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DA Can't Stop Musk Giveaway & Fired Prosecutors Run for Election · Bloomberg Law

0:03
Speaker 1: This is Bloomberg Law with June Brusso from Bloomberg Radio.
0:10
Speaker 2: The US Supreme Court will take up a new clash
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Speaker 2: over the use of race in redistricting, agree to hear
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Speaker 2: arguments on a Louisiana congressional map that creates an additional
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Speaker 2: majority black voting district. But the Court won't hear arguments
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Speaker 2: until early next year, and the twenty twenty four elections
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Speaker 2: are proceeding under the challenged map, which could boost Democrats'
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Speaker 2: chances of retaking the closely divided House of Representatives. This
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Speaker 2: is the latest step in more than two years of
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Speaker 2: federal court battles over Louisiana congressional districts. The state has
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Speaker 2: had two congressional maps blocked by lower courts, and the
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Speaker 2: Supreme Court has intervened twice. Joining me is Bloomberg Supreme
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Speaker 2: Court reporter Greg Storr. We've been hearing about this Louisiana
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Speaker 2: map for years, So tell us the history here.
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Speaker 3: Yeah, it's a convoluted history. The key practical question is
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Speaker 3: whether there has to be a second majority black district
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Speaker 3: in Louisiana. Louisiana has six congressional districts. About thirty three
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Speaker 3: percent of the state is black, and the question is
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Speaker 3: when the districts are being drawn, isn't enough just to
1:18
Speaker 3: have one majority black district. And so there was a
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Speaker 3: Supreme Court decision back in twenty twenty three involving Alabama
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Speaker 3: that was very similar, in which the Court essentially said, yeah,
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Speaker 3: Alabama has to have a second majority black district under
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Speaker 3: the Voting Rights Act, which basically protects minority voters from
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Speaker 3: having their voting power diluted by the way districts are drawn.
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Speaker 3: And it seemed like Louisiana was going to go the
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Speaker 3: same way, but then another group of voters, a group
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Speaker 3: of voters opposed to the second majority black district, sued
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Speaker 3: and said the way the state drew this up is
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Speaker 3: so convoluted, it's so jerrymandered that that violates the US Constitution.
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Speaker 3: They used ray too much in doing that. And so
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Speaker 3: this case at the Supreme Court is going to sort
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Speaker 3: of determine the balance between those two issues. The Voting
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Speaker 3: Rights Act that says essentially, you know, create a majority
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Speaker 3: minority district when you can, and the Equal Protection Clause,
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Speaker 3: which the Supreme Court is interpreted to put limits on
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Speaker 3: the ability of mapter ours to use race.
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Speaker 2: The disputed map will be used on Tuesday.
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Speaker 3: It will be there will be a second majority black
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Speaker 3: district on Tuesday in the election, and that will probably
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Speaker 3: be a shift another Democratic seat in Congress because of
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Speaker 3: that new map.
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Speaker 2: And explain how there have been unusual dynamics in this case.
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Speaker 3: Yeah. So interestingly, both the Republican controlled states, including the
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Speaker 3: Republican Attorney General Liz Murle and the NWCP Legal Defense FUNT,
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Speaker 3: ask the Supreme Court to intervene and uphold this map.
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Speaker 3: And the state, you look, we're being put in this
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Speaker 3: ridiculous bind. On one hand, we had been because of
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Speaker 3: another court case ordered to create a second majority black district.
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Speaker 3: And on the other hand, this different court comes along
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Speaker 3: and tells us, nope, used race too much. And so
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Speaker 3: Louisiana argued that even though we didn't agree with the
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Speaker 3: original decision requiring a second majority black district, here you're
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Speaker 3: basically turning us into the way to live Mura put
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Speaker 3: It were like a ball stuck at an endless game
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Speaker 3: of King Pok, And she argued, the state's got to
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Speaker 3: have a little breathing room to create districts.
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Speaker 2: And so while I have you, Greg, just explain what
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Speaker 2: the court did or didn't do as far as Pennsylvania
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Speaker 2: on Friday.
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Speaker 3: Yes, So this was a case where Republicans were asking
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Speaker 3: the Supreme Court to intervene and stop some provisional ballots
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Speaker 3: from being kind of potentially tens of thousands of provisional ballots.
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Speaker 3: And what these are folks who voted by mail and
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Speaker 3: there was something wrong with their mail in ballot, like,
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Speaker 3: for example, they didn't include the required secrecy envelope. And
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Speaker 3: so under a Pennsylvania Supreme Court decision, those folks were
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Speaker 3: going to be allowed to cast provisional ballot, so that
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Speaker 3: the original flawed ballot wasn't going to count, but they
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Speaker 3: could go to the polls and vote anyway. And Republicans
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Speaker 3: were asking the Supreme Court to intervene and say, no,
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Speaker 3: those folks are not allowed to cast provisional ballots. They
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Speaker 3: basically lost their chance because they submitted that flawed mail ballot,
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Speaker 3: and the Supreme Court said, no, we're not going to intervene. Essentially,
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Speaker 3: we're going to let those votes be counted. None of
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Speaker 3: the justices dissented. There was a statement by three of
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Speaker 3: the conservative justices on some aspects of the case, but
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Speaker 3: no disagreement at the Supreme Court about letting those votes count.
