WEBVTT - The Case the Crypto World Is Watching 0:00:03.120 --> 0:00:07.960 This is Bloomberg Law with June Brusso from Bloomberg Radio. 0:00:09.280 --> 0:00:12.600 The eyes of the crypto world turned to Washington, DC 0:00:12.840 --> 0:00:17.360 this week as Grayscale Investments faced off against the Securities 0:00:17.360 --> 0:00:20.400 and Exchange Commission with about five and a half billion 0:00:20.440 --> 0:00:24.599 dollars in unlocked value at stake and huge implications for 0:00:24.640 --> 0:00:28.440 the crypto industry. The drama centers on the fourteen point 0:00:28.480 --> 0:00:32.360 eight billion dollar Grayscale Bitcoin Trust, which has been trading 0:00:32.400 --> 0:00:36.720 at a steep discount to the cryptocurrency it holds. Grayscale 0:00:36.760 --> 0:00:40.880 wants to convert its Bitcoin trust into an exchange traded fund, 0:00:41.280 --> 0:00:45.280 but the SEC rejected the plan. In June, the DC 0:00:45.440 --> 0:00:49.440 Federal Appeals Court judges grilled the SEC on its decision 0:00:49.520 --> 0:00:53.239 to reject their proposed spot bitcoin ETF when it had 0:00:53.280 --> 0:00:57.560 earlier approved a similar product based on bitcoin futures. Here's 0:00:57.600 --> 0:01:01.320 Chief Circuit Judge Sri Shrine Vassin and Judge Naomi Rao 0:01:01.760 --> 0:01:06.560 whether Commission really needs to explain is how it understands 0:01:06.560 --> 0:01:11.440 the relationship between bitcoin futures and the spot price a bitcoin, 0:01:11.840 --> 0:01:14.560 Because it seems to me that these things, I mean, 0:01:14.560 --> 0:01:17.160 you know, one is just essentially a derivative of the 0:01:17.240 --> 0:01:20.880 other they moved together in ninety nine point nine percent 0:01:20.920 --> 0:01:24.240 of the time, it's just going to follow like the 0:01:24.360 --> 0:01:27.800 night follows the day that it affects both because the 0:01:27.800 --> 0:01:30.279 futures market, of course, it turns on the spot market. 0:01:30.680 --> 0:01:33.800 Joining me is security's law expert Robert him a partner 0:01:33.800 --> 0:01:36.600 at Tartar Krinsky and Drogan. Bob tell us. How we 0:01:36.680 --> 0:01:40.920 got to arguments at the DC Circuit Court of Appeals. Well, 0:01:40.920 --> 0:01:45.480 this all started when Greyscale wanted to create an exchange 0:01:45.520 --> 0:01:49.480 traded product for its Bitcoin trust, and the Bitcoin Trust 0:01:49.760 --> 0:01:53.880 is priced and trades in actual bitcoins, unlike some of 0:01:53.880 --> 0:01:56.680 the other exchange products that are currently on the market 0:01:56.760 --> 0:02:01.480 that concern futures contracts, and as a result, Grayscale and 0:02:01.840 --> 0:02:06.320 an exchange called ARCA applied to the SEC asking permission 0:02:06.600 --> 0:02:11.000 for gray scales Bitcoin Trust to become an exchange traded 0:02:11.120 --> 0:02:15.840 product and be available for retail investors. The SEC rejected 0:02:15.880 --> 0:02:20.920 that proposal in twenty twenty two, and Grayscale sued the 0:02:21.000 --> 0:02:25.200 SEC and file the petition with the DC Circuit Court, 0:02:25.720 --> 0:02:29.760 arguing that the SEC's rejection of its request was an 0:02:29.840 --> 0:02:33.560 arbitrary and capricious decision which should be overturned. By the court. 0:02:34.360 --> 0:02:39.240 Why did the SEC reject gray Scales application. The SEC's 0:02:39.440 --> 0:02:44.120 entire argument for why it rejected gray Scales application is 0:02:44.160 --> 0:02:47.960 that gray Scales product with Bitcoin it trades in the 0:02:48.000 --> 0:02:52.320 spot market, which means essentially that Grayscale has a trust 0:02:52.400 --> 0:02:56.920 that actually owns bitcoin digital currency, and the current products 0:02:56.960 --> 0:02:59.440 that are on the market that are exchange traded products. 0:02:59.520 --> 0:03:04.679 The underling asset in those products are futures Bitcoin futures contracts, 0:03:05.040 --> 0:03:08.680 and according to the SEC's reasoning, the SEC told the 0:03:08.760 --> 0:03:12.079 court that there's a big difference between those two types 0:03:12.120 --> 0:03:16.320 of structures because with futures contracts, those are regulated products. 