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Law Firm Wins Against Trump & Harvard Threatened · Bloomberg Law

0:02
Speaker 1: This is Bloomberg Law with June Grossel from Bloomberg Radio.
0:08
Speaker 1: A DC federal judge struck down President Donald Trump's order
0:13
Speaker 1: targeting the law firm of Perkins Cooy, finding it unconstitutional.
0:18
Speaker 1: Judge Beryl Howell barred executive branch agencies from enforcing Trump's
0:23
Speaker 1: March sixth executive order, finding it was an unprecedented attack
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Speaker 1: on the foundational principles of the American judicial system. She
0:32
Speaker 1: said in a cringe worthy twist on Shakespeare's Let's Kill
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Speaker 1: all the lawyers, Trump's executive order quote takes the approach
0:41
Speaker 1: of let's kill the lawyers. I don't like sending the
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Speaker 1: clear message lawyers must stick to the party line or
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Speaker 1: else joining me is Professor Matthew Diller of Fordham Law
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Speaker 1: School remind us why Perkins Cooey was targeted.
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Speaker 2: So Perkins was targeted by the Trump administrator because it
1:01
Speaker 2: had an active role in representing the Democrat and Hillary
1:07
Speaker 2: Clinton in the twenty and sixteen election and then again
1:11
Speaker 2: continue to do work on behalf of Democrat associated groups
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Speaker 2: around the twenty twenty election. So Donald Trump has had
1:21
Speaker 2: it in for Perkins Cooey for almost a decade and
1:24
Speaker 2: has tweeted and done social media postings denouncing them for
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Speaker 2: many years. So Perkins Cooey has always been very high
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Speaker 2: on this headlist.
1:34
Speaker 1: The judge ruled that the order was unconstitutional. Tell us
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Speaker 1: what the basis of her ruling was.
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Speaker 2: So, first of all, it is a really remarkable ruling.
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Speaker 2: And what's remarkable about it is not the result, because
1:49
Speaker 2: I think the result is what everyone who is watching
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Speaker 2: this case predicted. But what's remarkable about it is the
1:57
Speaker 2: thoroughness and clarity of her decision and its comprehensiveness. So
2:01
Speaker 2: in it she both addresses the big picture issues that
2:06
Speaker 2: this executive order posed and its threats to the rule
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Speaker 2: of law, and then walked us through step by step
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Speaker 2: all the different particular ways in which it is unconstitutional,
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Speaker 2: and there are many, and then finally she addressed the
2:23
Speaker 2: government's defenses. And so I think the fact that it
2:26
Speaker 2: is so comprehensive and so clear will mean that it
2:29
Speaker 2: has great influence. And I think people are going to
2:32
Speaker 2: pay attention to this decision. Now haven't answered your question,
2:34
Speaker 2: so let me come back to that. So she found
2:37
Speaker 2: that the order against Perkins Kui was unconstitutional for a
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Speaker 2: number of reasons. The first and biggest is that it
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Speaker 2: violates the First Amendment in that it targets Perkins Kuhi
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Speaker 2: for its political views, for its political activity, for arguments
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Speaker 2: and representations it makes in court. And the Supreme Court
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Speaker 2: has long held that thectivity of representing clients in court
3:01
Speaker 2: and presenting arguments of court is protected by the First Amendment,
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Speaker 2: and indeed that the ability to raise claims in court
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Speaker 2: is really core to our democratic system of government. It
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Speaker 2: violated rights of association in that it penalized clients for
3:18
Speaker 2: associating with Perkins Cody. It violated the rights of employees
3:22
Speaker 2: of Perkins Kui in a number of ways. So the
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Speaker 2: thrust and biggest overarching issue is false within the sculpe
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Speaker 2: at the First Amendment, but there are other problems with
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Speaker 2: it too, and the judge how walked us through those.
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Speaker 2: So Secondly, it violated due process because the executive order
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Speaker 2: came completely out of the blue. Perkins Kooy had no
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Speaker 2: notice of any charges or claims against it and had
3:46
Speaker 2: no opportunity to respond. And so under our constitution, the
3:51
Speaker 2: government takes action against someone that have to provide notice
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Speaker 2: and opportunity to be heard, and that wasn't done here.
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Speaker 2: And then She also found that certain aspects of the
4:01
Speaker 2: order violated the new Process clause just because they were
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Speaker 2: so vague and that no one could really tell what
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Speaker 2: was prohibited what wasn't prohibited, and that section of the
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Speaker 2: rule in particularly deals with the order's treatment of Diversity,
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Speaker 2: Equity and Inclusion DEI, and have been a number of
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Speaker 2: cases challenging the administration's actions around DEI program because they
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Speaker 2: never really define what DEI is.
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Speaker 1: The series of executive orders were labeled as these law
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Speaker 1: firms were national security threats? Did she address that?
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Speaker 2: Yes, she did. And the reason this comes up is
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Speaker 2: because the orders talk about restinding security clearances for individuals
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Speaker 2: who work at PERKINSCOI, and so that normally would be
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Speaker 2: a national security analysis. What the drug fairly is focused
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Speaker 2: on is, first of all, the language of the order
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Speaker 2: itself talks not in terms of national security but in
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Speaker 2: terms of the national interest, and national interest is a
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Speaker 2: much broader category of things that seems to be whatever
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Speaker 2: the President wants it to be as opposed to national security.
