00:27:22,680 Speaker 4: to accept that offer so that they can get out 440 00:27:22,720 --> 00:27:25,320 Speaker 4: of jail. And that happens in New York all the time. 441 00:27:25,680 --> 00:27:29,760 Speaker 4: In New York, often plea offers are extended at arrangments 442 00:27:29,800 --> 00:27:32,880 Speaker 4: so the first day and people often especially for low 443 00:27:33,000 --> 00:27:36,720 Speaker 4: level cases, or the government's request is for you know, 444 00:27:36,920 --> 00:27:40,320 Speaker 4: time served, they often accept those deals as a way 445 00:27:40,359 --> 00:27:43,520 Speaker 4: to get out of jail. So that's why you see 446 00:27:43,600 --> 00:27:47,119 Speaker 4: folks that aren't necessarily concerned with the constitutional rights of 447 00:27:47,480 --> 00:27:51,719 Speaker 4: poor people really pressing for pre trial's attention. 448 00:27:52,440 --> 00:27:56,959 Speaker 2: According to data from DC's Pre Trial Services Agency, in 449 00:27:57,000 --> 00:28:00,800 Speaker 2: twenty twenty five, ninety percent of individual Jewels on pre 450 00:28:00,920 --> 00:28:05,240 Speaker 2: trial release remained a rest free while eighty nine percent 451 00:28:05,440 --> 00:28:09,920 Speaker 2: of those awaiting trial made all their scheduled court appearances. 452 00:28:10,520 --> 00:28:13,280 Speaker 2: And have there been studies done as to whether there's 453 00:28:13,680 --> 00:28:18,320 Speaker 2: more crime in cities that have cashless bail as opposed 454 00:28:18,359 --> 00:28:19,480 Speaker 2: to those that don't. 455 00:28:20,240 --> 00:28:22,159 Speaker 4: I don't think so. I think we all know what 456 00:28:22,359 --> 00:28:26,320 Speaker 4: causes crime, and it's not based on our bail systems. 457 00:28:26,400 --> 00:28:30,320 Speaker 4: It's whether people have support, whether people have you know, 458 00:28:31,000 --> 00:28:33,959 Speaker 4: ways to meet their basic needs, you know, whether they 459 00:28:33,960 --> 00:28:37,280 Speaker 4: have access to health services and mental health services and 460 00:28:37,359 --> 00:28:42,400 Speaker 4: substance abuse treatment. The bail regimen in a particular city 461 00:28:42,520 --> 00:28:45,160 Speaker 4: or state is not the driver of crime. 462 00:28:46,120 --> 00:28:48,720 Speaker 2: What is Trump trying to do with this executive order? 463 00:28:48,760 --> 00:28:52,320 Speaker 2: Because DC is different from the rest of the country. 464 00:28:53,520 --> 00:28:59,680 Speaker 4: Well, yes, DC, because you know, when our framers were 465 00:29:00,520 --> 00:29:03,200 Speaker 4: dreaming of, you know, what they wanted the country to 466 00:29:03,200 --> 00:29:07,120 Speaker 4: look like. They didn't want the center of federal government 467 00:29:07,280 --> 00:29:11,120 Speaker 4: to be in any particular state. And so we are 468 00:29:11,160 --> 00:29:15,120 Speaker 4: a city without a state and in many ways controlled 469 00:29:15,200 --> 00:29:19,719 Speaker 4: by the federal government. But since the nineteen seventies and 470 00:29:20,080 --> 00:29:24,000 Speaker 4: when the Home Rule Act was passed, DC has had 471 00:29:24,040 --> 00:29:26,520 Speaker 4: a lot more autonomy. And we've enjoyed that autonomy for 472 00:29:26,560 --> 00:29:30,080 Speaker 4: now fifty years. So we have our own DC council, 473 00:29:30,720 --> 00:29:33,680 Speaker 4: we have a mayor. Now, you know, there's a lot 474 00:29:33,680 --> 00:29:35,960 Speaker 4: of self governance. Didn't