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Trump Administration Targets Lisa Cook & Cassidy Hutchinson · Bloomberg Law

0:02
Speaker 1: This is Bloomberg Law with June Grosso from Bloomberg Radio.
0:09
Speaker 1: In August of 2025, President Trump took the unprecedented step
0:14
Speaker 1: of firing Lisa Cook from the Federal Reserve's Board of Governors,
0:19
Speaker 1: claiming there was evidence she made false statements on mortgage agreements.
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Speaker 2: She seems to have had an infraction and she can't
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Speaker 2: have an infraction, especially that infraction, because she's an charge of,
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Speaker 2: if you think about it, mortgages, and we need people
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Speaker 2: that are 100% above board.
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Speaker 1: But Cook litigated the case, and the Supreme Court refused
0:42
Speaker 1: to let Trump immediately fire her, finding in June that
0:46
Speaker 1: he'd failed to provide her with enough advance notice and
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Speaker 1: an opportunity to respond to accusations of wrongdoing. So now,
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Speaker 1: Trump appears to be setting the groundwork to fire Cook again.
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Speaker 1: He's announced the formation of a committee to investigate the
1:03
Speaker 1: mortgage fraud allegations against her, a committee that consists of
1:08
Speaker 1: Trump appointees. David, Trump announced this committee of inquiry to
1:14
Speaker 1: look into claims that Cook had made false statements in
1:18
Speaker 1: connection with past mortgages and said she'd be required to
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Speaker 1: appear at a White House hearing on November 5th to
1:25
Speaker 1: defend herself. Now, you have to go back to 1912
1:29
Speaker 1: to find something similar where President William Howard Taft set
1:35
Speaker 1: up a commission to remove two officials from an independent agency.
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Speaker 1: And it seems that's the only similar commission.
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Speaker 3: Well, they do this in Australia all the time. It's
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Speaker 3: called a kangaroo court. Obviously, the committee is completely stacked
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Speaker 3: with people who are subject to the president's will and
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Speaker 3: will do exactly what he wants and what he wants
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Speaker 3: is to get rid of Lisa Cook. But I find
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Speaker 3: it particularly remarkable that they put Kevin Hassett on the
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Speaker 3: committee who might well get her job if she's removed.
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Speaker 3: If that isn't a conflict of interest atop all conflicts
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Speaker 3: of interest, I don't know what is.
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Speaker 1: He said, Cook shall attend to answer questions from the committee.
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Speaker 1: Are there any rules and regulations here about what's going
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Speaker 1: to be admitted here? I mean, it just seems so unstructured.
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Speaker 3: It is because this doesn't happen. It's been understood since
2:31
Speaker 3: the Federal Reserve was created that it is supposed to
2:35
Speaker 3: be independent and that its effectiveness depends on its being
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Speaker 3: independent of the president. The charges against her have been
2:45
Speaker 3: explored at great length, have been found to be completely vacuous.
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Speaker 3: They're simply leverage for him to get her off of
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Speaker 3: the Fed and to intimidate a couple of other members
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Speaker 3: that he doesn't like either. So there's no precedent for
3:02
Speaker 3: this because this is a foolish and improper thing to do.
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Speaker 1: It seems like they're trying to comply with what the
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Speaker 1: Supreme Court said in its decision to that she should
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Speaker 1: have advance notice and an opportunity to respond to accusations
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Speaker 1: of wrongdoing. Cook's attorneys have said they have grave doubts
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Speaker 1: that this hearing is a legitimate one that would conform
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Speaker 1: to the law. What is the law on this?
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Speaker 3: Well, there's law provided by the Due Process Clause, and
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Speaker 3: that's what the Supreme Court was getting at. And one
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Speaker 3: of the requirements of the Due Process Clause is a
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Speaker 3: decision maker who has not previously made up their mind.
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Speaker 3: This committee looks like it's about as dependent on Trump's
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Speaker 3: preferences as it can get. It's, I suppose, collecting information
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Speaker 3: on behalf of President Trump, but it's not doing it
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Speaker 3: with any open-mindedness. And it's very obvious that whatever facts
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Speaker 3: are presented, that he will go forward with the action
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Speaker 3: he's already said he wanted to do. And then as
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Speaker 3: soon as he's gotten rid of her, he'll go after
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Speaker 3: Jerome Powell.
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Speaker 1: Yes, he has recently started talking about Jerome Powell again.
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Speaker 1: We'll get to that in a minute. Does Cook have
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Speaker 1: to attend this hearing? I mean, it seems like her
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Speaker 1: lawyers are talking like she will attend the hearing.
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Speaker 3: I think it's very, very risky to say this hearing
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Speaker 3: is so bad I won't attend it. A lot of
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Speaker 3: people are going to say we can't really tell in advance.