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Speaker 2: It's not actually flamed around national security. But in terms
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Speaker 2: of removing of security clearances, what Judge Hall said is that, well,
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Speaker 2: it's very difficult for an individual to challenge the government's
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Speaker 2: determination that he or she does not deserve is not
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Speaker 2: trustworthy enough for a security clearance. What was done here
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Speaker 2: was not individualized determinations about whether each individual with security
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Speaker 2: clearance posed a threat of any kind, but rather just
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Speaker 2: a broad brush suspension of the security clearance. For I
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Speaker 2: think there are twenty five people at Perkins Coop you
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Speaker 2: have security clearances, and they were all suspended in the
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Speaker 2: same stroke with very little explanation other than saying in
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Speaker 2: the national interest, which doesn't quite do it. And so
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Speaker 2: what the judge said is that there was no individualized
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Speaker 2: determination of whether these indi it was actually worth threat
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Speaker 2: to national security. That's what the problem was for that, she.
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Speaker 1: Said, you know the clear messages, lawyers have to stick
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Speaker 1: to the party liner else and Paul Cleman, who is
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Speaker 1: representing Wilmer Hale in a similar case, told Judge Leon,
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Speaker 1: if I have to stand up here and argue in
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Speaker 1: front of the court today with one eye on how
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Speaker 1: this is going to be perceived by the executive branch
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Speaker 1: and how that's going to influence the interests of my
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Speaker 1: other clients, well I might as well go sit down.
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Speaker 1: Do you see these orders as more of a warning
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Speaker 1: to law firms writ large.
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Speaker 2: Yes, I think these are a threat to the legal
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Speaker 2: profession and lawyers in general, and really to anyone who
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Speaker 2: wants to push back against the Trump administration. And that's
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Speaker 2: what's so striking about, particularly the first part of these orders,
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Speaker 2: which the first part starts with as statements of the
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Speaker 2: purpose of the order, and it walks through all the
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Speaker 2: reasons why the administration doesn't like Perkinskoy and then doesn't
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Speaker 2: disguise the fact that that's why the administration is taking
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Speaker 2: these actions. And indeed, they issued a fact sheet that
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Speaker 2: went with the Perkins Cooey order that says Perkins Cooy
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Speaker 2: has filed lawsuits against the Trump administration, including one designed
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Speaker 2: to reduce military readiness. So the orders are very upfront
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Speaker 2: about how they are being triggered by the fact that
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Speaker 2: these law firms have opposed Donald Trump, and so it's
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Speaker 2: a clear warning that if you oppose the president, they
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Speaker 2: will come after you.
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Speaker 1: The judge skipped the trial, skipped having a trial, and
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Speaker 1: went directly to a final ruling.
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Speaker 2: So that's not unusual that the judge skipped the trial.
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Speaker 2: I would have been surprised if there have been a
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Speaker 2: file in a case like this, because really the order
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Speaker 2: is in my mind illegal, honest faith, and there's nothing
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Speaker 2: to have a trial about. When the illegality is claim
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Speaker 2: from the document itself, there's really no point to having
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Speaker 2: the trial. So that doesn't surprise me. What's striking about
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Speaker 2: it is how fast she turned around the whole thing.
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Speaker 2: You know, all of this began to unfold, I think
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Speaker 2: in March, and we're already at the point where she
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Speaker 2: has brought the case to final judgment with one hundred
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Speaker 2: page decision and it's only the very beginning of May.
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Speaker 2: That is incredibly fast, and it reflects just how seriously
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Speaker 2: she's taken the order to be a threat to our
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Speaker 2: system of government and our democracy.
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Speaker 1: This is the first order of its kind, but there
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Speaker 1: are other cases out there. Do you think that this
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Speaker 1: decision will have an impact on the other cases?
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Speaker 2: So I think this decision will certainly help the law
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Speaker 2: firms that are challenging other executive orders that are very similar.
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Speaker 2: I think, as I said at the top, the result
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Speaker 2: here is not surprising in the sense that it's pretty
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Speaker 2: hard to defend these orders that they feel illy they
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Speaker 2: are illegal, and so the outcome is not shocking, but
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Speaker 2: the eloquence and the thoroughness with which she has explained
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Speaker 2: it will be influential, and I do think other judges
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Speaker 2: will drop them at I also think that language from
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Speaker 2: this decision will show up at some of the reasonings
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Speaker 2: in other challenges to Trump executive orders that are unrelated
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Speaker 2: to the law firm executive orders, because you know, there
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Speaker 2: are other orders that are also retaliatory and were issued
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Speaker 2: in order to send threats to universities, to individuals, and
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Speaker 2: wherever the administration is seeking to punish people for things
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Speaker 2: that they're entitled to do. I think this will serve
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Speaker 2: as a precedent upon why that is improper and dangerous.
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Speaker 1: She ordered the government not to enforce the executive order.
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Speaker 1: Do we expect the government to follow that? I mean,
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Speaker 1: is there a way to track that this is really
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Speaker 1: going to be observed?
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Speaker 2: You know. One of the things that was striking about
10:01
Speaker 2: what happened here is just how open and once they
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Speaker 2: were about it. For example, Perkins Cury reported that SEDIL
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Speaker 2: agencies began to cancel appointments with their lawyers, like within
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Speaker 2: days of when this executive order was issued, and they
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Speaker 2: would say, we're canceling this meeting because of the executive order.