remember everyone it was in the 475 00:29:36,000 --> 00:29:38,840 Speaker 4: district as a US citizen, So they should have the 476 00:29:38,920 --> 00:29:41,640 Speaker 4: right to enjoy the same things that people who reside 477 00:29:41,760 --> 00:29:45,000 Speaker 4: in states reside, right getting to pick their leaders and 478 00:29:45,040 --> 00:29:47,040 Speaker 4: having those people be the ones who decide what the 479 00:29:47,080 --> 00:29:50,080 Speaker 4: laws are and being accountable to the people who actually 480 00:29:50,080 --> 00:29:53,760 Speaker 4: live in the district when Congress makes laws about the district. 481 00:29:54,320 --> 00:29:57,880 Speaker 4: You know, it's really unfair because the people who live 482 00:29:57,960 --> 00:30:01,680 Speaker 4: here in Washington, d C. Have the opportunity to elect 483 00:30:01,760 --> 00:30:06,400 Speaker 4: those people. And so by declaring that he wants there 484 00:30:06,560 --> 00:30:10,240 Speaker 4: to be a changed in the DC bail statute, you know, 485 00:30:10,280 --> 00:30:15,080 Speaker 4: it's a way to exert control over a city that 486 00:30:15,400 --> 00:30:17,959 Speaker 4: didn't vote for Trump. I think it was about ninety 487 00:30:18,000 --> 00:30:21,720 Speaker 4: percent of people voted for Harris in d C. And 488 00:30:21,800 --> 00:30:24,960 Speaker 4: that you know, has a sizeable number of people of color. 489 00:30:25,320 --> 00:30:25,560 Speaker 1: DC. 490 00:30:25,960 --> 00:30:27,960 Speaker 4: You know used to be called Chocolate City, right, there's 491 00:30:28,000 --> 00:30:31,680 Speaker 4: a sizeable black population here, and you know what we're 492 00:30:31,720 --> 00:30:36,840 Speaker 4: seeing isn't you know, grounded in any reality, crime in 493 00:30:36,920 --> 00:30:40,600 Speaker 4: DC is at a thirty year low. There are at 494 00:30:40,720 --> 00:30:45,560 Speaker 4: least thirty cities with higher crime rates than Washington, d C. 495 00:30:46,480 --> 00:30:48,480 Speaker 4: And so the fact that this is the city that 496 00:30:48,560 --> 00:30:51,400 Speaker 4: he has focused his efforts on is you know, certainly 497 00:30:51,440 --> 00:30:55,680 Speaker 4: because of DC's unique status, but it's not related to crime. 498 00:30:56,400 --> 00:31:00,000 Speaker 2: But can he do it because of DC's unique status? 499 00:31:00,120 --> 00:31:02,920 Speaker 2: Can he somehow eliminate cashless bail? 500 00:31:03,000 --> 00:31:06,760 Speaker 4: There No, not through an executive order. A law would 501 00:31:06,800 --> 00:31:09,760 Speaker 4: have to be passed. There's a statue that the judges 502 00:31:09,840 --> 00:31:13,080 Speaker 4: in DC Superior Court follow and they are governed by 503 00:31:13,080 --> 00:31:18,120 Speaker 4: the law. Now, if Congress changed the law that you know, 504 00:31:18,360 --> 00:31:23,480 Speaker 4: could impact you know, the law that the judges must follow. 505 00:31:23,560 --> 00:31:26,240 Speaker 4: But for now, we have the same bail statute we 506 00:31:26,320 --> 00:31:30,160 Speaker 4: had before the executive order. Let me also say that, 507 00:31:30,880 --> 00:31:34,760 Speaker 4: you know, one thing that we're seeing is because you know, 508 00:31:34,800 --> 00:31:37,320 Speaker 4: it's the US Attorney's Office who prosecute's crime in DC, 509 00:31:37,960 --> 00:31:40,200 Speaker 4: they're bringing a lot of cases in federal court. But 510 00:31:40,240 --> 00:31:43,680 Speaker 4: it's important to remember that it's the exact same statue. 