Latest / Bloomberg Law / Trump's Tariffs & Trump's 'Enemies': Jack Smith, James Comey & Letitia James

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Trump's Tariffs & Trump's 'Enemies': Jack Smith, James Comey & Letitia James · Bloomberg Law

0:02
Speaker 1: This is Bloomberg Law with June Grosso from Bloomberg Radio.
0:08
Speaker 2: President Trump's signature economic policy is under a judicial microscope again,
0:14
Speaker 2: and the administration faced skeptical questions from a U.S. trade
0:18
Speaker 2: court about the legal foundation underpinning Trump's latest round of
0:23
Speaker 2: global tariffs. Trump's tariffs have faced a rocky legal path,
0:28
Speaker 2: and one of the questions facing the judge is, is
0:31
Speaker 2: whether the tariffs under Section 301 of the Trade Act
0:34
Speaker 2: of 1974 were a pretext to revive earlier global tariffs
0:40
Speaker 2: that the Supreme Court struck down. Joining me is Bloomberg
0:43
Speaker 2: legal reporter Zoe Tillman. She attended the hearings at the U.S.
0:47
Speaker 2: Trade Court yesterday. Zoe, explain which tariffs are at issue
0:52
Speaker 2: in this case.
0:53
Speaker 3: So every time I say I'm going to court for tariffs,
0:56
Speaker 3: someone says to me, I thought that was done. And
0:58
Speaker 3: I say, no, there are more tariffs. So this is
1:02
Speaker 3: the third round of what we often refer to as
1:06
Speaker 3: global tariffs that President Trump has sought to impose. There
1:09
Speaker 3: was the first round that was last year under international
1:13
Speaker 3: economic emergency powers law. Supreme Court said he couldn't do that.
1:17
Speaker 3: So then they announced what was inherently a temporary set,
1:22
Speaker 3: but again, of global tariffs under a different legal authority
1:26
Speaker 3: called Section 122. But those were always going to be
1:29
Speaker 3: short term. They have a time limit under the statute.
1:32
Speaker 3: So everyone knew there was a date, expiration date on those.
1:35
Speaker 3: In the meantime, they announced they were launching investigations under
1:39
Speaker 3: what's known as Section 301, which has to do with
1:43
Speaker 3: trade practices that hurt U.S. commerce and the U.S. economy.
1:47
Speaker 3: And they announced they were investigating dozens of countries for this.
1:51
Speaker 3: which the statute requires. It can't just be all of
1:54
Speaker 3: a sudden you wake up and decide to do it.
1:56
Speaker 3: So they announced an investigation. And on the day that
1:59
Speaker 3: the temporary tariffs expire, they say, we've finished our investigation.
2:04
Speaker 3: We've determined that these 60 economies covering 86, I believe, countries,
2:10
Speaker 3: because they count the EU as one economy, they all
2:14
Speaker 3: have a unfair practices. And specifically, they don't do enough
2:19
Speaker 3: to deal with forced labor in the goods that they import,
2:23
Speaker 3: which in turn hurts the U.S. economy because it undercuts U.S.
2:28
Speaker 3: goods in their trade around the world because we combat
2:32
Speaker 3: forced labor, other countries don't. So what we're now dealing
2:35
Speaker 3: with is the third set of tariffs. It's not every
2:38
Speaker 3: country in the world, but it's dozens and dozens of
2:41
Speaker 3: countries that they've now sought to impose these tariffs on.
2:45
Speaker 2: Small businesses, Democratic states sued. Tell us what the argument
2:50
Speaker 2: of the plaintiffs is.
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Speaker 3: So the overarching argument is that this is all a pretext,
2:56
Speaker 3: that courts keep knocking down the tariffs that President Trump
3:01
Speaker 3: wants to impose. And so they are searching for any
3:03
Speaker 3: legal authority that they can find to do it. regardless
3:07
Speaker 3: of whether it's the intended or valid use of that
3:11
Speaker 3: legal authority. So that's their sort of sweeping argument here,
3:14
Speaker 3: that whatever they say they're doing, whatever reason they're giving
3:17
Speaker 3: to do it is significantly undermined by the fact that
3:21
Speaker 3: Trump himself and other high level officials have said this
3:27
Speaker 3: is the alternative to the tariffs that we have been
3:29
Speaker 3: unable to keep in place otherwise. It's worth noting that
3:34
Speaker 3: the emergency powers tariffs were in place for months and
3:37
Speaker 3: months while the case was litigated. So they were collecting,
3:40
Speaker 3: I think it's something like $ 130- plus billion in tariffs. They
3:42
Speaker 3: collected those. When they lost in the Supreme Court, they've
3:47
Speaker 3: now had to spend months refunding that money back to businesses.
3:51
Speaker 3: So they were able to enforce those tariffs for a
3:54
Speaker 3: period of time. They lost. They've had to give all
3:57
Speaker 3: that money back. They collected more tariffs under the stopgap measures.
