August 28, 2025 • 33 mins
Elliott Stein, Bloomberg Intelligence senior litigation analyst, discusses Fed Governor Lisa Cook’s lawsuit to stop President Trump from firing her. Vida Johnson, a professor at Georgetown law and co-director of the school’s criminal justice clinic, discusses Trump’s executive order to end cashless bail. June Grasso hosts.
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Speaker 1 (00:02):
This is Bloomberg Law with June Grossel from Bloomberg Radio.
Speaker 2 (00:09):
It will be an unprecedented legal battle that could reshape
the Federal Reserve's longstanding political independence. No president in history
has tried to fire a FED governor, but President Trump
is attempting to fire Lisa Cook, the first black woman
to serve as a FED governor. It's over allegations that
(00:30):
she committed mortgage fraud before she joined the Central Banks
Governing Board.
Speaker 3 (00:36):
She seems to have had an infraction, and she can't
have an infraction, especially that infraction, because she's in charge of,
if you think about it, mortgages, and we need people
that are one hundred percent above board.
Speaker 2 (00:49):
But Cook is fighting back by filing a lawsuit against Trump,
saying he doesn't have the power to remove her from
office and that he violated the federal law that allows
seem to remove a FED governor only for cause. This
is a major escalation in the growing clash between the
White House and the Fed, which has resisted Trump's demands
(01:10):
to lower interest rates. It presents novel issues and will
almost certainly end up before the Supreme Court. Joining me
is Elliott Stein, Bloomberg Intelligence senior litigation analyst Elliott tell
us about the big picture of Cook's lawsuit.
Speaker 1 (01:27):
Sure, well, I mean, you know, the four cause is,
obviously if the central legal focus of her lawsuit, saying
that that standard hasn't been met, But bigger pictures, she's
arguing that the allegations of mortgage fraud are really a
pretext to get rid of her for policy disagreement purposes,
(01:47):
which you know goes against FED independence, which is why
you have a four cause removal restriction in the first place.
And you know that fits into the broader theme. And they,
you know, talk about all this as well in the
com how Trump has been pushing for lower interest rates
for a long time, has been critical of fedhare Powell
(02:08):
and initially was going after him for not lowering rates
quickly enough. And they tried to use allegations against him
of cost overruns related to the renovations of the Federal
Reserve building, And so you know, they tied allegations against POLICEA.
Cook into sort of that broader context.
Speaker 2 (02:27):
Not only a lot of legal research went into this,
but a lot of factual research too about what's been
happening recently. So now let's talk about the center of
the legal fight, which is the four cause removal protection
in the Federal Reserve Act. The Act doesn't define what
cause means, how do they define it?
Speaker 1 (02:47):
So that's exactly right. The Federal Reserve Act says that
the President can remove a Federal Reserve Board governor for cause,
but as you say, it doesn't say what cause means.
It doesn't give any examples of that. So the complaint says,
you know, when courts have had to grapple with this
question before, they usually point to the Humphreys Executor case
(03:10):
from nineteen thirty five, which is sort of the seminal
case about whether four cause removal restrictions are even constitutional.
And in that case, the removal restriction said that, you know,
an FTC commissioner could be removed for inefficiency or a
neglective duty or malfeasance in office. So the argument in
Lisa Cook's complaint is sort of twofold. One is that
(03:33):
it can't just be bare allegations. It has to be
some sort of malfeasance or some sort of you know,
neglect of duty. And then the other thing is that
it has to have occurred while she's been in office.
And you refer to some of the factual underpinnings of
the complaint related to that. They talk about how the
mortgage applications that are being accused of, you know, being
(03:56):
fraudulently completed, those were filled out in twenty twenty one,
and she wasn't even appointed and confirmed to the board
until the following year. So part of the argument is
that the four cause removal restriction really applies to misconduct
that took place while in office.
Speaker 2 (04:14):
Let's take a step back and look at the allegations
of mortgage fraud. Trump claims that Cook fraudulently listed homes
in Michigan and Georgia as her primary residences when she
got mortgages in twenty twenty one. So explain where these
allegations of mortgage fraud came from.
Speaker 1 (04:37):
They first appeared in social media posts by Bill Poulti,
who is the director of the Federal Housing Finance Agency,
the Fahferry, which is the conservator and essentially the regulator
for Fannie May, Freddie Mack, and the Federal Home Loan banks.
Poulty posted those on social media. He made a referral
(04:57):
to the Justice Department saying that these were indications of
mortgage fraud. The President then sort of adopted those allegations
as well and posted on his social media about them,
and then ultimately those documents were also used as justification
for the President's letter on August twenty fifth attempting to
(05:19):
fire Lisa Cook.
Speaker 2 (05:21):
The complaint also refers to other criminal referrals that Poulty
made before, where he referred Adam Schiff, the Democratic Senator
from California, and Letitia James, the Democratic Attorney General of
New York, with similar allegations. And they say quote, each
of Director Poultice's criminal referrals have notably been, at one
(05:43):
time or another, political targets of President Trump's aire prior
to any mortgage fraud allegations. Both Schiff and James have
denied the allegations, and there have been no criminal charges
brought against either of them. And here with Cook, there
hasn't even been an investigation, has there.
Speaker 1 (06:03):
That's exactly right. We don't know any more about these
documents than we've seen in Bill Polti's posts. And so
you know, in order for there to be fraud, you
need some sort of fraudulent intent, right, you have to
have intended to deceive another party, essentially, and that other
party has to have relied on your misrepresentations to their detriment.
(06:27):
We don't know any of that, right, I mean, we
don't even know if these documents are accurate or if
they're real. In this day and age, impossible to know
whether a social media post is real or made up.
But taking you know the director at his word that
these are accurate documents and reflect what's on them. We
don't know what Lisa Cook meant when she signed both
(06:48):
of them. We don't know if it was a clerical error,
which is what her complaint suggests. And we don't know
what kind of communications she may have had with the
mortgage lenders on the other side and whether they were
deceived or whether they were harmed, because you also need
that in order for there to be mortgage fraud.
Speaker 2 (07:07):
Now, the lawsuit doesn't provide an explanation for why she
might have listed two residences as her primary residence, but
it does suggest that she could have quote mislabeled a
home's purpose unintentionally, and that wasn't in the complaint, that
was in the motion for a tro So are they
(07:27):
trying to offer an innocent explanation and to blunt the
fraudulent intent.
Speaker 1 (07:33):
Yeah, they're sort of hinting at that. You know, they're
sticking primarily to sort of the legal standard in this complaint, right,
that essentially the actual facts of what happened aren't necessary
at this point in order to allow Lisa Cook to
continue and to basically render ineffective President Trump's termination letter
(07:54):
there arguing in their complaint that on these unsubstantiated allegations alone,
that is not enough to meet the four cause standard.