511 00:31:44,040 --> 00:31:46,880 Speaker 4: There's cashless bail in federal court too, and in federal 512 00:31:46,880 --> 00:31:50,640 Speaker 4: courts across the country in New York and California. All 513 00:31:50,760 --> 00:31:54,760 Speaker 4: federal courts follow the same cashless bail scheme, and so 514 00:31:55,280 --> 00:31:59,520 Speaker 4: it just you know, this move by the President doesn't 515 00:31:59,520 --> 00:32:02,560 Speaker 4: seem in a lot of knowledge about the law. 516 00:32:03,200 --> 00:32:07,840 Speaker 2: He also wants major criminal cases in DC to be 517 00:32:07,920 --> 00:32:09,160 Speaker 2: moved to federal court. 518 00:32:10,120 --> 00:32:12,600 Speaker 4: Yes, that's been playing out in the last few weeks 519 00:32:12,600 --> 00:32:16,400 Speaker 4: since the federal occupation. Anything that can be brought in 520 00:32:16,440 --> 00:32:20,160 Speaker 4: federal court is being run in federal court. Prosecutors are 521 00:32:20,200 --> 00:32:23,760 Speaker 4: also charging the top charge that they can charge rather 522 00:32:23,840 --> 00:32:26,880 Speaker 4: than the charge that is just and so we've been 523 00:32:27,280 --> 00:32:31,160 Speaker 4: experiencing a really significant strain in our legal system, and 524 00:32:31,200 --> 00:32:33,680 Speaker 4: it's something that the courts and the lawyers simply can't 525 00:32:33,760 --> 00:32:34,320 Speaker 4: keep up with. 526 00:32:34,680 --> 00:32:39,240 Speaker 2: I understand that the DCUs attorney, Janine Pireau, has been 527 00:32:39,280 --> 00:32:43,080 Speaker 2: having some problems getting grand juries to indict. 528 00:32:42,840 --> 00:32:45,800 Speaker 4: On some of these Yes, so because she's bringing them 529 00:32:45,800 --> 00:32:49,560 Speaker 4: in federal court. She's been trying to bring these solim 530 00:32:49,640 --> 00:32:54,240 Speaker 4: police officer cases and charge them as felonies, which requires 531 00:32:54,320 --> 00:32:57,160 Speaker 4: the grand jury to make the charging decision. I think 532 00:32:57,240 --> 00:33:01,600 Speaker 4: the grand jury in DC is made up byc residents. 533 00:33:01,640 --> 00:33:04,880 Speaker 4: And you know, fortunately in our from a legal system, 534 00:33:05,080 --> 00:33:07,920 Speaker 4: in felony cases, the people have the last day, and 535 00:33:08,040 --> 00:33:10,720 Speaker 4: they have not been indicting in those cases. 536 00:33:11,000 --> 00:33:13,880 Speaker 2: And the old saying is that a prosecutor can get 537 00:33:13,920 --> 00:33:17,120 Speaker 2: a grand jury to indict a ham sandwich, but I 538 00:33:17,160 --> 00:33:21,440 Speaker 2: guess not. Thanks so much, Vita. That's Professor Vita Johnson 539 00:33:21,520 --> 00:33:24,360 Speaker 2: of Georgetown Law. And that's it for this edition of 540 00:33:24,360 --> 00:33:27,000 Speaker 2: the Bloomberg Law Show. Remember you can always get the 541 00:33:27,080 --> 00:33:30,240 Speaker 2: latest legal news on our Bloomberg Law Podcast. You can 542 00:33:30,320 --> 00:33:34,560 Speaker 2: find them on Apple Podcasts, Spotify, and at www dot 543 00:33:34,600 --> 00:33:38,760 Speaker 2: Bloomberg dot com, slash podcast, Slash Law, And remember to 544 00:33:38,800 --> 00:33:41,840 Speaker 2: tune into The Bloomberg Law Show every weeknight at ten 545 00:33:41,920 --> 00:33:45,680 Speaker 2: pm Wall Street Time. I'm June Grosso and you're listening 546 00:33:45,760 --> 00:33:46,440 Speaker 2: to Bloomberg