Speaker 1: This is Bloomberg Law with June Brusso from Bloomberg Radio.
Speaker 1: After a trial that lasted almost two months, exiled Chinese
Speaker 1: tycoon Guo Wangui was convicted of a massive fraud and
Speaker 1: duping investors out of one billion dollars to fund his
Speaker 1: lavish lifestyle. Quo's criticism of the Communist Party won him
Speaker 1: legions of online followers, and prosecutors say he fleeced those
Speaker 1: loyal followers out of their money for seemingly legitimate businesses
Speaker 1: and then diverted the funds to himself so he could
Speaker 1: spend his days living in his twenty six million dollar mansion,
Speaker 1: lounging on his thirty seven million dollar yacht, driving his
Speaker 1: million dollar red Lamborghini, not to mention a four million
Speaker 1: dollar Ferrari for his son, a more than one million
Speaker 1: dollar jewelry box, and other extravagant purchases. Joining me is
Speaker 1: Bloomberg Legal reporter av Benny Morrison, who covered the trial,
Speaker 1: ava the jury convicted him of fraud and racketeering nine
Speaker 1: counts out of twelve. Tell us about the prosecution's case.
Speaker 2: Marsgow was charged with twelve different offenses related to a
Speaker 2: scheme to defraud investors out of a billion dollars. Prosecutors
Speaker 2: alleged that he did this in a number of smaller schemes,
Speaker 2: one related to a cryptocurrency exchange, another related to a
Speaker 2: farm to lians program, and an exclusive membership club called
Speaker 2: G Clubs. The allegation was that he really pried on
Speaker 2: his followers, that he had a mass through his anti
Speaker 2: Chinese Communist Party campaign, A lot of people online gravitated
Speaker 2: towards his online videos and his very outspoken critical statements
Speaker 2: against the Chinese government, and then he appealed to them
Speaker 2: to invest money in the various business opportunities. The prosecution
Speaker 2: said that he took a lot of this money, more
Speaker 2: than a billion dollars, and spent it on himself and
Speaker 2: his family.
Speaker 1: He had incredible wealth, he flaunted, and the prosecution spent
Speaker 1: some time on showing how he spent his money.
Speaker 2: Yes, the prosecution said that he spent a lot of
Speaker 2: investor funds on enriching himself and his family. So that
Speaker 2: included a twenty six million dollar mansion in New Jersey,
Speaker 2: a red Lamborghini, a Ferrari for his son, a sixty
Speaker 2: thousand dollars TV, ridiculously expend his mattresses, all of those
Speaker 2: luxuries that went into living a very opulent lifestyle. The
Speaker 2: defense came back and said, look, he is used to
Speaker 2: this lifestyle. He came from a really wealthy family of
Speaker 2: properties developers in China. And while most people might think
Speaker 2: it's outrageous to spend thirty five thousand dollars on a mattress,
Speaker 2: these were things that Musglow was used to. He's always argued,
Speaker 2: and he shouldn't be judged for that.
Speaker 1: His crusade against the Communist Party, What part did that
Speaker 1: play in the trial?
Speaker 2: It was a big argument that the defense put forward.
Speaker 2: So they tried to paint him as someone who had
Speaker 2: devoted his life to the whistleblower movement and put himself
Speaker 2: in grave danger because of that. They said that he
Speaker 2: was an unapologetic critic of the Chinese government and fled
Speaker 2: persecution in China to the US, where he sought political
Speaker 2: asylum in twenty seventeen. And the defense said that he
Speaker 2: had been the target of retaliation by the Chinese government.
Speaker 2: They'd tried to extradite him back to China a few
Speaker 2: years ago, that hacked into his bank account, his phones,
Speaker 2: his laptop. They said that he had put himself at
Speaker 2: great risk and painted him as of this brave political
Speaker 2: crusader and an activist. The government essentially suggested that this
Speaker 2: was all a bit of a front and even if
Speaker 2: he was a political activist, it didn't have anything to
Speaker 2: do with the crux of the case, which was that
Speaker 2: he defrauded a lot of investors out of a lot
Speaker 2: of money.
Speaker 1: A two month trial start with the prosecution what kinds
Speaker 1: of witnesses which were the most effective.
Speaker 2: The most effective witnesses were some of the investors themselves
Speaker 2: that the prosecution called. They described investing money in some
Speaker 2: of Milesgow's businesses and his companies like GTV Media, which
Speaker 2: was a social media platform on g clubs, the exclusive
Speaker 2: members only club, the farm to Loan program, and a
Speaker 2: crypto exchange. They said that they gravitated towards Miles Glow's
Speaker 2: videos where he was critical of the Chinese government. Some
Speaker 2: of those videos he recorded in the penthouse at the
Speaker 2: famous Sherry Nedeline hotel that overlooks Central Park in Manhattan,
Speaker 2: or on the deck of his one hundred and fifty
Speaker 2: two foot super yacht, which was often maud Off the Posters, Connecticut,
Speaker 2: where he had another house so some of these investors
Speaker 2: spoke about how they admired him and they believed in
Speaker 2: what he was saying and were on the same page
Speaker 2: as he was when it came to beaking out against
Speaker 2: the Chinese government. So they felt comfortable in investing their
Speaker 2: money with him. But then they never got it back.