4:01
Speaker 3: Those were still in litigation when they expired. And now
4:04
Speaker 3: these new tariffs are in place. So they've sort of
4:06
Speaker 3: been able to do it just in fits and starts
4:09
Speaker 3: and getting knocked down significantly earlier this year. So that's
4:13
Speaker 3: a broad argument. drilling down on really what the hearing
4:17
Speaker 3: yesterday focused mostly on were the arguments that this is
4:21
Speaker 3: just not what the statute and what Congress intended, that
4:25
Speaker 3: under Section 301, there are certain guidelines for what the U.S.
4:30
Speaker 3: trade representative has to show, what he has to do
4:34
Speaker 3: in order to impose these tariffs. And what the challengers
4:37
Speaker 3: say is that the way that they've gone about it,
4:40
Speaker 3: issuing a single report, saying based on a handful of
4:43
Speaker 3: case studies, the economic principles at play here for how
4:47
Speaker 3: forced labor may implicate the U.S. economy, because many other
4:53
Speaker 3: countries import these types of goods where we know forced
4:56
Speaker 3: labor is an issue, applying these principles broadly, They all
5:01
Speaker 3: should be subject to tariffs. And the challengers say, no, no,
5:04
Speaker 3: this is not what's supposed to happen. It's supposed to
5:06
Speaker 3: be country by country. There's supposed to be unique, specific
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Speaker 3: investigations and country specific findings. Not only that, you know,
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Speaker 3: there's forced labor in their their import of goods, but
5:17
Speaker 3: that that poses a burden on the U.S. economy and how.
5:21
Speaker 3: And so there's all these different steps that are supposed
5:24
Speaker 3: to be followed. And the challengers say that the way
5:26
Speaker 3: this administration did it, unprecedented, massive investigation, it only took
5:31
Speaker 3: two and a half months, where in the past, you know,
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Speaker 3: a single investigation might take seven months, that none of
5:37
Speaker 3: this is the way it's supposed to go under the law.
5:40
Speaker 3: And that's really the core of the challenge and what
5:43
Speaker 3: the judges focused on at the hearing yesterday.
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Speaker 2: I mean, does the trade rep or the administration claim
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Speaker 2: that they actually investigated all these countries in that short
5:54
Speaker 2: period of time?
5:56
Speaker 3: They do. They say that the trade representative, Jameson Greer,
5:59
Speaker 3: has broad discretion in making these types of determinations and
6:03
Speaker 3: that they essentially checked the boxes that they needed to.
6:07
Speaker 3: They provided an appendix showing that these different economies do
6:12
Speaker 3: import the types of goods that can be at issue
6:14
Speaker 3: when we're talking about industries where forced labor is a problem.
6:18
Speaker 3: No one is disputing that forced labor is a problem.
6:21
Speaker 3: It's not sort of in question here. So they say,
6:24
Speaker 3: you know, then applying these economic principles broadly, if you
6:27
Speaker 3: look at case studies involving, for instance, China importing Brazilian
6:32
Speaker 3: beef where there's a forced labor issue. And then, you know,
6:36
Speaker 3: that beef circulates in a way around the world that
6:40
Speaker 3: undercuts the U.S. beef imports that, you know, there's an
6:44
Speaker 3: implication there. that you can apply these broadly and that
6:47
Speaker 3: they've done enough to satisfy the statute. Now, the challengers say, OK,
6:51
Speaker 3: but you exempted Brazilian beef from the tariffs. So that
6:54
Speaker 3: case study doesn't quite hold up the way that the
6:58
Speaker 3: government says it does. It's something that came up yesterday.
7:01
Speaker 3: But there's really this back and forth about how much detailed,
7:06
Speaker 3: specific analysis and concrete analysis. The challengers say this can't
7:10
Speaker 3: be a may hurt the U.S. economy. It can't be
7:12
Speaker 3: a likely to hurt the U.S.
7:13
Speaker 4: Economy.
7:14
Speaker 3: They have to show It does. And how? So at
7:18
Speaker 3: each step, the challengers say it's not enough. And at
7:20
Speaker 3: each step, the government says we did enough to satisfy
7:25
Speaker 3: the statute.
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Speaker 2: Were there certain areas or questions that the judges concentrated on?
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Speaker 3: Yeah, so they gave not a lot of time to
7:35
Speaker 3: the pretext argument. There were questions at the beginning about it.
7:40
Speaker 3: They wanted to test the waters on that a bit
7:43
Speaker 3: with the challengers. They didn't ask the government any questions
7:45
Speaker 3: about that. It's always hard to predict, but might mean
7:49
Speaker 3: that they're not super focused on it. On the more
7:52
Speaker 3: core legal questions, though, the lawyer for the Justice Department
7:56
Speaker 3: faced some very skeptical questions from the judges about how
8:00
Speaker 3: they were reading and interpreting the statute, where During one
8:04
Speaker 3: notable exchange, one of the judges was asking, you know,
8:07
Speaker 3: there are two subsections here that define unreasonable trade practices.
8:12
Speaker 3: The trade rep is supposed to base his decisions on one.