0:03:16.400 --> 0:03:20.320 They're overseen by the CME, there's market surveillance, and there's 0:03:20.320 --> 0:03:23.720 all sorts of investor protections in place, whereas with the 0:03:23.760 --> 0:03:28.320 bitcoin spot market, it's essentially an unregulated market. There's no 0:03:28.400 --> 0:03:32.280 regulator that oversees that. As a result, the SEC felt 0:03:32.280 --> 0:03:35.120 that there just wasn't enough safeguards in place for Gray 0:03:35.160 --> 0:03:38.880 Scales trust to warrant it being approved for retail trading. 0:03:39.080 --> 0:03:43.400 And how did Grayscale frame its arguments to the DC circuit. 0:03:43.760 --> 0:03:46.200 What the court specifically is looking at is whether the 0:03:46.320 --> 0:03:50.440 SEC has articulated a reasonable position or not when it 0:03:50.480 --> 0:03:54.640 distinguishes between exchange traded products that are based on futures 0:03:55.120 --> 0:03:58.920 versus exchange traded products that are based on actual bitcoin, 0:03:59.440 --> 0:04:02.360 and arding to Grayscale, their arguments are is that there's 0:04:02.360 --> 0:04:05.960 really no meaningful distinction between the two and that any 0:04:06.000 --> 0:04:09.880 sort of concerns the SEC has about manipulation or fraud 0:04:10.360 --> 0:04:14.440 in the unregulated bitcoin market, you know, essentially also have 0:04:14.560 --> 0:04:17.520 to carry over to the futures market because those futures 0:04:17.600 --> 0:04:21.360 contracts are based on this unregulated market. So what gray 0:04:21.400 --> 0:04:23.719 Scales argument to the court is is that the SEC 0:04:23.920 --> 0:04:27.480 is drawing a distinction here that has no real substantive 0:04:27.680 --> 0:04:31.920 weight behind it, and the SEC obviously disagrees with Dad 0:04:31.920 --> 0:04:34.479 and is putting forward its reasons for why it thinks 0:04:34.520 --> 0:04:38.080 there's a difference between the two markets. In the oral arguments, 0:04:38.120 --> 0:04:41.880 the judges seem to be grilling the SEC's attorney more 0:04:41.920 --> 0:04:44.800 than gray Scale's attorney. The judges really seem to be 0:04:44.839 --> 0:04:47.720 picking up a lot of the points that gray Scale 0:04:47.880 --> 0:04:51.040 raised in their briefs, especially when it was the SEC's 0:04:51.120 --> 0:04:54.440 lawyer's turn to argue. The judges were really pressing the 0:04:54.520 --> 0:04:58.760 SEC to explain and justify the position that there is 0:04:58.800 --> 0:05:02.599 some sort of meaningful distinction between the bitcoin futures market 0:05:02.720 --> 0:05:06.320 and the bitcoin spot market. And from listening to the 0:05:06.400 --> 0:05:10.240 judges questions and seeing how they responded to the arguments, 0:05:10.640 --> 0:05:13.440 it seemed like the judges were really not convinced by 0:05:13.440 --> 0:05:16.560 the SEC's arguments that there was a valid basis between 0:05:16.600 --> 0:05:21.479 distinguishing these different types of exchange traded products. Tell us 0:05:21.520 --> 0:05:24.560 about the different ways the Court could rule here. So 0:05:24.600 --> 0:05:27.760 I think there's still a lot of uncertainty ahead for Grayscale, 0:05:27.800 --> 0:05:30.560 because the Court here can do a few different things. 0:05:30.800 --> 0:05:33.919 One of course, it could agree with the SEC that 0:05:34.040 --> 0:05:36.640 there is some sort of reasonable basis for the arguments 0:05:36.680 --> 0:05:40.720 that the SEC is making, And the court's role is 0:05:40.760 --> 0:05:43.760 really not to sit in second guests the SEC and 0:05:43.839 --> 0:05:48.040 to substitute its judgment for the SEC's judgment. The courts 0:05:48.080 --> 0:05:51.159 they are really to ensure the SEC hasn't gone off 0:05:51.240 --> 0:05:54.440 the rails and has not presented any sort of reasonable 0:05:54.520 --> 0:05:57.560 argument for its position. If the Court finds that there's 0:05:57.600 --> 0:06:01.680 even some reasonableness to the section, it could very well 0:06:01.760 --> 0:06:06.480 sustain the SEC's position and uphold the denial of the listing. 