Speaker 2: And I remember one witness being on the stand too well,
Speaker 2: get quite emotional a lot of times, was saying, you know,
Speaker 2: just because you're anti CCP doesn't give you an excuse
Speaker 2: to rip people off. Doesn't it give you an excuse
Speaker 2: to commit fraud either. So they were some of the
Speaker 2: most powerful I think prosecution witnesses. We also heard from
Speaker 2: luxury car dealers who sold Malsgow or his companies these
Speaker 2: extremely expensive and rare cars as well. What are the
Speaker 2: other witnesses was a managing director at a hedge fund
Speaker 2: run by Kyle Bass. Miles Glow had transferred one hundred
Speaker 2: million dollars, which prosecution said was stolen from investors to
Speaker 2: one of Kyle Bass's hedge funds. Interestingly, he was actually
Speaker 2: acquitted of three chargers, and those three charges relate to
Speaker 2: the stock offering in GTV, the social media platform company,
Speaker 2: and the one hundred million dollar transfer to the Hedge Fund.
Speaker 2: On the defense side, Milesglow didn't get on the witness
Speaker 2: stand himself, but the witnesses that they called all sort
Speaker 2: of spoke to Milescow's position as a political activist and
Speaker 2: why he felt so strongly about speaking out against the ECP, that.
Speaker 1: Being the Chinese Communist Party and he was friends with
Speaker 1: Trump advisor Steve Bannon, who got a million dollar payment
Speaker 1: from one of Guo's companies and was arrested on Guo's yacht. Now,
Speaker 1: the prosecution played for the jury a secretly recorded phone
Speaker 1: call between Guo and his subordinates in twenty twenty one.
Speaker 1: What did that show?
Speaker 2: Yes, the prosecution in its closing address to the jury,
Speaker 2: opened with this quite dramatic phone call recording. Before the
Speaker 2: prosecutor even started speaking, he just pressed the play button
Speaker 2: and this recording played out across the courtroom and you
Speaker 2: could hear Miles Glow yelling at some of his employees.
Speaker 2: He was speaking with some of his staff and the
Speaker 2: discussion was around the transfer of money from one of
Speaker 2: Milesclow's entities to somewhere else, and one of Milesglow's employees
Speaker 2: was saying like, hang on, we need to go to
Speaker 2: the board with this, and then all of a sudden
Speaker 2: you can hear Miles Glow who's speaking. Amendorin translation was
Speaker 2: included in subtitles before the jury. He's yelling at his employee,
Speaker 2: calling them a scumbag, telling them to go to hell,
Speaker 2: telling them to shut the hell up. So it was
Speaker 2: quite dramatic, and what the prosecution was trying to do
Speaker 2: there was say to the jury. Milesgow might sound very
Speaker 2: reasonable and softly spoken and almost at times demure and
Speaker 2: calm in his videos that many of his followers and
Speaker 2: investors have seen, but you know behind the scenes he
Speaker 2: could be quite brash and abusive to his employees.
Speaker 1: His supporters were in the courtroom every day, a lot
Speaker 1: of his supporters.
Speaker 2: Yes, every single day, the court was packed with his supporters.
Speaker 2: There must have been anywhere between thirty and forty people
Speaker 2: every single day. Without a doubt, they would file in there.
Speaker 2: Some of them were wearing T shirts or jackets or
Speaker 2: scarves with the G Fashion logo on it, and G
Speaker 2: Fashion was another one of Milesglow's companies, so you could
Speaker 2: tell that they were very, very supportive of him. Every
Speaker 2: time he was walking to the courtroom and they would
Speaker 2: all sort of wave and smile at him, and at
Speaker 2: different points throughout the trial days he would turn around,
Speaker 2: he would look at the public gallery and give everyone
Speaker 2: a smile. It was quite amazing to see them turn
Speaker 2: up every single day over the course of almost two months.
Speaker 2: Towards the end of the trial, there were also some detractors,
Speaker 2: so there was a little bit of tension in the
Speaker 2: courtroom and you could see towards the end there there
Speaker 2: were more US Marshals turning up to make sure everyone
Speaker 2: was sort of behaving themselves, and the court security officers
Speaker 2: were making sure that they were talking to these people
Speaker 2: and telling them to be respectful of the environment that
Speaker 2: they were in. Once the verdict was handed down, we
Speaker 2: were expecting some sort of emotions and tensions to boil over,
Speaker 2: but everyone was very calm. Even Malesgow himself was very calm,
Speaker 2: you know. If anything, he was comforting his lawyers, who
Speaker 2: fought very hard for him and put up a pretty
Speaker 2: good case throughout his trial. He hugged one of his
Speaker 2: defense lawyers, was shaking the hands of the others for
Speaker 2: he was led away. One for his supporters got outside
Speaker 2: the courthouse. There was a little bit of yelling and
Speaker 2: back and forth outside the court building, and some of
Speaker 2: the US marshals had to step in and tell them
Speaker 2: just to calm down. So, yeah, it was quite impressive
Speaker 2: to see the people that turned out to support him
Speaker 2: every single day.