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Speaker 3: Which one? And DOJ lawyers said, neither. And the judge
8:20
Speaker 3: was sort of astonished and said, I don't understand. And
8:23
Speaker 3: they went back and forth. And the Justice Department lawyer said,
8:26
Speaker 3: we just disagree with your interpretation of the structure of
8:29
Speaker 3: this law and what's required. And There were a couple
8:31
Speaker 3: exchanges like that where there just seemed to be a
8:34
Speaker 3: disconnect between how the judges were thinking about this case
8:38
Speaker 3: and the Justice Department's interpretation of the law here. Always
8:42
Speaker 3: with the caveat that questions and arguments don't always predict
8:45
Speaker 3: what judges are thinking or how they're going to rule.
8:48
Speaker 3: But it did seem like they at least had a
8:51
Speaker 3: lot of questions about how the Justice Department was doing this.
8:54
Speaker 3: And they made some comments suggesting that they weren't quite
8:57
Speaker 3: sold on it yet.
8:59
Speaker 2: One of the judges... pointed out that there was not
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Speaker 2: a lot of depth in the evidence the administration cited
9:05
Speaker 2: to show how it determined certain goods were affected by
9:08
Speaker 2: forced labor.
9:09
Speaker 3: Right. There was a lot of discussion of lists of
9:12
Speaker 3: evidence in an appendix that was submitted along with the
9:15
Speaker 3: trade representative's report that listed all the countries that were
9:18
Speaker 3: subject to these tariffs and saying, you know, here are
9:21
Speaker 3: the goods that they import. But the judges really seemed
9:24
Speaker 3: to be looking for more analysis connecting all the threads
9:30
Speaker 3: of information that the administration had proffered as the reason
9:33
Speaker 3: these tariffs were needed. You know, it's one thing to say, well,
9:36
Speaker 3: these countries import goods that we know are implicated by
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Speaker 3: forced labor, but they were wondering what is the evidence
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Speaker 3: that that is what's happening? What is the evidence that
9:46
Speaker 3: these goods from this country are coming to the United
9:49
Speaker 3: States and burdening U.S. commerce and the U.S. economy? I
9:53
Speaker 3: think they were pushing the Justice Department lawyer to pull
9:57
Speaker 3: more of these things together and explain. how they had
10:01
Speaker 3: done a sufficient, specific enough analysis to justify these tariffs
10:05
Speaker 3: against each economy.
10:08
Speaker 2: So is it possible that the judges could give the
10:11
Speaker 2: trade rep a chance to fix the gaps in the record?
10:14
Speaker 3: Yes. That was another notable exchange or several exchanges during
10:20
Speaker 3: the hearing in discussing what the remedy could be if
10:22
Speaker 3: they determined that the record just wasn't clear. Do they
10:25
Speaker 3: go back and give them more time to essentially try again?
10:30
Speaker 3: Do they just say, this is just not enough? And
10:34
Speaker 3: if you need to reopen the record to do better,
10:37
Speaker 3: then that means that this was a loss for you
10:40
Speaker 3: and you can't keep this case going. indefinitely delayed to
10:44
Speaker 3: do that. And the lawyer for the challenges, Prateek Shah,
10:47
Speaker 3: he explicitly told the judges that he would rather that
10:51
Speaker 3: his clients lose and be able to take this up
10:53
Speaker 3: on appeal than have it go back to the trade
10:56
Speaker 3: rep and leave the case in limbo. Obviously, he thinks
10:59
Speaker 3: they should win, and he certainly wasn't conceding anything. But
11:02
Speaker 3: the idea was that they don't want this dragging out
11:04
Speaker 3: for months and months and months while these tariffs are
11:07
Speaker 3: still in effect. They want clarity and everyone, you know,
11:10
Speaker 3: I think the implicit acknowledgement was that this is probably
11:13
Speaker 3: going to go back up on appeal, probably going to
11:16
Speaker 3: end up in the Supreme Court, especially if the government
11:18
Speaker 3: loses again. So they don't want this to drag out.
11:21
Speaker 3: The $ 130 billion in emergency economic powers tariffs that were
11:26
Speaker 3: collected before the Supreme Court said those tariffs were unlawful,
11:30
Speaker 3: the business community does not want that again. They don't
11:33
Speaker 3: want to pay $ 130 billion in tariffs and then deal
11:37
Speaker 3: with refunds a year down the line. There's not an
11:41
Speaker 3: appetite for that. So I think the suggestion was, give
11:44
Speaker 3: us a ruling on the law and let us move forward.
11:47
Speaker 3: It's worth saying that it's also not clear how broad
11:50
Speaker 3: a ruling might be. The judges discussed whether they could
11:55
Speaker 3: issue relief beyond the businesses that sued, whether they could
11:59
Speaker 3: issue relief that applied to tariff's beyond the countries that
12:03
Speaker 3: these small businesses import goods from. This is stemming from
12:07
Speaker 3: a ruling from the Supreme Court last year that really
12:10
Speaker 3: narrowed the ability of courts to issue sweeping injunctions that
12:14
Speaker 3: apply far beyond the parties in a case. But the idea,
12:17
Speaker 3: you know, the challenger said is they wanted a ruling
12:20
Speaker 3: that this is unlawful and that would open the door
12:22
Speaker 3: for other businesses to come in and get their refunds,
12:25
Speaker 3: challenge it, what have you. So the short-term relief, even
12:28
Speaker 3: if they win, might be pretty narrow. It might just
12:30
Speaker 3: be that these businesses don't have to pay tariffs, not
12:33
Speaker 3: all businesses, but it would kick off litigation that everyone
12:38
Speaker 3: seems to acknowledge needs to happen to get a final
12:41
Speaker 3: legal ruling on whether these are okay.