0:06:07.160 --> 0:06:12.560 Gray Scales argument is that the SEC's position is just arbitrary, capricious, 0:06:13.120 --> 0:06:16.800 and their lawyer, Donald Barelli, who is the former Solicitor 0:06:17.000 --> 0:06:19.960 General of the United States, made the point in his 0:06:20.080 --> 0:06:23.280 argument that this is a very different case because gray 0:06:23.320 --> 0:06:27.039 Scale is actually asking for more regulation. They've applied to 0:06:27.080 --> 0:06:30.880 the SEC to become a regulated exchange traded product, and 0:06:30.960 --> 0:06:33.960 they want that SEC regulation in order to offer and 0:06:34.080 --> 0:06:36.960 trade their shares because right now this is traded in 0:06:37.000 --> 0:06:39.880 the over the counter market, which is subject to a 0:06:39.880 --> 0:06:43.800 lot less regulation. So gray Scale is actually arguing that 0:06:43.839 --> 0:06:46.560 they want to come under SEC regulation for this product. 0:06:46.800 --> 0:06:49.040 And what's your best guess about how the court might 0:06:49.160 --> 0:06:52.000 rule here. You never really know in litigation how things 0:06:52.000 --> 0:06:53.880 are going to come out, even though some of the 0:06:53.960 --> 0:06:57.000 questions seem to be favorable to gray Scale, and the 0:06:57.040 --> 0:06:59.400 Court could still do a couple of things. Even if 0:06:59.400 --> 0:07:02.680 it doesn't rule outright in favor of the SEC. It 0:07:02.800 --> 0:07:05.640 could rule in favor of Grayscale and just overturn the 0:07:05.720 --> 0:07:09.800 SEC's decision and allow the fund to begin trading. Or 0:07:10.320 --> 0:07:13.040 kind of a middle ground approach is that the Court 0:07:13.080 --> 0:07:15.960 could send it back to the SEC and say you 0:07:16.000 --> 0:07:19.800 need to reconsider this because we don't find your reasoning persuasive, 0:07:20.040 --> 0:07:23.000 and I think that might be the most likely scenario, 0:07:23.640 --> 0:07:27.360 especially given the recent blow up of FTX and all 0:07:27.440 --> 0:07:30.440 the problems that have been occurring in the crypto market. 0:07:30.480 --> 0:07:32.360 I think the judges are going to be reluctant to 0:07:32.560 --> 0:07:35.760 just replace the SEC's judgment with their own and say 0:07:35.760 --> 0:07:39.040 that this exchange fund can now begin trading which is 0:07:39.080 --> 0:07:41.520 based on bitcoin. There may be a lot of reluctance 0:07:41.760 --> 0:07:44.480 on the judge's part to do that, and it may 0:07:44.520 --> 0:07:47.040 be more comfortable for them to send it back to 0:07:47.080 --> 0:07:50.360 the SEC with more guidance and have the SEC take 0:07:50.360 --> 0:07:53.080 a second look at this. Do you think that a 0:07:53.200 --> 0:08:00.320 spot bitcoin ETF protects investors better? As the really argued? Well, 0:08:00.360 --> 0:08:03.800 I think that the SEC's arguments were fairly weak. While 0:08:03.920 --> 0:08:08.080 their concerns about fraud and manipulation are well justified in 0:08:08.160 --> 0:08:13.280 the bitcoin market. The SEC specifically mentioned things like wash trading, 0:08:13.400 --> 0:08:17.240 insider trading, hacking. You know, those are all very legitimate 0:08:17.320 --> 0:08:20.920 concerns that need to be addressed, But the SEC really, 0:08:21.080 --> 0:08:23.480 in my opinion, didn't do a very good job of 0:08:23.600 --> 0:08:27.960 explaining why those same risks are less when you have 0:08:28.000 --> 0:08:32.080 a futures product based on bitcoin, And it seems to 0:08:32.120 --> 0:08:34.880 the judges and to me that there really are the 0:08:34.960 --> 0:08:39.560 same risks. And the interesting thing about the Grayscale case too, 0:08:39.600 --> 0:08:42.199 is that there's been a number of amiki that have 0:08:42.360 --> 0:08:45.120 filed Friends of the Court briefs, and in some of 0:08:45.160 --> 0:08:48.040 those briefs there was some pretty compelling arguments made about 0:08:48.040 --> 0:08:51.880 all the steps that the exchanges and other service providers 0:08:51.960 --> 0:08:54.560 take to try to address those sort of fraudulent and 0:08:54.679 --> 0:08:58.840 manipulative practices in the bitcoin spot market. Grayscale has said 0:08:58.920 --> 0:09:01.800 that if it loses, it will appeal to the Supreme 0:09:01.880 --> 0:09:05.079 Court and that if it loses, it may try a 0:09:05.120 --> 0:09:07.560 tender offer. Do you think the Supreme Court would take 0:09:07.559 --> 0:09:10.440 this case? Well, this case has more going for it 0:09:10.440 --> 0:09:13.480 than the average case. It is a very important case 0:09:13.600 --> 0:09:17.400 to the crypto industry, as is evidenced from the fact 0:09:17.480 --> 0:09:21.640 that