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Huawei on Trial & Ramped Up Investigation into Trump's Perceived Enemies · Bloomberg Law

0:02
Speaker 1: This is Bloomberg Law with June Grosso from Bloomberg Radio.
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Speaker 2: President Trump raised national security concerns about Huawei during his
0:13
Speaker 2: first term and moved to counter the global expansion of
0:17
Speaker 2: the world's biggest supplier of telecommunications network equipment.
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Speaker 3: Huawei is something that's very dangerous.
0:24
Speaker 2: You look at what they've done from a security standpoint,
0:27
Speaker 2: from a military standpoint, it's very dangerous. The U.S. has
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Speaker 2: lobbied Western allies to avoid using the Chinese company's products
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Speaker 2: in their high-speed wireless network, while U.S. prosecutors... have accused
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Speaker 2: Huawei of stealing technology, plotting to steal U.S. trade secrets,
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Speaker 2: and committing wire and bank fraud. Eight years after charges
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Speaker 2: were brought during Trump's first term, the criminal racketeering trial
0:52
Speaker 2: of Huawei has started in New York. Joining me is
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Speaker 2: business law professor Eric Talley of Columbia Law School. Eric,
1:00
Speaker 2: tell us about the charges against Huawei.
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Speaker 3: The government's trial against Huawei basically has three clusters of allegations.
1:07
Speaker 3: One is sort of bank and wire fraud actions that
1:12
Speaker 3: are basically related to business with sanctioned countries like Iran
1:16
Speaker 3: and North Korea. That's one cluster. A second has to
1:19
Speaker 3: do with trade secret theft, kind of industrial espionage.
1:23
Speaker 1: And the third is kind of a throw in.
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Speaker 3: It's a racketeering charge that basically is a conspiracy theory
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Speaker 3: that ties all three of these claims together, the first
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Speaker 3: two with the third.
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Speaker 2: Tell us more about the racketeering charge. Does it allow
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Speaker 2: the prosecutors to bring in more or different kinds of evidence?
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Speaker 3: Typically, yes and no. The thing that holds the same
1:47
Speaker 3: as the other two is that RICO basically requires what's
1:52
Speaker 3: sometimes known as a predicate offense, that there's got to
1:54
Speaker 3: be some underlying wrongdoing that is then sort of part
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Speaker 3: of an overall strategy that is about a continuous organized
2:03
Speaker 3: pattern of of criminal activity. So the triggers for RICO
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Speaker 3: are actually still going to be the same as the
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Speaker 3: first two allegations, trade secret theft and bank and wire fraud.
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Speaker 1: But in addition, the government's going to.
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Speaker 3: Actually have to bring evidence that these weren't just sort
2:19
Speaker 3: of one-off events, but that they were part of a continuous, organized,
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Speaker 3: kind of orchestrated pattern of Huawei and not just, you know, spot,
2:29
Speaker 3: cherry-picked examples.
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Speaker 2: So the Justice Department lawyer in the openings told jurors
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Speaker 2: that theft lies corruption for 20 years. That's how Huawei function.
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Speaker 2: Huawei's defense was it's about competition, not conspiracy, innovation, not theft,
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Speaker 2: ordinary business dealings, not criminal conduct. Which side has the
2:49
Speaker 2: tougher road?
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Speaker 3: Well, one of the reasons this is going to trial
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Speaker 3: is that both of these types of arguments are actually
2:55
Speaker 3: reasonably good. Huawei is 100% correct that this is an
2:59
Speaker 3: incredibly competitive industry in which different manufacturers are essentially trying
3:06
Speaker 3: to one-up one another. And if you can sort of
3:08
Speaker 3: outflank your competition even by a little, you can take
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Speaker 3: an awful lot of market share. That's in many ways very,
3:15
Speaker 3: very healthy forms of competition. But because employees go back
3:19
Speaker 3: and forth, because there are different business dealings, because there
3:21
Speaker 3: are trade fairs, it often can give rise to claims
3:25
Speaker 3: that you got your edge wrong. through an impermissible sort
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Speaker 3: of approach. But Huawei's, you know, overall claim is that
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Speaker 3: this is a really, really competitive industry, and it's unfair
3:36
Speaker 3: to look at specific anecdotes as a way to lay
3:40
Speaker 3: out some kind of a systematic pattern. They're just anecdotes.
3:43
Speaker 3: On the other hand, the government's got some decent anecdotes,
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Speaker 3: you know, particularly on the trade secret dimension.
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Speaker 1: They have got some pretty vivid.
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Speaker 3: Examples of unauthorized stealing, of of source codes for routers,
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Speaker 3: user manuals, antenna technology, and they even have some evidence
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Speaker 3: of one Huawei employee physically breaking off a piece of
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Speaker 3: T-Mobile's phone testing robot to take back home and to
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Speaker 3: study it. And so these are going to be pretty vivid,
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Speaker 3: particularly for a jury, but they are also consistent with
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Speaker 3: this being a very, very competitive industry. I think there's
4:19
Speaker 3: really going to be this sort of question about whether
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Speaker 3: these specific events that the government has seemingly hard evidence
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Speaker 3: about are going to be enough to convince the jury
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Speaker 3: that this is really, you know, not only significant events
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Speaker 3: in and of themselves that themselves constitute episodes of actionable
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Speaker 3: and criminal trade secrets, but they're also part of this overarching,
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Speaker 3: longstanding conspiracy.