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Speaker 2: But there was disagreement among the justices earlier in the
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Speaker 2: week on Wednesday about Virginia purging voter rolls. That was
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Speaker 2: a six to three decision.
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Speaker 3: Yeah, well, they're very very different legal issues. The Virginia
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Speaker 3: case was all about whether the state could purge its
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Speaker 3: voter rules in the run up to the election, just
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Speaker 3: before the election, and what it said was an effort
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Speaker 3: to remove non citizens from the polls, even though if
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Speaker 3: you at least some folks who were citizens were also
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Speaker 3: purged from the roles there. The Pennsylvania issue was very,
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Speaker 3: very different in that it's the kind of thing we
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Speaker 3: might actually see after the election if the election is
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Speaker 3: super close. It's a question of how quick will the
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Speaker 3: US Supreme Court be to jump in and say, State
5:34
Speaker 3: Supreme Court, you misinterpreted your own law and we're going
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Speaker 3: to overrule you. And at least this one particular data
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Speaker 3: point says at the moment, the US Supreme Court is
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Speaker 3: not that interested in telling a state supreme court that
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Speaker 3: it's done something wrong and for example, should not have
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Speaker 3: counted some votes.
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Speaker 2: Thanks so much, Greg, that's Bloomberg. New Supreme Court reporter
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Speaker 2: Greg store turning now to the one million dollars a
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Speaker 2: day voter giveaway by Elon Musk's pro Trump Superpack that
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Speaker 2: the Philadelphia District Attorney is trying to stop as an
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Speaker 2: illegal lottery. Here's how Musk has characterized the giveaway. We
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Speaker 2: are going to be awarding a million dollars to randomly
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Speaker 2: to people who have signed the petition.
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Speaker 1: Every day from now until the election.
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Speaker 2: But today in court, Musk's lawyer made a surprising admission,
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Speaker 2: saying that the winners are not chosen by chance, but
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Speaker 2: are selected based on their suitability to be a public
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Speaker 2: spokesperson for Musk's political action committee. Bloomberg's Crystal Mesh was
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Speaker 2: in the courtroom. Chris tell us about this admission.
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Speaker 1: What's clear is that Musk bet on stage, you know,
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Speaker 1: these people are being chosen at random, And what's the
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Speaker 1: treasurer for the pack that stified today is He said,
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Speaker 1: he was a little bit surprised by that because essentially
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Speaker 1: what they they are calling it is an employment contract
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Speaker 1: that these people are chosen. You know, once they sign
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Speaker 1: the position to refer others, they're chosen based on the
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Speaker 1: number of people they refer, you know, their social media posts,
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Speaker 1: things like that, and it's not because they're just chosen
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Speaker 1: their band. They made that pretty clear during the hearing,
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Speaker 1: and that's why they say it's not an illegal lottery.
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Speaker 1: They're basically say they're employing these people and the work
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Speaker 1: that they're doing is making videos, you know, speaking on
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Speaker 1: behalf of the pack, that sort of thing.
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Speaker 2: I mean, did the people who sign up for this
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Speaker 2: know that that's the way they were being chosen?
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Speaker 1: Well, it's not clear. I mean, so at least the
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Speaker 1: first person was chosen before he was told, he was
7:40
Speaker 1: told he was going to appear on stage. He made
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Speaker 1: some videos, but he didn't know until that moment when
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Speaker 1: he was selected. As to the other winners, it's not
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Speaker 1: there how much they knew or what they suspected. But
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Speaker 1: they were also told that they were going to appear
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Speaker 1: on stage, So the possibility is that they were not
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Speaker 1: really in the dark there as to what might be happened.
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Speaker 2: Tell us about the testimony of the Philadelphia DA Larry Krasner.
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Speaker 1: He said essentially that he've used this as a violation
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Speaker 1: of both state's lottery laws and its consumer protection laws,
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Speaker 1: mostly because they're taking the individual personal information of the
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Speaker 1: people who got the money. He also argues that the
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Speaker 1: lottery laws would be violated because they require free things,
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Speaker 1: there to be a prize, there to be an element
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Speaker 1: of chance, and for there to be compensation, meaning that
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Speaker 1: somebody has to pay to get in. He contends that
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Speaker 1: to pay that they are giving is their information and
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Speaker 1: that it therefore violates the state laws, and the rgues
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Speaker 1: they're not protecting their personal information. He said, they're essentially
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Speaker 1: trying to buy votes. So it was relatively testy points
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Speaker 1: during the cross but it was all in all mostly
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Speaker 1: congenialous change.