so many amicus briefs were filed, and bitcoin is 0:09:21.679 --> 0:09:25.200 the largest digital currency by far its market cap is 0:09:25.240 --> 0:09:29.040 four hundred billion. The gray Scale Trust itself has twelve 0:09:29.040 --> 0:09:31.960 billion of bitcoin, so this is clearly a case that 0:09:32.040 --> 0:09:38.320 has national implications and importance for a developing industry. And 0:09:38.559 --> 0:09:40.960 as of the last few years, the Supreme Court has 0:09:41.000 --> 0:09:44.280 also shown an interest in taking cases where the SEC 0:09:44.400 --> 0:09:46.839 has been a respondent, because there are a number of 0:09:46.920 --> 0:09:49.160 cases that have come out over the last five years 0:09:49.200 --> 0:09:52.160 where the SEC has lost at the Supreme Court because 0:09:52.200 --> 0:09:55.920 the Court viewed the Commission is either overstepping its boundaries 0:09:56.040 --> 0:09:59.320 or acting in an arbitrary and capricious manner. So I 0:09:59.360 --> 0:10:02.120 do think that this cases more than an average cases 0:10:02.200 --> 0:10:05.240 chance of success in being taken up by the Supreme Court. 0:10:05.320 --> 0:10:07.679 But still it's a very small percentage of cases are 0:10:07.920 --> 0:10:10.760 taken by the Supreme Court. Yes, smaller and smaller every year, 0:10:11.280 --> 0:10:14.840 it seems. Something So, And what about Grayscale trying a 0:10:14.880 --> 0:10:17.120 tender offer? You know, I think that's going to be 0:10:17.160 --> 0:10:21.640 an interesting option. You know, it's clearly PLANEDZ. I think 0:10:21.880 --> 0:10:25.400 for Grayscale it's not an ideal solution because it's going 0:10:25.440 --> 0:10:28.160 to be quite a bit more costly. It's a different 0:10:28.160 --> 0:10:32.040 regulatory path that's involved, and I think that Grayscale would 0:10:32.120 --> 0:10:35.400 much prefer to have this product traded in the market, 0:10:35.600 --> 0:10:39.199 and it would also allow it to grow and to 0:10:39.679 --> 0:10:42.520 really set this standard. The tender offer may be something 0:10:42.600 --> 0:10:44.920 that they would look at. I don't think they've really 0:10:45.080 --> 0:10:47.920 fleshed out the idea very much in terms of pricing 0:10:47.960 --> 0:10:51.239 and valuation and how that would work with the discount 0:10:51.240 --> 0:10:54.319 to the market, whether the tenderoffer would be made at 0:10:54.360 --> 0:10:57.319 some premium or whether it would be the full discount. 0:10:57.520 --> 0:10:59.360 So I think there's a lot of open questions on 0:10:59.440 --> 0:11:03.000 the tender for plan. Still, has the SEC been cracking 0:11:03.080 --> 0:11:07.040 down on digital asset products in general, Yes, I would 0:11:07.080 --> 0:11:10.720 say so. Ever since the new chair came in, Gary Gensler, 0:11:11.120 --> 0:11:15.480 he's been very aggressive in terms of tackling the cryptocurrency 0:11:16.120 --> 0:11:19.400 issues and digital asset issues. There has been a number 0:11:19.400 --> 0:11:24.439 of enforcement cases under his tenure against digital asset companies. 0:11:24.840 --> 0:11:27.200 I would say it's it's a real effort on the 0:11:27.280 --> 0:11:31.760 SEC's part to expand their turf and to bring these 0:11:31.800 --> 0:11:36.240 digital assets under the umbrella of securities regulation and everything 0:11:36.240 --> 0:11:40.040 that goes with it in terms of disclosures and regulation 0:11:40.080 --> 0:11:44.920 of trading platforms and all of the surveillance and so forth. 0:11:45.040 --> 0:11:49.120 So yes, and that emphasis only got stronger in the 0:11:49.120 --> 0:11:53.160 wake of the FTX collapse and really brought that to 0:11:53.280 --> 0:11:56.360 the top of the SEC's agenda in terms of regulating 0:11:56.360 --> 0:12:01.800 digital assets and cryptocurrencies. So the SEC has rejected several 0:12:01.960 --> 0:12:06.760 applications for ETF similar to this. If the court rules 0:12:06.800 --> 0:12:12.440 against the SEC here, will it have to reconsider those applications. 