Speaker 1: And something very unusual here the judge kept the names
Speaker 1: of the juror's secret. What was the reason for that.
Speaker 2: That's right before the trial began, there were arguments on
Speaker 2: both sides as to why there should be an anonymous jury,
Speaker 2: and this is quite an unusual step that the prosecution
Speaker 2: had argued that the jurors were potentially at risk if
Speaker 2: they were identified because of the very strong and loyal
Speaker 2: supporter base that Milgo had and they were a bit
Speaker 2: worried about and maybe retaliation, whereas the defense had argued
Speaker 2: that yes, the jury should be made anonymous, but the
Speaker 2: risk was coming from the CCP. So the judge didn't
Speaker 2: rule either way, but she said that yees essentially because
Speaker 2: this case has attracted so much intense interest, that the
Speaker 2: jury should remain anonymous. And they were escorted by US
Speaker 2: marshals to the court each day and.
Speaker 1: They deliberated over four days, but they had to start again.
Speaker 2: Yes, they started, and then were a few hours in
Speaker 2: before one of the jurors let it slip in deliberations
Speaker 2: that they had googled the name of the co defendant,
Speaker 2: a man called William g who is actually still at large.
Speaker 3: He was a.
Speaker 2: Financial advisor to Mirs Glow and featured prominently throughout the trial.
Speaker 2: And then the jury four person wrote a letter to
Speaker 2: the judge saying, you know, we've got a problem here. Now,
Speaker 2: this is sort of jury service one O one. You're
Speaker 2: not to read any external news article about the case
Speaker 2: that you're serving on the jury of You're not to google,
Speaker 2: certainly anyone that's mentioned in the case or do your
Speaker 2: own research. So everyone sort of held their breath when
Speaker 2: the judge read out that letter, and you know, we're warried,
Speaker 2: is this going to be a mistrial? But fortunately they
Speaker 2: were able to just excuse that dura that did the
Speaker 2: googling and bring in an alternate and they started deliberations again.
Speaker 2: So that jury deliberated for about three days until they
Speaker 2: came to a verdict.
Speaker 1: You always have to have those alternate's ready. So he's
Speaker 1: going to be standards on November nineteenth, how much time.
Speaker 2: Does he face even though he was acquitted on three
Speaker 2: out of the twelfth counts. He still faces decades in
Speaker 2: jail for the most serious charges, the fraud charges, the
Speaker 2: racketeering conspiracy. He faces up to twenty years each on
Speaker 2: those counts. So he's definitely facing a long period in prison.
Speaker 2: And because he is a Chinese citizen, you know, he
Speaker 2: faces extradition back to China as well, and there is
Speaker 2: an Interpol red notice out for him issued by the
Speaker 2: Chinese government. So his troubles will I think continue once
Speaker 2: his release from prison.
Speaker 1: And he's already been in prison for more than a
Speaker 1: year now. Thanks so much, Ava. That's Bloomberg Legal reporter
Speaker 1: Ava Benny Morrison coming up the ramifications of this Supreme
Speaker 1: Court's decision on homelessness. This is Bloomberg. For the first
Speaker 1: time in four decades this term, the Supreme Court ruled
Speaker 1: on homelessness, and the ramifications of that decision are already
Speaker 1: being felt across the country. In a decision split down
Speaker 1: ideological lines, the Court's conservative majority reinstated in Oregon city's
Speaker 1: law banning homeless residents from sleeping outside in public places. Now,
Speaker 1: cities across the country are weighing their policies, and some
Speaker 1: are preparing to take a harder line on homeless encampments.
Speaker 1: Joining me is Sanita Patel, a professor at UCLA Law
Speaker 1: School and the founding director of the UCLA Law Veterans
Speaker 1: Legal Clinic. She co authored an amicust brief in the
Speaker 1: case with the National Coalition for Homeless Veterans that was
Speaker 1: quoted by Justice Sonya Sotomayor in her descent. What was
Speaker 1: at stake in the Grant's past case.
Speaker 4: The Supreme Court was deciding whether or not to allow
Speaker 4: punishment for homeless people with no access to shelter who
Speaker 4: were sleeping outside was as little as a blanket or
Speaker 4: a bald up shirt for a pillow. And what was
Speaker 4: behind all of this was a prior Ninth Circuit decision
Speaker 4: called Boise versus Martin, where the Ninth Circuit had said, okay,
Speaker 4: cities and states can use restrictions on when, how and
Speaker 4: where unhoused folks can sleep outside, but they can't criminalize
Speaker 4: activities like sleeping outside or eating outside, as Justice Brown
Speaker 4: poised out, if there is no alternative, reasonable place to sleep.