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Speaker 2: I understand that the Trump administration has moved away from
4:47
Speaker 2: criminally charging corporations. So why go through with this, which
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Speaker 2: is going to be months long and, what, eight years
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Speaker 2: after the charges were first filed?
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Speaker 3: Well, it's an interesting political setting because this case started
5:03
Speaker 3: under the first Trump administration. It was then inherited by
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Speaker 3: President Biden, and now it's being tried in a broader
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Speaker 3: sort of U.S.-China technology race and competition under the second
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Speaker 3: Trump administration. It's relevant to note that even the Biden
5:19
Speaker 3: administration pushed the ball forward on this case. Huawei employee
5:24
Speaker 3: who was living in Vancouver was, in fact, subject to
5:27
Speaker 3: extradition orders and entered into a deferred prosecution agreement.
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Speaker 1: Some of the.
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Speaker 3: Things that she essentially put into that settlement have now
5:37
Speaker 3: evidently been accepted publicly. as statements of fact by the
5:41
Speaker 3: trial court judge that are going to be difficult for
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Speaker 3: Huawei to sort of push back against because it's from
5:46
Speaker 3: one of their own former employees. But one of the
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Speaker 3: bigger stages here is not just Huawei itself or the
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Speaker 3: Trump administration's attitude towards businesses and whether it takes a
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Speaker 3: more hands-off approach or hands-on approach.
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Speaker 1: There's an overarching U.S.
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Speaker 3: Versus China theme to this as well that has played
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Speaker 3: a big role in the first Trump administration. continues to
6:09
Speaker 3: play a role in this Trump administration. And, you know,
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Speaker 3: in many ways, some of the allegations had already been
6:15
Speaker 3: substantially served up on a platter before the second Trump
6:19
Speaker 3: administration actually was in power.
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Speaker 2: Have prosecutors in the Justice Department been successful in cases
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Speaker 2: against Chinese companies?
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Speaker 1: There have been some successes.
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Speaker 3: This is a large company, however, this is not sort
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Speaker 3: of a fly by night company that is essentially pilfering
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Speaker 3: trade secrets here or there. And so in terms of
6:41
Speaker 3: the target of the size of Huawei, this is a
6:44
Speaker 3: significant move to make. And so one would expect also
6:49
Speaker 3: that Huawei would, in fact, they are putting up a
6:52
Speaker 3: pretty steep defense because the stakes are enormous. A couple
6:57
Speaker 3: of things that are also kind of worth noting, however,
7:00
Speaker 3: is that this is a criminal case against a company.
7:05
Speaker 3: So success by the government isn't necessarily mean that someone's
7:08
Speaker 3: gonna go to prison. There aren't individuals who are basically
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Speaker 3: co-defendants along Huawei here. And Huawei is already heavily restricted
7:16
Speaker 3: in terms of its presence in the US market. And typically,
7:21
Speaker 3: in addition to whatever fines that might be levied against
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Speaker 3: a defendant company in this position, usually the most potent
7:28
Speaker 3: form of remedy would be, you basically have to leave
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Speaker 3: the US market. But Huawei's presence in the US market
7:36
Speaker 3: is already, because of U.S. trade policy, relatively small.
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Speaker 1: But the U.S.
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Speaker 3: Still could take a verdict in its favor in this
7:44
Speaker 3: case to try to persuade allies, suppliers, and others to
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Speaker 3: keep a distance from Huawei because it has been criminally
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Speaker 3: convicted if the government ends up getting some sort of
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Speaker 3: conviction in this case.
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Speaker 2: Would it be better, as far as presenting a case
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Speaker 2: that appeals to a jury— if the prosecutors charge some
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Speaker 2: people along with this nameless, faceless, giant tech company?
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Speaker 1: In some cases, it would.
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Speaker 3: I think sometimes when you're dealing with these sort of
8:15
Speaker 3: corporate alleged misconduct cases, the jury might actually push back
8:21
Speaker 3: against that, sort of saying, look, these are large, multi-person organizations.
8:25
Speaker 3: You're trying to throw one individual under the bus when
8:28
Speaker 3: really it was the organization itself.
8:30
Speaker 1: That was at fault.
8:32
Speaker 3: And a jury, particularly if an individual defendant is looking
8:35
Speaker 3: at potential for prison time, that could actually induce them
8:38
Speaker 3: to be less anxious to vote to convict. On the
8:42
Speaker 3: other hand, I think there is a sense in which
8:45
Speaker 3: the measure of success for the government is going to
8:48
Speaker 3: be a little bit less concrete than it would be
8:51
Speaker 3: in the context of an individual criminal defendant who's.
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Speaker 1: A natural person.