0:12:12.480 --> 0:12:16.480 Not necessarily because this case is going to be limited 0:12:16.600 --> 0:12:19.880 just a gray scale, but if the SEC loses, those 0:12:19.920 --> 0:12:24.160 other funds certainly may want to reapply to the SEC 0:12:24.440 --> 0:12:27.520 and get the benefit of any sort of favorable decision 0:12:27.720 --> 0:12:30.840 on that. And it's an interesting point the SEC is 0:12:30.880 --> 0:12:34.400 making because the gray Scales almost their entire argument is 0:12:34.440 --> 0:12:38.640 that the SEC is treating their bitcoin fund differently than 0:12:38.679 --> 0:12:43.120 the exchange traded products that were approved, even though essentially 0:12:43.600 --> 0:12:48.439 in gray scale's view, they're economically very, very similar, and 0:12:48.800 --> 0:12:51.480 the SEC notes that, well, you know, in their view, 0:12:51.520 --> 0:12:53.920 that's not the case. The SEC says that they've been 0:12:54.040 --> 0:12:58.679 very consistent in terms of rejecting exchange traded products that 0:12:59.000 --> 0:13:02.199 were based on bitcoin spot prices, just like here, though 0:13:02.240 --> 0:13:05.480 the SEC is arguing to the court the relevant comparison 0:13:05.600 --> 0:13:09.920 is not looking at futures based funds to spot based funds, 0:13:09.960 --> 0:13:13.440 but the relevant consideration is how did the SEC treat 0:13:13.640 --> 0:13:18.040 other spot funds, And they've rejected those applications too, So 0:13:18.120 --> 0:13:21.319 in the SEC's view, they are being consistent in the 0:13:21.320 --> 0:13:24.200 way they're treating gray Scale because they've rejected gray Scale 0:13:24.240 --> 0:13:27.560 just like they've rejected other spot ETF types of funds 0:13:27.559 --> 0:13:30.960 for bitcoin. A lot of people interested in this decision, 0:13:31.040 --> 0:13:34.679 Thanks so much, Bob. That's Robert him of Tartar, Krinsky 0:13:34.720 --> 0:13:40.319 and Drogen. Special Counsel Jack Smith is moving aggressively in 0:13:40.440 --> 0:13:45.439 his investigation, subpoenaing former Vice President Mike Pence, former White 0:13:45.440 --> 0:13:49.080 House Chief of Staff Mark Meadows, and several of Trump's 0:13:49.080 --> 0:13:53.320 attorneys to testify before the grand jury. Multiple news outlets 0:13:53.320 --> 0:13:56.320 are reporting that the special counsel is asking a judge 0:13:56.360 --> 0:14:00.920 to bypass the attorney client privilege claims made by Trump's attorney, 0:14:00.920 --> 0:14:04.560 Evan Corkran due to the crime fraud exception. Joining me 0:14:04.640 --> 0:14:08.520 is former federal prosecutor Robert Mints, a partner McCarter and English. 0:14:08.960 --> 0:14:13.400 Trump's attorney, Evan Corkran had raised attorney client privilege claims, 0:14:13.800 --> 0:14:17.320 but the special counsel is asking the judge to bypass 0:14:17.520 --> 0:14:21.720 those claims of attorney client privilege by invoking the crime 0:14:21.760 --> 0:14:26.120 fraud exception. Explain what the crime fraud exception is. The 0:14:26.200 --> 0:14:30.120 attorney client privilege is a broad privilege that protects all 0:14:30.160 --> 0:14:34.760 communications between a client and an attorney, whether it's information 0:14:34.840 --> 0:14:36.800 that the client is giving to the attorney in or 0:14:36.880 --> 0:14:40.040 to seek legal advice or advice that the attorney is 0:14:40.080 --> 0:14:43.240 giving to the client. But there is one exception to 0:14:43.400 --> 0:14:46.480 that that is often used by prosecutors, and that's something 0:14:46.480 --> 0:14:49.840 called the crime fraud exception. What that means is that 0:14:49.880 --> 0:14:52.920 there's an exception where there's reason to believe that the 0:14:53.040 --> 0:14:56.880 legal advice that the attorney is giving is being used 0:14:56.920 --> 0:14:59.560 in furtherance of a crime. So, in other words, of 0:14:59.640 --> 0:15:01.840 a client and comes in and talks about something they 0:15:01.840 --> 0:15:04.400 did in the past, that would all be covered by 0:15:04.440 --> 0:15:08.160 the privilege, even though the prior conduct may constitute a crime. 0:15:08.400 --> 0:15:11.640 What you cannot do is close your conversations with your 0:15:11.640 --> 0:15:16.320 attorney going forward if you're talking about a prospective crime. 