February 3, 2025 • 35 mins
Antitrust expert Harry First, a professor at NYU Law School, discusses the Trump administration’s first antitrust lawsuit to stop HPE’s acquisition of Juniper Networks. Bernie Kohn, Editor-at-large, Bloomberg Industry Group, discusses the so-called “buyout” offers sent to federal employees by the Trump administration. Dave Aronberg, former Palm Beach County State Attorney, discusses the Trump purge at the FBI and Justice Departments. June Grasso hosts.
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Speaker 1 (00:02):
This is Bloomberg Law with June Grossel from Bloomberg Radio.
Speaker 2 (00:08):
It took less than two weeks for the Trump Justice
Department to file its first antitrust lawsuit. The Department sued
to block Hewlett Packard Enterprise is fourteen billion dollar acquisition
of Juniper Networks, arguing that tie up with harm competition
in the market for enterprise wireless equipment used by large companies, universities,
(00:30):
and hospitals. In a complaint file Thursday in federal court
in California, the US said the deal would consolidate the
sector down from three major players HPE, Juniper, and Cisco
Systems down to two that would control seventy percent of
the market. But HPE CEO Antonio Neery told Bloomberg that
(00:51):
the DOJ's reasoning is flawed.
Speaker 3 (00:54):
We believe there is no case here. This is pro competitive.
We'll bring it two complementary technologies together, which also will
enable us to compete outside the United States in the
context of the previous competition we have with josh against
the Chinese vendors. In the context of national security, particularly
in cloud and the service provider space.
Speaker 2 (01:14):
Joining me is anti trust expert Harry First, a professor
at NYU Law School, Harry Many expected the Trump administration
to sort of ease up on the aggressive anti trust
enforcement by the Biden administration. Is it a surprise that
they brought an anti trust lawsuit so soon?
Speaker 4 (01:33):
Oh, it's a surprise, yes, that they didn't wait for
the new team really to be in place. And the
complaint is very much a Biden administration type complaint. It's
written like and refers to the merger guidelines that were
adopted during the Biden administration. So it's curious. I don't know.
(01:54):
Maybe they're acting Assistant Attorney General just never got the memo,
doesn't read his emails. I can't quite explain why they
decided to go ahead with this unless there was some
time pressure on the deal, I'm not certain about that.
Speaker 2 (02:10):
And they're also doing this big action before they actually
have someone in place as the top of the antitrust.
Speaker 4 (02:19):
Division, right, So the complaint is signed by the acting
Assistant Attorney General who was put in place over the
person who would normally have been put in place for
this position. So the way it's gone, particularly in recent times,
is the most apolitical person in the division is appointed
(02:42):
as acting Usually it's the head of criminal Enforcement, which
is really a political is no one who says, oh, no,
we like cartels and we think they should flourish, so
enforcement against cartels. No one objects to that that I
know of. So the person who was head of Criminal
Enforcement was instead reassigned to I guess it's a homeland
(03:07):
security position, right.
Speaker 2 (03:10):
Yeah, they're putting a lot of people in immigration.
Speaker 4 (03:12):
An immigration unit, which of course is presumably something they
reassigned him to so that he would then leave the
same as Manish Kumar. Fine guy, I mean you know,
he couldn't have been on anybody's enemies list that I
can imagine, So they reassigned him to it's a sanctuary
city's task force. It's ridiculous to a waste of his talent.
(03:36):
And then they brought in this person who has just
been in the any Trust Division, just joined last year.
He'd been in the White House Counsel's Office in the
prior Trump administration, so they appointed him as acting head.
But why he decided to go ahead and sign this complaint,
I honestly do not know. And why he couldn't wait
(03:58):
for Gail Slater to be confirmed, which I assume she
will be to review it. So I don't know the
answer to that.
Speaker 2 (04:05):
So, I mean, they're assigning environmental lawyers to that Sanctuary
Cities unit, whatever it is. But these people have expertise,
this guy, for example, in anti trust or environment and
they're setting them to a totally different.
Speaker 4 (04:19):
Well, it's a political I mean, just the name of it.
I don't know for sure, but just the name of it.
It's something designed to I don't know, rub their noses
in it. It's a perversion of any good use of
talent and designed to humiliate them. I don't know, but
I was sort of shocked that they did that to Kumar.
It doesn't make sense, you know, in anybody's world. And
(04:43):
for all I know, he might have been more moderate
and said, you know, we should hold up and wait
for the new head of the division to be approved
by the Senate. So it's sort of a curious turn
of events that, you know, this complaint is the result.
Just explain what the deal is, okay, So roughly, so,
this is a deal that was announced in January of
(05:05):
twenty twenty four, so it's been sitting there for a
little while under investigation, and it involves the w land industry,
wireless local area network industry, but on the commercial scale,
not the routers that you and I have in our
houses that create this little local area network that we
(05:26):
can connect to wherever we are in the house. But
you know, for enterprises, universities, offices, big companies that need
to connect all their employees wirelessly wherever they're working to
some access point. So it's all the equipment necessary for
(05:46):
putting those wireless local area networks together. And Cisco is
the leader worldwide and in the United States apparently, and
according to the complaint, it's marked share is more than
twice what HPE Hewlett Packard Enterprises market share is. Hp
(06:07):
is second in the US market. And Juniper, the company
being acquired by HPE, it's not clear where they sit
in the market. The complaint doesn't say they're third, so
maybe they're not quite third in the market. Maybe they're
fourth or fifth, but I don't know. Their market shares
vary around the world in different markets, but they're smaller
(06:28):
than HPE, So Cisco's market shares more than twice what
HPEES is, so they really dominate the market and the
combined market share of the three firms. Now, the Justice
Department complaints says Will be more than seventy percent, so
a very concentrated market, and the increase in concentration, which
(06:51):
is a key figure for merger enforcement, is over the thresholds.