You know, if the case does go forward in some
capacity to determine what cause means and whether at least
the Cook's conduct rises to that level, then I expect
(08:17):
development of the facts in a more fulsome way, in
which case we'll probably know more about, you know, what
happened with these documents.
Speaker 2 (08:26):
The Trump administration is going to respond. I mean, would
one of their arguments be that the way for cause
is being described by Cook's lawyers is incorrect.
Speaker 1 (08:38):
Yeah, I mean, they'll say, look, the statute only says
for cause when Congress inserted that language into the Federal
Reserve Act in nineteen thirty five, And the complaint talks
about this how they inserted that language after the Humphrey's
Executor decision right, sort of As a response to that,
the President's argument will be Congress knew that it could
(09:00):
have articulated what four cause means. It could have limited
it to inefficiency, neglect, and malfeasans, but it chose not to,
and as a result, what actually constitutes cause is broader
than just those three things. That is most likely what
the President is going to argue, And he's also going
to argue that it's within his discretion to determine what
(09:21):
cause is because he's the president and the statue gives
the president the power to remove a Federal Reserve Board
governor for cause. I think that's what the president's team
is going to argue.
Speaker 2 (09:35):
After the lawsuit was filed, the White House said that
Trump was acting lawfully. Quote, the President determined there was
cause to remove a governor who was credibly accused of
lying in financial documents from a highly sensitive position overseeing
financial institutions.
Speaker 1 (09:52):
Lisa Cook is obviously going to contest a lot of
what's in that statement. Right. He's going to say these
aren't credible accusations because you know, there's been no investigation
related to them. He's gonna take issue with the fact
that he's been accused of lying when there's been no
development or investigation to bolster that accusation. So we know
what each side is going to say. I think what's
(10:14):
going to be interesting is what the courts say, and
you know, eventually this will go up to the Supreme Court.
I think the Supreme Court's decision in May in the
Wilcox case, which concerned the termination of commissioners at the
National Labor Relations Board and the Merit Systems Protection Board,
I think that decision is going to be key because
there the Supreme Court sort of went out of its
(10:34):
way to distinguish the Federal Reserve from these other agencies.
Because for those other agencies, it seems like the Supreme
Court is leaning towards finding the four cause removal restrictions
in those statutes unconstitutional. But it seems like it distinguished
the Federal Reserve with the intent of allowing the Federal
Reserve Acts for cause removal restriction to be deemed constitutional.
(10:59):
And then you know, if you allow the President to
make that decision unilaterally as to what causes, you're really
rendering toothless and meaningless before cause removal restriction in the statute.
Speaker 2 (11:11):
Coming up next on the Bloomberg Lawn Show. I'll continue
this conversation with Bloomberg Intelligence senior litigation analyst Elliot Stein.
Cook is asking a judge for an emergency injunction to
block her firing and confirm her status as a member
of the Fed's governing board. I'm June GROANSO, and this
is Bloomberg. No president in history has tried to fire
(11:35):
a FED governor, but President Trump is attempting to fire
Lisa Cook, the first black woman to serve as a
federal governor. It's over allegations that she committed mortgage fraud
before she joined the Central Bank's governing board by listing
homes in both Michigan and Georgia as her primary residences
(11:55):
when she got mortgages in twenty twenty one. Cook is
fighting back by by filing a lawsuit saying Trump doesn't
have the power to remove her from office and that
he violated the federal law that allows him to remove
a federal governor only for cause. It's an unprecedented legal
battle that could reshape the Federal Reserve's longstanding political independence.
(12:19):
Scott Alvarez, a former General counsel at the Federal Reserve Board,
expressed his concerns if the president is allowed to fire
a Federal Board member without proper cause.
Speaker 3 (12:30):
It's definitely worse for the institution if the president can
fire a member of the Board at will or based
solely on an allegation that's unproven, undemonstrated. I think in
that situation, there really is no independence of the Federal
Reserve and its ability to act, and that's got to
(12:50):
set markets, make markets uneasy.
Speaker 2 (12:54):
I've been talking to Bloomberg Intelligence senior litigation analyst Elliott Stein.
There's so many interlocking issues here. The complaint also says
that Trump violated Cook's right to due process and her
right to notice in hearing under the Federal Reserve Act.
Speaker 1 (13:11):
That argument really revolves around the fact that she has
a property interest essentially in her role as a Federal
Reserve Board governor, and that by taking away that seat
from her without any notice or opportunity to be heard,
her due process rights are being violated. So that's a
constitutional argument. They also have a statutory argument related to that,
(13:33):
which says that for roles where you have a fixed
number of years in service and you're terminated, that you're
entitled to some sort of notice and opportunity to be
heard as well.
Speaker 2 (13:45):
Cook is seeking an emergency injunction to block her firing
and confirm her status as a member of the fed's
governing board, and DC Federal Judge Gia Cobb has scheduled
an emergency hearing for tomorrow. Explain the reasons Cook gives
for asking for a temporary restraining order.
Speaker 1 (14:06):
So you know, right now, this is the question I
get from clients a lot is is she actually still
a Federal Reserve Board governor? You know, if there were
a meeting tomorrow, could she participate? You know, if you
asked the President, he would say, no, she's been fired.
If you asked her, she would say, you know, the
purport determination was improper. So yeah, void, I'm still a
(14:27):
Federal Reserve Board governor. This tro application is a way
to get the court to opine on that quickly. Right.
It's an emergency application essentially to say that President Trump's
termination letter on August twenty fifth has no effect. Right.
And you know what's interesting is that, in addition to
President Trump being named as a defendant, the Federal Reserve
(14:50):
Board is named as a defendant, as are the governors,
as is FED Chair Powell. Because part of Lisa Cook's
tro application is to stop the Federal Reserve Board from
effectuating President Trump's termination letter.
Speaker 2 (15:06):
Who has the stronger argument for.
Speaker 1 (15:08):
The TRO Well, I think Governor Cook got a very
good judicial draw so to speak. The judge, as you said,
is Biden appointee. I think it's likely that the judge
is going to view favorably Lisa Cook's arguments for FED
independence and going to view unfavorably President Trump's arguments, saying
(15:29):
that allegations alone are enough for cause and if the
president alone can make that determination. So I would not
be surprised to see Judge Cobb grant the tro potentially,
you know, as soon as the end of the hearing
tomorrow which starts at ten am, or perhaps later in
the day. Just given the magnitude of this case, I
think a very quick decision is warranted.
Speaker 2 (15:50):
The Supreme Court in May block the reinstatement of NLRB
and Merit Systems Protection Board commissioners while their suits played out.
Did the same for Consumer Product Safety commission heads in July.
Might the Court do the same here?
Speaker 1 (16:07):
I think this is where that decision in May is
so important, because the Supreme Court really went out of
its way to distinguish the Federal Reserve from these other agencies.