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Speaker 3: So I think her better course would be to attend
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Speaker 3: the hearing to present the facts, which are not harmful
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Speaker 3: to her at all, and then to see what they do.
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Speaker 3: This administration is so determined to adhere to any brainstorm
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Speaker 3: the president may have that they will surely throw her out,
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Speaker 3: and if they do so in a way that ignores
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Speaker 3: the facts she's presented, then she will have a very
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Speaker 3: strong procedural case.
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Speaker 1: So she was first accused of mortgage fraud more than
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Speaker 1: a year ago, and she hasn't been charged with any
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Speaker 1: crime yet. So that says something. The Supreme Court in
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Speaker 1: its decision didn't say specifically what for cause would be.
5:25
Speaker 1: It suggested it must imply unfitness for office and not
5:29
Speaker 1: simply represent an effort to secure a friendlier replacement. They
5:34
Speaker 1: said whether cause for removal exists in any given situation
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Speaker 1: will depend on the seriousness of the alleged conduct and
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Speaker 1: the extent of any nexus to the governor's professional duties.
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Speaker 1: I mean, these charges appear to have no nexus to
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Speaker 1: her professional duties.
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Speaker 3: Yeah, the... problem here is that she's not accused of
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Speaker 3: misconduct in office. She's accused of checking a box that
6:04
Speaker 3: maybe she shouldn't have checked long before she was on
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Speaker 3: the board. There's no indication that she received any benefits
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Speaker 3: from this as opposed to President Trump who has been
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Speaker 3: found to have misrepresented property values to get very substantial
6:25
Speaker 3: benefits from insurers and banks. So this is largely irrelevant,
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Speaker 3: even if it was true, and there's pretty good reason
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Speaker 3: to think it's not true. The broader picture here is
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Speaker 3: that the Supreme Court, both in Dr. Cook's case and
6:42
Speaker 3: in the accompanying slaughter case, made very clear that the
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Speaker 3: president is not entitled to to the Federal Reserve Board
6:50
Speaker 3: of his choosing that this part of the statute is legal,
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Speaker 3: is constitutional, and any sensible president would take the message
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Speaker 3: and drop it, just as any sensible president would read
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Speaker 3: what the Supreme Court said about tariffs and drop it,
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Speaker 3: or would read what the Supreme Court said about birthright
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Speaker 3: citizenship and drop it. This president won't drop it. This
7:15
Speaker 3: president won't take a hint. And the Supreme Court, I think,
7:20
Speaker 3: is going to learn rapidly that if they want the
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Speaker 3: president to do something, they need to put it in
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Speaker 3: black and white in unmistakable terms. There's no subtlety with
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Speaker 3: this president.
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Speaker 1: So we can anticipate after this hearing, she'll be fired
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Speaker 1: and then she'll appeal. It'll go up to the Supreme
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Speaker 1: Court again.
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Speaker 3: Oh, yes, absolutely. And I think what could very well
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Speaker 3: happen is the Supreme Court will again set aside her firing,
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Speaker 3: but for specific reasons, rather than saying globally, leave Dr.
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Speaker 3: Cook alone, you've got plenty of appointees on the board,
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Speaker 3: and your economic stewardship is not so great that you
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Speaker 3: should have complete control. But that's what they should do.
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Speaker 3: They should say, enough's enough, we've heard a second case now,
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Speaker 3: we don't want to hear a third, just drop it.
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Speaker 3: But unless they say it in almost those words, he's
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Speaker 3: going to keep at this thing.
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Speaker 1: And, you know, you mentioned Jerome Powell, and he has
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Speaker 1: renewed his attacks recently on Jerome Powell, saying he should
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Speaker 1: resign from the board of governors over those findings in September,
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Speaker 1: that the Fed mismanaged the renovation of its headquarters, although
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Speaker 1: he was cleared of any wrongdoing. Well, do you think
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Speaker 1: he's going to try anyway to fire Powell?
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Speaker 3: I think he's going to go after Dr. Cook first
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Speaker 3: because he's farther down the road on that. But yes,
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Speaker 3: he will absolutely try to fire Jerome Powell. If he
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Speaker 3: wants to talk about people that are mismanaging buildings, I
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Speaker 3: suggest that he go after the chair of the board
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Speaker 3: of the Kennedy Center, who seems to have done a
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Speaker 3: terrible job with a quarter of a billion dollars of
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Speaker 3: renovation money. He should definitely get that guy investigated.
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Speaker 1: I'll reserve comment on that. Let's turn now to another
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Speaker 1: of Trump's perceived enemies who may be the next one
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Speaker 1: to be indicted by the Justice Department.