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Speaker 2: What was his reaction to their saying that now this
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Speaker 2: is not a lottery, it's not random.
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Speaker 1: Well, the Philadelphia DA was incredulous to stay the least.
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Speaker 1: He called it one of the more disingenuous arguments he's
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Speaker 1: ever heard during his decades of practicing law. He contended
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Speaker 1: that it was essentially nonsense. He thought it was outrageous
9:03
Speaker 1: to say the legal the most entertaining part of it,
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Speaker 1: without a doubt. He was asked to be on to
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Speaker 1: testilize and said, he asked you on to twenty sixteen.
9:11
Speaker 1: He used to be a mechanic, and he appreciates the vehicle.
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Speaker 4: And then he was asked about you know, the political
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Speaker 4: accusations that he's doing this simply political point and he said,
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Speaker 4: he said Taylor Swift did the same thing.
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Speaker 1: He would bring a complain against her.
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Speaker 2: Was Elon Musk there, he was supposed to attend, right.
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Speaker 1: He did not. And honestly it was kind of interesting
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Speaker 1: because you know, the judge said last week was supposed
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Speaker 1: to be here, and he clearly was not. He didn't testify. Uh,
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Speaker 1: he didn't even There was no real address to that
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Speaker 1: other than the DA pointing it out once again. So
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Speaker 1: whether the judge, you know, gives that any weight as
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Speaker 1: the credibility and that's sort of thing the DA you know,
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Speaker 1: implied that, you know, basically they're they're running away from it.
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Speaker 1: And the fact that he didn't show up at them not.
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Speaker 2: Addressing Thanks so much, Chris, that s Bloomberg Legal reporter
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Speaker 2: Chris Domesh. Shortly after the hearing, the judge ruled that
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Speaker 2: the million dollar a day sweepstakes can continue through election day.
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Speaker 2: He did not give his reasons for that decision, but
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Speaker 2: Musk's lawyers in closing arguments had called it core political speech,
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Speaker 2: given that participants sign a petition endorsing the US Constitution
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Speaker 2: They also said that Krasner's legal bid to shut down
10:26
Speaker 2: the sweepstakes under Pennsylvania law was moot because there would
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Speaker 2: be no more Pennsylvania winners before the program ends tomorrow.
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Speaker 2: The first three winners came from Pennsylvania. Other winners came
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Speaker 2: from the battleground states of Wisconsin, Nevada, Arizona, Georgia, North Carolina,
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Speaker 2: and Michigan. Krasner has said he could still consider criminal
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Speaker 2: charges as he's tasked with protecting both lotteries and the
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Speaker 2: integrity of elections. Coming up next on the Bloomberg Lane Show,
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Speaker 2: two prosecutors fired by Florida Governor Ron de Santis are
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Speaker 2: asking voters to reinstate them. And I'm June Grosso and
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Speaker 2: this is Bloomberg. Florida Governor Ron de Santis removed two
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Speaker 2: elected prosecutors from their jobs, saying they refuse to enforce
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Speaker 2: the state's laws. Now, Andrew Warren and Monique Warrel, both Democrats,
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Speaker 2: are asking voters to reinstate them as district attorneys. Joining
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Speaker 2: me is Alex Ebert, Bloomberg Last senior correspondent, So Alex
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Speaker 2: tell us about these two former prosecutors who are running
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Speaker 2: for reelection despite being ousted by Ron de Santis.
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Speaker 5: So, these two former prosecutors, both progressives and both outspoken
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Speaker 5: critics of Governor Ron de Santas, were both terminated by
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Speaker 5: the governor, he says, for refusing to follow the state law.
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Speaker 5: And they say it was all part of their discretion
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Speaker 5: and their ability to pick and choose what crimes they're
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Speaker 5: going to tackle, and.
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Speaker 2: So tell us about the court battles.
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Speaker 5: Absolutely, so the court battles ranged from state and federal,
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Speaker 5: and they both didn't go the prosecutor's way on the
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Speaker 5: state level. Both Andrew Warren and he's in Tampa, and
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Speaker 5: Monique Warrel and she's in Orlando. They assued in the
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Speaker 5: state Supreme Court seeking a special writ to get them
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Speaker 5: back into office, and the State Supreme Court said that
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Speaker 5: Warren he waited too long to sue he started in
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Speaker 5: feral court and Warrel she didn't have enough back into
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Speaker 5: her complaints. Basically, they ruled that Warren, you were too late,
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Speaker 5: too short, and Warrel, what you did is arguably within
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Speaker 5: the discretion of the governor to get rid of you for.