It wasn't a definitive rule in it was sort of
dicta but it didn't even need to include that language.
And when you talk about whether you know someone like
Lisa Cook or these other commissioners should serve while the
(16:30):
litigation plays out, you know, the factors you consider are
likelihood of success on the merits, whether there's irreparable harm
to either side, and you also look at the public
interest in terms of likelihood of success on the merits.
I think Lisa Cook has very good arguments that the
four cause provision can't be satisfied by mere allegations alone,
(16:51):
because then that really again renders meaningless the standard because
anyone could drum up accusations in terms of mobile harm.
I think it's important that again, in the May ruling,
the Supreme Court essentially carved out the Federal Reserve from
the executive branch in the sense that it suggested strongly
(17:14):
that the Federal Reserve is quasi private. It has a
unique historical structure, and as a result, it doesn't really
wield executive authority like other agencies do. So in terms
of the president's executive authority being harmed by her continuing
to serve on the board. I think it's unlikely that
(17:35):
the court is going to say that he is suffering
harm like it did in the Wilcox case. And then
in terms of the public interest, you know, I think
the Supreme Court is likely to consider things like Federal
Reserve independence very strongly, and so all these things I
think wigh in favor of Lisa Cook's arguments.
Speaker 2 (17:53):
Elliott tell us what the Fed's response to the lawsuit
has been.
Speaker 1 (17:58):
The FED is sort of staying silent and not picking
aside and saying they'll abide by any court decision, which
is why Lisa Cook's complaint names the Federal Reserve Board
governors both collectively and in their individual capacity as defendants,
along with FED Chair Jpwell explain.
Speaker 2 (18:16):
Why timing might be important for Trump here.
Speaker 1 (18:19):
In the near term. You have an SOMC meeting in
mid September, right where everyone's expecting some sort of rate cuts.
It seems I actually don't think that's the most important
date because for that date, Lisa Cook is just one
seat on the FMC out of twelve. In July when
they met, and they did at lower rates. You only
had two dissenting votes, so I don't think her vote
(18:39):
is necessarily going to sway anything in September. But to me,
the more important dates to keep in mind are the
end of February, when the Federal Reserve Board gets to
reappoint or block reappointment of the regional Federal Reserve Bank
presidents who rotate onto the FMC. The President can elst
(19:02):
least a cook. By February, he essentially on the Federal
Reserve Board will have three sympathetic votes. You'll have Waller
Bowman and presumably Stephen Merron, who is probably going to
start his confirmation process next week to replace the Adrianna
Kugler who resigned earlier in August. And on the other side,
(19:23):
you'd have three votes you know that probably don't align
with the President Powell, Michael Barr, and Vice Jared Jefferson,
And you wouldn't have all these other Regional Reserve Bank
presidents who for the most part have been voting consistently
with Jay Powell against lowering rates. So you know, FEDRUAR
is important because it starts to potentially change the composition
(19:48):
of the FOMC in a direction that's more favorable to
President Trump, and.
Speaker 2 (19:52):
Trump is continuing to fire board members. We learned that
Trump has fired one of two Democratic members of the
US Service Transportation Board to break a two to two
tie before the board considers the largest railroad merger ever.
Proposed Board member Roger E. Primus was the only board
(20:12):
member to oppose Canada Pacific's acquisition of Kansas City's Southern
Railroad when it was approved two years ago.
Speaker 1 (20:20):
You know, I think the hallmark of this investigation when
the history books are written, is its efforts to expand
executive authority over almost every aspect of the government. You know,
we do have this Supreme Court decision in May that
suggested the Federal Reserve is a little different. We'll sort
of see how that plays out.
Speaker 2 (20:39):
We'll certainly be watching this closely. Thanks so much, Elliott.
That's Bloomberg Intelligence Senior litigation analyst Elliott Stein coming up
next on the Bloomberg Law Show. President Trump wants to
get rid of cashless bail and I'm June Grosso. When
you're listening to Bloomberg, President Trump has signed an executive
(21:00):
order threatening to revoke federal funding to local and state
governments that allow cashless bail, arguing that it's a threat
to public safety cashless bail.
Speaker 3 (21:11):
They thought it was discriminatory to make people put up
money because they just killed three people lying on the street.
Any street all over the country. Cashless bail. We're ending it,
but we're starting by ending it in DC.
Speaker 2 (21:25):
But defense attorneys and criminal justice advocates say ending cashless
bail will negatively impact lower income defendants who could be
behind bars unlawfully, and Washington DC Mayor Muriel Bowser points
out that this is not a new policy for many
of these cities.
Speaker 1 (21:44):
Cashless bail is not a new phenomenon in the district.
Speaker 4 (21:48):
I think it's been in place since the mid nineties.
Speaker 2 (21:52):
My guest is Vita Johnson, a professor at Georgetown Law
and co director of the school's Criminal Justice Clinic, is
formally a public defender in DC. Vita, will you explain
what is cashless bail? Exactly?
Speaker 1 (22:07):
Sure.
Speaker 4 (22:08):
So, DC's bail system is identical to the federal bail statute,
and what it does is it takes a person's ability
to pay out of the equation in deciding whether someone
should be held before trial or not. So DC's system,
(22:30):
just like the federal one, is based on whether someone
is a danger or risk of flight, and that helps
a judge determine whether or not someone should be held
rather than the amount of money in their bank account.
So if the person is charged with a dangerous crime
or a violent crime, the judge can hold them. So
(22:53):
it's a way of helping the judge make a decision
that is most closely related to public welfare while still
preserving the accused person's presumption of innocence. There are other
ways that a person can be held if they are
on probation or parole or supervisor release for another matter,
(23:14):
or if they have a pending case, they can be
held without bond. So again, money is not part of
the equation because in DC we've decided that it is
important to make a determination about fail based on the
accusations and the person's history and characteristics rather than their
(23:36):
ability to pay.
Speaker 2 (23:38):
Was DC the model for other states and cities who
have cashless bail.
Speaker 4 (23:44):
Yes, absolutely, and we've had this since the nineties, so
it's not anything new and it has truly been the
model for you know, criminal legal reform. Again, we don't
want a system where rich people, you know, get to
wait for their trial in the luxury of their homes,
while poor people are held a taxpayer expense no less
(24:09):
at the jail just because they don't have bail money.
Speaker 2 (24:12):
President Trump has talked a lot about cash list bail
and how it's the problem leading to crime in the
Democratic led cities. And he said, no cash come back
in a couple of months, will give you a trial,
you never see the person again.
Speaker 4 (24:26):
That's just not true. I mean, the bail system looks
at whether someone has a history of failing to appear
in deciding whether or not someone should be held before trial.
Remember that someone who's accused of a crime is presumed innocent.