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Speaker 4: I first noticed there was ketchup dripping down the wall
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Speaker 4: and there's a shattered porcelain plate on the floor. The
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Speaker 4: valet had articulated that the president was extremely angry at
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Speaker 4: the attorney general's AP interview. and had thrown his lunch
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Speaker 4: against the wall.
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Speaker 1: You may remember back in June of 2022, when one
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Speaker 1: of the star witnesses at the House Select Committee investigations
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Speaker 1: into the January 6th attack on the Capitol was Cassidy Hutchinson,
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Speaker 1: the former aide to Trump's then Chief of Staff, Mark Meadows.
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Speaker 1: Among other things, Hutchinson testified that Trump had urged his
10:05
Speaker 1: supporters to march on the Capitol despite knowing they were armed.
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Speaker 4: Something to the effect of take the bags away.
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Speaker 3: They're not here to hurt me.
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Speaker 5: Let them in. Let my people in.
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Speaker 4: They can march the Capitol after the rally's over. They
10:19
Speaker 4: can march from They can march from the elevs.
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Speaker 1: But most startling may have been her testimony that she
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Speaker 1: was told by another White House aide that Trump had
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Speaker 1: tried to take control of the presidential SUV, being adamant
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Speaker 1: about going to the Capitol.
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Speaker 4: The president reached up towards the front of the vehicle
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Speaker 4: to grab at the steering wheel.
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Speaker 3: Mr.
10:43
Speaker 4: Engel grabbed his arm, said, sir, you need to take
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Speaker 4: your hand off the steering wheel. We're going back to
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Speaker 4: the West Wing. We're not going to the Capitol.
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Speaker 1: And now federal prosecutors have been presenting evidence to a
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Speaker 1: grand jury in D.C. about whether Hutchinson may have lied
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Speaker 1: to Congress in her testimony back in June of 2022.
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Speaker 1: That's according to Bloomberg sources. I've been talking to David Super,
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Speaker 1: a professor at Georgetown Law. It's so difficult to prosecute
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Speaker 1: a perjury case.
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Speaker 3: It's a very difficult case to make. And it's instructive
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Speaker 3: that this case is being brought not by the U.S.
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Speaker 3: attorney in D.C., who would be the ordinary people to
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Speaker 3: prosecute a perjury case, but by the Civil Rights Division
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Speaker 3: of the Department of Justice. I don't know how you
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Speaker 3: could possibly say this is a civil rights case under
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Speaker 3: the broadest reading of the civil rights laws, but I'm
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Speaker 3: assuming that they are having the Civil Rights Division prosecuted
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Speaker 3: because those are the only prosecutors they could find who
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Speaker 3: would be willing to sign their names to these papers.
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Speaker 1: Also, maybe because Jeanine Pirro has not been very successful
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Speaker 1: getting D.C. grand juries to indict.
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Speaker 3: I mean.
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Speaker 1: You go back to, you know, the sandwich guy. She
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Speaker 1: couldn't get an indictment against him. They had to go
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Speaker 1: for a misdemeanor.
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Speaker 3: Without an indictment against the sandwich guy, she just couldn't
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Speaker 3: get a conviction.
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Speaker 1: But she didn't get a grand jury indictment. They charged
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Speaker 1: him for the misdemeanor. But, I mean, there's also what
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Speaker 1: stands out, the six lawmakers. Maybe he's lost confidence in
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Speaker 1: Jeanine Pirro and he wants to try Harmeet Dhillon, who's
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Speaker 1: such a staunch ally of his. That's the only thing I.
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Speaker 3: Can think of. But when you are having to shop
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Speaker 3: around to find a prosecutor, that tells you that there
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Speaker 3: are an awful lot of lawyers who do not want
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Speaker 3: to risk their bar license on a frivolous case. I
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Speaker 3: find Ketchley Hutchinson's case very strange because in listening to
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Speaker 3: her testimony before the committee, I don't know that I've
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Speaker 3: ever heard a more careful witness. She did not talk
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Speaker 3: about things she didn't know. She talked about things that
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Speaker 3: she heard. and obviously the committee members knew what she
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Speaker 3: was and was not going to say. Some reporters jumped
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Speaker 3: to conclusions and attributed to her things she didn't say,
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Speaker 3: but her actual testimony was extraordinarily careful. It's really hard
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Speaker 3: to imagine how you could make a perjury case out
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Speaker 3: of that unless you have some sort of recording of
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Speaker 3: what conversation she had with people, and there's no indication
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Speaker 3: they have that.
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Speaker 1: At least the incident that really sort of blew up,
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Speaker 1: the supposed incident in the car where Trump wanted to
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Speaker 1: grab the steering wheel, that is a he said, she said,
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Speaker 1: a real he said, she said, but we don't know.