For highly concentrated market, there's a presumption that competition may
be substantially lessened in the future, So the market's highly concentrated,
it's over the thresholds. The increases over the thresholds, and again,
(07:12):
according to the twenty twenty three guidelines which the complaint sites,
that's presumed to violate the law. And that's sort of
the core of the case.
Speaker 2 (07:22):
Will there be questions about market definition or anything like that,
or is it pretty.
Speaker 4 (07:26):
Clear there are always questions about our definition because as
we know, this is what any trust lawyers love. And yes,
there will probably be some, but I'm not sure in
the end that that's going to be the thing that matters,
even though the parties will fight over it. What makes
the case more interesting is that this merger was cleared
(07:46):
by the European Commission and by the UK Competition Markets Authority,
the CMA, So both of them cleared this merger in
August finding really no problems, and had been the pattern
during the Biden administration, had generally been. All three of
those agencies were in agreement on most of the controversial mergers.
(08:11):
They were not out of step. They all agreed, even
ones that were controversial that they violated European law or
law in the United Kingdom or the United States. So
this is unusual in the sense that the US is
trying to block a merger that the other two just
didn't go any further with. They both issued reports saying, hey,
(08:33):
no problem.
Speaker 2 (08:34):
What's gotten a lot of attention is a memo in
twenty twenty one from an HPE sales leader encouraging his
team to quote kill, missed, exclamation point, exclamation point, exclamation point,
and on and on. There were like forty exclamation points,
and missed was the name of Juniper's competing product.
Speaker 4 (08:55):
We love those memos. Yeah, that's the kind of thing
when NHS obviously that they go, oh my god, we
cannot suppress those helse people. You know, they keep using
language that get us into trouble. And yes, that's featured
prominently in the complaint. Who wouldn't feature that prominently in
the complaint? But in a number of these cases, those
(09:17):
sorts of kill memos are often used where the conduct
is exclusionary. In other words, the idea it was, you know,
will cut off their air supply. This is back in
the old Microsoft case. They were in a browser war,
and that was the colorful language, but it was to
exclude them from the market. These memos are a little
(09:38):
different in the sense that he's telling his group to
really compete hard and win these contracts. So the more
specific parts, beyond the concentration in the market, is that
these are head to head competitors that often competed for
contracts with the same parties, the same buyers, and this
(10:00):
merger will eliminate that head to head competition that had
produced lower prices. So it's kill was not so much exclusionary,
you know, as in kill, but you know, fight hard.
However you want to look at it, and that's what
I think the defense will say. So what you're witnessing
is competition. So every time we have competition, you can't say,
oh my god, let's cry foul. This is what we want.
Speaker 2 (10:23):
I mean, is there any doubt that consumers benefit from
having three players in the in the market rather.
Speaker 4 (10:30):
Than two, Well, I'd be a little cautious about three
rather than two. The complaint doesn't say there aren't others,
and in fact, at one point the complaint says, there
are many suppliers, and if you look at the markets
described both in the UK and in Europe, they are
obviously more players, and so there are other sources of supply,
(10:53):
and so presumably they will argue, well, we are head
to head competitors, but we're also head to head competitors
with other supplies. And if now after the merger, the
new Hpe Juniper decides to try to raise its price,
customers will just switch to the other suppliers like Hey, Cisco,
which has defenty percent of the market, or other small suppliers.
(11:17):
Now one difference with and it's an interesting difference. The
complaint excludes Huawei, the Chinese supplier, on sort of obvious
grounds that the US has been trying to keep them
out of US markets and that will likely continue. That's
not the case in Europe, where they are you know,
they're not a big player, but they are a significant
(11:38):
enough player that they could constrain any effort to raise
price in Europe, but you know, not a competitive constraint
so much in the US. So in that sense, the
geographic market may be more in contention but it will
be hard to say that Huawei is an effective competitor today.
Speaker 2 (11:56):
How are there any accommodations that HPE could reach with
the Justice Department to forward the merger?
Speaker 4 (12:05):
Yeah, it would be some settlements that would restore competition,
or however it's put in horizontal mergers like this. I mean,
I don't know the business that well, but it's hard
to see exactly what the parties might agree to divest
that would affect the analysis of the merger. You know,
(12:26):
when there are retail outlets, like the Albertson's Kroger deal,
you could offer to divest the number of supermarkets, and
you know that becomes a point of contention. But this
doesn't seem to be that sort of market. So I
would be surprised if there's a deal here to be had.
(12:46):
So my senses there, they'll probably even after the new
head of any trust division is appointed that they'll probably
go ahead and litigate this merger. It'd be hard to
settle it, I mean, unless they decide to dismissed the complaint,
but that would look sort of weird since it was
this administration in a sense that filed it.
Speaker 2 (13:07):
Does the government have a strong case.
Speaker 4 (13:09):
Here, you think so in one sense, yes, if they
get a court that's willing to stick with the twenty
twenty three guidelines that emphasizes the highly concentrated market, increase
in concentration, creating a presumption and says, okay, it's up
to you, Hpe and Juniper to justify this merger, to
(13:29):
show why it will increase competition, what the pro competitive
effects are. So if they can convince a judge to
shift the burden over to the defendants to justify the deal,
then I think that's you know, they have a shot
at it. They obviously have some business documents that show
this head to head competition. I don't know whether they
(13:51):
have testimony from buyers of this equipment saying, oh my god,
we're afraid that prices are going to go up if
the deal goes through. So it would be helpful to
them if they have testimony like this. But it's possible
that they'll be able to convince a district court judge
to go ahead and stop the merger. But the reason
why I'm hesitant is that fictions and you know, the
(14:15):
theory that's being advanced, the head to head competition theory,
was pretty much sloughed off in both of those jurisdictions.
