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Speaker 1: This is Bloomberg Law, with June brasso from Bloomberg radio

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Speaker 1: claiming you have money that you do not have. Does

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Speaker 1: not amount to the art of the deal, it's the

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Speaker 1: art of the steel and there cannot be different rules

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Speaker 1: for different people in this country or in this state,

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Speaker 1: and former presidents are no different. New York's Attorney General,

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Speaker 1: Letitia James, is suing former President Donald Trump, his three

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Speaker 1: eldest children and his company for what she called staggering

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Speaker 1: fraud over a decade, alleging they lied about the value

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Speaker 1: of his prized real estate assets, from golf courses and

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Speaker 1: hotels to his homes at trump tower and Mara Lago.

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Speaker 1: The lawsuit strikes at the essence of what made trump

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Speaker 1: famous and the core of his brand, and the ultimate

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Speaker 1: aim is to stop the trump's from doing business in

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Speaker 1: New York ever again. My guest is former federal prosecutor

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Speaker 1: Robert Mints, a partner mcarter. In English, this is a

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Speaker 1: two hundred twenty two page complaint. You could say it's

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Speaker 1: almost three years in the making, listing two hundred plus

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Speaker 1: times trump allegedly lied about valuations of his assets over

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Speaker 1: ten years. This is a sweeping and detailed complaint not unexpected,

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Speaker 1: by the way, something that everybody thought was going to

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Speaker 1: come eventually out of the New York Attorney General's office,

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Speaker 1: but the details and the number of interviews and the

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Speaker 1: number of documents that were reviewed in putting this complaint

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Speaker 1: together is something that certainly gets your attention. It a

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Speaker 1: leg is a widespread effort to manipulate property valuations by

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Speaker 1: former president trump and three of his children and the

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Speaker 1: trump organization and some of the trump executives, and it's

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Speaker 1: asking for two D fifty million dollars and penalties and

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Speaker 1: an into their operations in the state of New York.

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Speaker 1: It's specifically accused his former president trump, his son Donald

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Speaker 1: Trump Jr, his daughter Ivanka trump, his other son Eric

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Speaker 1: trump another trump company executives of engaging in a year's

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Speaker 1: long scheme to enrich themselves by inflating the values of

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Speaker 1: a wide variety of properties both within the United States

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Speaker 1: and internationally. And just explain how inflating the values helped trump?

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Speaker 1: Sure well, this probe was launched back in tween and

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Speaker 1: it came as a result of testimony that Michael Cohne,

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Speaker 1: who was former president trump's lawyer previously. He testified before

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Speaker 1: Congress and said that the trump organization had regularly engaged

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Speaker 1: in a pattern of fraudulent financial statements, and by that

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Speaker 1: he meant that the trump organization would inflate the valuation

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Speaker 1: of assets in certain circumstances, for example when seeking loans

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Speaker 1: and for insurance coverage purposes, but at the same time

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Speaker 1: deflate the value of those very same assets in order

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Speaker 1: to reduce their tax liability. During the press conference, the

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Speaker 1: a g gave some examples, for example, the trump triplex

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Speaker 1: apartment in trump tower. He represented that it was more

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Speaker 1: than thirty thousand square feet. In reality it was less

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Speaker 1: than eleven thousand square feet, which increased the value by

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Speaker 1: about two million dollars. And James said that, you know,

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Speaker 1: this wasn't an honest mistake, it was deliberate fraud because

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Speaker 1: he knew about the layout of the apartment in the building.

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Speaker 1: He'd personally overseen the construction. But what the Attorney General

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Speaker 1: was trying to do here was to get out in

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Speaker 1: front of an argument that these valuations are, by definition,

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Speaker 1: somewhat subjective. In other words, in order to try to

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Speaker 1: put a valuation on Commercial Property in Manhattan, for example,

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Speaker 1: there is somewhat of a subjective element to coming up

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Speaker 1: with a number of what that property is worth based

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Speaker 1: upon other commercial properties. So what the A G here

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Speaker 1: was attempting to do was to give examples that did

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Speaker 1: not involve any of that subjectivity. So, as an example,

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Speaker 1: the complaint alleges that the triplex apartment at the trump

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Speaker 1: tower was thirty thousand square feet in certain documents and

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Speaker 1: then was listed as only eleven thousand square feet in others.

