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Speaker 1: This is Bloomberg Law with June Brusso from Bloomberg Radio.

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Speaker 2: All my life I made money. I made money. I've

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Speaker 2: always been good making money.

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Speaker 3: I have made billions of dollars in business making deals.

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Speaker 3: Donald Trump has never been shy about how much money

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Speaker 3: he has, even though his actual finances are notoriously opaque.

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Speaker 3: But when it comes to his staggering legal expenses, Trump

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Speaker 3: is not looking to dip into his own money. The

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Speaker 3: former president spent fifty one point two million dollars on

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Speaker 3: legal expenses in twenty twenty three. That money came from

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Speaker 3: one of his packs, but he'll likely drain his war

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Speaker 3: chest for legal fees this summer, leaving him crunched for cash.

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Speaker 3: Justice's presidential campaign ramps up spending for an expected rematch,

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Speaker 3: with President Joe Biden joining me. Is Bill Allison, Bloomberg

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Speaker 3: campaign finance reporter who's been looking into to Trump's legal

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Speaker 3: fees and where the money's coming from. Trump has a

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Speaker 3: reputation for not paying his lawyers. Do all these legal

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Speaker 3: fees mean he's paying his lawyers now?

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Speaker 1: We're definitely seeing payments from his political committees, which have

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Speaker 1: to report the money that they spend to the Federal

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Speaker 1: Election Commission. So yes, he is paying his legal bills

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Speaker 1: this time around. And do some of these fees go

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Speaker 1: to help aids and others who are kind of caught

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Speaker 1: up in some of these cases that involve the president?

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Speaker 3: So how much did he spend on legal expenses last

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Speaker 3: year and.

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Speaker 1: What does that leave Trump spent more than fifty one

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Speaker 1: million dollars on legal expenses last year. And this is

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Speaker 1: all through one leadership pack called Save America, which was

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Speaker 1: kind of his political vehicle set up after his presidency

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Speaker 1: and before he was a candidate to raise and spend money.

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Speaker 1: Right now, Trump has about twenty three point five million

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Speaker 1: dollars that he can tap for his legal defense. That

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Speaker 1: includes a little less than eighteen million dollars that's currently

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Speaker 1: held by a super pack. That super pack, which is

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Speaker 1: the one that principal won backing his campaign, has been

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Speaker 1: slowly refunding money to his leadership pack, which can then

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Speaker 1: use the money to spend on legal fees. So he

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Speaker 1: has that eighteen million dollars left, that's all. It's left

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Speaker 1: from a contribution of sixteen million dollars that this leadership

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Speaker 1: pack made to the super pack in twenty twenty two.

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Speaker 1: Is kind of its initial seed capital. And so now

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Speaker 1: what Trump is essentially doing is he's raising money from

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Speaker 1: big donors for his superpack and using that money to

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Speaker 1: refund it to his Leadership Pack to pay his legal fees.

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Speaker 1: There's a very kind of complicated transaction, but this is

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Speaker 1: Donald Trump we're talking about.

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Speaker 3: For someone who doesn't know much about packs, this is

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Speaker 3: all legal. You could just transfer money from one pack

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Speaker 3: to the other. I mean, why not leave it in

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Speaker 3: the pack it was initially in.

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Speaker 1: So the reason he transferred this money to the super

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Speaker 1: pac and twenty twenty two is is that a Leadership

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Speaker 1: pack could only spend five thousand dollars on Trump's own campaign,

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Speaker 1: and he had tens of millions of dollars left in

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Speaker 1: Save America at the end of twenty twenty two. So

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Speaker 1: he couldn't give that money to his campaign. He couldn't

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Speaker 1: spend it on his campaign. He could do was donate

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Speaker 1: it to an allied super pac. Now, there are campaign

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Speaker 1: finance lawyers who believe that this is very problematic and

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Speaker 1: probably violates the law. There are others who say that

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Speaker 1: know that this is like a legitimate contribution because the

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Speaker 1: super pac didn't initially support Trump, it supported Senate candidates

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Speaker 1: and House candidates that Heat endorsed. What's fairly clear, though,

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Speaker 1: is is that, you know, if these super PACs are

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Speaker 1: really supposed to be independent, it's a little odd that

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Speaker 1: it would be giving back, you know, so far about

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Speaker 1: forty three million dollars to a single donor. You know,

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Speaker 1: super PACs generally are not in the business of making

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Speaker 1: refunds out of that large.

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Speaker 3: So I take it that it is legal to use

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Speaker 3: money from super packs for your legal expenses.

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Speaker 1: See, actually it's not, and this is kind of why

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Speaker 1: he's going to pickle. It is legal for the super

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Speaker 1: pac to refund money to a donor, and in this

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Speaker 1: case it's Save America. His leadership pack is paying his

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Speaker 1: legal fees. But once the super pack has refunded all

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Speaker 1: the money that was initially donated by the leadership, he

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Speaker 1: can't tap that money anymore. So that's why we're coming

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Speaker 1: up with the figure that you know, roughly he is

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Speaker 1: about twenty three and a half million dollars left. Part

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Speaker 1: of that is what is in his leadership pack, and

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Speaker 1: part of it is what he's yet to refund from

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Speaker 1: the super pack to the leadership pack.

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Speaker 3: Very confusing is anyone actually paying attention to what happens

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Speaker 3: with these packs.

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Speaker 1: You know, I'm really sort of surprised because usually you

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Speaker 1: would see like a lot of complaints filed by the

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Speaker 1: different campaign finance watchdog groups, and we really haven't seen him.

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Speaker 1: There's been a few, but it's been sort of quiet,

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Speaker 1: and we haven't seen like sort of the you know,

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Speaker 1: every transaction and every questionable transfer being challenged by some

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Speaker 1: group that has a very literal view, let's campaign finance regulations.

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Speaker 1: I think part of that maybe because you know, the

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Speaker 1: system is so awash in money and both sides are

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Speaker 1: you know, drowning in political money, that there may be

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Speaker 1: lesson cento for Democrats and the Federal Election Commission, which

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Speaker 1: is made up, let's face it, of Republicans and Democrats

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Speaker 1: to at least the system as vigorously as they once did,

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Speaker 1: which was not very vag or expecting today. But yeah,

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Speaker 1: I mean, it's it's been strange that this has really

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Speaker 1: kind of been under the raidar that a lot of

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Speaker 1: this has happened without getting you called out by some

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Speaker 1: of the groups that are concerned about campaign finance laws

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Speaker 1: being enforced.