12:43
Speaker 2: And we have no idea when the trade court will
12:45
Speaker 2: come down with its decision. Thanks so much, Zoe. That's
12:49
Speaker 2: Bloomberg Legal Reporter Zoe Tillman. In testimony before Congress, former
12:54
Speaker 2: special counsel Jack Smith stood by his prosecutions of President
12:59
Speaker 2: Trump for trying to overturn the results of the 2020
13:03
Speaker 2: presidential election and for storing classified documents at his Mar-a-Lago estate.
13:09
Speaker 5: Our investigation developed proof beyond a reasonable doubt that President
13:14
Speaker 5: Trump engaged in serious crimes against our nation. If asked
13:19
Speaker 5: whether to prosecute a former president today based on the
13:24
Speaker 5: same facts, I would do so regardless of whether that
13:27
Speaker 5: president was a Republican or a Democrat.
13:31
Speaker 2: But Republican senators were more interested in accusing Smith of
13:35
Speaker 2: abusing his power By subpoenaing Republicans' phone records and texts, some,
13:41
Speaker 2: like Louisiana Senator John Kennedy, attacked Smith personally.
13:46
Speaker 6: You make me want to throw up in my mouth.
13:48
Speaker 2: But the questioning that drew the most attention was when
13:51
Speaker 2: Missouri Republican Senator Eric Schmidt tried to catch Smith perjuring
13:56
Speaker 2: himself about attending a Hawks game in Atlanta in 2024.
14:01
Speaker 3: What would you say if I had a series of
14:02
Speaker 3: text messages from your team that said you were in Atlanta...
14:06
Speaker 3: at a Warrior Hawks game on February 3rd, 2024, the
14:09
Speaker 3: day after Willis and Wade.
14:10
Speaker 6: Announced their affair.
14:11
Speaker 2: Smith denied meeting Atlanta prosecutor Fonny Willis, who was investigating Trump,
14:19
Speaker 2: and said he wasn't in Atlanta at the time.
14:23
Speaker 5: I recall going to a University of Maryland basketball game
14:27
Speaker 5: where Caitlin Clark was playing right around that time. And
14:32
Speaker 5: the Marshal Service was there with me. You could check
14:34
Speaker 5: if that was the exact date. It was Maryland playing Iowa.
14:38
Speaker 2: It turns out Schmidt had confused an Iowa Hawkeyes basketball
14:43
Speaker 2: game for an Atlanta Hawks game. But he never retracted
14:48
Speaker 2: his statements about perjury or calling Smith a dirtbag. Joining
14:53
Speaker 2: me is an expert in constitutional law. Hal, what was
14:56
Speaker 2: the purpose or point of this hearing?
15:00
Speaker 7: I mean, the hearing seems to cover the similar ground
15:04
Speaker 7: of the administration trying to embarrass or go after or trip.
15:09
Speaker 4: Up political enemies.
15:11
Speaker 7: And clearly, Jack Smith, the special counsel who headed the
15:15
Speaker 7: investigations into whether Trump committed crimes, is a figure that
15:21
Speaker 7: attracts resentment and hatred amongst the MAGA faithful.
15:26
Speaker 2: He stood by his decision to prosecute the president. Was
15:29
Speaker 2: much of the hearing on, you know, his basis for
15:32
Speaker 2: prosecuting the president? Or was it more about the Republicans being,
15:36
Speaker 2: you know, upset about his obtaining their phone records and
15:40
Speaker 2: text messages?
15:41
Speaker 7: The focal point really was on the fact that Republicans
15:45
Speaker 7: felt that Smith embarrassed members of Congress by looking at
15:50
Speaker 7: their phone records.
15:51
Speaker 4: There was a relevance here.
15:52
Speaker 7: The relevance was that Jack Smith wanted to see whether
15:55
Speaker 7: outside agitators were trying to call members of Congress to
15:59
Speaker 7: upset the electoral process. vote at the time after the
16:03
Speaker 7: election for Biden. And so it's relevant. But on the
16:07
Speaker 7: other hand, it is an extraordinary measure to subpoena the
16:11
Speaker 7: phone records of members of Congress. They felt Their privacy
16:15
Speaker 7: was invaded. They felt that some of their contacts should
16:18
Speaker 7: not be disclosed to the outside world. So it created
16:21
Speaker 7: that very deep tension. And, you know, in retrospect, maybe
16:26
Speaker 7: even though the records could have been relevant to an investigation,
16:29
Speaker 7: maybe Jack Smith should have stayed his hand and not
16:32
Speaker 7: requested those and obtained those very private records of calls
16:37
Speaker 7: that members of Congress had.
16:38
Speaker 4: Now, interestingly, some of.
16:41
Speaker 7: The And interlocutors said that Smith violated the speech and
16:46
Speaker 7: debate clause by grabbing these records. And I have to
16:49
Speaker 7: say that's a frivolous argument. And I'm quite surprised that
16:53
Speaker 7: members of Congress would relate that. All the speech and
16:56
Speaker 7: debate clause does is protect members of Congress from being prosecuted.