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Speaker 2: So now going forward, of course they won't say that,
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Speaker 2: and they can't say that, and I don't expect them
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Speaker 2: to cancel those meetings because I don't think that they
10:27
Speaker 2: necessarily wanted to cancel those meetings. I think they were
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Speaker 2: responding to the executive order, and they themselves, you know,
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Speaker 2: the federal officials themselves were intimidated. Whether it has other
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Speaker 2: subtle continuing effects, it's hard to say.
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Speaker 1: When this first happened, some law firms reported losing clients,
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Speaker 1: and I'm also wondering if some clients will still stay
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Speaker 1: away from firms like Perkins Couy knowing that they're not
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Speaker 1: in the favor of the administration. So there's this sort
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Speaker 1: of underlying threat.
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Speaker 2: So it's possible, possible that Perkins KOOI won't recover the
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Speaker 2: clients that are lost, and it's certainly lost a number
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Speaker 2: of clients. But you know, there are also reports out
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Speaker 2: now about clients that are choosing firms like Perkins Cooey
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Speaker 2: who stood up to the executive orders because you know,
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Speaker 2: they support the decision that Perkins Coooy made and it's
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Speaker 2: and it's bravery in standing up to a patently illegal
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Speaker 2: order and so now you know, the shoe may be
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Speaker 2: on the other foot, which is, are there clients who
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Speaker 2: are turning away from the firms that have settled with
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Speaker 2: Trump because those firms, you know, are they strong advocates
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Speaker 2: or are they not strong advocates. So there's a way
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Speaker 2: in which Perkins Koohy has really bolstered its reputation for
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Speaker 2: standing up for principle, for being a strong advocate, for
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Speaker 2: taking risk in ways that I think are going to
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Speaker 2: be attracted to clients.
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Speaker 1: Yeah, what do you think about the nine other law
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Speaker 1: firms that struck deals with the Trump administration's many even
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Speaker 1: before an executive order was issued about their firm, and
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Speaker 1: it's a total of almost a billion dollars in free
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Speaker 1: legal services.
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Speaker 2: First of all, this decision that came down is not surprising.
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Speaker 2: So it's pretty predictable that these orders would have been
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Speaker 2: stricken down. And so I think those firms were in
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Speaker 2: a difficult position because they're they're victims here. The administration
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Speaker 2: was in essence trying to extort benefits from them, and
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Speaker 2: they agreed to that, they acceded to it. I think,
12:34
Speaker 2: you know a lot of these firms they're probably you know,
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Speaker 2: rethinking whether that was a great idea or not, and
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Speaker 2: we'll see what happens. And when I say we'll see
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Speaker 2: what happens, there are a lot of unanswered questions about
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Speaker 2: these agreements with law firms. So the one thing that's
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Speaker 2: been made public is the dollar value of the pro
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Speaker 2: bono work that the firms have agreed to provide. And
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Speaker 2: then it says for causes and clients mutually agreed upon
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Speaker 2: between the administration and the firm, and they provide a
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Speaker 2: few examples. But then since then, President Trump has gone
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Speaker 2: around citing all sorts of things that he wants these
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Speaker 2: firms to work on. And so if the administration follows
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Speaker 2: through on that, then the firms will be put to
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Speaker 2: the test of you know, do they really want to
13:22
Speaker 2: represent the United States for free in trade negotiations? Do
13:26
Speaker 2: they want to represent police accused of misconduct and excessive force?
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Speaker 2: You know, even when many of those cases, those those
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Speaker 2: police would have access to lawyers through the government that
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Speaker 2: they work for. There was a whole range of things
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Speaker 2: which which Trump is now going around saying he's going
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Speaker 2: to use these firms for. And it's not clear how
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Speaker 2: the firms would respond to those requests. And so I
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Speaker 2: think the firms may have opportunities to say, no, this
13:56
Speaker 2: isn't what we signed up for, and to back out
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Speaker 2: of the agreement. The administration really pushes on these questions,
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Speaker 2: and so to that extent, this decision gives the firms
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Speaker 2: more leverage in how they implement the agreements.
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Speaker 1: And we'll see how the judges rule in the three
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Speaker 1: other cases involving law firms that were targeted and decided
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Speaker 1: to fight back. Thanks so much, Matthew. That's Professor Matthew
14:21
Speaker 1: Diller of Fordham Law School. This is Bloomberg. Does teaching
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Speaker 1: middle schoolers about Islam along with other religions in a
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Speaker 1: World Culture and Geography class violate the First Amendment's establishment clause.
14:36
Speaker 1: The Third Circuit Court of Appeals found that the curriculum
14:39
Speaker 1: taught by a New Jersey school district didn't show any
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Speaker 1: of the hallmarks of religious establishment, ruling against the parents
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Speaker 1: of a seventh grader. Joining me is an expert in
14:49
Speaker 1: the First Amendment, Professor Timothy Zick of William and Mary
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Speaker 1: Law School, Tim, can you explain what the parents were
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Speaker 1: complaining about? In this case?