Speaker 4: So when you had no adequate shelter space, there was
Speaker 4: a lot of hand ringing by the cities and the
Speaker 4: states saying that they weren't able to enforce the laws
Speaker 4: well enough. And what we see with the Grant's past
Speaker 4: decision is that the core kind of buys into the
Speaker 4: unnecessary hand ringing from the cities and states that weighed
Speaker 4: in because they were complaining that the Ninth Circuit's prior
Speaker 4: decision in Martin tied their hands from enforcing anti camping laws.
Speaker 1: And so why did the court come to the conclusion
Speaker 1: that this wasn't cruel and unusual punishment?
Speaker 4: The Court was really looking at whether or not these
Speaker 4: ordinances from Grant's Pass Oregon criminalized and punished homeless people
Speaker 4: for the status of being homeless, or whether it was
Speaker 4: for actions associated with being homeless. And so you see
Speaker 4: this interesting play in the majority and the dissent where
Speaker 4: the majority says, well, you know, this is a punishment
Speaker 4: not of status, but of actions that people are doing.
Speaker 4: This is not actually a case that falls squarely within
Speaker 4: the prior precedent called Robinson, which had been in place
Speaker 4: for fifty years already. And the court decided that the
Speaker 4: punishments here were not actually cruel, that they were not.
Speaker 4: So that's what they decided.
Speaker 1: And just as Sonya Sotomayor's descent had some emotional overtones
Speaker 1: in describing the crisis of homelessness.
Speaker 4: Well, you know, I think that for many people in
Speaker 4: this country, the idea of living on the streets is
Speaker 4: quite a stark reality, especially if you've lived on the
Speaker 4: West Coast or she's from New York City. In the Bronx,
Speaker 4: you see the plight of unhoused folks on a daily basis,
Speaker 4: and in those circumstances were left to think, well, how
Speaker 4: can it not be cool to require someone to sleep
Speaker 4: on the streets without even a blanket in the cold
Speaker 4: winter of Grant's past and have nowhere else to go?
Speaker 4: So here, you know, I thought she actually did a
Speaker 4: very careful analysis of the purpose, the text, and the
Speaker 4: enforcement of the Grants ordinances. I agreed with how she
Speaker 4: showed the ordinances actually criminalized status. Right, So the action
Speaker 4: of sleeping outside is something that necessarily defines the status
Speaker 4: of being unhoused, and it is a human biological need.
Speaker 4: Another thing that she points out, which is what the
Speaker 4: Ninth Circuit pointed to as well, is that the Martin
Speaker 4: decision left open lots of ways to regulate homelessness. So
Speaker 4: you're still able to find or ticket someone because you
Speaker 4: don't like where they're sleeping. You're still able to sign
Speaker 4: or ticket someone if they are intoxicated in a public area,
Speaker 4: if they're urinating a public area, if they're obstructing an
Speaker 4: entryway or panhandling. You know, there's a host of petty
Speaker 4: offenses that you can still enforce. It was really just
Speaker 4: this idea of sleeping outside at night with a small covering,
Speaker 4: which literally defines being unhoused, that was in front of
Speaker 4: the court. What they decided was that in order to
Speaker 4: apply the Eighth Amendment Cruel and Unusual Punishment clause, it
Speaker 4: would need to extend the prior Robinson ruling sort of
Speaker 4: extended slightly around the status offense. And luckily they said
Speaker 4: Robinson is still the law of the land right now,
Speaker 4: which is good. It's been a president that's been around
Speaker 4: for decades, and when the court of precedent it can
Speaker 4: turn things on its head, and.
Speaker 1: We've seen that a lot in the last few terms.
Speaker 1: In Grant's pass, were they actually arresting people who were
Speaker 1: sleeping outside at night, Yes.
Speaker 4: That's my understanding. The two plaintiffs in this case, they
Speaker 4: were cited for and find and eventually excluded from the city,
Speaker 4: but they were sleeping in cars. The definition of camping
Speaker 4: in the Grands Pass Organance includes sleeping in any vehicle.
Speaker 1: How do you think this decision will affect homeless veterans.
Speaker 4: Yes, that's a very good question. So you see, a
Speaker 4: Veteran's Legal Clinic worked on behalf of the Coalition for
Speaker 4: Homeless Veterans, and we filed an amicist brief in the
Speaker 4: case that Justice Sotomayor did cite briefly, and we really
Speaker 4: presented the picture of what it's like to be an
Speaker 4: unhoused veterans, the complications that come with acquiring work, or
Speaker 4: receiving your medications, or finding your social worker. But when
Speaker 4: you sleep outside and you're being shuffled around because of
Speaker 4: criminalization efforts, because of police enforcement. And so this decision
Speaker 4: is going to affect veterans in the same way it's
Speaker 4: going to affect other on housed populations, on house communities.