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Speaker 2: And now they're running for the same seats that they
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Speaker 2: were ejected from by the governor.
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Speaker 5: That's right. They're running for their old jobs back and
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Speaker 5: both of them are in districts the Democrats do pretty well,
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Speaker 5: and Worrel won a landslide back in twenty twenty. She
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Speaker 5: had like sixty percent of the vote. Warren was around
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Speaker 5: the mid fifties with his election. And both of them
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Speaker 5: are once again running against prosecutors they think they can
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Speaker 5: take on.
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Speaker 2: And are they running against the prosecutors that DeSantis put
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Speaker 2: in place after he removed Warren and Warrel.
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Speaker 5: Indeed, yes, it is like they're running against exes right there.
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Speaker 5: So in Tampa, we've got Warren running against State Attorney Lopez,
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Speaker 5: who we interviewed with for Our Peace and she touts
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Speaker 5: all of her great relationships with local law enforcement. She
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Speaker 5: was in the office for over a decade and she
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Speaker 5: was tapped to be a local judge before being tapped
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Speaker 5: once again by De Santas to take over that state
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Speaker 5: attorney's office. You know, she said that she's focusing on
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Speaker 5: prosecuting more low level crimes and focusing more on the
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Speaker 5: interest of victims than Warren did when he was the
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Speaker 5: prosecutor there.
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Speaker 2: I mean, have there been polls out to see, you know,
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Speaker 2: who's doing better?
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Speaker 5: Not to my knowledge I got with the attorneys that
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Speaker 5: were running here, and they didn't share with me anything.
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Speaker 5: What is well known is how sort of striking the
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Speaker 5: voting public is here. You know, you have districts that
14:11
Speaker 5: lean Democrat, you know, especially in the Orlando area, and
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Speaker 5: even though DeSantis was winning across the state, these individuals
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Speaker 5: were able to easily win their offices four years ago.
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Speaker 2: The amount of money being poured by conservatives into these
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Speaker 2: races is just amazing. Backers of Dessanders's replacement for Warren,
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Speaker 2: Susie Lopez, have spent two point one million dollars on
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Speaker 2: ads and groups supporting the other desand disappointee Andrew Bain
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Speaker 2: has spent two point three million dollars.
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Speaker 5: It is iepopping. So the amount of money is involved
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Speaker 5: in the ninth district race that's Swirl and the thirteenth
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Speaker 5: district race that's Warren together, that is more than four
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Speaker 5: times as much as you're seeing spent statewide.
15:02
Speaker 3: And in those.
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Speaker 5: Specific races, the Republican or conservative sides are vastly outspending
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Speaker 5: the Democrats. You see figures as much as ten to
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Speaker 5: one spent in these races seeking to have these conservatives
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Speaker 5: hold on to their posts.
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Speaker 2: If they do win, will DeSantis remove them again?
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Speaker 5: This is an open question, and it's one of the
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Speaker 5: reasons why this becomes such a flashpoint for this broader
15:27
Speaker 5: discussion across the country. We've seen states where progressive prosecutors
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Speaker 5: were recalled right or they've paced immense criticism and they
15:36
Speaker 5: lost their next election. But this is the first and
15:39
Speaker 5: second instance where we've seen a governor literally remove the
15:43
Speaker 5: progressive prosecutors just because of a difference in discretion. You
15:48
Speaker 5: have Warren who had refused to enforce abortion related crimes,
15:53
Speaker 5: and you had World whose policies were to seek more
15:56
Speaker 5: diversion and more non bail related pre trial release, and
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Speaker 5: because of that, DeSantis said that he could remove them.
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Speaker 5: National experts in criminal law and others that follow this
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Speaker 5: issue closely say that this could be a template for
16:12
Speaker 5: other governors or even a Republican president to seek to
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Speaker 5: remove or work around local prosecutors.
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Speaker 2: You know, there have been different places where these conflicts
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Speaker 2: have arisen. Do they only arise when it's liberal prosecutors
16:28
Speaker 2: elected in cities in a state with a conservative governor
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Speaker 2: or legislature?
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Speaker 5: Experts at the ABA discuss this topic with me. They've
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Speaker 5: researched this issue really thoroughly, and what they've come across
16:43
Speaker 5: is that you're seeing mostly this occur with progressive local
16:47
Speaker 5: prosecutors and Republican governors. However, you've seen for years this
16:53
Speaker 5: issue where democratic governors or data attorneys general will seek
16:58
Speaker 5: to take issue used off the plate of the local
17:02
Speaker 5: prosecutors or seek to bring cases that local prosecutors won't bring.
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Speaker 5: You've seen things like that in states like Massachusetts, Minnesota, Michigan,
17:12
Speaker 5: where liberal executives or other state officials will sort of
17:17
Speaker 5: work around the local prosecutors and do things they don't want.