17:00
Speaker 7: for what they say on the congressional floor. These calls
17:03
Speaker 7: were not on the congressional floor, and there was no prosecution.
17:06
Speaker 7: So simply, it's not relevant, but that was some significant
17:10
Speaker 7: discussion of that in the hearings as well.
17:12
Speaker 2: Could Smith be prosecuted for what he did? You know,
17:15
Speaker 2: he got a judge's permission, right? But he said that
17:18
Speaker 2: he didn't tell the judge it was for members of Congress.
17:22
Speaker 7: I don't think that he could be prosecuted for that,
17:25
Speaker 7: at least in retrospect. We have to remember there's been
17:27
Speaker 7: a lot of time. There's a great crisis back around
17:30
Speaker 7: January 6th. But, you know, again, maybe history will say
17:34
Speaker 7: that that was a good move, but certainly it's not
17:36
Speaker 7: a crime. Maybe history will say that that was a
17:39
Speaker 7: good move, but certainly it's not a crime.
17:42
Speaker 2: Do you think it was unethical what he did?
17:44
Speaker 4: I think it was questionable judgment.
17:46
Speaker 7: I mean, again, going back to the timeframe, we were
17:49
Speaker 7: really worried that there was a conspiracy to overthrow the
17:52
Speaker 7: government and that members of Congress would refuse to count.
17:56
Speaker 4: All the electoral votes.
17:58
Speaker 7: And so, you know, Jack Smith wanted to unearth that
18:02
Speaker 7: at the time and sort of say if there was
18:04
Speaker 7: this great conspiracy, we have to reveal it now and
18:08
Speaker 7: punish it. And, you know, I don't think the conspiracy
18:10
Speaker 7: was as wide as he feared, but I think that
18:13
Speaker 7: in terms of using his powers to get the film records, again,
18:17
Speaker 7: at least with the comfort of history, was excessive and
18:20
Speaker 7: probably was a questionable judgment.
18:22
Speaker 4: Not unethical, not illegal, but a questionable judgment.
18:26
Speaker 2: The focus in reports about this hearing ended up being
18:30
Speaker 2: on Schmidt trying to set a perjury trap for Smith,
18:36
Speaker 2: which fell apart.
18:38
Speaker 7: Well, the whole idea of calling Jack Smith in front
18:41
Speaker 7: of Congress was, as in other cases, was to create
18:44
Speaker 7: a perjury trap. And what Senator Schmidt started out by
18:48
Speaker 7: trying to suggest that there was some conspiracy between Fannie Willis,
18:52
Speaker 7: as you mentioned, the Georgia prosecutor, and Jack Smith turned
18:55
Speaker 7: out to be kind of a comic part of the
18:58
Speaker 7: hearing because it turns out that Schmidt had the wrong
19:01
Speaker 7: basketball game. and that there were even witnesses placing Jack
19:05
Speaker 7: Smith at a woman's Hawkeye game so they could watch
19:09
Speaker 7: Caitlin Clark as opposed to in Georgia at that time.
19:13
Speaker 7: So that one backfired badly, but it does reveal the
19:17
Speaker 7: weaponization and the political nature of this whole inquiry.
19:21
Speaker 2: And, you know, the rhetoric from Republicans was just over
19:24
Speaker 2: the top. You had Senator John Kennedy saying, you make
19:28
Speaker 2: me want to throw up in my mouth. And Ted
19:31
Speaker 2: Cruz was talking about Les Mis. I mean, it was
19:34
Speaker 2: just so over the top.
19:36
Speaker 7: Well, I think that was Senator Tillis, the Republican, who
19:40
Speaker 7: commented well that we have to understand the dangers and
19:43
Speaker 7: the risks of politicizing this process.
19:46
Speaker 4: And I think he was right on the money.
19:48
Speaker 7: And in case we have a shift in the midterms,
19:52
Speaker 7: I think we have to give serious thought so that
19:54
Speaker 7: the Democrats, if they're in charge, don't just give vent
19:57
Speaker 7: to the same kind of base impulses as the Republicans did.
20:01
Speaker 7: I've already heard leading Democrats say, of course, the first
20:04
Speaker 7: thing we're going to do is impeach as many people
20:06
Speaker 7: as we can. And this kind of tit for tat
20:10
Speaker 7: is not good for the country. And I think we
20:12
Speaker 7: need to think of a different process, a different way
20:15
Speaker 7: to explore the past through commissions or other kinds of
20:18
Speaker 7: means so that we can get to what governing demands,
20:22
Speaker 7: which is some kind of compromise across party lines.
20:25
Speaker 4: We're not close to that now.
20:27
Speaker 7: And this kind of theater that we saw with the
20:29
Speaker 7: questioning of Smith is some of the worst kind of theater.
20:32
Speaker 7: And I hope that if there is a shift in
20:34
Speaker 7: the midterm, it just doesn't repeat itself.
20:36
Speaker 2: The Republicans are repeatedly complaining that the Biden administration weaponized
20:43
Speaker 2: the Justice Department. But the Trump Justice Department is weaponized
20:48
Speaker 2: against his perceived enemies.