That's something our whole criminal legal system is based on
(24:47):
that premise, and so when you hold someone prior to trial,
it really undermines that presumption. Normally that it can truly
ruin a person. Let's say someone's falsely accused of a shoplifting,
but they don't have a lot of money and so
they can't pay the bail. Should that person lose their
(25:11):
housing because they're not home to pay the rent. Should
they lose their job because they're at the jail and
can't work, Should they lose the custody of their children,
based just solely on the government say so, I think
most people would think absolutely not. And imagine the cost
to the taxpayer of holding someone on a really low
(25:33):
level offense like that at the jail. It's a tremendous expense.
It costs, you know, hundreds of dollars every day to
hold someone pre trial. And so DC, just like the
federal system, has decided that for you know, for someone
who with no record, who's accused of a non dangerous
crime and has no history of not appearing in court,
(25:55):
that they should be released pending trial.
Speaker 2 (25:58):
One of the things that led to New York passing
cashless bail was a Bronx High school student who was
accused of stealing a backpack and was in prison for
three years on Rikers Island awaiting trial because his family
couldn't afford the bail, which was three thousand dollars, and
he attempted suicide at Rikers and committed suicide after he
(26:21):
was released.
Speaker 4 (26:22):
Yes, absolutely, and we just don't want those kinds of
tragedies because someone just couldn't pay or their family couldn't
afford to pay the bail.
Speaker 2 (26:31):
What's the other side, Why are people so determined to
get rid of cashless bail.
Speaker 4 (26:37):
Well, the reason that prosecutors want people held before trial
is because it coerces pleased from people. So a prosecutor
would love for everyone to be held before trial if
they don't want to have a trial. Right, So let's
take that shoplifting. That innocent person accuse of a sh uplifting.
(27:00):
If they're held at the jail at risk of losing
everything in their life, their home, their children, their job,
when the government offers them a plea to a time served,
even if they're innocent, there's going to be a strong
motive for that person to take that plea offer, right
to accept that offer so that they can get out
(27:22):
of jail. And that happens in New York all the time.
In New York, often plea offers are extended at arrangments
so the first day and people often especially for low
level cases, or the government's request is for you know,
time served, they often accept those deals as a way
to get out of jail. So that's why you see
(27:43):
folks that aren't necessarily concerned with the constitutional rights of
poor people really pressing for pre trial's attention.
Speaker 2 (27:52):
According to data from DC's Pre Trial Services Agency, in
twenty twenty five, ninety percent of individual Jewels on pre
trial release remained a rest free while eighty nine percent
of those awaiting trial made all their scheduled court appearances.
And have there been studies done as to whether there's
(28:13):
more crime in cities that have cashless bail as opposed
to those that don't.
Speaker 4 (28:20):
I don't think so. I think we all know what
causes crime, and it's not based on our bail systems.
It's whether people have support, whether people have you know,
ways to meet their basic needs, you know, whether they
have access to health services and mental health services and
substance abuse treatment. The bail regimen in a particular city
(28:42):
or state is not the driver of crime.
Speaker 2 (28:46):
What is Trump trying to do with this executive order?
Because DC is different from the rest of the country.
Speaker 4 (28:53):
Well, yes, DC, because you know, when our framers were
dreaming of, you know, what they wanted the country to
look like. They didn't want the center of federal government
to be in any particular state. And so we are
a city without a state and in many ways controlled
(29:15):
by the federal government. But since the nineteen seventies and
when the Home Rule Act was passed, DC has had
a lot more autonomy. And we've enjoyed that autonomy for
now fifty years. So we have our own DC council,
we have a mayor. Now, you know, there's a lot
of self governance. Didn't remember everyone it was in the
(29:36):
district as a US citizen, So they should have the
right to enjoy the same things that people who reside
in states reside, right getting to pick their leaders and
having those people be the ones who decide what the
laws are and being accountable to the people who actually
live in the district when Congress makes laws about the district.
You know, it's really unfair because the people who live
(29:57):
here in Washington, d C. Have the opportunity to elect
those people. And so by declaring that he wants there
to be a changed in the DC bail statute, you know,
it's a way to exert control over a city that
didn't vote for Trump. I think it was about ninety
(30:18):
percent of people voted for Harris in d C. And
that you know, has a sizeable number of people of color.
Speaker 1 (30:25):
DC.
Speaker 4 (30:25):
You know used to be called Chocolate City, right, there's
a sizeable black population here, and you know what we're
seeing isn't you know, grounded in any reality, crime in
DC is at a thirty year low. There are at
least thirty cities with higher crime rates than Washington, d C.
(30:46):
And so the fact that this is the city that
he has focused his efforts on is you know, certainly
because of DC's unique status, but it's not related to crime.
Speaker 2 (30:56):
But can he do it because of DC's unique status?
Can he somehow eliminate cashless bail?
Speaker 4 (31:03):
There No, not through an executive order. A law would
have to be passed. There's a statue that the judges
in DC Superior Court follow and they are governed by
the law. Now, if Congress changed the law that you know,
could impact you know, the law that the judges must follow.
(31:23):
But for now, we have the same bail statute we
had before the executive order. Let me also say that,
you know, one thing that we're seeing is because you know,
it's the US Attorney's Office who prosecute's crime in DC,
they're bringing a lot of cases in federal court. But
it's important to remember that it's the exact same statue.
(31:44):
There's cashless bail in federal court too, and in federal
courts across the country in New York and California. All
federal courts follow the same cashless bail scheme, and so
it just you know, this move by the President doesn't
seem in a lot of knowledge about the law.
Speaker 2 (32:03):
He also wants major criminal cases in DC to be
moved to federal court.
Speaker 4 (32:10):
Yes, that's been playing out in the last few weeks
since the federal occupation. Anything that can be brought in
federal court is being run in federal court. Prosecutors are
also charging the top charge that they can charge rather
than the charge that is just and so we've been
experiencing a really significant strain in our legal system, and
(32:31):
it's something that the courts and the lawyers simply can't
keep up with.
Speaker 2 (32:34):
I understand that the DCUs attorney, Janine Pireau, has been
having some problems getting grand juries to indict.
Speaker 4 (32:42):
On some of these Yes, so because she's bringing them
in federal court. She's been trying to bring these solim
police officer cases and charge them as felonies, which requires
the grand jury to make the charging decision. I think
the grand jury in DC is made up byc residents.
And you know, fortunately in our from a legal system,
(33:05):
in felony cases, the people have the last day, and
they have not been indicting in those cases.
Speaker 2 (33:11):
And the old saying is that a prosecutor can get
a grand jury to indict a ham sandwich, but I
guess not. Thanks so much, Vita. That's Professor Vita Johnson
of Georgetown Law. And that's it for this edition of
the Bloomberg Law Show. Remember you can always get the
latest legal news on our Bloomberg Law Podcast. You can
find them on Apple Podcasts, Spotify, and at www dot
(33:34):
Bloomberg dot com, slash podcast, Slash Law, And remember to
tune into The Bloomberg Law Show every weeknight at ten
pm Wall Street Time. I'm June Grosso and you're listening
to Bloomberg
This is Bloomberg Law with June Grossel from Bloomberg Radio.