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Speaker 3: Tell me about MAGA Inc.

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Speaker 1: That's trumps superpack. It's Make America Great Again or MAGA Inc.

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Speaker 1: Is the super pac that he's set up in the

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Speaker 1: fall of twenty twenty two to back House and Senate candidates,

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Speaker 1: and it got sixty million dollars in donations from Save

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Speaker 1: America starting in October twenty twenty two.

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Speaker 3: And how much of each dollar from MAGA Inc. Did

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Speaker 3: he use to pay his lawyers?

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Speaker 1: Well, if you look at what he's raised in twenty

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Speaker 1: twenty three, and you know, he became a candidate in

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Speaker 1: November of twenty twenty two, but twenty twenty three is

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Speaker 1: sort of when the presidential election cycle starts. Of the

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Speaker 1: money the super pac has raised, seventy one cents of

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Speaker 1: every dollar has gone to refunds to Save America, and

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Speaker 1: most of that money is going for legal bills.

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Speaker 3: He diverts ten percent of contributions to Save America for

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Speaker 3: legal bills.

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Speaker 1: So this is when his campaign raises money. And so

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Speaker 1: you know, if you're an online donor and you go

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Speaker 1: to it's a service called win Read it's a way

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Speaker 1: for Republican donors to donate online to Republican candidates. And

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Speaker 1: when you go onto a Trump page, it says very

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Speaker 1: explicitly that you know your donation ninety percent will go

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Speaker 1: to Donald J. Trump for President twenty twenty four, which

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Speaker 1: is his campaign committee, and ten percent will go to

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Speaker 1: Save America. It doesn't necessarily say that that's for legal expenses,

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Speaker 1: but that's the split, and donors have the optional. I

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Speaker 1: think it's it's kind of small printee and most people

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Speaker 1: won't notice it, but they do have the option to

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Speaker 1: put one hundred percent going to the campaign when we've

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Speaker 1: interviewed you know, this is anecdotal evidence, to be sure,

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Speaker 1: But when we've talked to trump small dollar donors before,

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Speaker 1: especially during the Russian collusion investigations, when a lot of

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Speaker 1: Trump's legal expenses were being paid by his campaign and

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Speaker 1: the Republican National Committee, which we're raising a lot of

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Speaker 1: small dollar donor money, they would always say when they

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Speaker 1: found out that's what the money was going towards, they'd say, well,

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Speaker 1: I would have given more if i'd note that. So,

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Speaker 1: you know, Trump has characterized all of these investigations in

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Speaker 1: court cases as witch hunts, and I think to some

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Speaker 1: extent his donors, you know, buy into that. Now. The

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Speaker 1: problem though, is that you know, as you get closer

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Speaker 1: to the election, you need more and more money to

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Speaker 1: spend to influence voters. If you have this drag where

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Speaker 1: you're having to divert more and more of it to

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Speaker 1: legal fees, that might leave you short, you know, reaching

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Speaker 1: the voters. You need to go to the polls.

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Speaker 4: Now.

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Speaker 3: Is there any estimate of how much he might have

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Speaker 3: to spend in legal fees over the next year.

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Speaker 1: I don't know that there's a scientific estimate. There are

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Speaker 1: some people who say that, you know, he may end

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Speaker 1: up spending double what he spent last year, but you know,

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Speaker 1: we really don't know. I mean, you know, cases can

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Speaker 1: be dismissed, cases can be thrown out of court, and conversely,

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Speaker 1: cases can drag on. You can have appeals, you can

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Speaker 1: have lengthy pre trial proceedings before you even get to

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Speaker 1: a trial date. So it's going to be a lot

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Speaker 1: of money. I mean, that's that's the one thing that

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Speaker 1: everybody agrees on. But to come up with a calculation

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Speaker 1: of exactly how much it's going to be, that's I

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Speaker 1: think that's very hard to predict.

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Speaker 3: Yeah, it's probably going to be much much more than

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Speaker 3: he paid last year. With the recent trial in the

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Speaker 3: Attorney General's case and the upcoming criminal trial, in the

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Speaker 3: Manhattan DA's case over hush money payments, and then the

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Speaker 3: fact that he appeals almost every decision even up to

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Speaker 3: the Supreme Court, as.

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Speaker 1: We've seen exactly. And those delays actually cost a lot

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Speaker 1: of money because what you're paying is lawyers to research

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Speaker 1: court cases and come up with reasons to delay or

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Speaker 1: throw out or otherwise hinder these cases against him.

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Speaker 3: So he's still getting online contributions where he puts ten

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Speaker 3: percent to legal expenses. So what does he do when

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Speaker 3: the money for the legal expenses runs out? Where does

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Speaker 3: he go?

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Speaker 1: Well, there's a couple of different things he could do.

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Speaker 1: I mean, assuming that he's the party's nominee and it

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Speaker 1: looks like he will be, the Republican National Committee could

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Speaker 1: pay his legal bills. And you know, there's a dedicated

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Speaker 1: to count that the Republican Party raises money for to

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Speaker 1: pay for legal expenses. The maximum donation, if you count

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Speaker 1: the hard money, is more than one hundred and sixty

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Speaker 1: five thousand dollars that an individual donor could give. When

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Speaker 1: you get like, you know, one hundred or one thousand

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Speaker 1: donors giving that much, it starts to be some real money.

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Speaker 1: So that's one option. Another option is to increase the

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Speaker 1: percentage he's getting from small dollar donors and other donors

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Speaker 1: giving up to thirty three hundred dollars to his campaign,

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Speaker 1: and you know, diverting more of that to save America

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Speaker 1: once he's the nominee, and you know, once we get

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Speaker 1: towards the general election, I mean, the closer the election gets,

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Speaker 1: the bigger the monthly totals get for campaigns. It's possible

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Speaker 1: that you know, diverting ten percent, he might have enough money,

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Speaker 1: you know, depending on how big the legal bills are,

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Speaker 1: to pay those legal bills out of the leadership pack.