Speaker 2 (14:23):
Business leaders thought that this administration would be more amenable
to deals involving tech companies, just more amenable to M
and A. Is it too soon to tell whether it
will be or whether it won't be with this one lawsuit.
Speaker 4 (14:38):
You know, if I were advising any then I would
be hesitant to draw much, if anything, from this one case,
because the person who's going to make these decisions is
just not in place. And unless I had some intelligence
indicating that the acting head really was acting in a
way that he knew was consistent with what the income
(15:00):
had wanted, I would view this as a one off
and not make predictions of what the future might hold
either way. Actually, until we really see what the new
heads of the two agencies do with the twenty twenty
three merger guidelines, whether they pull them or not.
Speaker 2 (15:19):
Do you know about the people who are nominated, what
their track record is.
Speaker 4 (15:24):
I don't know them personally other than what I've read.
Cale Slater seems like an anti trust person. She doesn't
seem to be coming from some other weird spot with
a list of you know who I hate in the
anti trust world. So she seems like a normal anti
trust person, but it's hard to know how that's going
(15:45):
to work out in the specifics. Well, I'm a little
more concerned at the Federal Trade Commission because the new
chair of the Federal Trade Commission has seemed to have
gone all in on the Trump agenda in ways that
I haven't seen yet from the nominee at the Any
Trust Division. But then if I were the nominee there,
I would not say anything right now and wait to
(16:08):
be confirmed.
Speaker 2 (16:09):
A lot to watch, Thanks so much, Harry. As always,
that's Professor Harry First of NYU Law School. As part
of President Trump's efforts to reshape the federal government at
breakneck speed, most federal employees got an email offering them
the chance to resign by February sixth and be paid
through September. Some lawmakers, like Democratic Senator Tim Kaine of Virginia,
(16:35):
warned workers that Trump does not have the authority to
make that offer.
Speaker 5 (16:40):
Don't be fooled.
Speaker 4 (16:43):
He's tricked hundreds of people with that offer. If you
accept that offer and resign, he'll stiff you, just like
he stiffed the contractors.
Speaker 1 (16:52):
He doesn't have any authority to do this. Do not
be fooled by this guy.
Speaker 2 (16:58):
My guest is Bernie Cone, editor of Lodge of the
Bloomberg Industry Group. Bernie tell us about these emails.
Speaker 5 (17:04):
So, on Tuesday, January thirty first, there was an email
that went out from a brand new email address at
the Office of Personnel Management to more than two million
federal workers with the subject line fork in the Road.
Now that's key because that is, word for word, the
(17:26):
same subject line in the email that Elon Musk sent
out after taking over Twitter, right before he got rid
of eighty percent of the workforce there. So what this
was was an offer to resign with pay from your position,
with pay and benefits allegedly continuing through September thirty first.
(17:46):
And the deal was is that if you were going
to accept it, all you did was type the word
resign in the subject line in your reply email.
Speaker 2 (17:55):
Tell us a little bit more about how it seems
to be similar to what happened at Twitter.
Speaker 5 (18:00):
Well, it goes beyond the subject line. Of course. What
we did was we really took a look at the
promises that were in this email. And it is only
an email. There was no legal documentation with it. There
was nothing in fact for say you to sign or review,
and how that synced up with some of the promises
(18:23):
and the things that happened after Twitter sought to cut jobs.
And there are quite a number of lawsuits still going
on against Twitter over severance and related issues. And where
you get some interesting parallels is that people at Twitter
were promised severance if they resigned, and then over time
(18:43):
there were reasons concocted to fire a lot of them
for cause and make them ineligible for severance. And as
I said, those are lawsuits that are still going on.
There was another senior level person who was fired for
allegedly doing something with Trump's Twitter feed. We don't quite
know what that was. So what this tells you is
that there are certainly reasons to doubt that the deal
(19:07):
is what it's being presented to be.
Speaker 2 (19:10):
Employment lawyers that you talked to, what did they suggest
for these workers.
Speaker 5 (19:16):
Other than obviously it's an individual decision for you know,
more than more than two million people. But in terms
of trying to challenge this whole thing, the lawyers we
talked to said that people will have a better case
if they essentially don't respond and then wait to be
laid off. That sort of challenging this offer such as
(19:36):
it is, is not likely to get you anywhere, even
though there are some real questions as to whether it's
even legal to offer seven eight months of administrative leave, which
is what this offer pretends to be.
Speaker 2 (19:50):
So why would that be a problem.
Speaker 5 (19:52):
It's a problem because there was actually a federal rule
that became final only two weeks ago that makes very
clear that administrative leave can only be used for ten
working days per calendar year, and the offer that went
out via OPM last week says that people will be
on administrative leave through September thirtieth.
Speaker 2 (20:14):
In Elon Musk's case, the Twitter case, there was a
proposed class action that.
Speaker 6 (20:20):
Was dismissed right Essentially, what Musk was able to do
was to claim there was no such thing as a
Twitter severance plan, and he won, even though there was
a fair amount of documentation produced in which severance plans
were outlined and mentioned.
Speaker 5 (20:37):
Now that case is on appeal at the Ninth Circuit
right now, but the district court decision right now prevails,
and there are.
Speaker 2 (20:44):
Other suits by high level employees.
Speaker 5 (20:49):
Correct. There are several different cases, really at least four
that sort of mattered to some of the issues at hand.