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Speaker 1: That is something that is clearly not subjective but is

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Speaker 1: simply an objective fact. It's either thirty thousand or eleven

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Speaker 1: thousand square feed. Other examples that were specifically included in

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Speaker 1: the complaint include adding more floors and square footage to

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Speaker 1: buildings and actually exists, claiming more residential lots than were

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Speaker 1: actually zoned for on certain golf courses and listing values

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Speaker 1: beyond what the appraisers had valued those properties at. Again,

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Speaker 1: all of these are attempts by the Attorney General's office

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Speaker 1: to show that these were not mistakes, these were not

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Speaker 1: differences between two asset valuators in terms of what the

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Speaker 1: subjective valuation of a property is worth, but these were

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Speaker 1: simply facts that were misstated. According to the Attorney General's

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Speaker 1: office were misstated intentionally by Donald Trump and by others

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Speaker 1: in the trump organization when they knew in fact that

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Speaker 1: these facts were wrong. She said that many of these

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Speaker 1: alleged evaluations were, quote, greatly exaggerated, grossly inflated, objectively false.

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Speaker 1: For example, he overestimated the value of Moral Lago by

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Speaker 1: almost ten times, and I think that's what the Attorney

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Speaker 1: General's office has to do here, because of the subjective

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Speaker 1: nature in valuing these properties, these have to be examples

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Speaker 1: that are so extreme that they can point out that

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Speaker 1: nobody could have really believed that these valuations were true.

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Speaker 1: And so the the age has found certain examples where

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Speaker 1: she believes that these evaluations are so exaggerated that it

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Speaker 1: cannot be an innocent mistake. The other thing we're seeing

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Speaker 1: throughout this complaint is the attempt by the Attorney General's

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Speaker 1: office to show that this is a pattern and practice.

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Speaker 1: In other words, it's not an isolated example. It's not

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Speaker 1: a situation in which the trump organ aization can say

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Speaker 1: that they may have made a mistake or they may

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Speaker 1: have relied on evaluation that was improper, but they're showing

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Speaker 1: that this is a pattern in practice that involved multiple properties,

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Speaker 1: both domestic and internationally, on something that went on for

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Speaker 1: many years. Ultimately, in order to prove their case, they

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Speaker 1: have to show that this was done intentionally. Who was

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Speaker 1: not an innocent mistake? On his Social Media Site Truth

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Speaker 1: Social Trump called the lawsuit another witch hunt. His lawyer,

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Speaker 1: Elena Habba, said it's abundantly clear that the Attorney General's

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Speaker 1: office has exceeded its statutory authority by prying into transactions

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Speaker 1: where absolutely no wrongdoing has taken place. How do they

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Speaker 1: rebut though things like, you know, exaggerations of square footage?

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Speaker 1: That's a fact. How do you rebut that? Well, I

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Speaker 1: think that's part of the defense that we're certainly going

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Speaker 1: to see in this case. The fact is that Leticia

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Speaker 1: James is a Democrat who was elected. Alvin Braggmann, district attorney,

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Speaker 1: was also a Democrat right, and so it's certainly something

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Speaker 1: that's going to come out of the trump playbook to

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Speaker 1: argue that these people were politically motivated and in fact

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Speaker 1: Latitia James, as the New York Attorney General, once she

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Speaker 1: ran for office, specifically talked about investigating Donald Trump and

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Speaker 1: the trump organization. So this is part of an attempt

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Speaker 1: in order to nullify the jury, to go out there

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Speaker 1: and to suggest that this entire investigation and now this

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Speaker 1: civil investigation and the civil charges that have been brought today,

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Speaker 1: we're all part of the witch hunt and there's really

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Speaker 1: no substance here. UN ultimately, when it gets down to

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Speaker 1: a trial, they will have to rebut these specific examples

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Speaker 1: where the a g has cited misstatements in these asset valuations,

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Speaker 1: and that's exactly why we're seeing a situation here where

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Speaker 1: the Attorney General's office is giving multiple examples of where

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Speaker 1: they believe these are objective and indefensible valuations, where and