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Speaker 1: But at that point probably, I mean, the most precious

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Speaker 1: money in a political campaign, you know, an election campaign

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Speaker 1: is what your campaign committee raises. You have the most

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Speaker 1: freedom to use it. You can use it in the

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Speaker 1: most ways. You don't have all the restrictions the party,

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Speaker 1: your super pack or other money has. So siphoning some

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Speaker 1: of that money off, I'm sure is not an attractive

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Speaker 1: prospect for you know, his campaign strategists and for the president.

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Speaker 3: You left out bill he could pay the legal expenses

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Speaker 3: himself from his own money.

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Speaker 1: Well that's that is true too, But this is I

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Speaker 1: think another problem for him is that you know, he

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Speaker 1: just had this three hundred and sixty four million dollar

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Speaker 1: judgment in the civil case in New York about the

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Speaker 1: fraud alleged and his accounting practices and the valuation of

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Speaker 1: his assets. That obviously there's tens of millions of dollars

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Speaker 1: of interest that could be levied on top of that

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Speaker 1: since that figure was originally determined. So if he appeals

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Speaker 1: that case, he might have to put up a bond

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Speaker 1: that would tap his available cash. You know, Bloomberg's wealth

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Speaker 1: team estimates he's worth three point one billion dollars. The

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Speaker 1: thinking is he had about six hundred million dollars in

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Speaker 1: liquid cash. Although Trump's you know, finances are famously opaque.

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Speaker 1: He could certainly raise money. He could sell buildings and

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Speaker 1: things like that, but you know, it's questionable whether he'd

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Speaker 1: be willing to do that, and especially if he has

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Speaker 1: other options, like, you know, using the political system to

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Speaker 1: raise the money that way.

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Speaker 3: Coming up next on the Bloomberg Law Show, I'll continue

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Speaker 3: this conversation with Bloomberg campaign finance reporter Bill Allison. We've

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Speaker 3: been talking about Trump's legal expenses, but what about the

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Speaker 3: legal fines. I'm June Grosso and you're listening to Bloomberg,

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Speaker 3: Donald Trump will likely drain his war chest for legal

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Speaker 3: fees this summer, leaving him crunched for cash just as

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Speaker 3: his presidential campaign ramps up spending for an expected rematch

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Speaker 3: with President Joe Biden. The former president spent fifty one

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Speaker 3: point two million dollars on legal expenses in twenty twenty

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Speaker 3: three and can tap another twenty three point five million.

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Speaker 3: Most of it's stashed in an Allied super pack that

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Speaker 3: he can use to pay his lawyers, but as his

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Speaker 3: four criminal cases ramp up, those funds are expected to

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Speaker 3: run out at a critical time around July. That leaves

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Speaker 3: Trump with only a few unappealing options to keep paying

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Speaker 3: for his defense. I've been talking to Bloomberg campaign finance

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Speaker 3: reporter Bill Allison. So, Bill, we've been talking about how

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Speaker 3: you can pay legal expenses from these funds. Can you

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Speaker 3: also pay fines from the funds?

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Speaker 1: You cannot pay the fines from the funds. So that's

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Speaker 1: that's the one thing. He couldn't do that, And the

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Speaker 1: legal expense is really he can only pay because you know,

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Speaker 1: in his argument is and I don't think it's necessarily

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Speaker 1: a crazy argument, is that had he not become a

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Speaker 1: political figure, had he not run for president, that all

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Speaker 1: of this stems from him becoming a candidate. Now, obviously

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Speaker 1: the New York case, you know, you could say that, well,

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Speaker 1: that this is just real estate dealings, and but you know,

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Speaker 1: he would argue, so.

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Speaker 3: Bill, we've been talking about how you can pay legal

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Speaker 3: expenses from these funds. Can you also pay fines from

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Speaker 3: the funds?

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Speaker 1: You cannot pay the fines from the funds. So that's

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Speaker 1: that's the one thing he couldn't do that, And the

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Speaker 1: legal expense is really he can only pay because you know,

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Speaker 1: in his argument is, and I don't think it's necessarily

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Speaker 1: a crazy argument, is that had he not become a

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Speaker 1: political figure, had he not run for president, that all

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Speaker 1: of the stems from him becoming a candidate. Obviously, the

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Speaker 1: New York case, you know, you could say that, well,

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Speaker 1: that this is just real estate dealings, and but you know,

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Speaker 1: he would argue that, you know, nobody went after him

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Speaker 1: before he ran for president, and you know, this case

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Speaker 1: was put together by an attorney general of partisan Democrats.

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Speaker 1: He would say, who's going after him? Because he's the

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Speaker 1: leader of the Republican Party, and it's offully hard to

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Speaker 1: prove motive, and obviously you can testify back and forth,

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Speaker 1: but I don't think the Federal Election Commission is likely

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Speaker 1: to challenge that contention at this later date.

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Speaker 3: But the finds a definite no.

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Speaker 1: The fines are a definite no yet. But the legal

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Speaker 1: expense is it's just like, you know, it's the equivalent

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Speaker 1: of a of a jail sentence and in a sense

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Speaker 1: of the judgment. And you can't get it to the

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Speaker 1: jail sentence by saying, oh, well, I was paying for

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Speaker 1: it with money raised the elections. So the fine is like,

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Speaker 1: that's that's his you know, personal actions that led to

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Speaker 1: the finder, his company's actions, and you know, you can't

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Speaker 1: blame that on the political system.

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Speaker 3: Now, his campaign and groups spent more than they raised

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Speaker 3: last year.

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Speaker 1: Right, and that was because you may remember that after

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Speaker 1: the twenty twenty election, he went on a fundraising tear

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Speaker 1: and I think he raised like two hundred million dollars

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Speaker 1: following the election, which is just, you know, an insane

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Speaker 1: amount of money. And this is when he was, obviously,

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Speaker 1: like in a writer up till January sixth, was raising money.