Speaker 4: We will see the veterans that we represent, the veterans
Speaker 4: around the country getting moved around, unable to locate and
Speaker 4: connect with their service providers, lose their medications, lose their paperwork.
Speaker 4: All of these things make it extremely difficult for them
Speaker 4: to obtain permanent housing, even in a resource rich system
Speaker 4: like the VA, where there are lots of options and
Speaker 4: different ways for individuals to the comme house and get
Speaker 4: connected to housing and justice.
Speaker 1: Sodo Mayor, in quoting from your Brief and her Descent,
Speaker 1: talked about Aaron Spencer, a disabled Marine Corps veteran. Tell
Speaker 1: us what she said.
Speaker 4: You know, she's discussing how diverse the veteran community is
Speaker 4: and how this decision is unfortunately going to affect marginalized
Speaker 4: and vulnerable populations more. We know that, for example, thirty
Speaker 4: seven percent of the homeless community is black, even though
Speaker 4: they're thirteen percent of the general population, and because of
Speaker 4: structural racism lack of access to housing and jobs, we
Speaker 4: have this racial disparity when it comes to veterans. We
Speaker 4: also have a pretty stark disparity for unsheltered veterans in
Speaker 4: comparison to the veteran population the general population.
Speaker 3: And so here she's.
Speaker 4: Pointing out that veterans are more likely to become homeless
Speaker 4: if they have served in combat, if they have PTSD,
Speaker 4: And she talks about the case of Aaron Spenser, who
Speaker 4: is a disable Bold Marine Corps veteran, and he was
Speaker 4: putting his tools and his bike parts and other things
Speaker 4: that he uses to make money on the side in
Speaker 4: a cart, and then he was arrested repeatedly for illegal lodgings,
Speaker 4: for being on the streets, and every time his car
Speaker 4: and his belongings they were taken away. And you know,
Speaker 4: she quotes him saying, the massive number of times the
Speaker 4: city or state has taken all I possessed leaves me
Speaker 4: in a macuous daja zoo. And this is really indicative
Speaker 4: of the stories that we hear from unhoused veterans and
Speaker 4: unhoused people in general. There's this sense of I don't
Speaker 4: know when I wake up, am I going to be
Speaker 4: able to sleep here or not? Are my things going
Speaker 4: to be taken? Am I going to be facing some
Speaker 4: bureaucratic nightmare today as I try to access services and
Speaker 4: food and shelter and just the basic human needs.
Speaker 1: How does this opinion leave you feeling as an advocate
Speaker 1: for homeless veterans rather than as a lawyer.
Speaker 4: I am doing a research project on homelessness in La County,
Speaker 4: and you know, I think this idea of the cycle
Speaker 4: of moving in and out the majority opinions sort of
Speaker 4: suggests that well, police are really on the front lines
Speaker 4: of protecting our un housed folks and getting them into services.
Speaker 4: I mean, it's just not the lived reality of the
Speaker 4: people we speak to, and that is really a problem.
Speaker 4: I think when the Supreme Court doesn't recognize the wealth
Speaker 4: of research, social science and other research that's out there,
Speaker 4: but instead is quoting from the Sheriff's Association brief on
Speaker 4: the work that they do to help connect veterans, that's
Speaker 4: one thing that is a bit of a problem. But
Speaker 4: I'm hopeful that there are other ways for us to
Speaker 4: challenge these laws. I mean, as an advocate, we always say, well,
Speaker 4: the fight's going to continue, right, So the court left
Speaker 4: open lots of other ways to challenge really problematic laws.
Speaker 4: We have the do process clause. There's several claims there.
Speaker 4: There's also in Dan's past there is a provision on
Speaker 4: the fines and Fees clause excessive punishment clause that is
Speaker 4: still a live challenge that's in front of the district Court.
Speaker 4: The city didn't appeal the loss that they have faced
Speaker 4: on that claim because they really couldn't. I mean, the
Speaker 4: punishment that they're seeking again someone for sleeping outside is
Speaker 4: so excessive and beyond the pale that they would have
Speaker 4: lost clearly, and so they didn't even challenge that. So
Speaker 4: advocates can raise those claims. Advocates can also raise other
Speaker 4: claims like vagueness challenges. There are some other ways to
Speaker 4: continue the sort of legal challenges. Now that's me being
Speaker 4: an optimist. The reality is that I think that this
Speaker 4: is just going to clear the groundwork for more police actions,
Speaker 4: more coercive activity, and ultimately that is not going to
Speaker 4: actually solve the problem in the crisis of homelessness that
Speaker 4: we're facing today. There are proven solutions. Obviously, we need
Speaker 4: more affordable housing. We need more access to the resources
Speaker 4: that will help people not only become housed, but stay housed,
Speaker 4: because there's a problematic, kind of cyclical effect if you
Speaker 4: stay homeless, if you have these tickets, you know, they
Speaker 4: affect your credit, and then when your credit is bad,
Speaker 4: you can't find a house. I mean, this is all
Speaker 4: very connected, and so you know, unfortunately we had the
Speaker 4: LAPD already has tweeted that, you know, now we can
Speaker 4: do what we want sort of thing, and I think that,
Speaker 4: unfortunately that's going to be the law enforcement mentality rather
Speaker 4: than you know, helping you know, I should say hopefully
Speaker 4: cities and counties around the country will not take the bait.