You have people that claim that essentially they were forced
to resign after deciding to stick around because they were
ordered to do illegal things. You have another group that
talks about having reasons concocted to terminate them for cause
(21:11):
because which they were never told what that cause was,
to deny them severance payments. At the very very end
of the period, you had this class action which you
just mentioned, which was for six thousand employees, which they
claim outlined a severance plan and that Twitter essentially renigged
on it gave them a fraction of what they say
(21:31):
they were owed. And then you have a separate one
which is personal to a Twitter senior official who claimed
that she was stripped of her severance because of something
involving Trump's Twitter account.
Speaker 2 (21:43):
This is not a buyout. This is not what a
buyout looks.
Speaker 5 (21:45):
Like exactly, And that's a really important distinction, especially since
that term has been used pretty liberally. This is not
a buyout offer. A buyout offer, you would get legal
paperwork which you would have a pretty decent amount of
time to assess. It might be thirty days, it might
be forty five days. It would very carefully outline the
(22:08):
terms in a binding way. It would have opt out clauses,
all of those kinds of things. And certainly, when I
was in the newspaper business, I saw multiple rounds of buyouts,
so I know what the paperwork looks like. Yes, this
is a deferred resignation. That was the term they used.
That's what this is. So then employees are being put
(22:28):
in the position of trying to figure out with really
no particularly legal backup, and with a very short time
for decision to decide, well, what is this really? Am
I really resigning right now on the spot? Are they
really going to pay me through September thirty gain? What
is there that finds them to actually pay me aside
(22:49):
some promise email? Those are pretty tough decisions to have
to day this kind of notice.
Speaker 2 (22:55):
I don't think you even need a lawyer to tell
you that something's pfishient here. Thanks much, Bernie. That's Bernie Cone,
editor at large of the Bloomberg Industry Group. The Trump
administration fired a group of prosecutors involved in the January
sixth criminal cases on Friday. Now, thousands of FBI employees
(23:16):
who participated in investigations related to the January sixth riot
are being asked to complete in depth questionnaires about their involvement.
This as the Trump administration Justice Department weighs disciplinary actions
that could result in firings. Joining me is former Palm
Beach County State Attorney Dave Ehrenberg. The acting FBI Director
(23:40):
Brian Driscoll, in an email to all FBI employees, and
he said that the FBI was told to turnover by
Tuesday all current and former FBI staff who worked on
investigations or prosecutions related to the Capitol riot. He said
the request covered thousands of FBI employees around the country,
including him.
Speaker 1 (24:00):
Knew it was going to get bad, and he said
that I will be your retribution. So we can't be
too surprised that he's going after the people who went
after him. But when it gets real like this, it
is quite a moment because we've never seen this before.
This is the weaponization of government. This is what the
(24:20):
other side keeps claiming that Joe Biden and Mary Garland
did weaponizing the Department of Justice. No, no, no, that
was projection. What they're doing is creating the DOJ as
the Donald Trump defense team, like his own law firm
and as part of his own law firm. He needs
investigators who are loyal to him. So that's what this
(24:41):
is about. And if you, especially if you worked against
him even though there was evidence, and they're just doing
their jobs and their career prosecutors and FBI agents who
have worked in multiple administrations, including Donald Trump's administration itself,
then you're the enemy.
Speaker 2 (24:56):
I think that most of these top level people are
going to have an easy time I'm finding a job
in the private sector right with their experience, right.
Speaker 1 (25:04):
But you know, as a former prospert myself and I
was a state attorney for twelve years, this is their passion.
This is what they want to do. They could have
always made more money in the private sector, but they
have a passion for justice and for just waking up
every day to try to do the right thing, to
stand up for victims of crime, and to hold wrongdoers accountable.
And now one of the wrongdoers is now the head guy,
(25:28):
and he is going after them for doing their jobs.
And so it is to them probably just like the
bizarre world where they get punished for doing the right thing,
for doing their jobs, and you got to believe in
They just think that at some point that this will
(25:48):
will be over that the bad guys don't win in
the end, at least not according to the to the
books that we read, the nursery rhymes and pro wrestling
and for wrestling.
Speaker 2 (25:58):
What's happening is they're transferring a lot of these people,
for example, attorneys, attorneys that are handling environmental matters for years,
attorneys that are handling cartel matters, for example, in the
antitrust department, and they're sending them all to this Sanctuary's
City team. But what's happening is a lot of them
(26:19):
are resigning rather than go into the Sanctuary Cities team.
So it's a way to get them to resign without
any legal hassles.
Speaker 1 (26:27):
Right See, these are career service people. They've got career
service protection under the law, so if they get fired,
they can sue and get their job back. But for
all practical purposes, their days are numbered in this administration,
because even if they get their jobs back, even if
they successfully bring an action against the Trump administration, they'll
be stuck counting paper clips in the basement. They're going
(26:48):
to be stuck at a department in an area that
they don't want to be in. And so they realize
that they're going to have to find something else now
if they want to stay around they really believe, Like
the head of the FBI said that I dug a foxhole,
I was staying in it. It sucked, but what had
to be done during wartime. Well yeah, but this is
four years as opposed to four days or four weeks.
(27:11):
And so that's why I just think it's a no
win proposition. We should all be appalled at what's going on.
But after all, Donald Trump told us he would do it.
Speaker 2 (27:20):
We don't know exactly what the extent of it will
be at this point, but do you think there are
enough layers in the FBI that it won't affect the
bottom line?
Speaker 1 (27:30):
I do worry that the FBI's mission of working with
intelligence agencies, and not just for domestic law enforce but
on counterintelligence, that that will be curtailed. Cashpttella said the
FBI should go back to being cops. But remember the
reason why the FBI has such a broad jurisdiction, a
broad mission is because of nine to eleven, there were
forms put in place to make sure we don't miss
(27:52):
out on intelligence where we could actually save lives and
prevent a terrorist attack. So that's why the FBI's mission
was broadened. Now, if you want to circumscribe their mission
and make them into just a domestic law enforcement operation
at the behest of the president, that is going to
jeopardize national security. And so I would hate for a
(28:13):
tragedy to happen for us to realize the error of
their ways.