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Speaker 1: on the one hand it's being valued at a certain

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Speaker 1: level and the facts about the property being presented in

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Speaker 1: a certain way when it benefits trump organization, and they're

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Speaker 1: being presented factually in a different way in order to

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Speaker 1: benefit the trump organization in a different context. Letitia James

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Speaker 1: said she rejected a settlement offer from trump, but her

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Speaker 1: door is open. What does it tell you that she

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Speaker 1: rejected a settlement offer? Well, I don't think it says

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Speaker 1: that much really. I mean it's interesting that the trump

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Speaker 1: organization is trying to settle these charges, but not surprising

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Speaker 1: just how far apart they may be in terms of settlement,

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Speaker 1: that's something we really don't know. As this case progresses.

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Speaker 1: Now now that the charges have actually been filed, the

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Speaker 1: case will move forward. There may be further discussions about

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Speaker 1: trying to resolve this case. But remember this is a

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Speaker 1: civil case only. It's not a criminal case. So the

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Speaker 1: only thing this case is ultimately about is money. So

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Speaker 1: ultimately is a case that can be settled with money.

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Speaker 1: One thing that makes this different, however, is that the

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Speaker 1: A G is not only seeking money in this case,

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Speaker 1: but also seeking to ban trump and his family from

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Speaker 1: engaging in business in New York state. So among the

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Speaker 1: penalties that are being sought by the attorney general are

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Speaker 1: to remove the trumps from business engaged in New York,

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Speaker 1: to appoint a monitor to monitor the trump business and

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Speaker 1: control its interests and to remove the trustees of the

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Speaker 1: trump organization we replace them with Independent Trustees in order

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Speaker 1: to monitor the commercial and real estate acquisitions for five years,

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Speaker 1: including all loans with New York banks, and basically run

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Speaker 1: the business through independent individuals, through a monitor, through independent trustees,

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Speaker 1: rather than president trump and his family. That is something

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Speaker 1: that is going to be difficult, I think, for the

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Speaker 1: trump organization and the attorney general to agree on, because

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Speaker 1: now that that's been laid out there, it's going to

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Speaker 1: be difficult for the age to walk that back and

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Speaker 1: that is not something that I can ever see the

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Speaker 1: trump organization agreeing to because that would essentially turn the organizations,

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Speaker 1: oh we're too independent, unrelated individuals, something that president trump

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Speaker 1: has never agreed to. He has always run his business

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Speaker 1: with close family members and executives who had been loyal

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Speaker 1: to him for many years. So the idea that individuals

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Speaker 1: who are independent and approved by the Attorney General's office

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Speaker 1: would run the trump organization and would be trustees of

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Speaker 1: the trump organization is something that is unlikely the president

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Speaker 1: trump will ever agree to. So, as you mentioned, this

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Speaker 1: is a civil complaint, but James said that she thinks

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Speaker 1: the conduct alleged here also violates Federal Criminal Law, including

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Speaker 1: issuing false statements to financial institutions and bank fraud, and

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Speaker 1: she's making criminal referrals to the u s attorney in

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Speaker 1: Manhattan and the I R S so they'll have the

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Speaker 1: benefit of all the evidence she's gathered in a lot

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Speaker 1: of hard fought legal fights. Does that put pressure on

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Speaker 1: them to do something? Well, I think it does ratchet

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Speaker 1: up the pressure a bit on the U S Atorney's office.

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Speaker 1: There will be a huge amount of information turned over

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Speaker 1: to them. The AG's office examine more than a million

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Speaker 1: pages of documents and interviewed many, many trump executives and

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Speaker 1: outside professionals who work with the trump organization, and all

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Speaker 1: of that will be passed on to the U S

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Speaker 1: Attorney's Office. On the I R S and Leticia James

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Speaker 1: and New York Attorney General specifically said that this investigation

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Speaker 1: uncovered potential criminal violations including falsifying business records, issuing false

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Speaker 1: financial statements, insurance fraud, conspiracy and bank fraud. So this will,

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Speaker 1: I think, put additional pressure on the U S Attorney's

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Speaker 1: office in the southern district. But ultimately they will review

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Speaker 1: this information, that will review this evidence and they'll come

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Speaker 1: to their own conclusion as to whether or not a

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Speaker 1: federal criminal law has been broken. Because, remember, the standard

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Speaker 1: for a civil case is simply a preponderance of the evidence.