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Speaker 3: Parents to the school district after their children were exposed
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Speaker 3: to materials on Islam in a course entitled World's Cultures
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Speaker 3: and Geography, and as part of that course, the children
15:13
Speaker 3: were taught some basic information about a variety of faith that,
15:17
Speaker 3: it turns out, in addition to Islam, they were taught
15:19
Speaker 3: about Christianity, Judaism, Buddhism, and Hinduism. The challenge materials on
15:25
Speaker 3: Islam were presented in a course of the course that
15:28
Speaker 3: cover the Middle East and North Africa, where of course
15:30
Speaker 3: Islam is the dominant religion, and to say, the materials
15:34
Speaker 3: covered the general tenets of the faith, including some core
15:37
Speaker 3: Muslim beliefs. The parents claimed that the school district's curriculum
15:41
Speaker 3: was an establishment of religion, so that it violated the
15:44
Speaker 3: First Amendment establishment clause, which says Congress shall make no
15:49
Speaker 3: law respecting an Establishment of Religion. So that was the
15:53
Speaker 3: claim that they litigated.
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Speaker 1: Were they only complaining about the Islam component of.
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Speaker 3: This, Yes, they were only complaining that Islam was, in
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Speaker 3: their view, not just covered in the way I described it,
16:06
Speaker 3: but actually being sort of proselytized students in a coercive way.
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Speaker 3: So that was the sort of nub of their complaint
16:13
Speaker 3: that their children were not being coerced to practice Islam
16:17
Speaker 3: or accept it as some true belief system, and.
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Speaker 1: The court relied on the Supreme Court decision in the
16:24
Speaker 1: case of Kennedy versus Bremerton, which is about the high
16:28
Speaker 1: school football coach who wanted to pray on the fifty
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Speaker 1: yard line after games.
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Speaker 3: Well, that's one of the recent cases where the court
16:36
Speaker 3: has been reconsidering. I guess I'll use that term. It's
16:39
Speaker 3: establishment clause jurisprudence, or doctrine. So in that case and others,
16:45
Speaker 3: it's sort of jettisoning some tests or standards it's used
16:48
Speaker 3: over the years to determine whether or not there's been
16:51
Speaker 3: an establishment of religion. They're doing it with free exercise
16:54
Speaker 3: as well, but particularly with establishment here. So you're right,
16:57
Speaker 3: that is the case involving the high school football coach
16:59
Speaker 3: who parade on the fifty yard line, and the school
17:02
Speaker 3: district has terminated his employment because of that. They feared
17:07
Speaker 3: that letting him do that, permitting him to do that,
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Speaker 3: and employing him would be viewed or perceived as an
17:13
Speaker 3: endorsement of religion, which at the time was one of
17:16
Speaker 3: the standards the court was applying to determine whether the
17:19
Speaker 3: establishment clause had been violated. So when Kennedy, the Court says, no,
17:22
Speaker 3: we don't do that anymore. We're not asking about whether
17:25
Speaker 3: someone mistakenly perceived that as endorsing religion. We're not using
17:30
Speaker 3: an old test that was called the Lemon test from
17:33
Speaker 3: a case way back. We were going to ask whether
17:36
Speaker 3: or not the practice is and that's been sort of
17:39
Speaker 3: consistent with history and tradition. So as in other parts
17:44
Speaker 3: of the constitutional landscape, the Court has moved steadily toward
17:49
Speaker 3: this notion of determining whether there's been a violation based
17:53
Speaker 3: on what history and tradition tell us.
17:56
Speaker 1: How the Third Circuit analyze it in.
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Speaker 3: This case, yeah, the Third Circuit spent some time trying
18:01
Speaker 3: to figure out how to apply that test history and
18:03
Speaker 3: tradition to these circumstances. One of the problems, of course,
18:07
Speaker 3: is that if the Founding there were really no free
18:10
Speaker 3: public schools, so a dispute like this could not have arisen.
18:14
Speaker 3: So they started generalized to well, what did official establishment
18:18
Speaker 3: of religion look like that the Founding when you had
18:22
Speaker 3: sort of state established or sanctioned churches. So they've relied
18:26
Speaker 3: on a number of different factors, the Third Circuit mostly
18:29
Speaker 3: boiling down to whether or not the school children had
18:32
Speaker 3: been course into practicing a religion or punished for not
18:38
Speaker 3: practicing it. Were they being sort of led through some
18:41
Speaker 3: kind of religious ceremony rather than a sort of secular
18:45
Speaker 3: curricular exercise. Were they, as a parent's challenge, being procestized
18:50
Speaker 3: into sort of accepting or believing the tenants of Islam?
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Speaker 3: And on each of those points, the Court said, No,
18:57
Speaker 3: this was a secular exercise. And no student was forced
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Speaker 3: to adopt any the tenants of Islam as they worked
19:03
Speaker 3: through the course materials, or otherwise compelled to practice Islam.
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Speaker 3: They're essentially just teaching kids about other faiths, which is not,
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Speaker 3: the Court said, coercion of religious belief. So contextas t
19:16
Speaker 3: the Court said, and this was again part of a
19:18
Speaker 3: secular course on world culture and geography.
19:20
Speaker 1: I'm not saying it happened in this case. But in
19:23
Speaker 1: the football coach case, I mean, it seemed like some
19:26
Speaker 1: of the kids were feeling coerced into praying with the coach.
19:31
Speaker 1: You know, there were concerns perhaps about whether the coach
19:34
Speaker 1: might treat them differently if they didn't pray with him,
19:38
Speaker 1: but the Supreme Court dismissed those I mean, what does
19:40
Speaker 1: it take to feel coercion.