0:15:16.400 --> 0:15:19.520 So if you're asking for advice from an attorney about 0:15:19.640 --> 0:15:22.680 conduct that may in and of itself be criminal and 0:15:22.720 --> 0:15:25.280 has not yet occurred, that is something that does not 0:15:25.320 --> 0:15:28.000 fall within the attorney client privilege, but is something called 0:15:28.000 --> 0:15:31.480 the crime fraud exception. What does it tell you that 0:15:31.880 --> 0:15:36.000 the special counsel is invoking that here? Does it tell 0:15:36.000 --> 0:15:39.360 you just that they suspect that a crime was committed, 0:15:39.960 --> 0:15:44.240 or that they suspect the lawyer was involved in the crime. Well, 0:15:44.280 --> 0:15:47.240 in this case, mister Corkran was among at least three 0:15:47.320 --> 0:15:50.520 lawyers for a former President Trump who appeared before a 0:15:50.560 --> 0:15:54.560 grand jury in January as part of the investigation into 0:15:54.600 --> 0:16:00.920 classified documents discovered at former President's Trump Maralago's residence in Florida. 0:16:01.040 --> 0:16:05.040 And during the course of that investigation, mister Corkran emerged 0:16:05.080 --> 0:16:08.960 as a figure of interest because federal investigators spoke to 0:16:09.040 --> 0:16:12.240 him about the fact that he handled mister Trump's response 0:16:12.440 --> 0:16:15.960 is the government's request to return those records that the 0:16:16.040 --> 0:16:18.760 government said belonged to the presidency and did not belong 0:16:18.800 --> 0:16:21.680 to mister Trump personally. And in fact, there came a 0:16:21.760 --> 0:16:24.920 point in time where there was a statement that was 0:16:25.000 --> 0:16:28.400 signed by another attorney, not by mister Corkrane, where that 0:16:28.480 --> 0:16:30.760 attorney vouched for the fact that they had done a 0:16:30.800 --> 0:16:34.680 diligent search of Marilago and did not believe that they 0:16:34.680 --> 0:16:39.400 were any classified documents located at the former president's resident. 0:16:39.840 --> 0:16:43.240 Following that, we all know the federal government came in. 0:16:43.280 --> 0:16:46.640 The FBI came in and did a search of Marilago 0:16:46.720 --> 0:16:50.480 and found additional classified documents. And still likely what they 0:16:50.520 --> 0:16:53.240 want to talk to mister Corkran about is what he 0:16:53.440 --> 0:16:57.120 did in terms of looking for those documents and whether 0:16:57.280 --> 0:17:00.840 or not his conversations with former President Trump in any 0:17:00.880 --> 0:17:06.199 way facilitated and obstruction of justice crime. Going forward, do 0:17:06.400 --> 0:17:11.240 prosecutors often invoke the crime fraud exception or is it unusual? 0:17:11.640 --> 0:17:14.440 The crime fraud excepts is not something that comes up 0:17:14.480 --> 0:17:19.399 all the time because judges are generally pretty wary of 0:17:19.600 --> 0:17:23.320 piercing the attorney client privilege. It is such a bedrock 0:17:23.440 --> 0:17:26.919 concept in our protections and our civil rights in the 0:17:26.960 --> 0:17:30.919 way that individuals are able to talk to their attorneys 0:17:30.960 --> 0:17:33.200 and they have to be able to believe that all 0:17:33.240 --> 0:17:36.800 the conversations with their attorneys are protected in order to 0:17:36.840 --> 0:17:39.359 get fair legal advice. You can't be in a situation 0:17:39.520 --> 0:17:42.400 where a client is fearful that the information that he's 0:17:42.440 --> 0:17:44.680 giving he or she is giving to his attorney will 0:17:44.720 --> 0:17:47.840 somehow be made public. On the other hand, where it's 0:17:47.920 --> 0:17:50.879 clear and organized crime cases are One example that I 0:17:50.960 --> 0:17:54.399 prosecuted and we did see this come up time and again, 0:17:54.920 --> 0:17:58.320 is where an outside council can be used not to 0:17:58.480 --> 0:18:02.080 give advice to a client about some prior conduct at 0:18:02.080 --> 0:18:04.800 defense against the potential criminal charge. It could be brought 0:18:04.800 --> 0:18:08.200 down the road, but lawyers have been used in order 0:18:08.240 --> 0:18:12.399 to help guide organized crime figures and other criminals in 0:18:12.560 --> 0:18:15.520 terms of perpetrating crimes in the future. And that's where 0:18:15.560 --> 0:18:18.520 you see a piercing of the attorney client privilege based 0:18:18.560 --> 0:18:21.480 upon the crime product exception. So while it's unusual, it's 0:18:21.480 --> 0:18:27.200 certainly not unheard of. Since Jack Smith was appointed special counsel, 0:18:27.320 --> 0:18:31.840 does it seem as if his department is