20:50
Speaker 7: And obviously, this is a constant refrain under the Trump
20:55
Speaker 7: administration and the Trump DOJ. Go after people like Comey.
20:59
Speaker 7: Go after Trump. people like Jack Smith and more. And
21:03
Speaker 7: it just doesn't leave the country any better. And so
21:07
Speaker 7: I hope that if there is a shift, that some
21:10
Speaker 7: lessons from these kinds of waste of energy and this
21:14
Speaker 7: venom and this anger, we can.
21:16
Speaker 4: Try to mute it.
21:18
Speaker 2: So Smith said he expects to face personal consequences. He
21:22
Speaker 2: believes the Trump administration will do everything in its power
21:25
Speaker 2: to try to build a case against him. He's one
21:27
Speaker 2: of the top on Trump's list. You have Comey. You
21:30
Speaker 2: have the New York Attorney General Letitia James. You have
21:33
Speaker 2: Jack Smith.
21:34
Speaker 4: We can't forget Jerome Powell.
21:35
Speaker 2: Well, they tried and failed on Jerome Powell so far.
21:39
Speaker 2: And also, when he testified before the House, there was
21:42
Speaker 2: also that kind of perjury trap effort. And Jim Jordan
21:46
Speaker 2: referred Smith to the Justice Department for potential prosecutions. without
21:50
Speaker 2: going through a full vote of the House, saying he
21:53
Speaker 2: lied to Congress. So is it just a question of
21:57
Speaker 2: when Smith is going to be indicted? Or is there
22:00
Speaker 2: a question of if?
22:01
Speaker 4: I think there's a question of if.
22:02
Speaker 7: I mean, the Trump administration has moved very aggressively, as
22:06
Speaker 7: we've talked about, against Patricia James, against Comey, against Jerome Powell.
22:12
Speaker 4: And it's gone much slower against Jack Smith.
22:15
Speaker 7: Which suggests that they're having trouble with unearthing some kind
22:20
Speaker 7: of theory that at least looks good in the newspapers
22:22
Speaker 7: if nowhere else. So I don't think it's a foregone conclusion.
22:26
Speaker 7: It could happen. And obviously, this was an effort to
22:28
Speaker 7: make it happen by laying the perjury traps, as you suggested.
22:32
Speaker 7: But I don't think it's a done deal for sure.
22:34
Speaker 2: Their grand conspiracy investigation in Florida, the judge overseeing that
22:41
Speaker 2: is Eileen Cannon. the Trump appointee who dismissed the classified
22:46
Speaker 2: documents case and consistently ruled in favor of Trump. She
22:50
Speaker 2: was even overturned twice by the 11th Circuit. Smith said
22:55
Speaker 2: he couldn't talk about some things because the final report
22:58
Speaker 2: he drafted about the classified documents case, she has permanently
23:03
Speaker 2: barred the report's release and blocked officials from discussing it.
23:08
Speaker 2: But I suppose no one in the Justice Department is
23:10
Speaker 2: going to appeal that.
23:11
Speaker 6: At this point, I think that's right.
23:13
Speaker 7: And so until another administration, everything that Eileen Cannon blocked,
23:18
Speaker 7: she's blocking.
23:19
Speaker 2: We'll have to wait to see if the Justice Department
23:22
Speaker 2: moves against Smith. Thanks so much, Hal. That's Professor Harold
23:26
Speaker 2: Krent of the Chicago-Kent College of Law. New York Attorney
23:32
Speaker 2: General Letitia James and former FBI Director James Comey were
23:37
Speaker 2: the earliest targets of President Trump's push to have the
23:40
Speaker 2: Justice Department prosecute his perceived political enemies. You may remember
23:46
Speaker 2: back in October when Comey was charged for allegedly lying
23:50
Speaker 2: to Congress about whether he had ever authorized leaks to
23:53
Speaker 2: the media. And James was charged for a supposed mortgage
23:57
Speaker 2: fraud scheme. Last fall, a judge dismissed both cases after
24:02
Speaker 2: concluding that Trump loyalist Lindsay Halligan had been unlawfully serving
24:08
Speaker 2: as interim U.S. attorney in the Eastern District of Virginia
24:12
Speaker 2: when she secured indictments against Comey and James. Well, that
24:17
Speaker 2: case is not over. The Trump administration is attempting to
24:21
Speaker 2: revive those prosecutions at the Fourth Circuit Court of Appeals.
24:26
Speaker 2: Joining me is Bloomberg Law senior reporter Holly Barker. Holly,
24:30
Speaker 2: tell us about the issue before the Fourth Circuit.
24:33
Speaker 1: So the appeal before the Fourth Circuit boils down to
24:36
Speaker 1: whether Lindsay Halligan the former interim U.S. attorney for the
24:40
Speaker 1: Eastern District of Virginia, was lawfully appointed when she obtained
24:44
Speaker 1: indictments of James Comey and Letitia James, and if not,
24:49
Speaker 1: whether the appropriate remedy was dismissal of the indictments against them.