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Speaker 3: We have to prove this beyond a reasonable doubt. Can
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Speaker 3: they prove beyond a reasonable doubt that a Secret Service
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Speaker 3: agent who would have been fired if he confirmed her
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Speaker 3: story was telling the truth and that she was lying.
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Speaker 3: No sane jury would spend 10 minutes on that. They'll
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Speaker 3: need to seat a jury that has never corrected themselves
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Speaker 3: about anything, that has never told the same story twice
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Speaker 3: with different words. Their expectations of precision here are absurd.
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Speaker 3: And then there's the broader question about whether this is
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Speaker 3: political retribution, which obviously it is. Images of the President
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Speaker 3: of the United States wrestling for the steering wheel of
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Speaker 3: a Secret Service car are extremely unflattering, especially when he
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Speaker 3: was trying to aid an attempt to overthrow the government. So, naturally,
14:37
Speaker 3: she's an embarrassment to the President, and I think any
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Speaker 3: jury and most grand juries would recognize that this is
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Speaker 3: political retribution.
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Speaker 1: And Trump has called her a total phony and leaker.
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Speaker 1: And he called for her prosecution in 2024. So that
14:55
Speaker 1: seems to write the motion for dismissal based on vindictive
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Speaker 1: prosecution if they do get a grand jury to indict her.
15:04
Speaker 3: Now, we should remember that grand juries operate without any
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Speaker 3: defense counsel. So there can be a great deal of
15:15
Speaker 3: inappropriate behavior involved. by the prosecutors in front of a
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Speaker 3: grand jury that goes unchallenged. We've had a lot of
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Speaker 3: trouble with this in Illinois and in Minnesota with prosecutors
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Speaker 3: violating textbook ethics rules, vouching to the grand jury apparently
15:32
Speaker 3: that this testimony or that is valid. We had some
15:35
Speaker 3: problems with that with the man who was indicted relating
15:39
Speaker 3: to the reflecting pool fiasco. So it's entirely possible they
15:45
Speaker 3: will get an indictment by handpicking their grand jury or
15:51
Speaker 3: by representing the grand juries or by misbehaving in front
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Speaker 3: of the grand juries. I don't think we should take
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Speaker 3: an indictment as anything terribly indicative of anything, and we
16:03
Speaker 3: should look forward to learning what happened in front of
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Speaker 3: the grand jury before we assess whether that indictment means
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Speaker 3: anything at all.
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Speaker 1: So this is just the latest example of the Justice
16:14
Speaker 1: Department pursuing criminal cases against Trump's perceived political enemies. You
16:18
Speaker 1: have the cases against Letitia James, I believe, three times
16:22
Speaker 1: went to a grand jury. James Comey twice. And now
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Speaker 1: the new indictment over the seashells. Bondi was fired because,
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Speaker 1: partly because she wasn't moving quickly enough to bring the cases.
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Speaker 1: And a reporter, Sarah Fitzpatrick at The Atlantic, said that
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Speaker 1: a former Trump official told her, the president wants indictments.
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Speaker 1: He wants people in handcuffs, no matter how thin the
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Speaker 1: supporting evidence might be. So, Is this the new attorney general,
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Speaker 1: Todd Blanche, pulling out all the stops? So you have,
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Speaker 1: you know, Cook is moving forward. You have this possible
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Speaker 1: case against Cassidy Hutchinson. You have the raid on Ilhan Omar.
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Speaker 1: I mean, it seems like even though the case is
17:07
Speaker 1: most people look at the case and say there is
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Speaker 1: no case there. The whole point is the prosecution and
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Speaker 1: the ignominy of being indicted and having to defend yourself
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Speaker 1: in court.
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Speaker 3: Yes, he's using the process as a punishment. And we
17:25
Speaker 3: have a long tradition of prosecutorial independence precisely to prevent that.
17:32
Speaker 3: That tradition hasn't always served us perfectly, but that has
17:35
Speaker 3: certainly been its goal. And the president has shown complete
17:39
Speaker 3: contempt for that tradition and has thoroughly politicized this department.
17:44
Speaker 3: President Trump once complained that he needed his own Roy Cohn,
17:49
Speaker 3: speaking of an attorney who had worked for Senator McCarthy
17:53
Speaker 3: and other extremely unsavory clients. And I believe he now
17:59
Speaker 3: is trying to get Todd Blanch to be his Roy Cohn.
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Speaker 3: And Todd Blanch, who doesn't want to be fired like
18:06
Speaker 3: his predecessor was, seems to be moving in that direction.