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Speaker 1: That's the standards of Leticia James has to prove in

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Speaker 1: court in order to win her civil case. For Federal Prosecures,

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Speaker 1: to win a criminal case, that has to be roof

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Speaker 1: beyond a reasonable doubt. So it's a higher standard and

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Speaker 1: the U S Attorney's Office that will then have to

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Speaker 1: evaluate that evidence and decide whether or not they can

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Speaker 1: meet that higher standard in a criminal case. How damaging

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Speaker 1: is this to former president trump? I mean he's facing

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Speaker 1: criminal investigations by the Justice Department, by the Fulton County

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Speaker 1: District Attorney's office in Georgia, possibly by the Manhattan District

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Speaker 1: Attorney's Office. How damaging is this to him? Criminal cases

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Speaker 1: are always more threatening because obviously there's a risk of

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Speaker 1: actually going to jail in a criminal case and a

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Speaker 1: civil case can only result in fines and penalties. But

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Speaker 1: on the other hand, this is a broad, sweeping indictment,

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Speaker 1: as it were, of the trump organization and their pattern

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Speaker 1: and practice of doing business. The criminal investigations are much

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Speaker 1: more focused. They're focused on allegedly taking confidential information to

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Speaker 1: Marrow Lago. They're focused on aspects of campering with the

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Speaker 1: twenty when the election. But this is a broad allegation

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Speaker 1: that really goes to the heart of the trump organization

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Speaker 1: and the brand that the trump's have built over many,

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Speaker 1: many years as a successful, smart business, somebody who knew

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Speaker 1: that led to properties being sold, all under a facade

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Speaker 1: of false valuations of these properties. Remains to be seen

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Speaker 1: whether the Attorney General's officer will be able to prove

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Speaker 1: these allegations, but it is certainly a frontal assault on

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Speaker 1: the trump organization and the brand the president trump has

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Speaker 1: spent decades building up. Thanks, Bob. That's Robert Mints, a

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Speaker 1: partner at Carter in English. The governors of the States

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Speaker 1: on sending migrants to sanctuary cities, but also on regulating

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Speaker 1: social media platforms. Texas is taking a stand against big

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Speaker 1: tech political censorship. We're not going to allow it. The

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Speaker 1: truth will set you free, and so that's what we're

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Speaker 1: doing here in the state of Florida. The Texas law

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Speaker 1: barring social media platforms with more than fifty million users

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Speaker 1: from discriminating on the basis of viewpoint was cleared as

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Speaker 1: constitutional by the Fifth Circuit Court of Appeals last Friday,

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Speaker 1: but Florida's similar law was struck down as unconstitutional by

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Speaker 1: the Eleventh Circuit Court of Appeals in May. The Supreme

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Speaker 1: Court often intervenes when there's this kind of a circuit split,

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Speaker 1: and Florida's Attorney General asked the court to do just

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Speaker 1: that on Wednesday, I guess, his First Amendment Law expert

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Speaker 1: Caroline Mallick Corbin, a professor at the University of Miami

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Speaker 1: Law School. Caroline tell us a little about the Texas

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Speaker 1: Social Media Law. So Texas passed a law that said

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Speaker 1: that large social media platforms cannot discriminate based on viewpoint

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Speaker 1: in terms of taking down posts, and ostensibly this was

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Speaker 1: in response to a perceived problem of large liberal companies

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Speaker 1: targeting conservatives viewpoints, when in reality what it may well

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Speaker 1: do is hamper platforms ability to take down hate speech

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Speaker 1: and disinformation and speech like that. So the companies are

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Speaker 1: claiming to violates their free speech rights. But there may

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Speaker 1: also be a question about preemption, for example, because section

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Speaker 1: two thirty in the communications decency acts provides protection for

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Speaker 1: of the needs in terms of taking down material that

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Speaker 1: they believe might be problematic. Can you give us an

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Speaker 1: analysis of this law using Basic First Amendment Principles? Free

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Speaker 1: speech clause protects both your right to speak and your

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Speaker 1: right not to speak. So the government can no more

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Speaker 1: censor you from saying what you like than it can

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Speaker 1: force you to say things you don't like, like Anti

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Speaker 1: Nazi dribble or covid disinformation right, the government cannot compel

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Speaker 1: you to speech any more than it can sense your speech.