moving aggressively 0:18:32.119 --> 0:18:37.000 their subpoenaing former Vice President Mike Penson, former White House 0:18:37.040 --> 0:18:40.600 Chief of Staff Mark Meadows, And here you have they're 0:18:40.600 --> 0:18:43.240 trying to get more information out of the lawyers. I 0:18:43.240 --> 0:18:46.040 wouldn't call it aggressive, but I would call it mindful 0:18:46.080 --> 0:18:49.720 of the fact that the presidential election is approaching, the 0:18:49.800 --> 0:18:53.720 presidential primaries are approaching, and there is a general rule 0:18:53.800 --> 0:18:56.320 in the Department of Justice that you do not want 0:18:56.320 --> 0:18:59.520 to return indictments so close in time to an election. 0:19:00.080 --> 0:19:03.000 They could in some way impact that election. So while 0:19:03.000 --> 0:19:05.600 on the one hand, as the prosecutor and someone who's 0:19:05.640 --> 0:19:07.919 going to be careful and thorough, you want to make 0:19:07.960 --> 0:19:10.760 sure you're dinning while your eyes, you're crossing your keys. 0:19:11.119 --> 0:19:13.280 You want to take your time and build your case 0:19:13.400 --> 0:19:15.680 to make sure if you do seek an indictment from 0:19:15.680 --> 0:19:18.520 the grand jury, that it's a strong one and ultimately 0:19:18.520 --> 0:19:20.480 you're going to be able to convict when you get 0:19:20.520 --> 0:19:23.399 to trial. On the other hand, in a sense, the 0:19:23.440 --> 0:19:27.680 special prosecutor is racing against the political clock, because clearly 0:19:27.880 --> 0:19:29.480 he does not want to be in a position where 0:19:29.520 --> 0:19:32.879 he's returning an indictment close in time to the primaries 0:19:32.960 --> 0:19:35.760 or close in time for the presidential election, such that 0:19:35.880 --> 0:19:38.159 there can be an argument that could be made that 0:19:38.359 --> 0:19:41.280 is in some way political interference with the outcome of 0:19:41.320 --> 0:19:45.560 the election. As far as the subpoena of Mike Pants, 0:19:46.000 --> 0:19:50.359 let's talk first about what former President Trump is trying 0:19:50.400 --> 0:19:54.440 to do to block that subpoena, or at least to 0:19:54.680 --> 0:20:00.520 block specific issues he claims were covered by executive privilege. 0:20:01.240 --> 0:20:05.800 Former President Trump has repeatedly invoked the legal protection of 0:20:05.880 --> 0:20:08.639 executive privilege to try to block the testimony of his 0:20:08.800 --> 0:20:12.720 allies from subpoenas related to the January sixth attack on 0:20:12.760 --> 0:20:16.399 the US capital. In this case, he has thought to 0:20:16.520 --> 0:20:20.000 block the testimony of former President Might Tense on the 0:20:20.000 --> 0:20:24.760 basis that that is also covered by executive privilege. Executive 0:20:24.760 --> 0:20:27.359 privilege is a legal protection for the president of the 0:20:27.400 --> 0:20:30.120 United States that allows them to shield some of their 0:20:30.160 --> 0:20:34.240 private communications from Congress and the course, and basically, at 0:20:34.280 --> 0:20:38.679 its core, it is designed to allow presidential advisors to 0:20:38.800 --> 0:20:43.000 give candidate advice free from fear of public disclosure, to 0:20:43.080 --> 0:20:47.040 allow presidents to deliberate productively, to have all the information 0:20:47.080 --> 0:20:49.560 they may need in order to make a decision without 0:20:49.720 --> 0:20:53.520 the fear that those discussions would someday become public. In 0:20:53.560 --> 0:20:57.160 this case, there's a question about whether the former president 0:20:57.359 --> 0:21:00.560 has a right to invoke executive privilege. That's something that 0:21:00.600 --> 0:21:03.679 has been tested by the courts, and in most instances 0:21:03.680 --> 0:21:07.320 the courts have ruled against former President Trump. In addition, 0:21:07.440 --> 0:21:11.400 executive privilege is clearly not something that is absolute, and 0:21:11.560 --> 0:21:15.040 generally the courts have held that if the information that 0:21:15.200 --> 0:21:17.960 is being sought is in connective with a criminal investigation 0:21:18.440 --> 0:21:22.960 that overrides executive privilege, is it more for the current 0:21:23.000 --> 0:21:27.760 president than a prior president. The question of whether a 0:21:27.800 --> 0:21:32.520 former president can invoke executive privilege is still somewhat unsettled. 