Speaker 2 (28:17):
So cash Ptel testified that all FBI employees will be
protected from political retribution and no one will be terminating
because of the specific cases they worked on. But that's
outright contradicted by what happened after that testimony.
Speaker 1 (28:34):
People will say anything to get confirmed. Ask Supreme Court
justices who said that roversus Wighed is settled law. When
you're there trying to get the votes, you say anything,
and then you get in, and yeah, good luck trying
to impeach these guys after they're sworn in. So yeah,
they'll say what they have to say and then they'll
do something different. But yeah, he may be right that
we're not going to fire you, but you're going to
(28:56):
essentially be sent to the office in Fargo to write
a two hundred page term paper that'll take four years.
Speaker 2 (29:06):
Forget about the conspiracy theories, forget about the red promises
of retribution? Is he qualified to run an agency as
big as the FBI?
Speaker 1 (29:14):
Talking about Cashpitel, well, I know Cashpitel. He used to
be a public defender in Dade County, so I knew him.
He doesn't come from the bureau, so in that sense
he would not be But now these days, expertise is disfavored.
This is the era of hey, I'll do my own research.
I think that he will get confirmed because he is
(29:36):
team Trump. I think the other two controversial ones, the
most controversial ones, RFK Junior and Tulsea Gabbard are not Republicans.
They're not part of the team. And if you're part
of the team, yeah, you're going to get through. They'll
find a way to get you through. Pete Hetseth got through,
but Gaberd was a Democrat who ran against Trump. RFK
Junior was a Democrat. So they don't have the loyalties
(29:57):
amongst the Republicans that a born and bred Republican does.
There's an old adage Democrats fall in love, Republicans fall
in line, and the centers will find a way to
confirm cash Pattel and I love that he walked away
from words he said in his own book. It reminds
me of when Charles Barkley was criticized for some of
the stuff he wrote in his own autobiography, and Barkley
(30:19):
said out he was misquoted.
Speaker 2 (30:21):
Charles Barkley can get away with that stuff, though, I'm
not so sure about Cash Patel. Now, one of the
complaints you hear is that if Patel hads the FBI,
there'll be no independence from the White House. Is that
really a big problem? There have been other times when
the FBI and the White House were aligned.
Speaker 1 (30:41):
Yeah, even though JEdgar Hoover was independent of the White House.
And so there is a long history of independence. Remember
the whole kerfuffle with James Comey. I mean, we've seen
this over and over again that the FBI actually has
had more independence from the president than the Attorney general has.
In the DOJ John F. Kennedy appointed his own brother
(31:03):
to be attorney general. President Obama and Eric Holder were
very close. Eric Holder referred to President Obama as his wingman.
So we've seen this before. Jimmy Carter's attorney general was
a boyhood friend of his from Georgia. So it's not
unusual for a president to appoint an attorney general who's
close with and so the whole thing about independence, Yeah,
and theory, that's great, but not everyone's going to be Jannerino.
(31:26):
With Bill Clinton, that was truly independent, Mary Garland, truly
independent when you go after and prosecute the president's son.
But we had that choice in the last election. We
had the choice between independent DOJ and independent FBI, and
a choice between that and Donald Trump, who said they're
going to essentially work for me and I will be
a retribution, and the voters chose the latter.
Speaker 2 (31:46):
So I know, you know Pam Bondy, but it seemed
like she did benefit from the fact that the person
who was initially chosen to be the attorney general was
so out of so out of the mainstream, so out
of most people comprehension, that she sort of got I
think a benefit from that because people were like, she's
not Matt.
Speaker 1 (32:05):
Gates, right right.
Speaker 5 (32:06):
Yeah.
Speaker 1 (32:07):
Reminds me of the person who became mayor of Washington,
d C. After Marion Barry. When your predecessor is caught
on camera smoking crack, you know you've got a low
bar to exceed. So that was Pam Bondi having to
to exceed that Matt Gates bar that was going to
be an easier get and Pam A. Bondi is someone
I know very well. I ran against her than I
worked for her, so I know that she does believe
(32:28):
in the rule of law. And people are asking, well
she should resign now, well, she hasn't even been confirmed yet,
and if she's not approved, and if she decides to resign,
out of discuss who do you think he's going to
a point? He's going to a point like Rudy Giuliani
or like the MyPillow guy with a degree from Trump
University or something. Who knows. So it's not going to
(32:50):
get better. Pam Bondi, I think is the best nominee
that Democrats could hope for, because she at least as
someone who is qualified. She's a twenty year prosecutor, she
believe in the rule of law, and she's hired Democrats
like me to work with her. So I do think
she will serve as somewhat of a check on some
of the real radical abuses. I got to believe she
would never have supported the full pardons for all these criminals,
(33:13):
these rioters, these insurrectionists that Donald Trump pardon including those
who beat up police officers.
Speaker 2 (33:19):
One thing that a lot of people found concerning Democrats,
I'll say is that she would not say that the
twenty twenty election was fair.
Speaker 1 (33:28):
Yeah, she went further than most. She said she accepts
the results. And yeah, but yeah, I mean, if you're
going to wait for a Republican nominee to say that
Donald Trump lost a twenty twenty election, you're gonna be
waiting for a long time because he would never appoint
someone who's not going to at least give lip service
to the big lie. This is the reason why he
appointed them, because they're gonna be loyal to him, and
(33:49):
you can't be loyal to him and actually say the
truth about the twenty twenty election. So yeah, you can
just hope for the best that we can get, which
is someone like Pam who can say that I accept
the results of the election. And she never used the
F word when she testified fraud. She didn't use that word.