Speaker 2 (00:09):
It will be an unprecedented legal battle that could reshape
the Federal Reserve's longstanding political independence. No president in history
has tried to fire a FED governor, but President Trump
is attempting to fire Lisa Cook, the first black woman
to serve as a FED governor. It's over allegations that
(00:30):
she committed mortgage fraud before she joined the Central Banks
Governing Board.
Speaker 3 (00:36):
She seems to have had an infraction, and she can't
have an infraction, especially that infraction, because she's in charge of,
if you think about it, mortgages, and we need people
that are one hundred percent above board.
Speaker 2 (00:49):
But Cook is fighting back by filing a lawsuit against Trump,
saying he doesn't have the power to remove her from
office and that he violated the federal law that allows
seem to remove a FED governor only for cause. This
is a major escalation in the growing clash between the
White House and the Fed, which has resisted Trump's demands
(01:10):
to lower interest rates. It presents novel issues and will
almost certainly end up before the Supreme Court. Joining me
is Elliott Stein, Bloomberg Intelligence senior litigation analyst Elliott tell
us about the big picture of Cook's lawsuit.
Speaker 1 (01:27):
Sure, well, I mean, you know, the four cause is,
obviously if the central legal focus of her lawsuit, saying
that that standard hasn't been met, But bigger pictures, she's
arguing that the allegations of mortgage fraud are really a
pretext to get rid of her for policy disagreement purposes,
(01:47):
which you know goes against FED independence, which is why
you have a four cause removal restriction in the first place.
And you know that fits into the broader theme. And they,
you know, talk about all this as well in the
com how Trump has been pushing for lower interest rates
for a long time, has been critical of fedhare Powell
(02:08):
and initially was going after him for not lowering rates
quickly enough. And they tried to use allegations against him
of cost overruns related to the renovations of the Federal
Reserve building, And so you know, they tied allegations against POLICEA.
Cook into sort of that broader context.
Speaker 2 (02:27):
Not only a lot of legal research went into this,
but a lot of factual research too about what's been
happening recently. So now let's talk about the center of
the legal fight, which is the four cause removal protection
in the Federal Reserve Act. The Act doesn't define what
cause means, how do they define it?
Speaker 1 (02:47):
So that's exactly right. The Federal Reserve Act says that
the President can remove a Federal Reserve Board governor for cause,
but as you say, it doesn't say what cause means.
It doesn't give any examples of that. So the complaint says,
you know, when courts have had to grapple with this
question before, they usually point to the Humphreys Executor case
(03:10):
from nineteen thirty five, which is sort of the seminal
case about whether four cause removal restrictions are even constitutional.
And in that case, the removal restriction said that, you know,
an FTC commissioner could be removed for inefficiency or a
neglective duty or malfeasance in office. So the argument in
Lisa Cook's complaint is sort of twofold. One is that
(03:33):
it can't just be bare allegations. It has to be
some sort of malfeasance or some sort of you know,
neglect of duty. And then the other thing is that
it has to have occurred while she's been in office.
And you refer to some of the factual underpinnings of
the complaint related to that. They talk about how the
mortgage applications that are being accused of, you know, being
(03:56):
fraudulently completed, those were filled out in twenty twenty one,
and she wasn't even appointed and confirmed to the board
until the following year. So part of the argument is
that the four cause removal restriction really applies to misconduct
that took place while in office.
Speaker 2 (04:14):
Let's take a step back and look at the allegations
of mortgage fraud. Trump claims that Cook fraudulently listed homes
in Michigan and Georgia as her primary residences when she
got mortgages in twenty twenty one. So explain where these
allegations of mortgage fraud came from.
Speaker 1 (04:37):
They first appeared in social media posts by Bill Poulti,
who is the director of the Federal Housing Finance Agency,
the Fahferry, which is the conservator and essentially the regulator
for Fannie May, Freddie Mack, and the Federal Home Loan banks.
Poulty posted those on social media. He made a referral
(04:57):
to the Justice Department saying that these were indications of
mortgage fraud. The President then sort of adopted those allegations
as well and posted on his social media about them,
and then ultimately those documents were also used as justification
for the President's letter on August twenty fifth attempting to
(05:19):
fire Lisa Cook.
Speaker 2 (05:21):
The complaint also refers to other criminal referrals that Poulty
made before, where he referred Adam Schiff, the Democratic Senator
from California, and Letitia James, the Democratic Attorney General of
New York, with similar allegations. And they say quote, each
of Director Poultice's criminal referrals have notably been, at one
(05:43):
time or another, political targets of President Trump's aire prior
to any mortgage fraud allegations. Both Schiff and James have
denied the allegations, and there have been no criminal charges
brought against either of them. And here with Cook, there
hasn't even been an investigation, has there.
Speaker 1 (06:03):
That's exactly right. We don't know any more about these
documents than we've seen in Bill Polti's posts. And so
you know, in order for there to be fraud, you
need some sort of fraudulent intent, right, you have to
have intended to deceive another party, essentially, and that other
party has to have relied on your misrepresentations to their detriment.
(06:27):
We don't know any of that, right, I mean, we
don't even know if these documents are accurate or if
they're real. In this day and age, impossible to know
whether a social media post is real or made up.
But taking you know the director at his word that
these are accurate documents and reflect what's on them. We
don't know what Lisa Cook meant when she signed both
(06:48):
of them. We don't know if it was a clerical error,
which is what her complaint suggests. And we don't know
what kind of communications she may have had with the
mortgage lenders on the other side and whether they were
deceived or whether they were harmed, because you also need
that in order for there to be mortgage fraud.
Speaker 2 (07:07):
Now, the lawsuit doesn't provide an explanation for why she
might have listed two residences as her primary residence, but
it does suggest that she could have quote mislabeled a
home's purpose unintentionally, and that wasn't in the complaint, that
was in the motion for a tro So are they
(07:27):
trying to offer an innocent explanation and to blunt the
fraudulent intent.
Speaker 1 (07:33):
Yeah, they're sort of hinting at that. You know, they're
sticking primarily to sort of the legal standard in this complaint, right,
that essentially the actual facts of what happened aren't necessary
at this point in order to allow Lisa Cook to
continue and to basically render ineffective President Trump's termination letter
(07:54):
there arguing in their complaint that on these unsubstantiated allegations alone,
that is not enough to meet the four cause standard.
You know, if the case does go forward in some
capacity to determine what cause means and whether at least
the Cook's conduct rises to that level, then I expect
(08:17):
development of the facts in a more fulsome way, in
which case we'll probably know more about, you know, what
happened with these documents.