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Speaker 1: And then after this, the next indictment may be former
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Speaker 1: special counsel Jack Smith, His testimony before Congress seemed to
18:18
Speaker 1: be set up like a perjury trap. And it seems
18:22
Speaker 1: like they keep falling back on perjury charges because they
18:26
Speaker 1: can't find anything else, anything more substantial.
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Speaker 3: They're easy to bring but almost impossible to win. So
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Speaker 3: I made a mistake earlier in this interview about the
18:36
Speaker 3: proceeding against the sandwich man. You can indict me for
18:41
Speaker 3: perjury and say that I made that mistake deliberately. You
18:44
Speaker 3: won't win. But people make slip-ups all the time. It's
18:49
Speaker 3: a lot more than a slip-up to get a conviction
18:51
Speaker 3: for perjury. So, you know, maybe, you know, tomorrow I'll
18:55
Speaker 3: get your indictment, but you won't win at trial.
18:59
Speaker 1: I forgot to swear you in this time.
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Speaker 3: I'm saved.
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Speaker 1: Okay, getting back to the case now, we talked about
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Speaker 1: how difficult it is to prove a perjury case. So
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Speaker 1: I just want to mentioned the elements that prosecutors would
19:14
Speaker 1: need to show beyond a reasonable doubt that Hutchinson lied,
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Speaker 1: that she did so knowingly, and that it materially impacted
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Speaker 1: the investigation.
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Speaker 3: It's important to remember, though, and you mentioned the lawyers,
19:26
Speaker 3: and that's a big part of it. These lawyers are
19:29
Speaker 3: not cheap. They're very good, but they're also very expensive.
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Speaker 3: And so even when Tish James or soon-to-be Cassidy Hutchinson
19:39
Speaker 3: or Lisa Cook get exonerated, they're still going to be
19:43
Speaker 3: losing huge sums of money for their lawyer fees. And
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Speaker 3: I think that's part of it, is that Trump is
19:50
Speaker 3: trying to inflict a financial burden on them, a reputational burden,
19:55
Speaker 3: interfere with them doing their job, even if he doesn't
19:59
Speaker 3: have a case. They're still going to suffer real harms,
20:03
Speaker 3: even when they're exonerated. And that's the cynical nature of
20:08
Speaker 3: this They know they're not going to win a perjury
20:11
Speaker 3: case against Cassidy Hutchinson. They know they're not going to
20:14
Speaker 3: win an illicit possession of seashells case against James Comey.
20:19
Speaker 3: But they're still going to make them waste time and
20:22
Speaker 3: money defending themselves, and that will stick.
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Speaker 1: Also, if they had prosecutors who were actually conforming to
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Speaker 1: ethical standards, they're not supposed to bring a case, federal prosecutors,
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Speaker 1: unless they believe... that they can prove it beyond a
20:38
Speaker 1: reasonable doubt.
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Speaker 3: Yeah, that's very clear. Prosecutorial ethics is a very well-developed field,
20:44
Speaker 3: but the Supreme Court has said that the president's absolute
20:48
Speaker 3: control of the executive branch is the highest power. So
20:53
Speaker 3: ethical federal prosecutors, for the most part, have resigned. They've
20:57
Speaker 3: been given a choice between their ethics and their jobs,
21:00
Speaker 3: and the more ethical ones have chosen their ethics and left.
21:03
Speaker 3: So you're left with people who have accepted that they're
21:08
Speaker 3: going to have to cut ethical corners for the most part.
21:12
Speaker 3: And you're left with people who are probably not as
21:14
Speaker 3: good lawyers. So even if there was a case to
21:17
Speaker 3: be made in some of these, which there largely isn't,
21:20
Speaker 3: they don't have the lawyers capable of making those cases.
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Speaker 1: It's always great to get your insights, David. Thanks so
21:26
Speaker 1: much for joining me today. That's Professor David Super of
21:30
Speaker 1: Georgetown Law. Vice President J.D. Vance says that nine universities
21:39
Speaker 1: are under investigation for allegedly abusing the J-1 visa program.
21:44
Speaker 1: At a press conference last week, Vance, who chairs the
21:47
Speaker 1: administration's fraud task force, accused universities of using the program to, quote,
21:54
Speaker 1: bring in foreigners to undercut the wages of American residents.
21:59
Speaker 1: Joining me is immigration law expert Leon Fresco of Holland & Knight. Leon,
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Speaker 1: first of all, what is the J-1 visa program?