Speaker 4: They will actually decide that they're going to decline to
Speaker 4: over enforce these laws and put excessive finds through the
Speaker 4: court system, which will only make it more difficult for
Speaker 4: people to move out of living on the street.
Speaker 1: Are there any cities that are dealing with the homelessness
Speaker 1: crisis successfully?
Speaker 4: You know, remarkably? I would say yes. I mean, Houston
Speaker 4: has made a lot of progress in solving homelessness by
Speaker 4: funding housing services. Also, Miami Dade County has done a
Speaker 4: pretty good job, and Milwaukee has also had like a
Speaker 4: remarkable ninety percent decrease in unsheltered population.
Speaker 1: So some hope there. Thanks so much, Sanita. That's Professor
Speaker 1: Sanita Patel of UCLA Law School. Coming up next on
Speaker 1: the Bloomberg Law Show. It's time for the Summer Olympics
Speaker 1: and there are lots of rules for companies who are
Speaker 1: not sponsors. I'm June Grosso and you're listening to Bloomberg.
Speaker 1: The Summer Olympics is coming up, and like everything else
Speaker 1: at the Olympics, there are lots of rules and regulations
Speaker 1: around the exclusive rights of the international Olympic Committee and
Speaker 1: the us Olympic Committee, to everything from symbols like those
Speaker 1: famous interlocking rings to terms like team USA. The IOC
Speaker 1: and USOC are hyper vigilant, so companies have to be
Speaker 1: very careful or they could get a cease and desist
Speaker 1: letter or worse yet, be sued. Joining me is an
Speaker 1: expert in trademarks, Fara soon Dirgy, a partner at Dorsey
Speaker 1: and Whitney, tell us about the exclusive rights of the
Speaker 1: IOC and the USOC.
Speaker 5: Sure, So the trademark situation resurspect to the Olympics in
Speaker 5: the United States is very interesting and it's a little
Speaker 5: bit different than your average brand. While the USOC does
Speaker 5: have regular trademark registrations, they also have statutory protection in
Speaker 5: the form of the Ted Stevens Olympic and Amateur Sports Act,
Speaker 5: which was originally passed in nineteen seventy eight and then
Speaker 5: it was amended again ten years later. So the reason
Speaker 5: for all of this is actually pretty interesting. The United
Speaker 5: States is one of the few countries where the Olympic
Speaker 5: teams are not funded by the government. The funding actually
Speaker 5: comes solely from sponsorships, and so in order to keep
Speaker 5: those sponsorship dollars really rolling in from large sponsors. They
Speaker 5: have to make promises to the sponsors or the would
Speaker 5: be sponsors and say, hey, brands, you guys are paying
Speaker 5: a lot of money to sponsor the team. We're going
Speaker 5: to make sure that other brands who are not paying
Speaker 5: those sponsorship dollars don't step on your exclusive rights. And
Speaker 5: so that's basically the genesis of the statutory protection. There
Speaker 5: was actually a Supreme Court case in eighty seven where
Speaker 5: the San Francisco Arts and Athletics Association they wanted to
Speaker 5: use gay Olympic games, and the case went all the
Speaker 5: way up to the Supreme Court, and the Supreme Court
Speaker 5: confirmed that they could not use it. The statutory rights
Speaker 5: that are involved here don't violate the First Amendments. And
Speaker 5: an interesting piece that also came out of that case
Speaker 5: was actually that the USOC when they sue somebody for
Speaker 5: trademark infringement, unlike regular brands who own trademark registrations, they
Speaker 5: do not have to prove likelihood of confusion. It's almost
Speaker 5: a strict liability circumstance where you use the trademark Olympics,
Speaker 5: you use go for the gold, or let the game begin.
Speaker 5: In any kind of advertising here in the United States,
Speaker 5: and it's automatically themed trademark infringement and then they take
Speaker 5: it from there. So it's really sort of a step
Speaker 5: above regular brands.
Speaker 1: So now let's go through the basic list of do
Speaker 1: not use, starting with the Olympic Rings logo.
Speaker 5: So the protection here extends to the Olympic ring logo,
Speaker 5: it extends to the word Olympics, Paralympics, Team USA, go
Speaker 5: for the goals, let the Games begin, pairs twenty twenty four,
Speaker 5: and the list is a little bit longer, but those
Speaker 5: are sort of the main ones. There is an interesting
Speaker 5: carve out that happened, I believe when the statutory section
Speaker 5: got amended where companies who are validly using the term
Speaker 5: Olympic in association with the Olympic Mountains in Washington are
Speaker 5: allowed to do that, but everybody else is not going
Speaker 5: to be able to use it.