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Speaker 3: So the government, you know, clearly has sort of decided
8:59
Speaker 3: for jurisdictional and possibly strategic reasons, they want to sort
9:02
Speaker 3: of keep this about Huawei. Hopefully, from their perspective, seize
9:07
Speaker 3: on a sentiment amongst the jurors that, you know, Huawei
9:10
Speaker 3: is an example of an unfair form of competition that
9:14
Speaker 3: is essentially skirting the rules both of intellectual property and
9:19
Speaker 3: international sanctions and visiting a penalty on the company itself
9:23
Speaker 3: is the best way to move. You know, one thing
9:26
Speaker 3: that's going to be pretty interesting from the jury's perspective,
9:29
Speaker 3: and this particularly relates to the RICO charge, is how
9:32
Speaker 3: likely is it that the jury is going to be
9:34
Speaker 3: able to take this set of examples, some of which
9:37
Speaker 3: are quite vivid, like the breaking off of the piece
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Speaker 3: of the robot, and say, oh, wait, no, that's part
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Speaker 3: of an entire pattern and practice, as opposed to some
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Speaker 3: cherry-picked anecdotes, which, you know, quite frankly, all prosecutors can
9:50
Speaker 3: usually find one or two examples of something that looks
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Speaker 3: a little bit sketchy and then try to weave a
9:55
Speaker 3: story of a longstanding criminal enterprise.
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Speaker 1: And that's going to be one thing.
10:00
Speaker 3: To really watch here about whether the government is going
10:03
Speaker 3: to be able to stitch together these anecdotes and basically say,
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Speaker 3: these aren't just anecdotes.
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Speaker 1: These are a pattern.
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Speaker 3: Huawei is basically going to say, look, you just cherry
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Speaker 3: picked some of the worst possible situations involving individual isolated employees,
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Speaker 3: former employees, contractors, Huawei, but that was never part of
10:21
Speaker 3: our corporate strategy.
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Speaker 2: How do you keep a jury's interest if this trial
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Speaker 2: is going until December?
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Speaker 1: It's going to be a long-standing trial.
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Speaker 3: It's one of the other reasons why going against a
10:32
Speaker 3: large company like Huawei that's well capitalized and can afford
10:36
Speaker 3: pretty good legal teams is going to almost certainly result
10:40
Speaker 3: in a protracted form of litigation.
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Speaker 1: The government has some nice cards to play here.
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Speaker 3: They've got these very, very vivid evidentiary examples that they
10:49
Speaker 3: will no doubt do.
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Speaker 1: A lot with. I think the harder ones.
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Speaker 3: Are keeping a jury's attention when you are basically trying
10:57
Speaker 3: to go through the accounting forensics of bank and wire
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Speaker 3: fraud associated with who is and who isn't on the
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Speaker 3: sanctions list. and what companies was Huawei doing business with
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Speaker 3: that in turn was doing business with Iran and North Korea,
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Speaker 3: and how much did they know about it? That's a
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Speaker 3: highly detailed, technical, and heavily kind of number-laden form of claim.
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Speaker 3: I could imagine not just a jury, but even if
11:24
Speaker 3: I had to teach that to a set of my
11:26
Speaker 3: own students, they might start to have the eyes glaze
11:28
Speaker 3: over a fact halfway through. So the government's going to
11:31
Speaker 3: have some bigger challenges when it comes to the financial
11:33
Speaker 3: aspects of its claim. I think the trade secret and
11:37
Speaker 3: IP claims, they're just a little bit more vivid and
11:40
Speaker 3: are likely going to catch people's attentions because they actually involve,
11:44
Speaker 3: you know, actions that you can observe and see, and
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Speaker 3: in some cases, quite tangible alleged acts of theft.
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Speaker 2: Are there any star witnesses expected? The person that you
11:53
Speaker 2: were referring to who was in Canada, her statements are
11:57
Speaker 2: going to be used, but she's not going to testify.
12:00
Speaker 1: Yeah, we'll see.
12:02
Speaker 3: Clearly, Meng Wanzhao's statement is a significant piece of evidence.
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Speaker 1: But as I understand it, she is not planning to
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Speaker 1: be brought to the U.S. to testify.
12:14
Speaker 3: Some of the actual participant actors may emerge as star witnesses.
12:18
Speaker 3: My sense is that her statement in the deferred prosecution
12:22
Speaker 3: agreement is very much kind of a partial centerpiece, particularly
12:27
Speaker 3: on some of the underlying allegations in the case. that
12:31
Speaker 3: she had concrete knowledge about and then put in a
12:35
Speaker 3: legally binding settlement, statements of fact that are definitely going
12:40
Speaker 3: to be things that Huawei is going to have to
12:42
Speaker 3: contend with. Are they going to try to claim that
12:44
Speaker 3: she was misstating those facts? Might they put up other
12:47
Speaker 3: people that had more direct knowledge of some of those
12:50
Speaker 3: certain facts and to try to correct the record on that?
12:53
Speaker 3: That'll be kind of an interesting thing to see it
12:55
Speaker 3: play out.