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Speaker 1: He took a hiatus for a little while after January sixth,

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Speaker 1: but then was back by the end of February raising

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Speaker 1: money again, and he built up this huge stockpile of

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Speaker 1: money in twenty twenty one and twenty twenty two. This

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Speaker 1: is where the sixty million dollars going to the superPAC

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Speaker 1: came from. And anyway, he had money in the bank

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Speaker 1: for both his campaign although it wasn't allowed. It was

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Speaker 1: about three million dollars at the beginning of twenty twenty three.

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Speaker 1: But he also had all of this money in the

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Speaker 1: super Pac account and the Leadership Pack still had a

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Speaker 1: lot of money left too.

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Speaker 3: How many super packs and packs does he have? Can

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Speaker 3: you sort of untangle it for us?

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Speaker 1: So let's just well just do the active committee, because

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Speaker 1: he has a bunch that are inactive. So he has

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Speaker 1: his campaign committee, he has his Leadership pack, Save them Er.

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Speaker 1: He has a second leadership pack called Make America Great

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Speaker 1: Again Pack not inc, which is a super pack, and

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Speaker 1: that's that with his twenty sixteen twenty twenty campaign committee

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Speaker 1: that he converted to a leadership pack. And then he's

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Speaker 1: got Trump Save America Joint Fundraising Committee and that's the

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Speaker 1: vehicle that raises money for his campaign and Save America.

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Speaker 1: And that's what donors actually give to when they go

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Speaker 1: online to donate, it goes through Trump Save America, which

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Speaker 1: then splits the money between his campaign and the joint

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Speaker 1: fundraising committee, and then he has an allied superpack called

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Speaker 1: Make America Great Again, Inc. And so, and that's kind

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Speaker 1: of the universe of Trump organizations right now.

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Speaker 3: And he must have some great election lawyers too on

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Speaker 3: the tab.

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Speaker 1: He must. And you know, one of the things that

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Speaker 1: has changed though with the Federal Election Commission is that

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Speaker 1: there are now you know, four commissioners, three Republicans and

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Speaker 1: one Democrat who tend to think that you know, you know,

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Speaker 1: campaigns need money and that the rules should be set

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Speaker 1: up to facilitate a candidates running for office, not to

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Speaker 1: hamstring them, I think is maybe a fair way of

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Speaker 1: putting it. And so one of the examples of this

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Speaker 1: is there was a case in Florida, very much like

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Speaker 1: the situation of Ron DeSantis, where there was a Florida

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Speaker 1: politician who had a nonprofit group, an area of state

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Speaker 1: level pack which had a lot of money that was

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Speaker 1: raised outside of the laws for federal candidates, and it

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Speaker 1: was transferred to a federal superpack and used to support

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Speaker 1: his election. This is exactly what descantists did would never

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Speaker 1: back down, and Friends of Ron DeSantis, which was a

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Speaker 1: Florida committee and the FEC, basically gave a roadmap as

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Speaker 1: to how you could do this legally and what the

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Speaker 1: necessary steps were. And DeSantis followed that to a tea

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Speaker 1: and I think that you know that there's just a

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Speaker 1: view that you know, politics is very important, you know,

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Speaker 1: it's actually I think that maybe some people feel it's underfunded,

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Speaker 1: that most Americans don't know what the political issues are,

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Speaker 1: and trying to communicate with the American people by political parties,

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Speaker 1: candidates and independent interests is a vital part of our

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Speaker 1: democracy and that means money.

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Speaker 3: But they do bring cases when candidates step over the line.

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Speaker 1: It turns out that they've stepped over the lines, you know,

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Speaker 1: the way the system is set up. Even if the

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Speaker 1: Federal Election Commission does act, it's usually long after the

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Speaker 1: election that it gets around to doing it right. A

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Speaker 1: famous example of this from recent times is Hillary Clinton's

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Speaker 1: twenty sixteen campaign and the Democratic National Committee paid for

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Speaker 1: the Steele dossier, but they did it through a legal

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Speaker 1: firm or law firm of THEIRS, and the payments were hidden,

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Speaker 1: so instead of it being opposition research and going to

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Speaker 1: Christopher Steele. It was legal payments going to this firm,

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Speaker 1: and the FEC find them for it, but they find

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Speaker 1: it for it. Like you know, several years after the election, what.

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Speaker 3: Is that quote about justice delayed being justice denied. Let's

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Speaker 3: turn for a moment to President Joe Biden. I understand

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Speaker 3: that he's raised a record amount for a Democratic candidate

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Speaker 3: at this point in the calendar.

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Speaker 1: Well, he's got a record amount of cash on hand,

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Speaker 1: about one hundred and thirty million dollars. And that's really

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Speaker 1: sort of the critical thing is is that because right

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Speaker 1: now what candidates are trying to do is in a

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Speaker 1: normal race, and particularly one is an incumbent like Joe Biden,

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Speaker 1: is raised money for the general election, and every dollar

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Speaker 1: he salts away now when he doesn't have a have

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Speaker 1: a serious primary opponent. Obviously there's legal problems that foreign

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Speaker 1: President Trump has, so he can really you know, stockpile

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Speaker 1: his money, which he's doing in the campaign and in

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Speaker 1: the Democratic Party and the state parties and getting ready

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Speaker 1: for raising money for one election. And he's got you know, again,

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Speaker 1: at this point in the cycle, he's got a record amount.

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Speaker 1: And as I say, the closer you get to the election.

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Speaker 1: The bigger the monthly totals are the campaigns raised.

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Speaker 3: So I read your article very closely. Annawin Tour is

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Speaker 3: going to participate in a Biden fundraiser in Paris tied

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Speaker 3: to fashion Week there, So is Biden going to Fashion

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Speaker 3: Week in Paris?

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Speaker 1: I don't know that he is. You know, I don't

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Speaker 1: think that he is. You know a lot of times

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Speaker 1: people have fundraisers independent of the campaign, and it would

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Speaker 1: be strange, I think for a president to raise money

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Speaker 1: on foreign soil. You know, it doesn't stop though. There's

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Speaker 1: a lot of Americans in Paris, as we all know,

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Speaker 1: and as long as they're citizens or green card holders,

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Speaker 1: they can donate to a presidential campaign. And Ana went

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Speaker 1: Tour has done this kind of stuff before, where she's

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Speaker 1: hosted events on her own.

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Speaker 3: Well, thanks so much for helping us understand all this bill.