17:20
Speaker 5: The most high profile version of this was back after
17:23
Speaker 5: the jobs decision came down. Michigan Attorney General Dana Nessel
17:28
Speaker 5: came in and she wrestled power from local prosecutors saying
17:32
Speaker 5: that no, you can't bring abortion related crimes. She went
17:36
Speaker 5: to court to get a declaration from a state court
17:39
Speaker 5: saying no, that's the job of the state attorney general
17:42
Speaker 5: and our policies that we're not going to prosecute these.
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Speaker 2: Has anything like this happened in Texas?
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Speaker 5: Indeed, it's an open question in Texas. My colleague Ryan Otulio,
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Speaker 5: the Great correspondent, we have in Texas did a great
17:56
Speaker 5: story about this last week on this very issue, where
17:59
Speaker 5: there's a job that will be considering whether a desearch
18:02
Speaker 5: attorney there should be taken out. There's other issues in
18:07
Speaker 5: Georgia surrounding the prosecution of Trump and in Tennessee where
18:11
Speaker 5: lawmakers there are actually campaigning and possibly taking out a
18:15
Speaker 5: progressive prosecutor.
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Speaker 2: These progressive prosecutors were probably elected by voters in a
18:22
Speaker 2: city or area that is more liberal than the state.
18:27
Speaker 2: How does the governor have the right to take away
18:30
Speaker 2: their vote?
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Speaker 5: So I had pretty in depth conversations with national experts
18:35
Speaker 5: for this story over several months, and the bottom line
18:38
Speaker 5: is that there's a gray area here. So prosecutors under
18:41
Speaker 5: the law, they have unlimited discretion, but at the same time,
18:45
Speaker 5: there's court rulings that say, if you're categorically refusing to
18:50
Speaker 5: enforce parts of the state law, that might be reason
18:53
Speaker 5: to say that you're not actually doing your job. DeSantis
18:56
Speaker 5: is leaning on some Florida president in his state that
19:00
Speaker 5: says basically exactly that for a prosecutor that refused to
19:04
Speaker 5: prosecute gambling issues. So you know, both sides have pretty
19:08
Speaker 5: strong legal arguments, and the question is you know, how
19:12
Speaker 5: do we balance that need for, you know, the protection
19:15
Speaker 5: of local citizens against crime with the ability of prosecutors
19:19
Speaker 5: to innovate and to consider what's the most important thing
19:23
Speaker 5: for them to do. Because at the end of the day,
19:26
Speaker 5: we can't prosecute all the crimes. The question is can
19:29
Speaker 5: we look the other way if certain crimes should be prosecuted.
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Speaker 2: Do these cases arise only when a prosecutor says I'm
19:37
Speaker 2: not going to prosecute abortion related crimes or I'm not
19:40
Speaker 2: going to prosecute gambling related crimes, where a prosecutor is
19:44
Speaker 2: sort of, you know, drawing a line in the sand,
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Speaker 2: or does it happen because they notice that prosecutors are
19:50
Speaker 2: not are not going after certain kinds of criminals.
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Speaker 5: That's the distinction between Warren and Worl.
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Speaker 6: Right.
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Speaker 5: So, Warren is one of dozens of prosecut uters whom,
20:01
Speaker 5: after the Job's decision, came out and signed a statement
20:04
Speaker 5: saying I'm not going to prosecute abortion related crimes. And
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Speaker 5: the interesting thing for Warren's perspective is there have been
20:10
Speaker 5: no crimes like that committed inside of his district, you know,
20:15
Speaker 5: And both Republicans and Democrats will point to that but
20:19
Speaker 5: regardless that categoric Cobar got him in trouble with war.
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Speaker 5: What's different the Orlando attorney she got in trouble because
20:26
Speaker 5: of her policies, which DeSantis said, reduced sentences at jails,
20:31
Speaker 5: so there were fewer people being jailed, and because criminals
20:34
Speaker 5: that you know, normally would have been locked up prior
20:37
Speaker 5: to trial, you know, because of her policies were able
20:40
Speaker 5: to be outside of the carstural system at the time
20:44
Speaker 5: and had committed crimes. And so he pointed to that
20:47
Speaker 5: as a version of incompetence, while she pointed to that
20:51
Speaker 5: as something that she was trying to implement with her
20:54
Speaker 5: discretion to improve the local criminal justice system.
20:58
Speaker 2: Tell us about these legislation in twenty seven states that
21:02
Speaker 2: the bills that they filed.