Speaker 2 (08:26):
The Trump administration is going to respond. I mean, would
one of their arguments be that the way for cause
is being described by Cook's lawyers is incorrect.
Speaker 1 (08:38):
Yeah, I mean, they'll say, look, the statute only says
for cause when Congress inserted that language into the Federal
Reserve Act in nineteen thirty five, And the complaint talks
about this how they inserted that language after the Humphrey's
Executor decision right, sort of As a response to that,
the President's argument will be Congress knew that it could
(09:00):
have articulated what four cause means. It could have limited
it to inefficiency, neglect, and malfeasans, but it chose not to,
and as a result, what actually constitutes cause is broader
than just those three things. That is most likely what
the President is going to argue, And he's also going
to argue that it's within his discretion to determine what
(09:21):
cause is because he's the president and the statue gives
the president the power to remove a Federal Reserve Board
governor for cause. I think that's what the president's team
is going to argue.
Speaker 2 (09:35):
After the lawsuit was filed, the White House said that
Trump was acting lawfully. Quote, the President determined there was
cause to remove a governor who was credibly accused of
lying in financial documents from a highly sensitive position overseeing
financial institutions.
Speaker 1 (09:52):
Lisa Cook is obviously going to contest a lot of
what's in that statement. Right. He's going to say these
aren't credible accusations because you know, there's been no investigation
related to them. He's gonna take issue with the fact
that he's been accused of lying when there's been no
development or investigation to bolster that accusation. So we know
what each side is going to say. I think what's
(10:14):
going to be interesting is what the courts say, and
you know, eventually this will go up to the Supreme Court.
I think the Supreme Court's decision in May in the
Wilcox case, which concerned the termination of commissioners at the
National Labor Relations Board and the Merit Systems Protection Board,
I think that decision is going to be key because
there the Supreme Court sort of went out of its
(10:34):
way to distinguish the Federal Reserve from these other agencies.
Because for those other agencies, it seems like the Supreme
Court is leaning towards finding the four cause removal restrictions
in those statutes unconstitutional. But it seems like it distinguished
the Federal Reserve with the intent of allowing the Federal
Reserve Acts for cause removal restriction to be deemed constitutional.
(10:59):
And then you know, if you allow the President to
make that decision unilaterally as to what causes, you're really
rendering toothless and meaningless before cause removal restriction in the statute.
Speaker 2 (11:11):
Coming up next on the Bloomberg Lawn Show. I'll continue
this conversation with Bloomberg Intelligence senior litigation analyst Elliot Stein.
Cook is asking a judge for an emergency injunction to
block her firing and confirm her status as a member
of the Fed's governing board. I'm June GROANSO, and this
is Bloomberg. No president in history has tried to fire
(11:35):
a FED governor, but President Trump is attempting to fire
Lisa Cook, the first black woman to serve as a
federal governor. It's over allegations that she committed mortgage fraud
before she joined the Central Bank's governing board by listing
homes in both Michigan and Georgia as her primary residences
(11:55):
when she got mortgages in twenty twenty one. Cook is
fighting back by by filing a lawsuit saying Trump doesn't
have the power to remove her from office and that
he violated the federal law that allows him to remove
a federal governor only for cause. It's an unprecedented legal
battle that could reshape the Federal Reserve's longstanding political independence.
(12:19):
Scott Alvarez, a former General counsel at the Federal Reserve Board,
expressed his concerns if the president is allowed to fire
a Federal Board member without proper cause.
Speaker 3 (12:30):
It's definitely worse for the institution if the president can
fire a member of the Board at will or based
solely on an allegation that's unproven, undemonstrated. I think in
that situation, there really is no independence of the Federal
Reserve and its ability to act, and that's got to
(12:50):
set markets, make markets uneasy.
Speaker 2 (12:54):
I've been talking to Bloomberg Intelligence senior litigation analyst Elliott Stein.
There's so many interlocking issues here. The complaint also says
that Trump violated Cook's right to due process and her
right to notice in hearing under the Federal Reserve Act.
Speaker 1 (13:11):
That argument really revolves around the fact that she has
a property interest essentially in her role as a Federal
Reserve Board governor, and that by taking away that seat
from her without any notice or opportunity to be heard,
her due process rights are being violated. So that's a
constitutional argument. They also have a statutory argument related to that,
(13:33):
which says that for roles where you have a fixed
number of years in service and you're terminated, that you're
entitled to some sort of notice and opportunity to be
heard as well.
Speaker 2 (13:45):
Cook is seeking an emergency injunction to block her firing
and confirm her status as a member of the fed's
governing board, and DC Federal Judge Gia Cobb has scheduled
an emergency hearing for tomorrow. Explain the reasons Cook gives
for asking for a temporary restraining order.
Speaker 1 (14:06):
So you know, right now, this is the question I
get from clients a lot is is she actually still
a Federal Reserve Board governor? You know, if there were
a meeting tomorrow, could she participate? You know, if you
asked the President, he would say, no, she's been fired.
If you asked her, she would say, you know, the
purport determination was improper. So yeah, void, I'm still a
(14:27):
Federal Reserve Board governor. This tro application is a way
to get the court to opine on that quickly. Right.
It's an emergency application essentially to say that President Trump's
termination letter on August twenty fifth has no effect. Right.
And you know what's interesting is that, in addition to
President Trump being named as a defendant, the Federal Reserve
(14:50):
Board is named as a defendant, as are the governors,
as is FED Chair Powell. Because part of Lisa Cook's
tro application is to stop the Federal Reserve Board from
effectuating President Trump's termination letter.
Speaker 2 (15:06):
Who has the stronger argument for.
Speaker 1 (15:08):
The TRO Well, I think Governor Cook got a very
good judicial draw so to speak. The judge, as you said,
is Biden appointee. I think it's likely that the judge
is going to view favorably Lisa Cook's arguments for FED
independence and going to view unfavorably President Trump's arguments, saying
(15:29):
that allegations alone are enough for cause and if the
president alone can make that determination. So I would not
be surprised to see Judge Cobb grant the tro potentially,
you know, as soon as the end of the hearing
tomorrow which starts at ten am, or perhaps later in
the day. Just given the magnitude of this case, I
think a very quick decision is warranted.
Speaker 2 (15:50):
The Supreme Court in May block the reinstatement of NLRB
and Merit Systems Protection Board commissioners while their suits played out.
Did the same for Consumer Product Safety commission heads in July.
Might the Court do the same here?
Speaker 1 (16:07):
I think this is where that decision in May is
so important, because the Supreme Court really went out of
its way to distinguish the Federal Reserve from these other agencies.
It wasn't a definitive rule in it was sort of
dicta but it didn't even need to include that language.