Speaker 1: And what about images of the athletes or you know,
Speaker 1: snippets from the games.
Speaker 5: The other things that you can't use when you're doing
Speaker 5: marketing during the Olympics or frankly ever, is if you're
Speaker 5: not affiliated and you don't have a license, you can't
Speaker 5: stay put up a social media post and use an
Speaker 5: image of you know, an athlete participate at the Olympics.
Speaker 5: It violates the right of publicity of the particular athletes
Speaker 5: who's in the picture, and it also violates the copyright
Speaker 5: that's probably owned by, you know, the International Olympic Committee
Speaker 5: or the broadcaster who took the video or the picture.
Speaker 1: One of the biggest concerns is what's referred to as
Speaker 1: ambush marketing.
Speaker 3: Tell us what that is, sure.
Speaker 5: Ambush marketing is it's actually kind of an interesting way
Speaker 5: to market and it's not your sort of typical we're
Speaker 5: gonna put an ad up or you know, talking about
Speaker 5: our brand or our company, or we're going to put
Speaker 5: an ad on social media. Ambush marketing is something that's
Speaker 5: a little bit dicey, and it is actually prohibited by
Speaker 5: the Ted Stevens Zat and the International Olympic Committee. Wherever
Speaker 5: the games are, they've got pretty strong rules against it.
Speaker 5: One of the sort of interesting examples of ambush marketing
Speaker 5: happened in the twenty ten World Cup. Budweiser was actually
Speaker 5: the official sponsor for beer and this Dutch beer brand, Bavaria.
Speaker 5: They purchased a bunch of tickets to one of the
Speaker 5: matches and they gave them to a bunch of women
Speaker 5: and asked all these women to wear bright orange mini dresses.
Speaker 5: And so when you know, you looked at the crowd,
Speaker 5: your eyes were instantly drawn to the sort of orange sections,
Speaker 5: and you know, that's that's a good example of ambush marketing.
Speaker 5: And after the game, I believe the games were in
Speaker 5: South Africa that year, the women were actually detained and
Speaker 5: the beer brand was charged. You know, again, they pay
Speaker 5: the official sponsor pays a lot of money, you know,
Speaker 5: millions and millions of dollars in many cases to sponsor
Speaker 5: and have all the ads and stuff like that during
Speaker 5: the game, and a brand like this bought a handful
Speaker 5: of tickets and they got a bunch of publicity. And
Speaker 5: you know, the World Cup, FIFA, the NFL does not
Speaker 5: obviously permit that or like that, and the Olympics don't
Speaker 5: like it either.
Speaker 1: How aggressive is the IOC and the USOC in protecting
Speaker 1: their rights?
Speaker 5: The Olympics is very aggressive. In the United States. The USOC,
Speaker 5: which is the US Olympic Committee, they have an army
Speaker 5: of lawyers, whether they have outside lawyers or inside lawyers
Speaker 5: working on this. In the period around the games, they
Speaker 5: send out so many CEASYM business letters each time there
Speaker 5: are games. They also provide guidance beforehand for marketers trying
Speaker 5: to avoid mishaps during the games. But I think their
Speaker 5: team is probably online and working, you know, twenty four
Speaker 5: hours a day during the games to try to ensure
Speaker 5: that nobody who's not a sponsor is really working with
Speaker 5: and you know, capitalizing on the goodwill of the Olympics trademarks.
Speaker 1: And is it just big companies they go after or
Speaker 1: do they go after small companies?
Speaker 5: Everywhere in the past they've gone after everyone, they have
Speaker 5: gone after. I believe there was a case now it's
Speaker 5: probably many years ago where they went after a small
Speaker 5: carpet company in Minnesota for using Olympics in their name.
Speaker 5: So I think they really they go after big companies
Speaker 5: and small companies. Probably now after so many years of
Speaker 5: really large enforcement, I think that major brands are well
Speaker 5: aware of the situation that are not going to step
Speaker 5: on the toes of the Olympics rights. It's probably more
Speaker 5: smaller brands these bes. And with social media, it's so
Speaker 5: easy to step on the toes here because the USOC
Speaker 5: doesn't want you you using hashtag team USA, hashtag Olympics
Speaker 5: they think that that is there, and they're right in
Speaker 5: the United States per the Statute that those are their
Speaker 5: trademarks and they don't want them being used without payments.
Speaker 1: Do they go after individuals who might do that on
Speaker 1: social media?
Speaker 5: So they don't go after individuals. I think there's sort
Speaker 5: of four buckets here, right. There is the companies who
Speaker 5: pay to be sponsors of the Olympics and pay a
Speaker 5: large amount of money to be sponsored the Olympics. Then
Speaker 5: there's another group of companies and brands that sponsor individual athletes.
Speaker 5: They don't sponsor the games themselves, but they sponsor individual athletes.