She didn't say she saw fraud in Pennsylvania. She says
she saw things. Okay, take what you can get.
Speaker 2 (34:10):
She'll have control over the FBI, it's part of the DOJ.
Speaker 1 (34:15):
She'll have some level of control over it. Ultimately, the
power to prosecute comes from her, not from the FBI.
But there's an old adage you can beat the rap,
but you can't beat the ride. And that's where cash
Btel can be really dangerous. Is that, even if Pamboni
does not approve of the actual indictment of going to
a grand jury, cash Motel as the head of the FBI,
(34:36):
can investigate and make any target's life miserable.
Speaker 2 (34:40):
The investigations and the build up to possible prosecutions can
not only be nerve wracking, but very expensive as you
hire lawyers to defend yourself. Thanks so much for coming
on the show, Dave. That's Dave Ehrenberg, former Palm Beach
County State Attorney. And that's it for this edition of
The Bloomberg Law Show. Remember you can always get the
(35:01):
latest legal news on our Bloomberg Law podcasts. You can
find them on Apple Podcasts, Spotify, and at www dot
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 (00:08):
It took less than two weeks for the Trump Justice
Department to file its first antitrust lawsuit. The Department sued
to block Hewlett Packard Enterprise is fourteen billion dollar acquisition
of Juniper Networks, arguing that tie up with harm competition
in the market for enterprise wireless equipment used by large companies, universities,
(00:30):
and hospitals. In a complaint file Thursday in federal court
in California, the US said the deal would consolidate the
sector down from three major players HPE, Juniper, and Cisco
Systems down to two that would control seventy percent of
the market. But HPE CEO Antonio Neery told Bloomberg that
(00:51):
the DOJ's reasoning is flawed.
Speaker 3 (00:54):
We believe there is no case here. This is pro competitive.
We'll bring it two complementary technologies together, which also will
enable us to compete outside the United States in the
context of the previous competition we have with josh against
the Chinese vendors. In the context of national security, particularly
in cloud and the service provider space.
Speaker 2 (01:14):
Joining me is anti trust expert Harry First, a professor
at NYU Law School, Harry Many expected the Trump administration
to sort of ease up on the aggressive anti trust
enforcement by the Biden administration. Is it a surprise that
they brought an anti trust lawsuit so soon?
Speaker 4 (01:33):
Oh, it's a surprise, yes, that they didn't wait for
the new team really to be in place. And the
complaint is very much a Biden administration type complaint. It's
written like and refers to the merger guidelines that were
adopted during the Biden administration. So it's curious. I don't know.
(01:54):
Maybe they're acting Assistant Attorney General just never got the memo,
doesn't read his emails. I can't quite explain why they
decided to go ahead with this unless there was some
time pressure on the deal, I'm not certain about that.
Speaker 2 (02:10):
And they're also doing this big action before they actually
have someone in place as the top of the antitrust.
Speaker 4 (02:19):
Division, right, So the complaint is signed by the acting
Assistant Attorney General who was put in place over the
person who would normally have been put in place for
this position. So the way it's gone, particularly in recent times,
is the most apolitical person in the division is appointed
(02:42):
as acting Usually it's the head of criminal Enforcement, which
is really a political is no one who says, oh, no,
we like cartels and we think they should flourish, so
enforcement against cartels. No one objects to that that I
know of. So the person who was head of Criminal
Enforcement was instead reassigned to I guess it's a homeland
(03:07):
security position, right.
Speaker 2 (03:10):
Yeah, they're putting a lot of people in immigration.
Speaker 4 (03:12):
An immigration unit, which of course is presumably something they
reassigned him to so that he would then leave the
same as Manish Kumar. Fine guy, I mean you know,
he couldn't have been on anybody's enemies list that I
can imagine, So they reassigned him to it's a sanctuary
city's task force. It's ridiculous to a waste of his talent.
(03:36):
And then they brought in this person who has just
been in the any Trust Division, just joined last year.
He'd been in the White House Counsel's Office in the
prior Trump administration, so they appointed him as acting head.
But why he decided to go ahead and sign this complaint,
I honestly do not know. And why he couldn't wait
(03:58):
for Gail Slater to be confirmed, which I assume she
will be to review it. So I don't know the
answer to that.
Speaker 2 (04:05):
So, I mean, they're assigning environmental lawyers to that Sanctuary
Cities unit, whatever it is. But these people have expertise,
this guy, for example, in anti trust or environment and
they're setting them to a totally different.
Speaker 4 (04:19):
Well, it's a political I mean, just the name of it.
I don't know for sure, but just the name of it.
It's something designed to I don't know, rub their noses
in it. It's a perversion of any good use of
talent and designed to humiliate them. I don't know, but
I was sort of shocked that they did that to Kumar.
It doesn't make sense, you know, in anybody's world. And
(04:43):
for all I know, he might have been more moderate
and said, you know, we should hold up and wait
for the new head of the division to be approved
by the Senate. So it's sort of a curious turn
of events that, you know, this complaint is the result.