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Speaker 3: That's Bill Allison Bloomberg, campaign finance reporter. And as far

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Speaker 3: as that three hundred and fifty five million dollar fine

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Speaker 3: a judge ordered Donald Trump to pay as punishment for

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Speaker 3: a decade of fraud, New York Attorney General Letitia James

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Speaker 3: told ABC News that she's prepared to seize Donald Trump's assets.

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Speaker 3: If he doesn't come up with the fine, if.

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Speaker 2: He does not have funds to pay off the judgment,

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Speaker 2: then we will seek, you know, judgment enforcement mechanisms in court,

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Speaker 2: and we will ask the judge to seize his assets.

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Speaker 3: She mentioned Trump's skyscraper at forty Walls as one of

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Speaker 3: the buildings she would not hesitate to seize.

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Speaker 2: We are prepared to make sure that the judgment is

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Speaker 2: paid to New Yorkers, and yes, I look at Forty

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Speaker 2: Wall Street each and every day.

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Speaker 3: Coming up next on the Bloomberg Law Show, we'll talk

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Speaker 3: about a disturbing legal trend allowing government officials to retaliate

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Speaker 3: against criticism. Criticism normally considered protected under the First Amendment.

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Speaker 3: I'm June Grosso and you're listening to Bloomberg turning out

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Speaker 3: to a legal trend you may find troubling judges throwing

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Speaker 3: out lawsuits where it's alleged that a government official used

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Speaker 3: a position of power to retaliate against the speech of

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Speaker 3: a critic. Joining me as Caroline Grace Brothers of the

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Speaker 3: Institute for Justice, a nonprofit public interest law firm. The

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Speaker 3: Supreme Court will be hearing oral arguments in the case

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Speaker 3: of one of the institute's clients next month, a seventy

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Speaker 3: six year old grandmother who's suing the city officials of

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Speaker 3: Castle Hill, Texas for violating her rights by retaliating against her. Caroline,

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Speaker 3: You've written a piece for Bloomberg Law about these kinds

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Speaker 3: of retaliation cases. Let's get some background before we talk

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Speaker 3: about your client's case. Let's start with a case that

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Speaker 3: made headlines. Walt Disney had sued Florida Governor Ron DeSantis,

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Speaker 3: accusing him of politically retaliating against the company for speaking

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Speaker 3: out against a state law that bars classroom instruction on

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Speaker 3: gender identity and sexual orientation. A judge throughout that lawsuit

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Speaker 3: in January tell us about.

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Speaker 4: That Disney alleged that Governor DeSantis and other state officials

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Speaker 4: retaliated against Disney by passing a law which essentially removed

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Speaker 4: Disney's control over the Special Improvement District that is the

438
00:21:42,600 --> 00:21:45,400
Speaker 4: home of Disney World. Disney has controlled that district since

439
00:21:45,440 --> 00:21:48,600
Speaker 4: its creation in the nineteen sixties, but now under the

440
00:21:48,640 --> 00:21:52,040
Speaker 4: new law, the governor chooses the board members. So the

441
00:21:52,119 --> 00:21:55,200
Speaker 4: district court decided that Disney didn't have standing to sue

442
00:21:55,200 --> 00:21:59,720
Speaker 4: Governor DeSantis because although the governor appointed the current board

443
00:21:59,760 --> 00:22:02,960
Speaker 4: member of the district, which of course resulted in Disney's

444
00:22:03,000 --> 00:22:06,199
Speaker 4: loss of control. That action is in the past, and

445
00:22:06,240 --> 00:22:09,840
Speaker 4: Disney's only seeking prospective and junctive relief, so it had

446
00:22:09,880 --> 00:22:13,160
Speaker 4: to allege an imminent future harm, and according to the court,

447
00:22:13,240 --> 00:22:17,040
Speaker 4: Disney didn't allege that any imminent future appointments would contribute

448
00:22:17,080 --> 00:22:21,520
Speaker 4: to its harm. But the court also held that Disney's

449
00:22:21,520 --> 00:22:24,560
Speaker 4: first amendment claim failed on the merits too, and it

450
00:22:24,680 --> 00:22:27,679
Speaker 4: relied on Eleventh Circuit precedent that held it when a

451
00:22:27,720 --> 00:22:32,320
Speaker 4: statute is facially constitutional, a plaintiff can't claim that it

452
00:22:32,440 --> 00:22:36,000
Speaker 4: was passed with a retaliatory motive. So because the law

453
00:22:36,040 --> 00:22:41,800
Speaker 4: that restructured the district was facially constitutional, Disney couldn't bring

454
00:22:41,840 --> 00:22:46,200
Speaker 4: a claim that it was motivated by retaliatory intents against

455
00:22:46,200 --> 00:22:47,520
Speaker 4: Disney's criticism.

456
00:22:47,920 --> 00:22:50,560
Speaker 3: So now has that gone to the Eleventh Circuit yet?

457
00:22:50,680 --> 00:22:51,120
Speaker 1: Not yet.

458
00:22:51,560 --> 00:22:54,440
Speaker 4: Disney has filed a notice of appeal, so it will.

459
00:22:54,280 --> 00:22:57,000
Speaker 3: Be going soon, but it's based on law from the

460
00:22:57,000 --> 00:22:59,399
Speaker 3: Eleventh Circuit, so I don't know how far it'll go.

461
00:22:59,480 --> 00:23:02,320
Speaker 3: I guess. Tell us about some of the people you've

462
00:23:02,359 --> 00:23:06,959
Speaker 3: represented who've been penalized because of their speech against public

463
00:23:07,000 --> 00:23:09,439
Speaker 3: officials or government. Yeah.