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Speaker 5: So the J-1 visa program is this very kind of
22:10
Speaker 5: hodgepodge visa that has all these different kinds of categories
22:14
Speaker 5: of people that are allowed to come into the United
22:16
Speaker 5: States generally. But in the university context, it's usually used
22:21
Speaker 5: for researchers and professors and postdocs and people of that
22:26
Speaker 5: nature to come to the university and conduct research. And
22:31
Speaker 5: so what's interesting is, that this J-1 program is the
22:36
Speaker 5: one program that's run exclusively by the State Department. It's
22:40
Speaker 5: not run by the Department of Homeland Security. And because
22:44
Speaker 5: the point of the J-1 is it's supposed to be
22:46
Speaker 5: a cultural exchange program. It was created during the Cold
22:50
Speaker 5: War to basically say, come to America, come to our universities,
22:55
Speaker 5: and let us surround you with the beauty of America
22:59
Speaker 5: and American capitalism and things of this nature so that
23:02
Speaker 5: then you would go home and you would say, oh,
23:05
Speaker 5: America's great. I spent time at this university and I
23:09
Speaker 5: met all these people and you become a leader in
23:11
Speaker 5: your country, but you are part of America for a
23:14
Speaker 5: little while until you have this loyalty to America because
23:18
Speaker 5: of the time you spend here, etc. So what's weird
23:21
Speaker 5: is you have the Department of Labor Inspector General announcing
23:26
Speaker 5: an investigation about the J-1 program, which is run by
23:30
Speaker 5: the State Department. And so we've never had a situation
23:34
Speaker 5: like we have at this exact moment. where the Department
23:37
Speaker 5: of Labor inspector general happens to be a politician. Usually
23:41
Speaker 5: the inspector general of an agency is some sort of
23:44
Speaker 5: pencil pusher who's been a lawyer their whole life and
23:48
Speaker 5: is trying to look for, you know, the X mark
23:52
Speaker 5: doesn't match the document here, and so you need to
23:56
Speaker 5: check this document over there, et.
23:58
Speaker 2: Cetera, et cetera.
23:58
Speaker 5: This is not that. You have, I don't know why,
24:01
Speaker 5: but the Department of Labor and Trump administration decided to
24:04
Speaker 5: put this ex-congressman ex-politician, Mr. Desposito, as the Inspector General
24:11
Speaker 5: of the Department of Labor. And so he has said,
24:13
Speaker 5: I'm going to do what any politician does in any position.
24:16
Speaker 5: I'm going to try to maximize the constraints and the
24:20
Speaker 5: opportunities in my particular position and try to get as
24:23
Speaker 5: much media coverage and make as big a splash as possible.
24:27
Speaker 5: And so you now have this investigation in the J-1 context,
24:33
Speaker 5: which is not really part of the And the theory
24:36
Speaker 5: that they announced was that the universities are basically taking
24:43
Speaker 5: too many foreign students and researchers in this J-1 program
24:48
Speaker 5: and taking research that should have been done by, I guess, U.S.
24:53
Speaker 5: students and U.S. researchers and potentially using federally funded money
25:00
Speaker 5: in order to do it. And so trying to figure
25:02
Speaker 5: out should that have been done, was that a threat,
25:04
Speaker 5: et cetera. But at the end of the day, that's
25:07
Speaker 5: all very odd because every single person who comes into J-1,
25:12
Speaker 5: the State Department asks that person, what are you doing?
25:15
Speaker 5: What is the research you're going to be doing? What
25:17
Speaker 5: is the specific thing you're going to be doing? And
25:19
Speaker 5: these nine schools, Harvard, Yale, Stanford, Brown, MIT, Caltech, et cetera,
25:24
Speaker 5: don't have a reason to lie about that. They have
25:26
Speaker 5: every reason to be honest and say, this person is
25:29
Speaker 5: going to be performing cancer research or this person is
25:32
Speaker 5: going to be performing some sort of physics research or whatever.
25:35
Speaker 3: It may be.
25:36
Speaker 5: And so they have all of this information at their disposal.
25:40
Speaker 5: And all they really need to do is just check
25:42
Speaker 5: to see whether the person doing the research That they
25:45
Speaker 5: said they were going to do, but this seems very odd,
25:48
Speaker 5: this type of investigation to call out nine universities. And
25:51
Speaker 5: the other thing that I just personally find a little
25:54
Speaker 5: bit odd is this sort of what I would call
25:57
Speaker 5: trolling language from law enforcement officials. That's something that I
26:01
Speaker 5: would hope whenever we get into a future administration. And
26:04
Speaker 5: I've seen Democrats do it too. So I'll call them
26:07
Speaker 5: out too when Letitia James was doing that toward Trump.
26:10
Speaker 5: I think just in general, if I can do my part,
26:12
Speaker 5: I would just say, if you're listening to this and
26:15
Speaker 5: you have a law enforcement duty, stop trolling people during
26:19
Speaker 5: the investigation. Be the old school. Hear the allegations. Here's
26:24
Speaker 5: what's being investigated. we will let the facts determine what's
26:27
Speaker 5: going to happen. But instead there's language. People are going
26:30
Speaker 5: to jail. People are in big trouble and you haven't
26:32
Speaker 5: even started the investigation yet. And I just find that
26:35
Speaker 5: that's probably something that hopefully moving forward we'll have less of.