12:56
Speaker 2: The government hasn't specified what kind of penalties or the
12:59
Speaker 2: scope of the penalties it might be looking for. So
13:02
Speaker 2: as you mentioned, Huawei is already on a blacklist. I
13:06
Speaker 2: guess that leaves financial penalties. Would any financial penalty that
13:09
Speaker 2: could be obtained really hurt this company?
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Speaker 3: Most of Huawei's margin is generated outside the United States,
13:16
Speaker 3: and most of those assets are held outside the United
13:18
Speaker 3: States as well.
13:19
Speaker 1: That doesn't mean they don't have assets that.
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Speaker 3: Could be part of something that the government could directly recover.
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Speaker 3: I think the financial penalty, though, given the fact that
13:30
Speaker 3: a lot of these assets are offshore, is going to
13:33
Speaker 3: be a harder one to pursue, at least in some circumstances.
13:37
Speaker 3: And as you noted, Huawei is not going to be
13:39
Speaker 3: in a position where suddenly it's going to lose a
13:41
Speaker 3: bunch of customers in the U.S. since it currently doesn't
13:44
Speaker 3: have many customers in the U.S. since it's been blacklisted.
13:47
Speaker 3: So my sense is the real grab that a successful
13:50
Speaker 3: outcome for the Department of Justice would have is in
13:54
Speaker 3: effectively trying to throttle back Huawei's market share outside of
14:00
Speaker 3: the U.S. amongst trading partners who basically are told, look,
14:05
Speaker 3: if you continue to trade with What would then be
14:08
Speaker 3: a criminally convicted enterprise that's going to have implications for
14:12
Speaker 3: your own dealings with U.S.
14:14
Speaker 4: Markets?
14:15
Speaker 3: You know, the Trump administration has wielded that club many
14:18
Speaker 3: times thus far with tariffs and other contexts. So I
14:23
Speaker 3: could imagine that having a little bit of mileage, but
14:25
Speaker 3: there really is kind of a question given how global
14:28
Speaker 3: this market is. and how several of our historical allies
14:34
Speaker 3: seem to be getting a little bit closer to China
14:36
Speaker 3: as the U.S. levies tariffs on them, whether that's going
14:39
Speaker 3: to convince them to keep a healthy distance from Huawei
14:44
Speaker 3: or possibly embrace some of their products.
14:47
Speaker 2: And what's Huawei's position in China? What's its importance to
14:51
Speaker 2: that country?
14:53
Speaker 3: Significantly important company in China, one of the leading companies
14:57
Speaker 3: in China.
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Speaker 1: I don't imagine that a conviction in.
15:00
Speaker 3: The United States, again, with the overarching sort of political
15:04
Speaker 3: angle here, is going to cause Xi Jinping's government to say,
15:08
Speaker 3: we're going to have to throttle back Huawei, because it's
15:11
Speaker 3: been so effective at competing with U.S. manufacturing interests, that's
15:15
Speaker 3: a huge market, not just externally, but also internally in China.
15:20
Speaker 3: Huawei has been very much aggressively trying to expand its
15:25
Speaker 3: market footprint in just about every country but the United States.
15:29
Speaker 3: I would expect that they're going to continue to get support,
15:32
Speaker 3: either implicit or possibly explicit, from the Chinese government, particularly
15:36
Speaker 3: if a conviction is accompanied by kind of expanded rhetoric
15:40
Speaker 3: about the China versus U.S. competition in technology.
15:44
Speaker 2: We'll be following this trial for quite a while, so
15:47
Speaker 2: we'll talk again. It's always great to have you on, Eric.
15:50
Speaker 2: Thanks so much. That's Columbia Law School Professor Eric Talley.
15:54
Speaker 2: Coming up, the Justice Department is ramping up an investigation
15:58
Speaker 2: into Trump's perceived enemies. This is Bloomberg. On the campaign trail,
16:05
Speaker 2: President Trump loved to regale audiences with his list of
16:09
Speaker 2: grievances over what he saw as a years-long conspiracy to
16:14
Speaker 2: get him, whether it was the investigation into Russian interference
16:18
Speaker 2: in the 2016 election or the investigation into his mishandling
16:22
Speaker 2: of classified documents. From the beginning, the Democrats spied on
16:28
Speaker 2: my campaign.
16:29
Speaker 4: Remember that?
16:29
Speaker 1: They attacked me.
16:33
Speaker 3: With an onslaught of fraudulent investigations. Russia, Russia, Russia.
16:38
Speaker 1: Ukraine, Ukraine, Ukraine.
16:39
Speaker 3: Impeachment hoax number one.
16:43
Speaker 1: Impeachment hoax number two.
16:45
Speaker 3: The illegal and unconstitutional raid on Mar-a-Lago right here.