464
00:23:09,840 --> 00:23:12,840
Speaker 4: So the Disney case, it's an example of a really

465
00:23:12,840 --> 00:23:16,800
Speaker 4: concerning trend of government officials using their power to punish

466
00:23:16,880 --> 00:23:21,160
Speaker 4: or intimidate their critics. So, for example, our client Noah Pearson,

467
00:23:21,560 --> 00:23:24,719
Speaker 4: when he tried to express his concerns about the police

468
00:23:24,760 --> 00:23:28,040
Speaker 4: department and the city government at a city council meeting

469
00:23:28,520 --> 00:23:32,119
Speaker 4: in Newton, Iowa, the mayor had him arrested on the

470
00:23:32,200 --> 00:23:37,040
Speaker 4: spot for disrupting a lawful assembly. And as he was

471
00:23:37,080 --> 00:23:39,399
Speaker 4: being arrested, the mayor told him that he was not

472
00:23:39,440 --> 00:23:43,080
Speaker 4: allowed to make derogatory remarks about city officials, and he

473
00:23:43,200 --> 00:23:47,960
Speaker 4: later said, go do your activism where somebody cares. Thankfully,

474
00:23:48,160 --> 00:23:51,720
Speaker 4: a judge throughout the charges against Noah and how that

475
00:23:51,760 --> 00:23:54,359
Speaker 4: he had a person in the right to express his

476
00:23:54,480 --> 00:23:57,879
Speaker 4: concerns at a city council meeting. But we're trying to

477
00:23:57,920 --> 00:24:00,480
Speaker 4: hold the mayor and other officials accountable for what they

478
00:24:00,480 --> 00:24:04,200
Speaker 4: did to Noah. Another example is over in East Cleveland, Ohio.

479
00:24:04,480 --> 00:24:08,760
Speaker 4: Our client William Bambrough, tried to use his step van

480
00:24:08,800 --> 00:24:11,440
Speaker 4: as a sound truck to campaign for a friend who

481
00:24:11,480 --> 00:24:15,600
Speaker 4: is running for mayor, and in response, the incumbent mayor

482
00:24:15,800 --> 00:24:19,199
Speaker 4: and the police chiefs and other city officials coordinated a

483
00:24:19,240 --> 00:24:24,160
Speaker 4: campaign to issue mister Gambrou citations and they ultimately tod

484
00:24:24,200 --> 00:24:27,840
Speaker 4: his van, knocking it out of commission just weeks before

485
00:24:27,920 --> 00:24:32,160
Speaker 4: the election, and a city prosecutor later confirmed that all

486
00:24:32,200 --> 00:24:36,480
Speaker 4: of that was done because of mister Fambrose First Amendment

487
00:24:36,560 --> 00:24:39,720
Speaker 4: protected activity. So those those are just a couple of

488
00:24:39,760 --> 00:24:43,879
Speaker 4: examples of cases that we've seen of government officials using

489
00:24:44,400 --> 00:24:48,920
Speaker 4: otherwise legitimate power as a pretext to try and silence

490
00:24:48,960 --> 00:24:49,600
Speaker 4: their critics.

491
00:24:50,040 --> 00:24:53,200
Speaker 3: Do you find these kinds of incidents happening more in

492
00:24:53,359 --> 00:24:57,760
Speaker 3: certain parts of the country or in smaller towns. I mean,

493
00:24:57,800 --> 00:25:01,359
Speaker 3: they seem like just clear first violations.

494
00:25:01,640 --> 00:25:05,399
Speaker 4: We're seeing it across the country. It's mostly coming up,

495
00:25:05,440 --> 00:25:07,880
Speaker 4: and at least the examples that we've seen are kind

496
00:25:07,920 --> 00:25:11,560
Speaker 4: of coming up in smaller towns. But you know, as

497
00:25:11,560 --> 00:25:13,879
Speaker 4: we can see from the Disney case that a larger

498
00:25:13,960 --> 00:25:16,679
Speaker 4: stage is no impediment to retaliation.

499
00:25:17,560 --> 00:25:19,840
Speaker 3: We've talked before on the show about the concept of

500
00:25:19,960 --> 00:25:23,640
Speaker 3: qualified immunity, which was created by the Supreme Court. How

501
00:25:23,640 --> 00:25:25,359
Speaker 3: does that concept fit in here?

502
00:25:25,960 --> 00:25:30,640
Speaker 4: Yeah, so, qualified immunity is one of several doctrines that

503
00:25:30,880 --> 00:25:34,480
Speaker 4: have made it very, very difficult to hold government officials

504
00:25:34,520 --> 00:25:39,280
Speaker 4: accountable when they retaliate. So, qualified immunity is a doctrine

505
00:25:39,440 --> 00:25:42,280
Speaker 4: created by those Supreme Court in the nineteen eighties. The

506
00:25:42,320 --> 00:25:46,520
Speaker 4: protects government officials from being fooed for violating constitutional rights

507
00:25:46,640 --> 00:25:50,480
Speaker 4: unless victims can show that those rights are clearly established.

508
00:25:50,800 --> 00:25:52,879
Speaker 4: And so what that means is that victims have to

509
00:25:52,920 --> 00:25:57,200
Speaker 4: point to a previous judicial decision finding that the same

510
00:25:57,280 --> 00:26:01,840
Speaker 4: conduct in the same circumstances is unconsportus, and that's very

511
00:26:01,840 --> 00:26:05,960
Speaker 4: difficult to do. So. People who support qualified immunity argue

512
00:26:05,960 --> 00:26:09,760
Speaker 4: that it gives police officers breathing room, essentially to make

513
00:26:09,880 --> 00:26:15,080
Speaker 4: reasonable mistakes in dangerous situations. So think excessive force claims,

514
00:26:15,119 --> 00:26:17,960
Speaker 4: where police officers often have to make split second decision.

515
00:26:18,160 --> 00:26:21,439
Speaker 4: But qualified immunity applies much more broadly than that. It

516
00:26:21,480 --> 00:26:25,080
Speaker 4: applies to all government officials, regardless of how much time

517
00:26:25,119 --> 00:26:29,040
Speaker 4: they have to consider whether their actions are constitutional, and

518
00:26:29,080 --> 00:26:33,240
Speaker 4: it also applies to premeditated retaliation claims like the kind

519
00:26:33,240 --> 00:26:37,320
Speaker 4: that we're talking about. So my firm, the Institute for Justice,

520
00:26:37,560 --> 00:26:41,520
Speaker 4: recently released a report called Unaccountable that analyzed the over

521
00:26:41,680 --> 00:26:45,960
Speaker 4: fifty five hundred qualified immunity cases and First Amendment claims

522
00:26:46,000 --> 00:26:50,080
Speaker 4: featured in nearly one in five of those cases, and

523
00:26:50,440 --> 00:26:54,240
Speaker 4: in most of those, officials were accused of premeditated retaliation

524
00:26:54,880 --> 00:26:56,240
Speaker 4: for protected speech.