Just explain what the deal is, okay, So roughly, so,
this is a deal that was announced in January of
(05:05):
twenty twenty four, so it's been sitting there for a
little while under investigation, and it involves the w land industry,
wireless local area network industry, but on the commercial scale,
not the routers that you and I have in our
houses that create this little local area network that we
(05:26):
can connect to wherever we are in the house. But
you know, for enterprises, universities, offices, big companies that need
to connect all their employees wirelessly wherever they're working to
some access point. So it's all the equipment necessary for
(05:46):
putting those wireless local area networks together. And Cisco is
the leader worldwide and in the United States apparently, and
according to the complaint, it's marked share is more than
twice what HPE Hewlett Packard Enterprises market share is. Hp
(06:07):
is second in the US market. And Juniper, the company
being acquired by HPE, it's not clear where they sit
in the market. The complaint doesn't say they're third, so
maybe they're not quite third in the market. Maybe they're
fourth or fifth, but I don't know. Their market shares
vary around the world in different markets, but they're smaller
(06:28):
than HPE, So Cisco's market shares more than twice what
HPEES is, so they really dominate the market and the
combined market share of the three firms. Now, the Justice
Department complaints says Will be more than seventy percent, so
a very concentrated market, and the increase in concentration, which
(06:51):
is a key figure for merger enforcement, is over the thresholds.
For highly concentrated market, there's a presumption that competition may
be substantially lessened in the future, So the market's highly concentrated,
it's over the thresholds. The increases over the thresholds, and again,
(07:12):
according to the twenty twenty three guidelines which the complaint sites,
that's presumed to violate the law. And that's sort of
the core of the case.
Speaker 2 (07:22):
Will there be questions about market definition or anything like that,
or is it pretty.
Speaker 4 (07:26):
Clear there are always questions about our definition because as
we know, this is what any trust lawyers love. And yes,
there will probably be some, but I'm not sure in
the end that that's going to be the thing that matters,
even though the parties will fight over it. What makes
the case more interesting is that this merger was cleared
(07:46):
by the European Commission and by the UK Competition Markets Authority,
the CMA, So both of them cleared this merger in
August finding really no problems, and had been the pattern
during the Biden administration, had generally been. All three of
those agencies were in agreement on most of the controversial mergers.
(08:11):
They were not out of step. They all agreed, even
ones that were controversial that they violated European law or
law in the United Kingdom or the United States. So
this is unusual in the sense that the US is
trying to block a merger that the other two just
didn't go any further with. They both issued reports saying, hey,
(08:33):
no problem.
Speaker 2 (08:34):
What's gotten a lot of attention is a memo in
twenty twenty one from an HPE sales leader encouraging his
team to quote kill, missed, exclamation point, exclamation point, exclamation point,
and on and on. There were like forty exclamation points,
and missed was the name of Juniper's competing product.
Speaker 4 (08:55):
We love those memos. Yeah, that's the kind of thing
when NHS obviously that they go, oh my god, we
cannot suppress those helse people. You know, they keep using
language that get us into trouble. And yes, that's featured
prominently in the complaint. Who wouldn't feature that prominently in
the complaint? But in a number of these cases, those
(09:17):
sorts of kill memos are often used where the conduct
is exclusionary. In other words, the idea it was, you know,
will cut off their air supply. This is back in
the old Microsoft case. They were in a browser war,
and that was the colorful language, but it was to
exclude them from the market. These memos are a little
(09:38):
different in the sense that he's telling his group to
really compete hard and win these contracts. So the more
specific parts, beyond the concentration in the market, is that
these are head to head competitors that often competed for
contracts with the same parties, the same buyers, and this
(10:00):
merger will eliminate that head to head competition that had
produced lower prices. So it's kill was not so much exclusionary,
you know, as in kill, but you know, fight hard.
However you want to look at it, and that's what
I think the defense will say. So what you're witnessing
is competition. So every time we have competition, you can't say,
oh my god, let's cry foul. This is what we want.
Speaker 2 (10:23):
I mean, is there any doubt that consumers benefit from
having three players in the in the market rather.
Speaker 4 (10:30):
Than two, Well, I'd be a little cautious about three
rather than two. The complaint doesn't say there aren't others,
and in fact, at one point the complaint says, there
are many suppliers, and if you look at the markets
described both in the UK and in Europe, they are
obviously more players, and so there are other sources of supply,
(10:53):
and so presumably they will argue, well, we are head
to head competitors, but we're also head to head competitors
with other supplies. And if now after the merger, the
new Hpe Juniper decides to try to raise its price,
customers will just switch to the other suppliers like Hey, Cisco,
which has defenty percent of the market, or other small suppliers.
(11:17):
Now one difference with and it's an interesting difference. The
complaint excludes Huawei, the Chinese supplier, on sort of obvious
grounds that the US has been trying to keep them
out of US markets and that will likely continue. That's
not the case in Europe, where they are you know,
they're not a big player, but they are a significant
(11:38):
enough player that they could constrain any effort to raise
price in Europe, but you know, not a competitive constraint
so much in the US. So in that sense, the
geographic market may be more in contention but it will
be hard to say that Huawei is an effective competitor today.
Speaker 2 (11:56):
How are there any accommodations that HPE could reach with
the Justice Department to forward the merger?
Speaker 4 (12:05):
Yeah, it would be some settlements that would restore competition,
or however it's put in horizontal mergers like this. I mean,
I don't know the business that well, but it's hard
to see exactly what the parties might agree to divest
that would affect the analysis of the merger. You know,
(12:26):
when there are retail outlets, like the Albertson's Kroger deal,
you could offer to divest the number of supermarkets, and
you know that becomes a point of contention. But this
doesn't seem to be that sort of market. So I
would be surprised if there's a deal here to be had.
(12:46):
So my senses there, they'll probably even after the new
head of any trust division is appointed that they'll probably
go ahead and litigate this merger. It'd be hard to
settle it, I mean, unless they decide to dismissed the complaint,
but that would look sort of weird since it was
this administration in a sense that filed it.
Speaker 2 (13:07):
Does the government have a strong case.