0:21:33.040 --> 0:21:36.840 President Nixon tried to invoke executive privilege after he left 0:21:36.920 --> 0:21:41.679 office when prosecutors were seeking tapes in connection with the 0:21:41.760 --> 0:21:45.200 Watergate break, and in that case, we know Nixon lost 0:21:45.280 --> 0:21:47.679 the case. He had to turn over the tape, but 0:21:47.800 --> 0:21:50.720 the court was never entirely clear on the question of 0:21:50.760 --> 0:21:54.720 whether a former president could exercise executive privilege or not. 0:21:54.960 --> 0:21:56.879 So far, in the cases that have been tested by 0:21:56.920 --> 0:22:00.600 former President Trump, he has not prevailed. In most cases, 0:22:00.600 --> 0:22:02.199 of course, never a looted on the fact that the 0:22:02.200 --> 0:22:05.320 information that was thought was done in connection with a 0:22:05.440 --> 0:22:09.440 criminal investigation, and that is something that the Supreme Court 0:22:09.480 --> 0:22:13.080 has always acknowledged will outweigh the protection of executive privilege. 0:22:13.440 --> 0:22:18.000 Mike Pence himself is not using an executive privilege argument. 0:22:18.240 --> 0:22:21.400 He's using the speech and debate clause. I think it's 0:22:21.440 --> 0:22:23.800 the first time it's been used by a vice president 0:22:23.840 --> 0:22:27.280 in these kinds of circumstances. Explain what that's about. The 0:22:27.440 --> 0:22:30.959 speech or debate clause is designed as a safeguard against 0:22:30.960 --> 0:22:36.240 politically motivated civil litigation or criminal prosecutions that can kill 0:22:36.359 --> 0:22:41.520 congressional debate or arguably intimidate legislators. In this case, the 0:22:41.640 --> 0:22:45.200 former Vice president Pence is calling the subpoena by the 0:22:45.280 --> 0:22:50.439 Special Council unconstitutional, arguing that the executive branch cannot summon 0:22:50.520 --> 0:22:53.640 officials in the legislative branch into court or in any 0:22:53.640 --> 0:22:57.440 other place. The facts here are that as Vice president, 0:22:58.040 --> 0:23:00.840 Vice President Pence with a member of the executive branch 0:23:01.119 --> 0:23:04.240 during the Trump administration, but also held a unique role 0:23:04.560 --> 0:23:08.080 as all vice presidents do, as also acting as President 0:23:08.080 --> 0:23:10.880 of the Senate, and he does preside over the joint 0:23:10.920 --> 0:23:13.760 session of Congress, in this case, the one that certified 0:23:13.800 --> 0:23:17.240 the twenty twenty electoral vogue count. The Vice president also 0:23:17.320 --> 0:23:20.879 acts in the legislative capacity by breaking ties in the Senate. 0:23:21.040 --> 0:23:24.879 So the argument in support of his contention that the 0:23:24.920 --> 0:23:27.800 Special Council is not in pedal to subpoena him in 0:23:27.920 --> 0:23:31.280 connection with his role and certifying the twenty twenty election 0:23:31.800 --> 0:23:34.600 is that he was acting in the legislative capacity rather 0:23:34.640 --> 0:23:39.240 than an executive capacity when he was deciding whether or 0:23:39.280 --> 0:23:43.880 not he would certify those election results. Lindsay Graham used 0:23:43.880 --> 0:23:46.879 this to try to block a subpoena in Georgia. The 0:23:46.920 --> 0:23:49.440 subpoena was not blocked, but the judge said he could 0:23:49.520 --> 0:23:54.720 raise objections during the testimony to specific things. Is that 0:23:54.800 --> 0:23:58.040 a ruling that Mike Pence might face? Sure? I mean 0:23:58.200 --> 0:24:01.480 this question of whether or not vice president draws the 0:24:01.640 --> 0:24:06.240 same speech or debate protections as members of Congress is 0:24:06.359 --> 0:24:09.919 largely unsettled. It's a murky area where frankly, there is 0:24:10.000 --> 0:24:13.160 no clear outcome. On the other hand, I think it's 0:24:13.240 --> 0:24:16.200 clear that it will not act as a blanket or 0:24:16.320 --> 0:24:21.199 wholesale protection against Vice President Pence from having to appear 0:24:21.240 --> 0:24:23.600 before the grand jury and answer any questions at all. 0:24:23.840 --> 0:24:26.920 As you point out, when Lindsey Graham tried to raise 0:24:27.000 --> 0:24:30.000