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Speaker 1: The second important thing is, whether we like it or not,

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Speaker 1: the Supreme Court has held that for profit corporations have

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Speaker 1: free speech rights to the same extent as you or met,

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Speaker 1: with exception for its advertisements and other commercial speech. Generally,

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Speaker 1: corporations have free speech rights. So corporations also can't be

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Speaker 1: censored by the government or compel to speek against their will.

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Speaker 1: The final thing I want to point out is that

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Speaker 1: in free speech law, any time the government attempts to

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Speaker 1: regulate the content of your speech, it is presumptively unconstitutional,

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Speaker 1: on the idea that the government has no business telling

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Speaker 1: you what you can or cannot say. Well, what you

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Speaker 1: don't want to say. So under sort of foundational principles

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Speaker 1: of Free Speech Law, this looks like the content based regulations,

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Speaker 1: because it's telling speakers the content of what they have

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Speaker 1: to say. And again, they have a right not to

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Speaker 1: speak as much as a right to speak, and companies

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Speaker 1: have these protections as well. So the normal free speech

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Speaker 1: analysis would be this is a content based regulation. It's

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Speaker 1: telling companies what they have to say. The government is

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Speaker 1: not allowed to do that. It has to have a

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Speaker 1: really compelling government interests and no other way to accomplish

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Speaker 1: that interest in order to rise, and the government can't

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Speaker 1: make that showing. That's one way to do the analysis.

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Speaker 1: I take it the fifth circuit. Yes, this is how

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Speaker 1: the fifth circuit did the analysis, and I want to

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Speaker 1: highlight two claims it's made, one of which is preposterous

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Speaker 1: and one of which is wrong. So let me start

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Speaker 1: with the really outlandish claim that it made, which is

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Speaker 1: that this does not involve beach in any way. And

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Speaker 1: so it makes this argument in a couple of ways. First,

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Speaker 1: it tries to say that what's going on here is

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Speaker 1: that a private company is censoring speech and Censorship is conduct,

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Speaker 1: not speech, and the free speech clause protects speech, not conduct.

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Speaker 1: This is silly, apart from the fact that intuitively it

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Speaker 1: seems wrong to say that what social media does or

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Speaker 1: does not stand, that say, doesn't involve speech, even assuming

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Speaker 1: you're going to go along with the fifth circuits attempt

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Speaker 1: to characterize the decision not to publish something as conduct.

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Speaker 1: Conduct that has an expressive component is also protected by

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Speaker 1: the free speech clause. And clearly it's decision not to

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Speaker 1: publish something because it doesn't like its content means that

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Speaker 1: its censorship has an expressive component. And then it says,

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Speaker 1: even assuming this is about editorial discretion in what you

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Speaker 1: say or not say, editorial discretion is not protected by

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Speaker 1: the free speech clause. In other words, if I write

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Speaker 1: the chapters in a book, that would be protected by

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Speaker 1: the free speech clause, but if I'm putting together a

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Speaker 1: compilation of essays and choosing what other people I want

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Speaker 1: to have in my book, that would not be. That's

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Speaker 1: also just patently false. So the court's attempt to say

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Speaker 1: company's decision not to publish certain things on its platform

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Speaker 1: doesn't involve it's each is incorrect, very incorrect. The court

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Speaker 1: said the platforms are not newspapers, their censorship is not speech,

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Speaker 1: but aren't they just like newspapers for many, many people?

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Speaker 1: So that question actually touches on two things. Even a

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Speaker 1: decision of what you want to publish or not publish

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Speaker 1: is a decision about what to say or not say,

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Speaker 1: and it's protected by the free speech cause. But that

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Speaker 1: brings me to my second point, which is the court

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Speaker 1: also argues that social media platforms are actually common carriers

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Speaker 1: and there are special rules involved with common carriers, one

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Speaker 1: which is you can bar them from discriminating against people.