And when you talk about whether you know someone like
Lisa Cook or these other commissioners should serve while the
(16:30):
litigation plays out, you know, the factors you consider are
likelihood of success on the merits, whether there's irreparable harm
to either side, and you also look at the public
interest in terms of likelihood of success on the merits.
I think Lisa Cook has very good arguments that the
four cause provision can't be satisfied by mere allegations alone,
(16:51):
because then that really again renders meaningless the standard because
anyone could drum up accusations in terms of mobile harm.
I think it's important that again, in the May ruling,
the Supreme Court essentially carved out the Federal Reserve from
the executive branch in the sense that it suggested strongly
(17:14):
that the Federal Reserve is quasi private. It has a
unique historical structure, and as a result, it doesn't really
wield executive authority like other agencies do. So in terms
of the president's executive authority being harmed by her continuing
to serve on the board. I think it's unlikely that
(17:35):
the court is going to say that he is suffering
harm like it did in the Wilcox case. And then
in terms of the public interest, you know, I think
the Supreme Court is likely to consider things like Federal
Reserve independence very strongly, and so all these things I
think wigh in favor of Lisa Cook's arguments.
Speaker 2 (17:53):
Elliott tell us what the Fed's response to the lawsuit
has been.
Speaker 1 (17:58):
The FED is sort of staying silent and not picking
aside and saying they'll abide by any court decision, which
is why Lisa Cook's complaint names the Federal Reserve Board
governors both collectively and in their individual capacity as defendants,
along with FED Chair Jpwell explain.
Speaker 2 (18:16):
Why timing might be important for Trump here.
Speaker 1 (18:19):
In the near term. You have an SOMC meeting in
mid September, right where everyone's expecting some sort of rate cuts.
It seems I actually don't think that's the most important
date because for that date, Lisa Cook is just one
seat on the FMC out of twelve. In July when
they met, and they did at lower rates. You only
had two dissenting votes, so I don't think her vote
(18:39):
is necessarily going to sway anything in September. But to me,
the more important dates to keep in mind are the
end of February, when the Federal Reserve Board gets to
reappoint or block reappointment of the regional Federal Reserve Bank
presidents who rotate onto the FMC. The President can elst
(19:02):
least a cook. By February, he essentially on the Federal
Reserve Board will have three sympathetic votes. You'll have Waller
Bowman and presumably Stephen Merron, who is probably going to
start his confirmation process next week to replace the Adrianna
Kugler who resigned earlier in August. And on the other side,
(19:23):
you'd have three votes you know that probably don't align
with the President Powell, Michael Barr, and Vice Jared Jefferson,
And you wouldn't have all these other Regional Reserve Bank
presidents who for the most part have been voting consistently
with Jay Powell against lowering rates. So you know, FEDRUAR
is important because it starts to potentially change the composition
(19:48):
of the FOMC in a direction that's more favorable to
President Trump, and.
Speaker 2 (19:52):
Trump is continuing to fire board members. We learned that
Trump has fired one of two Democratic members of the
US Service Transportation Board to break a two to two
tie before the board considers the largest railroad merger ever.
Proposed Board member Roger E. Primus was the only board
(20:12):
member to oppose Canada Pacific's acquisition of Kansas City's Southern
Railroad when it was approved two years ago.
Speaker 1 (20:20):
You know, I think the hallmark of this investigation when
the history books are written, is its efforts to expand
executive authority over almost every aspect of the government. You know,
we do have this Supreme Court decision in May that
suggested the Federal Reserve is a little different. We'll sort
of see how that plays out.
Speaker 2 (20:39):
We'll certainly be watching this closely. Thanks so much, Elliott.
That's Bloomberg Intelligence Senior litigation analyst Elliott Stein coming up
next on the Bloomberg Law Show. President Trump wants to
get rid of cashless bail and I'm June Grosso. When
you're listening to Bloomberg, President Trump has signed an executive
(21:00):
order threatening to revoke federal funding to local and state
governments that allow cashless bail, arguing that it's a threat
to public safety cashless bail.
Speaker 3 (21:11):
They thought it was discriminatory to make people put up
money because they just killed three people lying on the street.
Any street all over the country. Cashless bail. We're ending it,
but we're starting by ending it in DC.
Speaker 2 (21:25):
But defense attorneys and criminal justice advocates say ending cashless
bail will negatively impact lower income defendants who could be
behind bars unlawfully, and Washington DC Mayor Muriel Bowser points
out that this is not a new policy for many
of these cities.
Speaker 1 (21:44):
Cashless bail is not a new phenomenon in the district.
Speaker 4 (21:48):
I think it's been in place since the mid nineties.
Speaker 2 (21:52):
My guest is Vita Johnson, a professor at Georgetown Law
and co director of the school's Criminal Justice Clinic, is
formally a public defender in DC. Vita, will you explain
what is cashless bail? Exactly?
Speaker 1 (22:07):
Sure.
Speaker 4 (22:08):
So, DC's bail system is identical to the federal bail statute,
and what it does is it takes a person's ability
to pay out of the equation in deciding whether someone
should be held before trial or not. So DC's system,
(22:30):
just like the federal one, is based on whether someone
is a danger or risk of flight, and that helps
a judge determine whether or not someone should be held
rather than the amount of money in their bank account.
So if the person is charged with a dangerous crime
or a violent crime, the judge can hold them. So
(22:53):
it's a way of helping the judge make a decision
that is most closely related to public welfare while still
preserving the accused person's presumption of innocence. There are other
ways that a person can be held if they are
on probation or parole or supervisor release for another matter,
(23:14):
or if they have a pending case, they can be
held without bond. So again, money is not part of
the equation because in DC we've decided that it is
important to make a determination about fail based on the
accusations and the person's history and characteristics rather than their
(23:36):
ability to pay.
Speaker 2 (23:38):
Was DC the model for other states and cities who
have cashless bail.
Speaker 4 (23:44):
Yes, absolutely, and we've had this since the nineties, so
it's not anything new and it has truly been the
model for you know, criminal legal reform. Again, we don't
want a system where rich people, you know, get to
wait for their trial in the luxury of their homes,
while poor people are held a taxpayer expense no less
(24:09):
at the jail just because they don't have bail money.
Speaker 2 (24:12):
President Trump has talked a lot about cash list bail
and how it's the problem leading to crime in the
Democratic led cities. And he said, no cash come back
in a couple of months, will give you a trial,
you never see the person again.
Speaker 4 (24:26):
That's just not true. I mean, the bail system looks
at whether someone has a history of failing to appear
in deciding whether or not someone should be held before trial.
Remember that someone who's accused of a crime is presumed innocent.