16:52
Speaker 2: Well, now that he's president, Trump is turning the tables
16:56
Speaker 2: on those who investigated him, all in service of his
16:59
Speaker 2: theory of a grand conspiracy by Democrats to sabotage him
17:04
Speaker 2: over the course of a decade. And the Justice Department
17:07
Speaker 2: is ramping up its extensive criminal investigation into whether former
17:12
Speaker 2: government officials conspired to undermine Trump. Joining me is Chris Strom,
17:18
Speaker 2: Bloomberg legal and national security reporter, who's been looking into
17:21
Speaker 2: this investigation. Chris, tell us about this Justice Department investigation
17:27
Speaker 2: that's been referred to as the grand conspiracy investigation.
17:32
Speaker 4: Well, the investigation is an extremely broad probe into multiple
17:39
Speaker 4: actions that were taken at the end of the Obama
17:42
Speaker 4: administration during the Biden administration, ranging from the investigation into
17:49
Speaker 4: Russia's interference in the 2016 election and whether the Trump
17:53
Speaker 4: campaign had any involvement in that, ranging all the way
17:57
Speaker 4: through to the investigation that was done under the Biden
18:00
Speaker 4: administration into Trump's activities, including his efforts to overturn the
18:06
Speaker 4: 2020 election and his taking of classified documents down to
18:11
Speaker 4: Mar-a-Lago after he left office.
18:14
Speaker 2: I mean, it sounds like especially the facts or allegations
18:18
Speaker 2: involving Russia are have been investigated over and over again,
18:23
Speaker 2: including by John Durham, who was appointed by Trump, right?
18:28
Speaker 4: One of the things that's so bizarre about what the
18:30
Speaker 4: Justice Department is doing is that they're retreading ground that
18:34
Speaker 4: has already been well plowed by other investigations. There's been
18:38
Speaker 4: multiple investigations into what happened in 2016 with regard to
18:43
Speaker 4: the Trump-Russia investigation. There was an Inspector General investigation into
18:50
Speaker 4: all of the activity that took place. And then there
18:52
Speaker 4: was a special counsel appointed during the first Trump administration,
18:57
Speaker 4: John Durham, and he took a deep dive look into
19:01
Speaker 4: whether there were any crimes committed during the Trump-Russia investigation.
19:05
Speaker 4: And he was only able to find one low-level FBI
19:09
Speaker 4: lawyer who lied on a document, and that individual pled guilty.
19:16
Speaker 4: No other individuals were ever charged with any crimes. based
19:22
Speaker 4: on the previous investigations. And so a lot of people
19:24
Speaker 4: are questioning now what the Justice Department is currently doing
19:28
Speaker 4: by going back 10 years and looking at activity that
19:34
Speaker 4: has already been well investigated without any findings of wrongdoing.
19:38
Speaker 2: I mean, there were pictures of boxes and boxes of
19:41
Speaker 2: classified documents piled up at Mar-a-Lago, so I'm not sure
19:46
Speaker 2: where the conspiracy would be there. And investigators go awry
19:52
Speaker 2: all the time. What kind of charges could they bring
19:55
Speaker 2: against these former officials for investigations?
20:00
Speaker 4: What's happening here is that Trump has demanded that the
20:04
Speaker 4: Justice Department investigate and potentially prosecute his perceived political enemies.
20:10
Speaker 4: And some of the major figures that Trump wants to
20:13
Speaker 4: be investigated were people who were involved in in the
20:17
Speaker 4: Trump-Russia investigation of 2016 and putting together an intelligence assessment
20:23
Speaker 4: during that time, as well as government officials who were
20:27
Speaker 4: involved in the investigation into Trump's retention of classified documents.
20:33
Speaker 4: And so the Justice Department, during the second Trump administration,
20:37
Speaker 4: has set out to conduct a sweeping investigation to look
20:42
Speaker 4: for any potential wrongdoing or criminal activity that was done
20:48
Speaker 4: over the last 10 years that they can find any
20:52
Speaker 4: potential crime where they could bring a charge. There's a
20:57
Speaker 4: lot of skepticism that the Justice Department is going to
21:01
Speaker 4: be able to find anything new, given that a lot
21:05
Speaker 4: is already known about these investigations. But They've convened a
21:10
Speaker 4: grand jury and they've sent a bunch of prosecutors down
21:14
Speaker 4: to Florida and they're looking under as many rocks as
21:18
Speaker 4: they possibly can and bringing people in before the grand
21:23
Speaker 4: jury to testify with the hopes of finding something that
21:29
Speaker 4: they can pin to somebody who Trump once investigated. And
21:35
Speaker 4: as of now, to this point, There's no indication that
21:39
Speaker 4: they found any criminal wrongdoing or have any justification to
21:45
Speaker 4: bring charges against anybody. But the investigation is ongoing. They
21:50
Speaker 4: do have an active grand jury. They are taking testimony.
21:54
Speaker 4: They have been receiving documents. And they've put a bunch
21:58
Speaker 4: of people under investigation. And they are moving forward with
22:03
Speaker 4: an undefined scope of investigation. that doesn't have any clear
22:09
Speaker 4: ending in sight.
22:10
Speaker 2: Are they targeting anyone in particular?