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Speaker 1: So a common carrier is sort of infrastructure that serves

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Speaker 1: as a conduit for people's speech. So a telephone company

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Speaker 1: is a common carrier, or a postal service is a

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Speaker 1: common carrier, broad band providers maybe common carriers. Right. These

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Speaker 1: are people who engage in sort of indiscriminate, neutral transmission

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Speaker 1: of any and all users speech. And so the question

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Speaker 1: is the question you raised. Are Social media platforms more

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Speaker 1: like newspapers, such that they are entitled to Full Free

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Speaker 1: Speech Protections, or they more like telephone companies, such that

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Speaker 1: their common carriers and therefore the government can say you

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Speaker 1: can't discriminate against few points. And whereas I think there

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Speaker 1: would be no disagreement above First Amendment, scholars that censorship

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Speaker 1: involved speech, there might be disagreement among free speech scholars

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Speaker 1: about whether social media platforms are best characterized as more

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Speaker 1: like newspapers or more like common carriers, and both the

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Speaker 1: District Court in Texas and the Eleventh Circuit, addressing a

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Speaker 1: similar question, held that they're really more like newspapers, is

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Speaker 1: that they do exercise editorial control over the information, not

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Speaker 1: just in terms of censoring certain speech, but also in

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Speaker 1: terms of how they present the speech, how they arrange

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Speaker 1: the speech. So if you have a twitter feed or

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Speaker 1: a facebook feed, you know that they tend to try

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Speaker 1: and show you things. So, with the fifth circuit saying

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Speaker 1: one thing in the eleventh circuits saying another, is it

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Speaker 1: likely the Supreme Court will take the case? The laws

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Speaker 1: were not exactly the same, but they presented some similar

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Speaker 1: issues and they've reached different conclusions about those issues and

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Speaker 1: that's the type of case that the Supreme Court often

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Speaker 1: decides to hear. Explain how this case went before the

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Speaker 1: Supreme Court before and what that might indicate. So once

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Speaker 1: the District Court had issued is ruling in Texas, instead,

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Speaker 1: this law violates the free speech clause. So I'M gonna stay.

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Speaker 1: I'm going to say it does not go into effect yet.

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Speaker 1: The fifth circuit remove the stay before it made any

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Speaker 1: kind of decision and said yes, this law should go

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Speaker 1: into effect. And when that was appealed to the Supreme Court,

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Speaker 1: the Supreme Court was like no, no, no, no, no no, actually,

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Speaker 1: we think that the district courts day should stay in effect.

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Speaker 1: So how do you read the Supreme Court's willingness to

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Speaker 1: say maybe we should hold off on having this law

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Speaker 1: go into effect? I'm not entirely sure. It may mean

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Speaker 1: that there are five votes for finding it unconstitutional. I

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Speaker 1: will note, however, that there was a dissent of three

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Speaker 1: justices who indicated that they thought the law might actually

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Speaker 1: be constitutional. How do you think this law might affect

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Speaker 1: social media platforms? So basically, anyone who thinks that their

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Speaker 1: post was removed because of viewpoint discrimination would have a

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Speaker 1: right to suit. And there were also disclosure requirements. So again,

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Speaker 1: the fear of being sued based on decisions about what

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Speaker 1: it takes down may very well affect how these companies

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Speaker 1: decide what gets posted or what doesn't get posted. Given

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Speaker 1: how much criticism they've come under for not removing enough content,

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Speaker 1: now they're coming under criticism for removing too much content.

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Speaker 1: It'll be really interesting to see whether the Supreme Court

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Speaker 1: wants to wade into this this term when it has

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Speaker 1: so many controversial cases on its docket already? Thanks so much, Caroline.

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Speaker 1: That's Caroline Mala Corbin, a professor at the University of

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Speaker 1: Miami Law School. And that's it for this edition of

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Speaker 1: the Bloomberg Law show. Remember you can always get the

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Speaker 1: latest legal news on our Bloomberg Law podcast. You can

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Speaker 1: find them on apple podcasts, spotify and at www dot

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Speaker 1: bloomberg dot com, slash podcast, slash law, and remember to

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Speaker 1: tune into the Bloomberg last show every week night at

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Speaker 1: ten PM Wall Street time. I'm June Grosso and you're

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