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Speaker 5: This was a topic that I hadn't expected to come
21:06
Speaker 5: up when I was looking into this. You know, often
21:08
Speaker 5: at Blomberg WA we do sidetrack sort of legal and
21:13
Speaker 5: legislative analysis to look at this. But a law professor
21:16
Speaker 5: brought this up and said, there are twenty seven states
21:19
Speaker 5: where legislators are seeking to improve governor's ability to remove
21:25
Speaker 5: local prosecutors. You know, many states they're not going to
21:28
Speaker 5: have the ability to do that unless there's some sort
21:31
Speaker 5: of truly bad ethics issue or competence issue, or, as
21:36
Speaker 5: the experts told me, issues revolving around you know, drug
21:39
Speaker 5: use or alcoholism in an office. Right, those are instances
21:43
Speaker 5: where we've seen these things happen in the past. But
21:46
Speaker 5: lawmakers here, typically Republicans, they're looking to empower the governors
21:51
Speaker 5: to remove people the same way that Desantist did. And
21:54
Speaker 5: that's something that in Project twenty twenty five to see
21:57
Speaker 5: the Heritage Foundation encouraging the next president of the United
22:01
Speaker 5: States to consider doing as well. Their argument is, you know,
22:05
Speaker 5: if you're not enforcing all the laws in a particular jurisdiction,
22:09
Speaker 5: they're getting enforced in other parts of the state, that's
22:12
Speaker 5: not equal protection under the state constitution or federal constitution,
22:16
Speaker 5: because you could be you know, put in jail for
22:18
Speaker 5: a crime in one area and not at another. Whereas
22:21
Speaker 5: you know, the people that are criticizing these lawmakers, they
22:24
Speaker 5: say this is actually undoing the votes of local voters
22:29
Speaker 5: who want to have their policies followed and the crimes
22:32
Speaker 5: they think most important, you know, be the emphasis of
22:35
Speaker 5: their state attorneys.
22:36
Speaker 2: And you talk to someone who said there was a
22:39
Speaker 2: concern about prosecutors worrying about keeping their jobs instead of
22:45
Speaker 2: worrying about the job that they're doing.
22:47
Speaker 5: Professor Ellen Yarshevsky over at Hofstra Law School, she's one
22:52
Speaker 5: of the co chairs of this American Bar Association Criminal
22:56
Speaker 5: Law Section that is studying prosecutorial and what she said
23:01
Speaker 5: is the main concern is that instead of sentencing how
23:05
Speaker 5: they should based on the local rules and you know,
23:09
Speaker 5: what they're seeing at their office or filing charges that
23:12
Speaker 5: properly align with their priorities, Prosecutors whether they're Democrats or Republicans,
23:18
Speaker 5: now might have to look over their shoulders and think,
23:21
Speaker 5: what is the governor going to think about this instead
23:24
Speaker 5: of what is the best thing for my local community?
23:27
Speaker 5: You know. She said that extends from bail, to sentencing,
23:30
Speaker 5: to charging or going to over or under charge instead
23:34
Speaker 5: of using their own discretion. She's worried and folks at
23:37
Speaker 5: the ABA are also worried that we're going to see
23:40
Speaker 5: prosecutors now think first, what would the governor want?
23:44
Speaker 2: Thanks so much for being on the show, Alex. That's
23:46
Speaker 2: Alex Ebert Bloomberg Laws, Senior correspondent. Coming up next. The
23:51
Speaker 2: justices here arguments over the False Claims Act. This is
23:54
Speaker 2: Bloomberg today the justice is considered what a government dollar is.
24:00
Speaker 2: Federal Communications Commission fraud case. Whistleblower Todd Heath filed a
24:05
Speaker 2: false CLAIMSAC suit in two thousand and eight alleging that
24:09
Speaker 2: telecommunications provider Wisconsin Bell overcharged schools and libraries for services
24:15
Speaker 2: under the FCC's E rate program, resulting in the fund
24:19
Speaker 2: paying out more money. But Wisconsin Bell argues the government
24:23
Speaker 2: couldn't have been harmed by the alleged misconduct because the
24:27
Speaker 2: fund is financed by the telecommunications providers and not the
24:31
Speaker 2: federal government. Joining me is Joe Whitley, a partner at
24:35
Speaker 2: Womble Bond Dickinson. He's the former US attorney for the
24:39
Speaker 2: Middle and Northern Districts of Georgia. So tell us about
24:42
Speaker 2: the issue here.
24:43
Speaker 6: This is the false Claims AC case being brought by
24:47
Speaker 6: a relator by the name of Todd Heath, and mister
24:51
Speaker 6: Heath followed this action in the name of the United States.
24:55
Speaker 6: That's how the false Claims statute works. And before he filed,
25:00
Speaker 6: he met with the United States on this filing in
25:04
Speaker 6: the United States at that time decided not to intervene
25:08
Speaker 6: and join mister Heath in the action. So this action
25:12
Speaker 6: then was filed in the Eastern District of Wisconsin, and
25:15
Speaker 6: a district court there in the Eastern District granted summary
25:19
Speaker 6: judgment to Wisconsin Bell and mister Heath, the relator in
25:24
Speaker 6: this case. Appealed this case to the Seventh Circuit, and
25:29
Speaker 6: the Seventh Circuit reversed the district court, But then Wisconsin
25:34
Speaker 6: Bell appealed this case to the US Supreme Court.