525
00:26:56,000 --> 00:26:56,800
Speaker 1: That they didn't like.

526
00:26:57,440 --> 00:27:00,320
Speaker 4: And obviously that's very, very different from the time kinds

527
00:27:00,320 --> 00:27:04,200
Speaker 4: of split second decisions that are often used to justify

528
00:27:04,440 --> 00:27:05,440
Speaker 4: qualified immunity.

529
00:27:06,119 --> 00:27:09,760
Speaker 3: Your law firm is also representing a seventy six year

530
00:27:09,800 --> 00:27:12,480
Speaker 3: old grandmother. Tell us about her case.

531
00:27:12,960 --> 00:27:17,440
Speaker 4: So we're representing Sylvia Gonzalez. She's a seventy six year

532
00:27:17,480 --> 00:27:20,800
Speaker 4: old grandmother. That case is going to be heard by

533
00:27:20,840 --> 00:27:24,400
Speaker 4: the Supreme Court. One of my colleagues at the Institute

534
00:27:24,400 --> 00:27:27,080
Speaker 4: for Justice is going to argue the case on March twentieth,

535
00:27:27,720 --> 00:27:31,960
Speaker 4: and that case concerns a different doctrine that applies specifically

536
00:27:32,000 --> 00:27:34,840
Speaker 4: to retaliatory arrest cases that makes it very difficult to

537
00:27:34,960 --> 00:27:38,800
Speaker 4: old officials accountable for those. That doctrine comes from a

538
00:27:38,840 --> 00:27:42,199
Speaker 4: case called Niebez versus Bartlett's, which held that if you

539
00:27:42,280 --> 00:27:45,600
Speaker 4: are arrested in retaliation for your speech, you can't suit

540
00:27:45,640 --> 00:27:48,720
Speaker 4: to challenge that retaliatory arrest unless you can prove that

541
00:27:48,760 --> 00:27:51,920
Speaker 4: there was no probable cause to arrescue, and of course

542
00:27:51,920 --> 00:27:54,320
Speaker 4: it's usually very difficult to prove that there was no

543
00:27:54,400 --> 00:27:58,000
Speaker 4: probable cause to arrest, because it's easy for officials to

544
00:27:58,080 --> 00:28:01,879
Speaker 4: find probable cause, but you broke one of the many state, local,

545
00:28:01,960 --> 00:28:04,359
Speaker 4: and federal laws on the books. But the court in

546
00:28:04,440 --> 00:28:08,240
Speaker 4: Nievaz reasons that arresting officers often have to make split

547
00:28:08,320 --> 00:28:11,760
Speaker 4: second decisions to arrest, and that in those cases it's

548
00:28:11,800 --> 00:28:15,080
Speaker 4: really difficult to determine whether the arrest was actually caused

549
00:28:15,080 --> 00:28:19,520
Speaker 4: by retaliatory intent or by the plaintiff's conduct. So in

550
00:28:19,520 --> 00:28:22,760
Speaker 4: this case, the Supreme Court is basically going to decide

551
00:28:23,359 --> 00:28:28,120
Speaker 4: whether that no probable cause rule is actually limited to

552
00:28:28,160 --> 00:28:33,399
Speaker 4: split second arrests. So and Gonzales versus Trevino Sylvia our client.

553
00:28:33,600 --> 00:28:37,199
Speaker 4: She ran for city council in Castle Hills, Texas, and

554
00:28:37,240 --> 00:28:40,960
Speaker 4: her very first second office was to support a petition

555
00:28:41,640 --> 00:28:44,440
Speaker 4: calling for the removal of the city manager. But the

556
00:28:44,480 --> 00:28:47,920
Speaker 4: city manager's allies were angry about that and they decided

557
00:28:47,960 --> 00:28:53,080
Speaker 4: to punish Sylvia for challenging him, and two months later

558
00:28:53,640 --> 00:28:57,960
Speaker 4: they had her arrested for campering with a government record,

559
00:28:58,440 --> 00:29:02,320
Speaker 4: and they alleged that she had stolen her own citizens petition.

560
00:29:02,920 --> 00:29:07,720
Speaker 4: So Sylvia later sued the officials for violating her constitutional rights.

561
00:29:08,040 --> 00:29:11,560
Speaker 4: The district Court let her case move forward, but when

562
00:29:11,560 --> 00:29:15,240
Speaker 4: the officials appealed, the Fifth Circuit reversed the District Court's

563
00:29:15,320 --> 00:29:19,000
Speaker 4: decision and it held that the no probable cause rule

564
00:29:19,360 --> 00:29:25,360
Speaker 4: from Nieves barred Sylvia's retaliatory rest claim from moving forward.

565
00:29:25,840 --> 00:29:29,160
Speaker 4: But Sylvia's case, in which the officials took months to

566
00:29:29,160 --> 00:29:33,280
Speaker 4: plan the retaliation, is very different from the types of

567
00:29:33,280 --> 00:29:36,840
Speaker 4: split second decisions that the Court envisioned in Nievez, So

568
00:29:36,880 --> 00:29:41,200
Speaker 4: you don't have that same difficulty in determining whether the

569
00:29:41,320 --> 00:29:46,680
Speaker 4: arrest was in fact based on retaliatory intent. So the

570
00:29:46,720 --> 00:29:50,680
Speaker 4: Supreme Court's going to decide whether Nieva applies to cases

571
00:29:50,720 --> 00:29:54,560
Speaker 4: like Sylvia's, where the officials did have time to consider

572
00:29:54,600 --> 00:29:57,320
Speaker 4: whether what they did violated the First Amendment.