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Speaker 3: I think that's an open question. You know, there was
19:45
Speaker 3: a dispute about the record in the Kennedy case, the
19:48
Speaker 3: football coach case. Obviously, the thesenter felt that the kids
19:52
Speaker 3: were being coersed, even if subtly, to participate in an
19:57
Speaker 3: exercise of prayer. Course saw it differently. They said he
20:02
Speaker 3: mostly prayed by himself. He wasn't sort of telling the
20:05
Speaker 3: students to come. In fact, you know, they were busy
20:08
Speaker 3: doing other things while he was praying at the fifty
20:10
Speaker 3: yard line. One of the main incidents in that case
20:13
Speaker 3: was about the opposing team and their students coming to pray,
20:16
Speaker 3: and that, of course isn't coersion of his players. So
20:20
Speaker 3: it's not clear exactly what the court would require in
20:24
Speaker 3: order to find that someone was coursed. I suppose if
20:27
Speaker 3: you made it part of their performance evaluation, whether is
20:31
Speaker 3: it the sport or their grade, to sort of participate
20:34
Speaker 3: in what's effectively a religious ceremony, that would constitute coercion.
20:38
Speaker 3: But in the Kennedy case, the court just didn't read
20:40
Speaker 3: the fact that way, at least the majority didn't.
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Speaker 1: So Americans United for Separation of Church and State said
20:46
Speaker 1: that this case had all the hallmarks of a manufactured
20:50
Speaker 1: controversy by far right groups. I mean, bringing a lawsuit
20:55
Speaker 1: over such a limited part of the curriculum might be
20:59
Speaker 1: seen as an reaction.
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Speaker 3: I mean this is part of a larger sort of
21:03
Speaker 3: culture war around curriculum and books and parental objection and
21:08
Speaker 3: parental control over what students are exposed to in the classroom.
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Speaker 3: And you know, if you understand sort of what establishment
21:18
Speaker 3: is historically, traditionally and otherwise in the courts of the doctrine,
21:22
Speaker 3: this seems like a very weak case. And it is because,
21:26
Speaker 3: of course, the students aren't being sort of paid through
21:29
Speaker 3: some kind of religious ceremony. They're not being graded on
21:32
Speaker 3: accepting as true the tenants of Islam. Maybe most importantly,
21:36
Speaker 3: they're being taught about all sorts of staiths. And I
21:39
Speaker 3: think you know that the parents are objecting to what
21:42
Speaker 3: they consider to be sort of an anti Christian sort
21:45
Speaker 3: of mindset in the schools where if a student mentions,
21:49
Speaker 3: you know, Jesus Christ, they're shushed and they can't say that.
21:52
Speaker 3: But here's the school district sort of teaching about Islam.
21:55
Speaker 3: But again, as the court said, the third Circuit context
21:58
Speaker 3: is key. This is not an single out or favor
22:01
Speaker 3: one religion over another. It's part of a secular course.
22:06
Speaker 3: So yeah, it stretched one as a very weak key.
22:09
Speaker 1: I want to turn down to this project you have,
22:12
Speaker 1: and it's quite a project. You're compiling a repository of
22:16
Speaker 1: all Trump's First Amendment related executive orders, lawsuits over them,
22:22
Speaker 1: and commentary about them. Tell us why you started this
22:27
Speaker 1: and what you want to accomplish with it.
22:30
Speaker 3: So you know, for better or words. I started out
22:32
Speaker 3: on this project at the urging of Ron Collins, another
22:35
Speaker 3: First Amendment guru, and he thought, of you a good
22:38
Speaker 3: idea and I did too, to sort of keep track
22:41
Speaker 3: sort of records of what the Trump administration is doing.
22:44
Speaker 3: As Trump is signing you know, literally over one hundred
22:47
Speaker 3: executive orders in the first like ninety days of his
22:50
Speaker 3: second term. Posted twenty of those actually impact or effect
22:55
Speaker 3: free expression. So my resource, which is being hosted at
22:59
Speaker 3: First Amend mid Watch, which is the First Amendment website,
23:02
Speaker 3: has those orders, but also the now approximately forty lawsuits
23:07
Speaker 3: challenging various executive orders and provisions of those orders on
23:11
Speaker 3: First Amendment grounds. And then we thought it would be
23:14
Speaker 3: a good idea so to keep track of the commentary
23:16
Speaker 3: analysis which gives you a sense of just how broad
23:20
Speaker 3: and deep this agenda that the administration is adopted it.
23:24
Speaker 3: So the document currently a sort of a word document,
23:28
Speaker 3: stretches over fifty pages, and that's in roughly one hundred
23:31
Speaker 3: days of the second Trump administration, and it just shows
23:35
Speaker 3: no sign of slowing down. So part of the reason
23:38
Speaker 3: I did that not just to keep a record or
23:40
Speaker 3: an archive of this period. So imagine, you know, back
23:43
Speaker 3: in the Macarthy era, someone was actually sort of keeping
23:46
Speaker 3: an archive or record everything that's going on. So we
23:49
Speaker 3: set out to do that. But it's also pretty common
23:51
Speaker 3: for people to say to me, well, all presidents clash
23:54
Speaker 3: with the press, and they all create free speech controversies,
23:58
Speaker 3: isn't it just business as you? And I think this
24:01
Speaker 3: document speaks for itself. If you go and visit it
24:04
Speaker 3: at first Amendment, watch it's clearly unprecedented sort of a
24:08
Speaker 3: whole of government, whole of society use of executive power
24:12
Speaker 3: to control and chill expressions. And I think, you know, again,
24:16
Speaker 3: the document sort of speaks to that. And I don't
24:19
Speaker 3: think it's sort of an unwarded panic of any kind.