25:38
Speaker 2: Wisconsin Bell is saying that the government doesn't provide money
25:43
Speaker 2: to the company that administers the Universal Service Fund. When
25:48
Speaker 2: the post office delivers a birthday card with a twenty
25:51
Speaker 2: dollars bill inside, no one would doubt that Grandma, not
25:55
Speaker 2: the government, provides the cash. Explain their argument correct.
25:59
Speaker 6: They're saying that the money that is being distributed, or
26:03
Speaker 6: the funds that they have in the account they provide
26:06
Speaker 6: money to, is not federal money. In other words, going back,
26:10
Speaker 6: I could go back to eighteen sixty three when the
26:14
Speaker 6: Congress passed the first version of the False Claims Act.
26:19
Speaker 6: It dealt exclusively with federal money, in other words, money
26:22
Speaker 6: that had been appropriated by Congress for the provisions that
26:26
Speaker 6: were needed during the Civil War. There was a lot
26:29
Speaker 6: of corruption happening in terms of government contractors providing materials
26:34
Speaker 6: to the Union government, the United States government during the
26:37
Speaker 6: Civil War. So at that time that was what it
26:40
Speaker 6: is contemplated to cover, only moneys appropriated by Congress. And
26:45
Speaker 6: in this circumstance, Wisconsin bella is saying, you know, in
26:49
Speaker 6: present day, all of the money that's in the account,
26:52
Speaker 6: the distributed out or provided reimbursement to telecommunications providers is
26:58
Speaker 6: not public money, not appropriated by the Congress, and it's
27:03
Speaker 6: not money from the US Treasury.
27:06
Speaker 2: And does the government agree with Wisconsin Bell or the
27:09
Speaker 2: other side.
27:10
Speaker 6: No, the government is taking the position that this provision
27:14
Speaker 6: could reach these funds and that there could be actionable
27:19
Speaker 6: cases against telecommunication providers if they don't provide. In other words,
27:25
Speaker 6: the issue is was Wisconsin Bell providing the lowest possible
27:30
Speaker 6: rate to schools and libraries and the relator says they
27:34
Speaker 6: were not providing lowest corresponding price also known as LCP
27:40
Speaker 6: under the c rate program. So that there is at
27:43
Speaker 6: least some suggestion that the government sees this, I would
27:47
Speaker 6: think as an opportunity to reach other conduct where there
27:51
Speaker 6: could be does an argument the government would be making
27:54
Speaker 6: that this does reach the conduct to Wisconsin.
27:57
Speaker 2: Bell is that also the argument of the real.
28:00
Speaker 6: Yes, the relator believes that the funds are from the
28:04
Speaker 6: US Treasury in the sense that some portion of the
28:07
Speaker 6: funds are fines, delinquent payments, criminal find some small amount
28:12
Speaker 6: of money actually in the fund is from arguably from
28:15
Speaker 6: the government. Relater is also arguing that the fund is
28:19
Speaker 6: also the E rate program is acting as an agent
28:24
Speaker 6: of the United States under this program because of the
28:27
Speaker 6: provisions are legislated and are regulated. And Congress is also
28:34
Speaker 6: involved because you know where as they set up this
28:36
Speaker 6: program via the regulations that the FCC created, and they
28:42
Speaker 6: believe that the position of the Fifth Circuit is incorrect
28:48
Speaker 6: and that this is covered by the legislation and that
28:52
Speaker 6: this should be conduct that falls within the false Claimed Act.
28:57
Speaker 2: I mean, which argument do you think is better?
29:00
Speaker 6: I have a bit of a bias having been a
29:03
Speaker 6: federal prosecutor and having been a US attorney in two
29:06
Speaker 6: different offices here in Georgia, Atlanta and Macon, and then
29:10
Speaker 6: also serving in the Department of Justice and a number
29:13
Speaker 6: of high level positions. I would prefer that this is
29:17
Speaker 6: a direction that we should go in, that this would
29:20
Speaker 6: be legislated by Congress. At Congress take a look at
29:24
Speaker 6: the reach of the False Claims Act, and if Congress
29:27
Speaker 6: deems there be a need to expand coverage here under
29:30
Speaker 6: the False Claim Act, so the E rate program would
29:32
Speaker 6: be covered, I would suggest that would be a better path,
29:36
Speaker 6: because there is some suggestion that if this case were
29:41
Speaker 6: to be resolved in favor of the relator, relators arguments
29:45
Speaker 6: that False Claims Act cases could be brought against the
29:51
Speaker 6: Fannie May and Freddie mac programs, which are mortgage programs
29:55
Speaker 6: that provide insurance for mortgages in situations like that. This
30:00
Speaker 6: could also perhaps the Boy Scouts that are set up
30:03
Speaker 6: under federal law, and the Veterans Affairs veterments of foreign wars.