573
00:29:57,800 --> 00:30:00,880
Speaker 3: So the Fifth Circuit is the most concerned vative circuit

574
00:30:00,880 --> 00:30:04,040
Speaker 3: in the country. It's also sort of gone out on

575
00:30:04,080 --> 00:30:08,320
Speaker 3: a limb in a lot of cases endorsing novel theories

576
00:30:08,360 --> 00:30:11,520
Speaker 3: of law, for example, and the Supreme Court has been

577
00:30:11,560 --> 00:30:15,800
Speaker 3: taking a lot of Fifth Circuit cases to review, the

578
00:30:15,800 --> 00:30:18,239
Speaker 3: theory being that the Fifth Circuit may have to be

579
00:30:18,360 --> 00:30:21,360
Speaker 3: rained in a little Do you think the Supreme Court

580
00:30:21,400 --> 00:30:25,280
Speaker 3: is taking the Gonzales case in order to reverse the

581
00:30:25,280 --> 00:30:28,400
Speaker 3: Fifth Circuit or is that at least what you're hoping.

582
00:30:29,360 --> 00:30:33,120
Speaker 4: Yeah, we certainly hope. So we certainly hope that the

583
00:30:33,160 --> 00:30:36,680
Speaker 4: Fifth Circuit decision highlights the problem with the reasoning in

584
00:30:36,760 --> 00:30:41,600
Speaker 4: the evis assuming that all retaliatory arrests are based on

585
00:30:41,720 --> 00:30:44,400
Speaker 4: these type of split second decisions. So we hope that

586
00:30:44,440 --> 00:30:46,800
Speaker 4: the Supreme Court is going to agree with us that

587
00:30:47,960 --> 00:30:50,640
Speaker 4: the reasoning in the US in fact should not apply

588
00:30:50,800 --> 00:30:53,880
Speaker 4: to situations like this where the officials they're not making

589
00:30:54,160 --> 00:30:59,560
Speaker 4: split second decisions. They have time to research and find

590
00:30:59,600 --> 00:31:03,160
Speaker 4: out what what they plan to do violates the Constitution.

591
00:31:03,640 --> 00:31:06,560
Speaker 4: I'll just add that we were really hoping that the

592
00:31:06,600 --> 00:31:11,640
Speaker 4: Supreme Court is going to rule that officials have to

593
00:31:11,640 --> 00:31:14,960
Speaker 4: be held accountable for retaliatory arrests that's based on a

594
00:31:15,080 --> 00:31:19,240
Speaker 4: month long scheme rather than a split second decision. Because

595
00:31:19,280 --> 00:31:22,160
Speaker 4: of course, at the First Amendment means anything, it has

596
00:31:22,240 --> 00:31:25,640
Speaker 4: to mean that individuals can criticize the government without fear

597
00:31:25,760 --> 00:31:26,840
Speaker 4: of retaliation.

598
00:31:27,520 --> 00:31:30,960
Speaker 3: Will certainly be listening to those oral arguments on March twentieth,

599
00:31:31,000 --> 00:31:34,640
Speaker 3: Thanks so much, Caroline. That's Caroline Grace Brothers of the

600
00:31:34,720 --> 00:31:39,320
Speaker 3: Institute for Justice. In other legal news today, a divided

601
00:31:39,360 --> 00:31:44,560
Speaker 3: Supreme Court left an elite school's diversity policy intact, turning

602
00:31:44,600 --> 00:31:47,480
Speaker 3: down an appeal that said a competitive Virginia public high

603
00:31:47,520 --> 00:31:52,000
Speaker 3: school revised its criteria to change its racial composition. The

604
00:31:52,040 --> 00:31:56,240
Speaker 3: Supreme Court reinforced school efforts to use their admissions policies

605
00:31:56,280 --> 00:32:01,160
Speaker 3: to foster socioeconomic diversity. The policy in question at Thomas

606
00:32:01,240 --> 00:32:05,160
Speaker 3: Jefferson High School for Science and Technology was designed to

607
00:32:05,240 --> 00:32:09,320
Speaker 3: achieve more geographic and economic diversity in the student body.

608
00:32:09,760 --> 00:32:12,560
Speaker 3: The challengers, made up of some of the school's students

609
00:32:12,560 --> 00:32:15,719
Speaker 3: and parents, argued that the real goal was to reduce

610
00:32:15,760 --> 00:32:19,680
Speaker 3: the percentage of Asian American students. The rebuff from the

611
00:32:19,760 --> 00:32:23,360
Speaker 3: Supreme Court is a setback to racial preference opponents who

612
00:32:23,520 --> 00:32:28,000
Speaker 3: sought to extend last year Supreme Court decision barring universities

613
00:32:28,040 --> 00:32:30,920
Speaker 3: from using race and admissions for the sake of diversity.

614
00:32:31,680 --> 00:32:34,960
Speaker 3: Although the Supreme Court order doesn't set a precedent, it

615
00:32:35,080 --> 00:32:38,400
Speaker 3: leaves intact a Fourth Circuit Us Circuit Court of Appeals

616
00:32:38,520 --> 00:32:43,400
Speaker 3: ruling that dissenting Justices Samuel Alito and Clarence Thomas said

617
00:32:43,440 --> 00:32:47,280
Speaker 3: today could serve as a quote blueprint for schools seeking

618
00:32:47,320 --> 00:32:51,520
Speaker 3: to circumvent the twenty twenty three decision. Earlier this month,

619
00:32:51,600 --> 00:32:55,000
Speaker 3: the Supreme Court allowed West Point to continue using race

620
00:32:55,000 --> 00:32:59,120
Speaker 3: as an admissions factor for now, rejecting an emergency request

621
00:32:59,200 --> 00:33:03,200
Speaker 3: that sought to the decades old affirmative action efforts at

622
00:33:03,240 --> 00:33:07,720
Speaker 3: the nation's oldest military academy. There were no public descents

623
00:33:07,760 --> 00:33:10,120
Speaker 3: in that case. And that's it for this edition of

624
00:33:10,160 --> 00:33:13,200
Speaker 3: the Bloomberg Law Podcast. Remember you can always get the

625
00:33:13,240 --> 00:33:16,160
Speaker 3: latest legal news by subscribing and listening to the show

626
00:33:16,360 --> 00:33:20,880
Speaker 3: on Apple Podcasts, Spotify, and at Bloomberg dot com, Slash podcast,

627
00:33:20,960 --> 00:33:24,840
Speaker 3: Slash Law. I'm June Grosso, and this is Bloomberg