26:39
Speaker 1: Well, I mean, this is what struck me as odd.
26:43
Speaker 1: Vance said these universities are employing J-1 visas for federally
26:48
Speaker 1: funded grants at a rate of about 61 percent. The
26:51
Speaker 1: national average is 38 percent. So something weird is going
26:55
Speaker 1: on at these universities. They're using the visas way too much.
26:59
Speaker 1: So you're making these charges against universities because something seems weird?
27:05
Speaker 5: When you're doing the level of research that is at
27:07
Speaker 5: these universities, these top, top elite universities, it's basically like
27:12
Speaker 5: the NBA, where the National Basketball Association All they're trying
27:16
Speaker 5: to do is find the best 12 players on a
27:19
Speaker 5: team anywhere in the planet. And so sometimes a team
27:23
Speaker 5: will have four or five people who are not Americans
27:26
Speaker 5: who are on that team because those just happen to
27:29
Speaker 5: be the best players in the world. And so that's
27:31
Speaker 5: what these universities have to do when they're doing this top, top,
27:34
Speaker 5: top cutting edge research. And so it may be that
27:37
Speaker 5: the best physicists are not Americans or the best cancer
27:42
Speaker 5: researchers are not Americans. But again, what difference does it
27:45
Speaker 5: make as long as it's been disclosed in the visa
27:47
Speaker 5: application and they're doing the research they said they were
27:50
Speaker 5: going to do? And so that's what I find out
27:53
Speaker 5: about this.
27:54
Speaker 1: They also announced that they're accusing Microsoft, Adobe, and a
27:59
Speaker 1: half dozen other companies of abusing a U.S. worker visa
28:03
Speaker 1: program and suspending them indefinitely.
28:06
Speaker 5: Now, this is a different issue, and this one has
28:09
Speaker 5: some more teeth to it, although the law is in
28:12
Speaker 5: such a bizarre place that it's going to be quite complicated.
28:16
Speaker 5: So let me take you through this. So whenever a company...
28:20
Speaker 5: wants to sponsor a foreign national for a green card,
28:23
Speaker 5: meaning lawful permanent residence, they have to go through this
28:26
Speaker 5: process called the PERM process, which is a Department of
28:30
Speaker 5: Labor process, which means as follows. You have to show
28:35
Speaker 5: that you are unable to find an American worker who's
28:39
Speaker 5: willing and able to do the job at the prevailing wage,
28:42
Speaker 5: meaning you can't undercut wages. But here's the problem. So
28:47
Speaker 5: the Department of Labor says, here's... How you do this
28:51
Speaker 5: job search and they have 10 things in a list
28:55
Speaker 5: and then you can pick three of them. And so,
28:57
Speaker 5: you know, one of them is that you put two
28:59
Speaker 5: Sunday paper ads. Another one can be a radio ad.
29:03
Speaker 5: Another one can be an ad on something like monster.com
29:06
Speaker 5: or indeed.com or something. And so there's 10 of these
29:10
Speaker 5: options and you pick three. And so what's complicated is this.
29:15
Speaker 5: And here's where the companies are getting in trouble. And
29:17
Speaker 5: this is quite fascinating. The Department of Labor is saying,
29:20
Speaker 5: when you really want to find someone to fill a job,
29:24
Speaker 5: you know how to do it. You call headhunters. You
29:27
Speaker 5: do all these other things. And we have the evidence
29:30
Speaker 5: of what you do. But when you do this PERM process,
29:33
Speaker 5: where you're trying to end up with the result that
29:36
Speaker 5: you couldn't find an American to fill the job... so
29:40
Speaker 5: that's why you need to hire the preferred person, you
29:43
Speaker 5: are rigging the process by using the three out of
29:47
Speaker 5: 10 methods that are least likely to find someone. The
29:51
Speaker 5: problem is, The companies are saying, yeah, but this is
29:55
Speaker 5: the process you make us use in order to get
29:58
Speaker 5: someone for a green card. And so the issue is
30:02
Speaker 5: going to be, is the Department of Justice and the
30:05
Speaker 5: Department of Labor correct? that those three out of 10
30:09
Speaker 5: are the minimum you have to do. But if you
30:12
Speaker 5: do something else to find people normally, you also have
30:15
Speaker 5: to do that. Or are the companies right that all
30:19
Speaker 5: they have to do is what the regulation tells them
30:21
Speaker 5: to do, and they don't actually have to perform the
30:25
Speaker 5: exact same job search they do in other contexts in
30:28
Speaker 5: order to find people for that job? And so that's
30:31
Speaker 5: the issue. But the problem is the system here and
30:34
Speaker 5: what the Department of Labor is frustrated with and the
30:36
Speaker 5: Trump administration and everyone is rightly frustrated with is you
30:40
Speaker 5: have a system that doesn't allow very smart and talented
30:45
Speaker 5: people to get green cards to live here permanently unless
30:48
Speaker 5: they do this kabuki theater of trying to show. that
30:52
Speaker 5: an American wasn't available for the job. So the incentives
30:55
Speaker 5: are completely out of whack because the company, if they
30:59
Speaker 5: want to hire this talented person, has every incentive to
31:02
Speaker 5: conduct the job search where they won't find said American.