Speaker 3: Then there are.
Speaker 5: Companies and brands that don't pay any sponsorship fees and
Speaker 5: are just out there trying to capitalize on interesting marketing situations,
Speaker 5: which really comprises a large group of companies, right. And
Speaker 5: then they're individuals. Individuals have a lot more rights for
Speaker 5: fair use because they are not using these trademarks in
Speaker 5: commercial manners. If I want to go on an Instagram
Speaker 5: account and just write a posting I love the Olympics,
Speaker 5: I think it's awesome hashtag team USA. The likelihood that
Speaker 5: the USOC is going to come after me, I.
Speaker 2: Think it's pretty small also considering I don't really.
Speaker 5: Have that any followers, it's not really making any intact
Speaker 5: on anything. But companies who do it, it's a different
Speaker 5: story because it's a commercial use on social media or
Speaker 5: you know, in another forum. The middle sort of group
Speaker 5: of brands who sponsor athletes but don't sponsor the games officially.
Speaker 5: In recent years or recent Olympics, the IOC and the
Speaker 5: USOC has created many, many rules for those types of
Speaker 5: brands about when they can congratulate their athletes, how they
Speaker 5: can care adu their athletes, how often they can post
Speaker 5: during they call the blackout period. And it's a very
Speaker 5: complex set of rules about you know, what they can
Speaker 5: do and how they can do it, what imagery they
Speaker 5: can use. Like I said, it's very complex, but they
Speaker 5: do provide pretty good guidance on it.
Speaker 1: Can AI be used in any way to get around
Speaker 1: these AI.
Speaker 5: Is obviously the hot topic of the year. I guess
Speaker 5: it was clearly hot before that. But AI and marketing
Speaker 5: can be fantastic. It can also be really dangerous legally,
Speaker 5: and using AI to for example, clone of voice, that's
Speaker 5: not going to get you around a rite of publicity claim.
Speaker 5: It's not going to get you around any kind of
Speaker 5: copyright claims or anything like that. You still have to
Speaker 5: be mindful of the basic IP rights of different rights holders.
Speaker 5: And just because you're using AI doesn't mean that you
Speaker 5: can step back and say, oh, we didn't create this.
Speaker 5: You know it's not us. And just because it's technically possible,
Speaker 5: for example, to clone someone's voice, doesn't mean you have
Speaker 5: their permission and you could still get food.
Speaker 3: Any closing thoughts for marketers who fall in the last
Speaker 3: bucket where they don't sponsor the games and they don't
Speaker 3: sponsor a particular athlete, there's still opportunities to be involved in.
Speaker 5: Marketing during the Olympics. You just have to be very careful. Obviously,
Speaker 5: you can't use the trademarks, as we said, you can't
Speaker 5: use footage, and you can't use images of athletes. But
Speaker 5: that doesn't mean that your team can't be watching the
Speaker 5: Olympics and you know, moving dynamically and creating really great
Speaker 5: ads about you know what has happened. I think one
Speaker 5: of the best examples sort of real time marketing happened
Speaker 5: in the It's actually one of my favorites in the
Speaker 5: twenty thirteen Super Bowl when the lights went out in
Speaker 5: the middle of that Super Bowl, there's this very well
Speaker 5: known now in marketing circle tweet that went out from Oreos.
Speaker 5: They wrote a post that said something like power out,
Speaker 5: you can still dunk in the dark. They didn't mention
Speaker 5: Super Bowl, they didn't even mention big games, but the
Speaker 5: tweet it went out like wildfire, and everybody picked it
Speaker 5: up during the game and thought it was this great
Speaker 5: marketing sensation. And they got so many impressions from it,
Speaker 5: and they didn't step on anybody's IP rights. It was
Speaker 5: a really great piece of marketing. There's another one, specifically
Speaker 5: from the Olympics that I always liked to cite to
Speaker 5: as a good example. Nike has an ad where they
Speaker 5: have a picture of a boy standing on one of
Speaker 5: those platforms above a very large pool that you often see,
Speaker 5: you know, in the diving competition in the Olympics, and
Speaker 5: it's a small boy and we just see his back
Speaker 5: and it says, find your greatness. It's not using anybody
Speaker 5: else's IP You're not having an image of a famous
Speaker 5: diver on the platform. There's no flags, there's no Olympic trade,
Speaker 5: but you get the look and the feel and the
Speaker 5: spirit of the Olympics in there and I think it's
Speaker 5: such a great ad.
Speaker 1: Some great examples, Thanks so much, Fara. That's Fara, Soondergy
Speaker 1: of Dorsey and Whitney. And that's it for this edition
Speaker 1: of the Bloomberg Law Podcast. Remember you can always get
Speaker 1: the latest legal news by subscribing and listening to the
Speaker 1: show on Apple Podcasts, Spotify, and at Bloomberg dot com,
Speaker 1: slash podcast, slash Law. I'm June Grosso and this is
Speaker 1: Bloomberg