24:22
Speaker 3: I mean, it's clear in the court that judges are
24:25
Speaker 3: viewing much of what's going on here is troubling. The
24:28
Speaker 3: one judge, for example, in response to one of these
24:31
Speaker 3: executive orders that targets the law firms based on their
24:35
Speaker 3: causes and clients, he said, it chills my spine what
24:39
Speaker 3: the administration is doing here. So I wanted to keep
24:42
Speaker 3: a record of that, so keep track of just how
24:45
Speaker 3: many different aspects of society are being affected by the
24:50
Speaker 3: stroke of a pen, essentially the use of executive orders.
24:54
Speaker 3: And I have to say, you know he's managed President
24:57
Speaker 3: Trump to reach law firms, library laboratory, museums, corporations, because
25:05
Speaker 3: I say it's it's very broad, very deep, and to me,
25:08
Speaker 3: as a First Amendment proponent, very troubling.
25:11
Speaker 1: And for those who want to take a look at
25:12
Speaker 1: the breath of these First Amendment related executive orders, you
25:18
Speaker 1: can go to First Amendment watch dot org. And Tim,
25:21
Speaker 1: I know you intend to keep this up to date
25:24
Speaker 1: going forward, and we'll see how long this compilation is
25:28
Speaker 1: at the end of four years. Thanks so much, Tim.
25:31
Speaker 1: That's Professor Timothy Zick of William and Mary Law School, Harvard.
25:35
Speaker 1: Has come under repeated fire from President Donald Trump and
25:39
Speaker 1: his conservative allies, who accuse it and other elite universities
25:44
Speaker 1: of ideological bias. In the latest escalation of the clash
25:48
Speaker 1: between the Trump administration and the nation's oldest university, the
25:52
Speaker 1: administration announced today it's blocking Harvard from new research grants
25:57
Speaker 1: due to concerns over quote recons responsible management. Just last week,
26:02
Speaker 1: Trump said in a social media post that Harvard would
26:06
Speaker 1: lose its tax exempt status. Joining me is George Yinn,
26:10
Speaker 1: emeritus law professor at the University of Virginia and former
26:14
Speaker 1: chief of staff of the Congressional Joint Committee on Taxation. George,
26:19
Speaker 1: will you start by explaining why most universities have tax
26:23
Speaker 1: exempt status and what it means.
26:26
Speaker 4: Well, here we're talking about a particular category of tax
26:29
Speaker 4: exemption that's under five oh one C. Three, and under
26:33
Speaker 4: that provision, there are a series of conditions that must
26:37
Speaker 4: be meant to qualify. The organization must be operated exclusively
26:42
Speaker 4: for certain qualifying purposes, which would include education. No part
26:46
Speaker 4: of its net earnings may inure to the benefit of
26:49
Speaker 4: a private individual. The organization is not allowed to engage
26:53
Speaker 4: in any substantial lobbying activities or engage in any political
27:00
Speaker 4: campaign activities. And finally, the organization may not engage in
27:04
Speaker 4: activities that are considered contrary to national public policy. So
27:10
Speaker 4: those are the basic requirements. The benefit of the status,
27:14
Speaker 4: there are several benefits. A main benefit is obviously the
27:18
Speaker 4: exemption of the organization's income from taxation, but there are
27:22
Speaker 4: other very important benefits. The most common one people know
27:27
Speaker 4: is the ability to deduct your donations to these organizations
27:32
Speaker 4: as a charitable contribution, and in India to that. There
27:36
Speaker 4: are some additional benefits, such as the availability for tax
27:39
Speaker 4: exempt bond financing, So there are significant tax benefits. There
27:44
Speaker 4: are some, you know, very specific conditions that have to
27:48
Speaker 4: be met to qualify under C three status.
27:53
Speaker 1: Trump wrote in a post on truth Social We're going
27:57
Speaker 1: to take away Harvard's tax exempt status they deserve. He
28:01
Speaker 1: didn't say why, but he had previously said it should
28:04
Speaker 1: lose its tax exempt status and be taxed as a
28:07
Speaker 1: political entity if it keeps pushing political, ideological and terrorist
28:12
Speaker 1: inspired supporting sickness. I mean, can a president just take
28:17
Speaker 1: away a university's tax exempt status?
28:21
Speaker 4: The short answer is no. There is a well established
28:25
Speaker 4: legal process for granting the status and infrequently, very infrequently,
28:31
Speaker 4: revoking the status. It involves an application to the RS,
28:36
Speaker 4: and then subsequently the IRS may review the status and
28:41
Speaker 4: recommend a revocation of that status. These decisions are not
28:47
Speaker 4: made just by order of the President or any other
28:50
Speaker 4: top governmental official. The decisions are required to be made
28:54
Speaker 4: in an even handed, non partisan way by the IRS.