31:06
Speaker 5: And so the Department of Labor has very target-rich environment
31:10
Speaker 5: to expose every big company like Microsoft and Adobe and
31:14
Speaker 5: everything else. But it's not really that company that's abusing
31:17
Speaker 5: the system. It's just that There's this bizarre misalignment of
31:22
Speaker 5: incentives that the statute that Congress wrote created, which is
31:27
Speaker 5: it saying you can only hire someone if you can't
31:29
Speaker 5: find an American and we're going to let the company
31:32
Speaker 5: try to find the American. It's up to the company.
31:34
Speaker 5: And so what do you think is going to happen
31:36
Speaker 5: when you write a statute like that?
31:38
Speaker 1: So what happens now?
31:39
Speaker 5: Well, what happens now, unfortunately for Microsoft, is they can't
31:43
Speaker 5: now petition for green card holders, which means if you
31:47
Speaker 5: are a very, very talented person on a temporary visa
31:51
Speaker 5: in the United States working for Microsoft, you have to
31:54
Speaker 5: leave Microsoft if you ever want to get a green card.
31:57
Speaker 5: And so that's terrible for Microsoft. It's terrible for the employees.
32:01
Speaker 5: And same thing for Adobe and for any other company
32:04
Speaker 5: that ends up getting suspended from this program. system. And
32:08
Speaker 5: so it's basically a drip, drip, drip deportation of many,
32:14
Speaker 5: many highly skilled foreign nationals who are in the United States.
32:18
Speaker 1: Do the companies have any way to appeal?
32:21
Speaker 5: Yes, certainly now they could file an Administrative Procedure Act case,
32:26
Speaker 5: suing the Department of Labor and challenging their dismissal from
32:31
Speaker 5: the PERM program. And it's going to depend. We're that
32:36
Speaker 5: at the end of the day, the way these companies
32:39
Speaker 5: have used the green card process in the past is, first,
32:43
Speaker 5: they hire the student right out of the university on
32:46
Speaker 5: their student visa, because there's this thing called OPT, optional
32:49
Speaker 5: practical training, that allows students to work for up to
32:52
Speaker 5: three years after they graduate. So then they're not in
32:55
Speaker 5: the green card process. Then there's a second thing called
32:58
Speaker 5: the H-1B visa, which people may have heard of, which
33:01
Speaker 5: is a temporary... two terms of three years, so six
33:05
Speaker 5: years total. And so what happens is, at the end of,
33:09
Speaker 5: let's say, those six years and the OPT three years,
33:11
Speaker 5: nine years, the companies say, you've done such good work,
33:14
Speaker 5: we're going to reward you for giving you a green card.
33:18
Speaker 5: The company doesn't actually care so much, many of these companies,
33:22
Speaker 5: to get the green card to keep the worker. That's
33:24
Speaker 5: not really what they're doing. They're just applying for the
33:27
Speaker 5: green card to reward the worker. And by debarring Microsoft
33:32
Speaker 5: and Adobe and others, that's not super hurting Microsoft and Adobe. Really,
33:37
Speaker 5: it's just hurting the worker who now can't get that
33:40
Speaker 5: reward from Microsoft and Adobe that They were trying to
33:45
Speaker 5: get the worker for those nine years of good work.
33:48
Speaker 1: That's where the brunt of a lot of these immigration
33:50
Speaker 1: policies falls. Thanks so much, Leon, as always. That's Leon
33:55
Speaker 1: Fresco of Holland & Knight. And that's it for this
33:58
Speaker 1: edition of the Bloomberg Law Show. Remember, you can always
34:01
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34:04
Speaker 1: You can find them on Apple Podcasts, Spotify, and at
34:08
Speaker 1: www.bloomberg.com slash podcast slash law. And remember to tune into
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Speaker 1: the Bloomberg Law Show every weeknight at 10 p.m. Wall
34:17
Speaker 1: Street time. I'm June Grosso, and you're listening to Bloomberg.