24:53
Speaker 1: The first question, whether Halligan was lawfully appointed, turns on
24:57
Speaker 1: whether the statute that authorized the appointment, which is Section 546,
25:02
Speaker 1: authorize the attorney general to make successive 120-day appointments. The
25:08
Speaker 1: statute of issue allows the AG to appoint an interim U.S.
25:13
Speaker 1: attorney for a period of 120 days. The question is
25:16
Speaker 1: whether or not they can do that more than once.
25:18
Speaker 1: Once they've appointed somebody and they've served that 120-day term,
25:23
Speaker 1: can they then appoint another U.S.
25:25
Speaker 6: Attorney to fill that position?
25:27
Speaker 1: So the question of whether Halligan was lawfully appointed revolves
25:31
Speaker 1: around whether or not the statute allows the attorney general
25:34
Speaker 1: to make successive 120-day appointments of interim attorney generals. In
25:40
Speaker 1: this case, Halligan's predecessor, Eric Siebert, had already served out
25:44
Speaker 1: a 120-day term after being appointed by then-Attorney General Pam Bondi,
25:49
Speaker 1: plus a few months as a district court's interim appointee.
25:52
Speaker 1: The district court here, it was Judge Cameron McGowan Curry
25:55
Speaker 1: of the District of South Carolina. He was sitting by
25:57
Speaker 1: designation for the Eastern District of Virginia. Posse indictments because
26:01
Speaker 1: he said that that wasn't allowed. The statute doesn't allow
26:04
Speaker 1: the attorney general to make a second, third, fourth, fifth,
26:08
Speaker 1: 120-day appointment under the statute. In Curry's view and in
26:11
Speaker 1: the defendant's view, once the 120 days are up, the
26:15
Speaker 1: statute shifts power to the district court to make any
26:18
Speaker 1: further interim use attorney appointments.
26:21
Speaker 2: During the oral arguments, the chief judge, Albert Diaz, said
26:25
Speaker 2: that the Trump administration's interpretation would allow the Department of
26:28
Speaker 2: Justice to make a limitless number of interim appointments, and
26:33
Speaker 2: that would evade the Senate's authority to approve U.S.
26:38
Speaker 3: Attorneys.
26:39
Speaker 6: That's right.
26:40
Speaker 1: He was skeptical of the government's reading for that reason.
26:43
Speaker 1: He pointed out, you know, he used the phrase endless carousel,
26:46
Speaker 1: which I think he borrowed from the district court, an
26:49
Speaker 1: endless carousel of interim appointees. which would basically enable the
26:53
Speaker 1: AG to forever dodge presidential appointment and Senate confirmation. You know,
26:57
Speaker 1: very early on in the argument, he said, how can
27:00
Speaker 1: that be? Later in the argument, you know, the government
27:04
Speaker 1: had sort of said, well, but the incentives are such
27:08
Speaker 1: that the executive is going to want to work with
27:10
Speaker 1: the district court. And, you know, I think that seemed
27:13
Speaker 1: to be cold comfort to Diaz. You know, he said
27:16
Speaker 1: at some point under your reading of the statutes, You know,
27:18
Speaker 1: that's the logical conclusion, is sort of the carousel thing.
27:21
Speaker 1: That on, quote, day 119, continue with succession of appointments,
27:26
Speaker 1: thereby essentially cutting off the dish of court and the
27:28
Speaker 1: Senate's advice and consent power. Under your reading of the statute,
27:32
Speaker 1: a nefarious ne'er-do-well executive could do just that. So Diaz
27:36
Speaker 1: seemed reluctant to adopt a reading that would enable this
27:41
Speaker 1: kind of misconduct, even if the incentives in the government's
27:45
Speaker 1: view were would foster cooperation between the executive and the judiciary.
27:51
Speaker 2: The panel of three judges were two Obama appointees and
27:55
Speaker 2: one was a Trump appointee?
27:56
Speaker 1: So Chief Judge Diaz is an Obama appointee. The other
28:00
Speaker 1: judge who was an Obama appointee on the panel was
28:03
Speaker 1: Senior Judge Henry Floyd. He was also skeptical of the
28:06
Speaker 1: Justice Department's argument. And then Judge Julius Richardson, a Trump appointee,
28:11
Speaker 1: seemed to be leaning in the government's directions.
28:14
Speaker 2: Was he doing a textualist reading of the statute?
28:18
Speaker 1: Richardson was heavily fixated on the statutory text.
28:22
Speaker 2: The judges also discussed whether, if they find that Halligan's
28:27
Speaker 2: appointment was defective, whether dismissing the indictments would be the remedy.
28:34
Speaker 1: The court did spend some time talking about remedies and
28:38
Speaker 1: what the correct fix was and also whether or not,
28:41
Speaker 1: sort of in real time, the government was able to
28:46
Speaker 1: cure any defective indictment to the extent their appointment was defective.
28:50
Speaker 1: The first argument is that she was an attorney for
28:53
Speaker 1: the government. So for purposes of the federal rules of
28:56
Speaker 1: criminal procedure, she was authorized to appear before the grand jury.
29:00
Speaker 1: So her title really doesn't matter. The second argument is ratifications.
29:05
Speaker 1: And the judges did spend a fair amount of time
29:08
Speaker 1: on this particular issue. So the idea is that the
29:11
Speaker 1: government claims that Bondi retroactively designated Halligan as a special attorney.