22:13
Speaker 4: Individuals that we know who are under investigation include John Brennan,
22:18
Speaker 4: the former CIA director, James Clapper, the former director of
22:22
Speaker 4: national intelligence, and other senior officials who were either in
22:28
Speaker 4: the Obama administration or the Biden administration. and worked for
22:32
Speaker 4: either the FBI or intelligence agencies. It's pretty clear that
22:36
Speaker 4: Trump wants certain individuals who are well-known, such as John Brennan,
22:42
Speaker 4: James Clapper, and James Comey, to be under investigation and, ideally,
22:48
Speaker 4: from Trump's point of view, face criminal charges. But at
22:51
Speaker 4: this point, there's not been any indication that evidence exists
22:55
Speaker 4: to actually bring charges against any of these individuals. So
22:59
Speaker 4: what might happen is that prosecutors will eventually write up
23:03
Speaker 4: a report and talk about activity that they believe was
23:08
Speaker 4: not justified and was done in the spirit of trying
23:12
Speaker 4: to make Trump look bad. But in the end, they
23:16
Speaker 4: just issue a report without any criminal charges.
23:19
Speaker 2: I mean, sometimes it seems like the point is the
23:22
Speaker 2: investigation itself, the news about the investigation, and just bringing charges,
23:28
Speaker 2: like the Comey charges over the seashells on the beach.
23:32
Speaker 2: So that entails hiring lawyers and court appearances and General Ajita.
23:37
Speaker 2: So maybe it's the prosecution itself that's one of the goals.
23:41
Speaker 4: Yeah. Part of what the Justice Department seems to be
23:43
Speaker 4: doing at this point is making the prosecution the punishment
23:48
Speaker 4: that by prosecuting individuals and putting them under investigation, they
23:52
Speaker 4: have to spend a lot of money and they have
23:54
Speaker 4: to spend a lot of time. They have to hire lawyers.
23:57
Speaker 4: They have to go into court. They have to file documentation.
24:02
Speaker 4: And so part of what the Justice Department appears to
24:05
Speaker 4: be doing right now is putting people under investigation just
24:09
Speaker 4: for the sake of putting them under investigation as a punishment.
24:13
Speaker 2: Has this ramped up since Blanche became Attorney General?
24:17
Speaker 4: Yes. By all accounts, the investigation has entered a new phase. Previously,
24:24
Speaker 4: the investigation has been going in fits and starts. When
24:27
Speaker 4: the Trump administration first began, it was being done under
24:31
Speaker 4: former Attorney General Pam Bondi. It is based in the
24:35
Speaker 4: Southern District of Florida. And investigators were spending a lot
24:40
Speaker 4: of time cooking up the theories of the case and
24:44
Speaker 4: then started sending out subpoenas for documentation. And so last year,
24:49
Speaker 4: there was a lot of subpoenas for documentation. And then
24:52
Speaker 4: the investigative pace seemed to stall. And of course, Bondi
24:56
Speaker 4: was removed in April. And Todd Blanche came in as
25:00
Speaker 4: the acting attorney general. And then in August, Blanche was
25:05
Speaker 4: confirmed as attorney general. And since then, we've seen an
25:09
Speaker 4: uptick in the activity. And the most significant thing is
25:13
Speaker 4: that prosecutors in Florida are now sending out subpoenas for
25:17
Speaker 4: individuals to come in and testify in person before the
25:21
Speaker 4: grand jury. And so this marks kind of a new
25:23
Speaker 4: and aggressive phase for the investigation.
25:26
Speaker 2: Why is it in Florida? Is it because Mar-a-Lago is there?
25:30
Speaker 4: The reason why the Justice Department based the investigation in
25:33
Speaker 4: Florida has always been a mystery. There is plenty of
25:36
Speaker 4: activity that is under investigation that doesn't seem to have
25:39
Speaker 4: any connection to Florida. Now, part of the theory of
25:42
Speaker 4: the case that prosecutors are pursuing is that there was
25:45
Speaker 4: a conspiracy against Trump ranging over the last 10 years
25:50
Speaker 4: from the Trump-Russia investigation that was done in 2016 to
25:54
Speaker 4: the Mar-a-Lago classified documents investigation that was done in 2023.
25:59
Speaker 4: And prosecutors are trying to stitch together kind of a
26:03
Speaker 4: Frankenstein of a case that says that there is a
26:06
Speaker 4: grand conspiracy against Trump ranging over 10 years. And therefore,
26:11
Speaker 4: if any of the activity took place in Florida... they
26:16
Speaker 4: can claim jurisdiction to carry out the investigation for all
26:21
Speaker 4: of the activity in Florida. And obviously, the Mar-a-Lago documents
26:26
Speaker 4: case has a connection to Florida because that's where the
26:30
Speaker 4: Mar-a-Lago resort is. And that's where the raid was done
26:33
Speaker 4: by the FBI to retrieve the classified documents. And so
26:37
Speaker 4: prosecutors are making the case that they are able to
26:41
Speaker 4: base their investigation in Florida because they have activity that
26:45
Speaker 4: occurred in Florida that is connected to a 10-year grand
26:49
Speaker 4: conspiracy against Trump. But what really appears to be going
26:53
Speaker 4: on is that the Justice Department did not want to
26:55
Speaker 4: bring any of the case in any other jurisdiction where
26:59
Speaker 4: they might not have a favorable jury or they might
27:02
Speaker 4: not have a in Fort Pierce. Fort Pierce just happens
27:10
Speaker 4: to be where Judge Eileen Cannon is located. And Judge
27:14
Speaker 4: Eileen Cannon oversaw the classified documents case against Trump. And
27:20
Speaker 4: as she oversaw that case, she made a lot of
27:22
Speaker 4: rulings that were favorable to Trump and ultimately dismissed the
27:26
Speaker 4: case against Trump. And so it appears what the Justice
27:30
Speaker 4: Department is now trying to do is engineer a way
27:34
Speaker 4: to get any kind of charges that they bring in
27:37
Speaker 4: front of Judge Cannon.