28:58
Speaker 4: Some of your listeners may recall a big controversy that
29:02
Speaker 4: a rodes in twenty twelve or twenty thirteen regarding the
29:06
Speaker 4: alleged discrimination by Lois Lerner, who at the time was
29:10
Speaker 4: the head of the IRS's Exempt Organization Division against Applicants
29:15
Speaker 4: for tax Exemption, which had a Tea Party affiliation. When
29:20
Speaker 4: this story came to light, the House Ways and Means
29:23
Speaker 4: Committee examined the case and actually made a referral to
29:27
Speaker 4: the Justice Department for possible criminal prosecution of Mislearner because
29:32
Speaker 4: she had acted not in an even handed and non
29:35
Speaker 4: partisan way, according to them. I researched this matter very
29:39
Speaker 4: closely and concluded that the evidence presented by the House
29:43
Speaker 4: Committee to the Justice Department was laughable and did not
29:47
Speaker 4: support in any way any wrongdoing by Learner or the IRS,
29:52
Speaker 4: and the Justice Department subsequently agreed. The conditions for cvree
29:57
Speaker 4: status are somewhat vague, certainly present a challenging administrative responsibility
30:04
Speaker 4: for the Tax Agency. But I thought the evidence showed
30:07
Speaker 4: simply showed the IRS doing what it's supposed to be doing,
30:11
Speaker 4: which is to follow up and investigate credible leads regarding
30:15
Speaker 4: the qualification of an organization for.
30:18
Speaker 1: That status, Harvard said it would be an unlawful misuse
30:23
Speaker 1: of the US Tax Code section which is entitled Prohibition
30:27
Speaker 1: on Executive Branch Influence over taxpayer audits and other investigations,
30:32
Speaker 1: which makes it a crime for the President or other
30:35
Speaker 1: executive Branch members to directly or indirectly request that the
30:40
Speaker 1: IRS investigate or audit a particular organization. A spokesperson for
30:47
Speaker 1: the White House said afterwards that the IRS actions were
30:50
Speaker 1: independent of the president and that any audit or investigations
30:55
Speaker 1: were initiated before Trump's post.
30:57
Speaker 4: Yeah, you're absolutely right, and they are actual. There are
31:00
Speaker 4: several issues, and let me just run through them. The
31:03
Speaker 4: first thing Harvard is arguing, and this is under section
31:06
Speaker 4: seventy two seventeen of the Code, that it's a felony
31:09
Speaker 4: for the president, vice president, their staff, and every cabinet
31:13
Speaker 4: member other than the Attorney General to direct the IRS
31:17
Speaker 4: to conduct or terminate and ordered of any taxpayer. And
31:21
Speaker 4: so the argument is that the president's assertion at the
31:25
Speaker 4: outset could be interpreted as directing the IRS to begin
31:29
Speaker 4: a review of Harvard's tax status and violation of that provision. Now,
31:35
Speaker 4: it's true that the president, thanks to the twenty twenty
31:39
Speaker 4: four Supreme Court case Trump the US, the President may
31:44
Speaker 4: claim immunity from criminal prosecution by reason of the holding
31:49
Speaker 4: in that case, so long as the President is found
31:52
Speaker 4: to have been performing his official duties rather than personal actions.
31:57
Speaker 4: The argument would be that his responsibilities include taking care
32:01
Speaker 4: that laws are faithfully executed, and so the President might
32:05
Speaker 4: claim while directing the audit and challenge of any taxpayer's
32:09
Speaker 4: exemption as part of that duty. It's important to note, however,
32:13
Speaker 4: that other people are also subject to seventy two seventeen,
32:17
Speaker 4: in particular virtually all the cabinet members, the vice president,
32:21
Speaker 4: and their staff, and they don't have the same immunity
32:25
Speaker 4: that the Supreme Court found in that case. So if,
32:29
Speaker 4: for example, the President asked the Vice president or the
32:33
Speaker 4: Treasury Secretary or some staff members to follow up on
32:38
Speaker 4: his assertion and to direct the IRS to take that action,
32:42
Speaker 4: those other people could be prosecuted and be vulnerable. Now,
32:46
Speaker 4: the second point you made, which was the White House
32:49
Speaker 4: subsequently saying, well, actually, Harvard was being scrutinized even before
32:56
Speaker 4: the President spoke, So the President in that sense really
33:00
Speaker 4: didn't initiate any particular action against Harvard. That action was
33:07
Speaker 4: already occurring. So therefore the seventy two seventeen provision doesn't
33:11
Speaker 4: apply well even in that case, which is kind of arguable.
33:16
Speaker 4: But even if that's true, then his statements may run
33:20
Speaker 4: a foul of a different problem, which is the prohibition
33:23
Speaker 4: against disclosing confidential tax return information. Whether a taxpayer is
33:29
Speaker 4: being reviewed or audited by the IRS is protected tax
33:34
Speaker 4: return information, and under section sixty one oh three, no
33:39
Speaker 4: officer or employee of the United States may disclose such
33:44
Speaker 4: protected information of any taxpayer. The violation is a misdemeanor,
33:51
Speaker 4: and a willful violation is a pelony. Importantly, in addition
33:55
Speaker 4: to a fine, imprisonment for up to five years, damages
34:00
Speaker 4: and costs, a willful violation results in discharge of the
34:05
Speaker 4: violator from federal employment. That's kind of an interesting thought
34:11
Speaker 4: in this particular case.
34:12
Speaker 1: Would you say, forgetting about you know, whether it's a
34:14
Speaker 1: criminal violation or not, would that be a defense for Harvard.
34:18
Speaker 1: Let's say the IRS does end up taking away its
34:20
Speaker 1: tax exempt status and they end up in litigation, would
34:24
Speaker 1: that be a defense for Harvard to say, no one
34:27
Speaker 1: in the executive branch is allowed to refer a case
34:31
Speaker 1: to the IRS, or.