29:17
Speaker 6: And so that curated a defect in her initial appointment.
29:20
Speaker 1: And they also say that because Bondi had the authority
29:23
Speaker 1: to indict James and Comey when they were indicted, that
29:26
Speaker 1: she can basically retroactively ratify Halligan's actions. And some of
29:31
Speaker 1: the argument about ratification revolved around laws.
29:36
Speaker 6: Of principle and agency.
29:38
Speaker 1: And one of the points that defense counsel made was,
29:41
Speaker 1: is this concept that really is sort of a civil
29:44
Speaker 1: concept be imported into a context where somebody's freedom is
29:49
Speaker 1: at stake? The third argument that the government raised that
29:52
Speaker 1: the indictments can stand is the de facto officer doctrine.
29:56
Speaker 1: And it's basically that Halligan was performing official duties under
29:59
Speaker 1: the cover of authority, so not all of her actions
30:03
Speaker 1: should be invalidated. And their final argument was that the
30:07
Speaker 1: error was harmless. So even if the appointment was flawed,
30:10
Speaker 1: the grand jury's decision to indict was independent and should
30:14
Speaker 1: be respected. At some point, and I think much more
30:16
Speaker 1: than once, the government was using the phrase strong medicine
30:19
Speaker 1: when talking about dismissal of the indictments as a cure.
30:23
Speaker 2: And so we should mention that the Trump administration has
30:27
Speaker 2: been trying to install loyalists in this way in many U.S.
30:31
Speaker 2: attorney's offices across the country. And other appellate courts have
30:35
Speaker 2: ruled against the Trump administration.
30:38
Speaker 1: So three courts of appeals have weighed in on Trump's
30:44
Speaker 1: apparent efforts to sort of get around presidential appointment and
30:47
Speaker 1: Senate confirmation efforts. But the three circuit courts that have
30:51
Speaker 1: weighed in, which are the 2nd, the 9th, and the 3rd,
30:54
Speaker 1: they were ruling on the attorney general's appointments under a
30:58
Speaker 1: different statute called the Federal Vacancies Reform Act. And that's
31:02
Speaker 1: a totally different mechanism for temporarily filling these seats.
31:08
Speaker 6: So those decisions, you know, aren't going to control this one.
31:11
Speaker 1: That said, not that they would anyway because they're sister courts,
31:14
Speaker 1: but they were dealing with a different substantive issue. Still,
31:18
Speaker 1: they sort of signal this reluctance among federal appellate courts
31:23
Speaker 1: to embrace any sort of approach to this that would
31:27
Speaker 1: threaten to indefinitely circumvent presidential appointment and Senate confirmation.
31:32
Speaker 2: It's hard for me to see this as anything but
31:35
Speaker 2: trying to avoid getting the Senate's advice and consent.
31:40
Speaker 6: Yeah, it's interesting.
31:41
Speaker 1: So it's like sort of Halligan, they screwed up because
31:44
Speaker 1: they just, they didn't know what they were doing yet.
31:46
Speaker 1: And they sort of refined their approach to getting around
31:51
Speaker 1: Senate confirmation after Comey and James raised their objections to
31:57
Speaker 1: the indictments. You know, Section 546 might not work. So
32:01
Speaker 1: they got.
32:02
Speaker 6: Smarter after that.
32:03
Speaker 1: So these other three circuits, the 2nd, the 3rd, and
32:06
Speaker 1: the 9th, what the government was doing was under the
32:10
Speaker 1: Federal Vacancies Reform Act, the first assistant, somebody with the
32:14
Speaker 1: title of first assistant automatically assumes the duties of the U.S.
32:20
Speaker 1: attorney when that seat becomes vacant. So instead of some
32:26
Speaker 1: of the president appointing a new U.S. attorney for Senate confirmation,
32:32
Speaker 1: what they were doing instead was appointing a first assistant
32:35
Speaker 1: after the U.S. attorney's seat was already vacant, and they
32:38
Speaker 1: would just sit there below the U.S. attorney's seat, but
32:42
Speaker 1: perform all of the functions. So it's a different kind
32:45
Speaker 1: of workaround. I think some courts have referred to it
32:47
Speaker 1: as a first assistant workaround. And what they've said is, no,
32:51
Speaker 1: the statute doesn't contemplate that the vacancy will open up
32:55
Speaker 1: and that you can then appoint a first assistant who
32:58
Speaker 1: will then assume that role and responsibility, that automatic succession
33:02
Speaker 1: only happens if that first assistant is already in place
33:06
Speaker 1: when the seat is vacated.
33:07
Speaker 2: And it sounds like the Fourth Circuit, the majority of
33:11
Speaker 2: the Fourth Circuit panel was skeptical of the government's argument here.
33:17
Speaker 2: Thanks so much, Holly. That's Bloomberg Law Senior Reporter Holly Barker.
33:22
Speaker 2: And that's it for this edition of the Bloomberg Law Show. Remember,
33:25
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33:27
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33:31
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33:41
Speaker 2: Wall Street time. I'm June Grosso, and you're listening to Bloomberg.