30:08
Speaker 6: Perhaps there is another group that could be covered, and
30:11
Speaker 6: the damages in these cases are extreme. In other words,
30:14
Speaker 6: if you're a mortgage company and you're using Fanny May
30:17
Speaker 6: or Freddie mack Is for insurance on your mortgage, if
30:21
Speaker 6: you provide information that somehow is deemed to be faulse,
30:24
Speaker 6: you might be facing trebled damages which could be substantial,
30:29
Speaker 6: and then fines of five thousand dollars to eleven thousand
30:32
Speaker 6: dollars per claim that you might have a file with
30:37
Speaker 6: the government. Arguably, so, I just I don't think any
30:39
Speaker 6: of this was contemplated, and I guess maybe some thought
30:43
Speaker 6: about this kind of original intent, if you will, and
30:45
Speaker 6: the legislation going back to Lincoln and Congress in eighteen
30:49
Speaker 6: sixty three. I just believe that this is a step
30:52
Speaker 6: beyond what is contemplated under the law, and that should
30:56
Speaker 6: be legislated by Congress, and then the FCC could provide
31:00
Speaker 6: regulatory coverage for this. But I think it's a bit
31:05
Speaker 6: it's a step too far, in my opinion. I'm taking them.
31:08
Speaker 6: I believe we shouldn't have the Supreme Court or any
31:12
Speaker 6: court legislating and effect I think that's what the Circuit
31:15
Speaker 6: Court did in the Seventh Circuit.
31:17
Speaker 2: So how do you think the Supreme Court will rule?
31:21
Speaker 6: Well, I think looking at the most recent Chevron case
31:25
Speaker 6: and how the Chevron case came out in the words
31:27
Speaker 6: that Chevron had been a doctrine that most administrative lawyers
31:31
Speaker 6: kind of took as a given in their analysis of
31:34
Speaker 6: administration or administrative regulations, and I think that that is
31:40
Speaker 6: a harbinger for this case. I think the Supreme Court
31:43
Speaker 6: will well side with the Fifth circuit. In terms of
31:48
Speaker 6: this circuit split, I think they will say that the
31:50
Speaker 6: reach of the False Claims Act does not reach circumstances
31:55
Speaker 6: like this where the funds are not government funds, and
31:59
Speaker 6: will suggest that the role of Congress should be part
32:03
Speaker 6: of this in our separation of power's government. And if
32:07
Speaker 6: Congress deems that this re should that rea should the
32:11
Speaker 6: false claims actually cover this particular fund, that that should
32:15
Speaker 6: be legislated. And I think in a six three decision,
32:20
Speaker 6: I can see the there may be being a split
32:25
Speaker 6: in the in the justices, or it could be you know,
32:28
Speaker 6: they'll be they'll all agree and have a nine to
32:30
Speaker 6: o decision. But I don't see this as you know,
32:35
Speaker 6: a political case. But I do see it as you know,
32:39
Speaker 6: what what role do relators have and what roles do
32:44
Speaker 6: plans have in in sort of structuring the law here.
32:48
Speaker 6: And I think that the prevailing provision or prevailing opinion
32:53
Speaker 6: is that this this, this, uh, this action or is
32:58
Speaker 6: not supportable and the False Claims Act.
33:02
Speaker 2: Do we know how much money is involved here?
33:04
Speaker 6: I think that that would be the determine in the
33:07
Speaker 6: litigation in court, but it would be it I believe
33:10
Speaker 6: in the tens of millions of dollars that Wisconsin Bell
33:14
Speaker 6: might be arguably liable for. I can't give you an
33:18
Speaker 6: exact amount, but obviously Wisconsin Bell would not be litigating
33:23
Speaker 6: this unless they thought it merited. They're doing so, and
33:27
Speaker 6: I think they've done a good job. Nonetheless, we're talking
33:30
Speaker 6: about millions of dollars not only in this case, but
33:33
Speaker 6: in many, many other cases it could be brought simming
33:37
Speaker 6: the court takes a more expansive view of the False
33:40
Speaker 6: Claims Act.
33:41
Speaker 2: Thanks so much for joining me. That's Joe Whitley of
33:44
Speaker 2: Womblebond Dickinson. And that's it for this edition of the
33:48
Speaker 2: Bloomberg Law Podcast. Remember you can always get the latest
33:51
Speaker 2: legal news by subscribing and listening to the show on
33:54
Speaker 2: Apple Podcasts, Spotify, and at Bloomberg dot com, slash podcast,
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Speaker 2: slash Law. I'm June Grosso, and this is Bloomberg