34:33
Speaker 4: Yeah, So that's an interesting question. I'm not sure the answer.
34:36
Speaker 4: My inclination would be that it's not a defense, because,
34:40
Speaker 4: after all, again, the qualification for exemption is set out
34:45
Speaker 4: in the law, and if, in fact, notwithstanding how the
34:49
Speaker 4: case came about, that is, whether it was a cabinet
34:53
Speaker 4: member who directed, et cetera. Notwithstanding that, if after a
34:58
Speaker 4: view of the facts in the law, it was found
35:01
Speaker 4: that the Harvard actually did violate one or more of
35:04
Speaker 4: the conditions for exemption, it's not clear to me that
35:08
Speaker 4: that would somehow absolve Harvard of that misconduct. So, but
35:13
Speaker 4: I'm actually not aware of any specific instance where that
35:17
Speaker 4: has happened, mainly because the seventy two seventeen has been
35:20
Speaker 4: rarely invoked because of course, you know, the presidents and
35:25
Speaker 4: vice presidents and those people, they are supposed to be
35:28
Speaker 4: aware of it, and they tend to kind of make
35:31
Speaker 4: sure that they don't violate that.
35:33
Speaker 1: Let's say that this does go as I said to litigation.
35:37
Speaker 1: What would be the issue in the case.
35:40
Speaker 4: Well, I don't know. I mean, it goes back to
35:42
Speaker 4: your original point, which is, what is the basis for
35:45
Speaker 4: the assertion that Harvard doesn't qualify for tax exemption. The
35:49
Speaker 4: only statement that I've seen so far was the one
35:52
Speaker 4: that you stated earlier, which is the President called Harvard
35:57
Speaker 4: a political entity, and I don't know what that means.
36:00
Speaker 4: I'm not aware of that term being in any aspect
36:03
Speaker 4: of the tax law in this area being used. He
36:06
Speaker 4: may have been saying they are been active in political campaigning.
36:11
Speaker 4: That's about the closest thing I can think of, and
36:14
Speaker 4: if that's true, that would be a violation and that
36:18
Speaker 4: would cause or might cause Harbor to lose its exemption.
36:22
Speaker 4: But of course you'd have to prove that, you know,
36:25
Speaker 4: just simply saying it, and I don't know what political
36:27
Speaker 4: energy is, but simply saying it doesn't necessarily mean that
36:31
Speaker 4: that has been violated. So maybe that's, you know, the
36:35
Speaker 4: basis that they would argue, But again, I don't know.
36:38
Speaker 4: I haven't really seen any arguments to support why they
36:42
Speaker 4: would be challenging the exemption. I wanted to add one
36:46
Speaker 4: additional thing because it's something that I think is particularly
36:50
Speaker 4: applicable or maybe particularly applicable in this case, and that
36:54
Speaker 4: I haven't seen it mentioned. If the President, like his
36:58
Speaker 4: apparent use of tariffs, is treating his claims against Harvard
37:03
Speaker 4: as part of a larger transaction to achieve some broader objective,
37:08
Speaker 4: then he and his cabinet members and other executive manch
37:12
Speaker 4: assistants should be aware of an anti extortion provision that's
37:17
Speaker 4: also in the tax law. This is section seventy two fourteen.
37:22
Speaker 4: Under that provision, it's a felony for any officer or
37:26
Speaker 4: employee of the United States, in connection with any revenue law,
37:30
Speaker 4: to demand, accept or attempt to collect, directly or indirectly
37:36
Speaker 4: anything of value for the compromise or settlement of any
37:41
Speaker 4: charge or complaint for any violation or alleged violation of
37:46
Speaker 4: the revenue laws, except is expressly authorized by law. So,
37:51
Speaker 4: for example, if threatening Harvard's taxis and status is really
37:56
Speaker 4: simply a way to get Harvard to change of its
38:00
Speaker 4: practices and policies, perhaps it's dei policies if you will,
38:06
Speaker 4: that have nothing to do with tax exemption, then this
38:10
Speaker 4: provision might apply because it would be a form of
38:13
Speaker 4: using the revenue laws to extort some other thing of value.
38:18
Speaker 4: The penalty in that case is again a fine, imprisonment
38:22
Speaker 4: for up to five years, damages, costs, and again discharge
38:28
Speaker 4: from office. So anybody, perhaps other than the president would
38:34
Speaker 4: be potentially vulnerable for that penalty. My own guess, and
38:40
Speaker 4: it's just a guess in this case, is that it
38:42
Speaker 4: would never come to that. That is my guess is
38:46
Speaker 4: that this issue would get resolved in some other way,
38:50
Speaker 4: whether Harvard would concede some things, or whether the White
38:54
Speaker 4: House would back off on something. I frankly don't think
38:58
Speaker 4: it's credible to think that exemption would be taken away,
39:03
Speaker 4: but again, I certainly haven't delved into all of their activities.
39:08
Speaker 1: There's a lot going on between Trump and Harvard, so
39:11
Speaker 1: perhaps this one will never come to fruition. Thanks so much, George.
39:15
Speaker 1: That's George Gin, emeritus law professor at the University of Virginia,
39:20
Speaker 1: and that's it for this edition of the Bloomberg Law Show.
39:23
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39:25
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39:30
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39:38
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39:42
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