27:38
Speaker 2: Yes, she really seemed to favor Trump in her rulings,
27:41
Speaker 2: and she was reversed twice by the 11th Circuit. I've
27:46
Speaker 2: been talking to Bloomberg legal and national security reporter Chris Strom.
27:51
Speaker 2: What's the effect of this all-hands-on investigation on the U.S.
27:56
Speaker 2: Attorney's Office in Florida?
27:59
Speaker 4: What we've been able to report is that The U.S.
28:02
Speaker 4: Attorney's Office for the Southern District of Florida has been
28:04
Speaker 4: turned upside down, and a lot of the activity has
28:08
Speaker 4: been put to the side in favor of carrying out
28:12
Speaker 4: this grand conspiracy investigation and also carrying out other cases
28:16
Speaker 4: that Trump wants. such as looking at bringing possible indictments
28:21
Speaker 4: against Cuban officials and looking at Venezuela activity. And so
28:26
Speaker 4: what appears to be happening now is that the investigations
28:30
Speaker 4: that the Southern District of Florida has been traditionally known
28:33
Speaker 4: to do have been put on the back burner in
28:36
Speaker 4: favor of carrying out investigations that are being demanded by
28:41
Speaker 4: Trump and the White House.
28:42
Speaker 2: So Trump ally Joseph DeGeneva was leading the investigation. He's
28:47
Speaker 2: certainly very experienced and qualified to do so. But tell
28:52
Speaker 2: us what happened there.
28:54
Speaker 4: In April, the Justice Department brought in Joe DiGenova in
28:58
Speaker 4: order to lead this grand conspiracy investigation. Joe DiGenova is
29:04
Speaker 4: a longtime Trump ally and conservative lawyer. He had previously
29:10
Speaker 4: served in the Justice Department. He served as the U.S.
29:13
Speaker 4: attorney for the District of Columbia back in the 1980s.
29:17
Speaker 4: And he's had kind of a storied reputation as being
29:20
Speaker 4: an experienced professional prosecutor and went into private practice. But
29:27
Speaker 4: in April, the Justice Department reached out to have him
29:31
Speaker 4: come in and lead the investigation based in Florida. And
29:35
Speaker 4: he had been working on it and trying to go
29:39
Speaker 4: through the process. of building a case for the last
29:43
Speaker 4: five months or so. But last week, he abruptly resigned.
29:48
Speaker 4: And there's a lot of questions over what actually took
29:51
Speaker 4: place behind the scenes. What we've been able to report
29:55
Speaker 4: at this point is is that he was very frustrated
29:59
Speaker 4: and mad at the heavy-handed approach that was coming out
30:04
Speaker 4: of Washington and the Justice Department leadership to dictate what
30:08
Speaker 4: the pace and scope of the investigation should be. He
30:12
Speaker 4: was pushing back on how fast the Justice Department wanted
30:17
Speaker 4: to do grand jury activity and potentially bring charges against
30:23
Speaker 4: individuals like John Brennan and eventually reached a boiling point
30:27
Speaker 4: where he could not continue doing the investigation the way
30:31
Speaker 4: that he believed it should be done. And so he
30:34
Speaker 4: ended up resigning.
30:35
Speaker 2: Do you know yet who's taking his place?
30:37
Speaker 4: Right now, it's our understanding that there's basically a cast
30:40
Speaker 4: of characters who are down in southern Florida, now leading
30:45
Speaker 4: different elements of the case. For example, an individual named
30:50
Speaker 4: Kurt Olson, who is a conservative lawyer and Trump ally,
30:54
Speaker 4: is leading the investigation into John Brennan. And Kurt Olson
31:00
Speaker 4: actually had a phone call with John Brennan's lawyer on
31:03
Speaker 4: Friday and notified Brennan's lawyer that Brennan is being subpoenaed
31:08
Speaker 4: to come in for grand jury testimony and that Brennan
31:12
Speaker 4: is a target in the investigation, ranging from the activities
31:17
Speaker 4: that took place in 2016 with regard to the intelligence
31:20
Speaker 4: community assessment on Russia's activities, all the way to testimony
31:25
Speaker 4: that John Brennan had given Congress a few years ago,
31:29
Speaker 4: in which there's some allegations that he might not have
31:32
Speaker 4: been honest with Congress. And so there's multiple investigations going
31:37
Speaker 4: on and there's multiple individuals who are leading different parts
31:40
Speaker 4: of it. But ultimately, the U.S. attorney's office is controlled
31:44
Speaker 4: by the U.S. attorney there, who is Jason Redding Canones,
31:48
Speaker 4: who was handpicked by Trump and confirmed by the Senate.