That's something our whole criminal legal system is based on
(24:47):
that premise, and so when you hold someone prior to trial,
it really undermines that presumption. Normally that it can truly
ruin a person. Let's say someone's falsely accused of a shoplifting,
but they don't have a lot of money and so
they can't pay the bail. Should that person lose their
(25:11):
housing because they're not home to pay the rent. Should
they lose their job because they're at the jail and
can't work, Should they lose the custody of their children,
based just solely on the government say so, I think
most people would think absolutely not. And imagine the cost
to the taxpayer of holding someone on a really low
(25:33):
level offense like that at the jail. It's a tremendous expense.
It costs, you know, hundreds of dollars every day to
hold someone pre trial. And so DC, just like the
federal system, has decided that for you know, for someone
who with no record, who's accused of a non dangerous
crime and has no history of not appearing in court,
(25:55):
that they should be released pending trial.
Speaker 2 (25:58):
One of the things that led to New York passing
cashless bail was a Bronx High school student who was
accused of stealing a backpack and was in prison for
three years on Rikers Island awaiting trial because his family
couldn't afford the bail, which was three thousand dollars, and
he attempted suicide at Rikers and committed suicide after he
(26:21):
was released.
Speaker 4 (26:22):
Yes, absolutely, and we just don't want those kinds of
tragedies because someone just couldn't pay or their family couldn't
afford to pay the bail.
Speaker 2 (26:31):
What's the other side, Why are people so determined to
get rid of cashless bail.
Speaker 4 (26:37):
Well, the reason that prosecutors want people held before trial
is because it coerces pleased from people. So a prosecutor
would love for everyone to be held before trial if
they don't want to have a trial. Right, So let's
take that shoplifting. That innocent person accuse of a sh uplifting.
(27:00):
If they're held at the jail at risk of losing
everything in their life, their home, their children, their job,
when the government offers them a plea to a time served,
even if they're innocent, there's going to be a strong
motive for that person to take that plea offer, right
to accept that offer so that they can get out
(27:22):
of jail. And that happens in New York all the time.
In New York, often plea offers are extended at arrangments
so the first day and people often especially for low
level cases, or the government's request is for you know,
time served, they often accept those deals as a way
to get out of jail. So that's why you see
(27:43):
folks that aren't necessarily concerned with the constitutional rights of
poor people really pressing for pre trial's attention.
Speaker 2 (27:52):
According to data from DC's Pre Trial Services Agency, in
twenty twenty five, ninety percent of individual Jewels on pre
trial release remained a rest free while eighty nine percent
of those awaiting trial made all their scheduled court appearances.
And have there been studies done as to whether there's
(28:13):
more crime in cities that have cashless bail as opposed
to those that don't.
Speaker 4 (28:20):
I don't think so. I think we all know what
causes crime, and it's not based on our bail systems.
It's whether people have support, whether people have you know,
ways to meet their basic needs, you know, whether they
have access to health services and mental health services and
substance abuse treatment. The bail regimen in a particular city
(28:42):
or state is not the driver of crime.
Speaker 2 (28:46):
What is Trump trying to do with this executive order?
Because DC is different from the rest of the country.
Speaker 4 (28:53):
Well, yes, DC, because you know, when our framers were
dreaming of, you know, what they wanted the country to
look like. They didn't want the center of federal government
to be in any particular state. And so we are
a city without a state and in many ways controlled
(29:15):
by the federal government. But since the nineteen seventies and
when the Home Rule Act was passed, DC has had
a lot more autonomy. And we've enjoyed that autonomy for
now fifty years. So we have our own DC council,
we have a mayor. Now, you know, there's a lot
of self governance. Didn't remember everyone it was in the
(29:36):
district as a US citizen, So they should have the
right to enjoy the same things that people who reside
in states reside, right getting to pick their leaders and
having those people be the ones who decide what the
laws are and being accountable to the people who actually
live in the district when Congress makes laws about the district.
You know, it's really unfair because the people who live
(29:57):
here in Washington, d C. Have the opportunity to elect
those people. And so by declaring that he wants there
to be a changed in the DC bail statute, you know,
it's a way to exert control over a city that
didn't vote for Trump. I think it was about ninety
(30:18):
percent of people voted for Harris in d C. And
that you know, has a sizeable number of people of color.
Speaker 1 (30:25):
DC.
Speaker 4 (30:25):
You know used to be called Chocolate City, right, there's
a sizeable black population here, and you know what we're
seeing isn't you know, grounded in any reality, crime in
DC is at a thirty year low. There are at
least thirty cities with higher crime rates than Washington, d C.
(30:46):
And so the fact that this is the city that
he has focused his efforts on is you know, certainly
because of DC's unique status, but it's not related to crime.
Speaker 2 (30:56):
But can he do it because of DC's unique status?
Can he somehow eliminate cashless bail?
Speaker 4 (31:03):
There No, not through an executive order. A law would
have to be passed. There's a statue that the judges
in DC Superior Court follow and they are governed by
the law. Now, if Congress changed the law that you know,
could impact you know, the law that the judges must follow.
(31:23):
But for now, we have the same bail statute we
had before the executive order. Let me also say that,
you know, one thing that we're seeing is because you know,
it's the US Attorney's Office who prosecute's crime in DC,
they're bringing a lot of cases in federal court. But
it's important to remember that it's the exact same statue.
(31:44):
There's cashless bail in federal court too, and in federal
courts across the country in New York and California. All
federal courts follow the same cashless bail scheme, and so
it just you know, this move by the President doesn't
seem in a lot of knowledge about the law.
Speaker 2 (32:03):
He also wants major criminal cases in DC to be
moved to federal court.
Speaker 4 (32:10):
Yes, that's been playing out in the last few weeks
since the federal occupation. Anything that can be brought in
federal court is being run in federal court. Prosecutors are
also charging the top charge that they can charge rather
than the charge that is just and so we've been
experiencing a really significant strain in our legal system, and
(32:31):
it's something that the courts and the lawyers simply can't
keep up with.
Speaker 2 (32:34):
I understand that the DCUs attorney, Janine Pireau, has been
having some problems getting grand juries to indict.
Speaker 4 (32:42):
On some of these Yes, so because she's bringing them
in federal court. She's been trying to bring these solim
police officer cases and charge them as felonies, which requires
the grand jury to make the charging decision. I think
the grand jury in DC is made up byc residents.
And you know, fortunately in our from a legal system,
(33:05):
in felony cases, the people have the last day, and
they have not been indicting in those cases.
Speaker 2 (33:11):
And the old saying is that a prosecutor can get
a grand jury to indict a ham sandwich, but I
guess not. Thanks so much, Vita. That's Professor Vita Johnson
of Georgetown Law. And that's it for this edition of
the Bloomberg Law Show. Remember you can always get the
latest legal news on our Bloomberg Law Podcast. You can
find them on Apple Podcasts, Spotify, and at www dot
(33:34):
Bloomberg dot com, slash podcast, Slash Law, And remember to
tune into The Bloomberg Law Show every weeknight at ten
pm Wall Street Time. I'm June Grosso and you're listening
to Bloomberg
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