31:52
Speaker 4: So he is Senate confirmed and he's leading the office there.
31:57
Speaker 4: And so he is ultimately in charge of the investigation.
32:02
Speaker 4: But a lot of the daily activity and the scope
32:07
Speaker 4: of the different investigative activities are being farmed out to
32:13
Speaker 4: prosecutors who have been sent there by the Justice Department
32:17
Speaker 4: leadership in Washington.
32:19
Speaker 2: That's so odd. If Brennan's a target, how can they
32:22
Speaker 2: expect him to testify?
32:24
Speaker 4: That's a good question. And it's one that we don't
32:27
Speaker 4: quite have a full answer on yet. But apparently, they
32:31
Speaker 4: are asking him to testify on parts of the investigation
32:35
Speaker 4: that he's not a target for. It puts John Brennan
32:38
Speaker 4: in a really difficult position because if he refuses to testify,
32:42
Speaker 4: he could be held in contempt of court. Now, it's
32:44
Speaker 4: also possible that his lawyers will contest the subpoena and
32:48
Speaker 4: try to get it quashed. They're in negotiations right now,
32:53
Speaker 4: John Brennan and his lawyer. or in negotiations with the
32:56
Speaker 4: Justice Department to try to resolve how to handle this subpoena.
33:00
Speaker 4: They might come to an agreement where Brennan agrees to
33:03
Speaker 4: voluntarily talk to prosecutors without going before the grand jury.
33:08
Speaker 4: But yes, John Brennan faces jeopardy because he has been
33:13
Speaker 4: told he's a target of the investigation, and now they
33:15
Speaker 4: want him to come in and testify before a grand jury,
33:18
Speaker 4: which is highly unusual.
33:20
Speaker 2: It seems like this investigation would be tough because they're investigating...
33:25
Speaker 2: investigations that involved intelligence sources and national security, and you
33:31
Speaker 2: wouldn't expect those to be easily uncovered.
33:34
Speaker 4: Yeah, it's been really hard to uncover exactly what investigators
33:41
Speaker 4: are pursuing in terms of individual prosecution theories. We know
33:46
Speaker 4: that there are two main buckets to the investigation, which
33:51
Speaker 4: is looking at whether any crimes were committed during the
33:55
Speaker 4: Trump-Russia investigation of 2016, including the production of an intelligence
34:00
Speaker 4: community assessment at the end of 2016, that's one bucket.
34:05
Speaker 4: And another bucket is the raid on Mar-a-Lago and the
34:09
Speaker 4: classified documents case against Trump. And so those are two
34:14
Speaker 4: main areas that prosecutors have been focusing on the most
34:19
Speaker 4: to try to find if there was any activity that
34:24
Speaker 4: that they could make a case was criminal wrongdoing. And
34:28
Speaker 4: at this point, we just haven't seen any evidence that
34:32
Speaker 4: would support criminal prosecution. But the Justice Department says the
34:38
Speaker 4: case is moving forward and that they believe that their
34:43
Speaker 4: prosecution theories are on solid ground.
34:46
Speaker 2: I'd really like to hear what those theories are, because
34:49
Speaker 2: other theories that they've used in court against Trump's perceived
34:53
Speaker 2: enemies haven't worked out too well.
34:56
Speaker 4: The Justice Department at this point doesn't have a good
34:58
Speaker 4: track record in terms of bringing prosecutions against Trump's political enemies.
35:03
Speaker 4: They've previously indicted James Comey, as well as the New
35:06
Speaker 4: York Attorney General Letitia James. And both of those indictments
35:09
Speaker 4: were thrown out because of mishandling of the case that
35:12
Speaker 4: was done by the U.S. attorney at the time. the
35:15
Speaker 4: Justice Department has also investigated Jerome Powell, the former chairman
35:21
Speaker 4: of the Federal Reserve. And they issued subpoenas to him
35:27
Speaker 4: in the Federal Reserve as part of a criminal investigation.
35:31
Speaker 4: And Powell and the Fed challenged the subpoenas, and they
35:34
Speaker 4: were quashed. And so already we've seen the Justice Department
35:39
Speaker 4: try to bring prosecutions based on theories that that Trump
35:45
Speaker 4: wants them to pursue that have not stood up in court.
35:49
Speaker 2: Thanks so much, Chris, for joining me. Some really great reporting.
35:53
Speaker 2: That's Bloomberg legal and national security reporter Chris Strom. And
35:57
Speaker 2: that's it for this edition of the Bloomberg Law Show. Remember,
36:00
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36:16
Speaker 2: Wall Street time. I'm June Grosso, and you're listening to Bloomberg.