Speaker 4 (13:09):
Here, you think so in one sense, yes, if they
get a court that's willing to stick with the twenty
twenty three guidelines that emphasizes the highly concentrated market, increase
in concentration, creating a presumption and says, okay, it's up
to you, Hpe and Juniper to justify this merger, to
(13:29):
show why it will increase competition, what the pro competitive
effects are. So if they can convince a judge to
shift the burden over to the defendants to justify the deal,
then I think that's you know, they have a shot
at it. They obviously have some business documents that show
this head to head competition. I don't know whether they
(13:51):
have testimony from buyers of this equipment saying, oh my god,
we're afraid that prices are going to go up if
the deal goes through. So it would be helpful to
them if they have testimony like this. But it's possible
that they'll be able to convince a district court judge
to go ahead and stop the merger. But the reason
why I'm hesitant is that fictions and you know, the
(14:15):
theory that's being advanced, the head to head competition theory,
was pretty much sloughed off in both of those jurisdictions.
Speaker 2 (14:23):
Business leaders thought that this administration would be more amenable
to deals involving tech companies, just more amenable to M
and A. Is it too soon to tell whether it
will be or whether it won't be with this one lawsuit.
Speaker 4 (14:38):
You know, if I were advising any then I would
be hesitant to draw much, if anything, from this one case,
because the person who's going to make these decisions is
just not in place. And unless I had some intelligence
indicating that the acting head really was acting in a
way that he knew was consistent with what the income
(15:00):
had wanted, I would view this as a one off
and not make predictions of what the future might hold
either way. Actually, until we really see what the new
heads of the two agencies do with the twenty twenty
three merger guidelines, whether they pull them or not.
Speaker 2 (15:19):
Do you know about the people who are nominated, what
their track record is.
Speaker 4 (15:24):
I don't know them personally other than what I've read.
Cale Slater seems like an anti trust person. She doesn't
seem to be coming from some other weird spot with
a list of you know who I hate in the
anti trust world. So she seems like a normal anti
trust person, but it's hard to know how that's going
(15:45):
to work out in the specifics. Well, I'm a little
more concerned at the Federal Trade Commission because the new
chair of the Federal Trade Commission has seemed to have
gone all in on the Trump agenda in ways that
I haven't seen yet from the nominee at the Any
Trust Division. But then if I were the nominee there,
I would not say anything right now and wait to
(16:08):
be confirmed.
Speaker 2 (16:09):
A lot to watch, Thanks so much, Harry. As always,
that's Professor Harry First of NYU Law School. As part
of President Trump's efforts to reshape the federal government at
breakneck speed, most federal employees got an email offering them
the chance to resign by February sixth and be paid
through September. Some lawmakers, like Democratic Senator Tim Kaine of Virginia,
(16:35):
warned workers that Trump does not have the authority to
make that offer.
Speaker 5 (16:40):
Don't be fooled.
Speaker 4 (16:43):
He's tricked hundreds of people with that offer. If you
accept that offer and resign, he'll stiff you, just like
he stiffed the contractors.
Speaker 1 (16:52):
He doesn't have any authority to do this. Do not
be fooled by this guy.
Speaker 2 (16:58):
My guest is Bernie Cone, editor of Lodge of the
Bloomberg Industry Group. Bernie tell us about these emails.
Speaker 5 (17:04):
So, on Tuesday, January thirty first, there was an email
that went out from a brand new email address at
the Office of Personnel Management to more than two million
federal workers with the subject line fork in the Road.
Now that's key because that is, word for word, the
(17:26):
same subject line in the email that Elon Musk sent
out after taking over Twitter, right before he got rid
of eighty percent of the workforce there. So what this
was was an offer to resign with pay from your position,
with pay and benefits allegedly continuing through September thirty first.
(17:46):
And the deal was is that if you were going
to accept it, all you did was type the word
resign in the subject line in your reply email.
Speaker 2 (17:55):
Tell us a little bit more about how it seems
to be similar to what happened at Twitter.
Speaker 5 (18:00):
Well, it goes beyond the subject line. Of course. What
we did was we really took a look at the
promises that were in this email. And it is only
an email. There was no legal documentation with it. There
was nothing in fact for say you to sign or review,
and how that synced up with some of the promises
(18:23):
and the things that happened after Twitter sought to cut jobs.
And there are quite a number of lawsuits still going
on against Twitter over severance and related issues. And where
you get some interesting parallels is that people at Twitter
were promised severance if they resigned, and then over time
(18:43):
there were reasons concocted to fire a lot of them
for cause and make them ineligible for severance. And as
I said, those are lawsuits that are still going on.
There was another senior level person who was fired for
allegedly doing something with Trump's Twitter feed. We don't quite
know what that was. So what this tells you is
that there are certainly reasons to doubt that the deal
(19:07):
is what it's being presented to be.
Speaker 2 (19:10):
Employment lawyers that you talked to, what did they suggest
for these workers.
Speaker 5 (19:16):
Other than obviously it's an individual decision for you know,
more than more than two million people. But in terms
of trying to challenge this whole thing, the lawyers we
talked to said that people will have a better case
if they essentially don't respond and then wait to be
laid off. That sort of challenging this offer such as
(19:36):
it is, is not likely to get you anywhere, even
though there are some real questions as to whether it's
even legal to offer seven eight months of administrative leave, which
is what this offer pretends to be.
Speaker 2 (19:50):
So why would that be a problem.
Speaker 5 (19:52):
It's a problem because there was actually a federal rule
that became final only two weeks ago that makes very
clear that administrative leave can only be used for ten
working days per calendar year, and the offer that went
out via OPM last week says that people will be
on administrative leave through September thirtieth.
Speaker 2 (20:14):
In Elon Musk's case, the Twitter case, there was a
proposed class action that.
Speaker 6 (20:20):
Was dismissed right Essentially, what Musk was able to do
was to claim there was no such thing as a
Twitter severance plan, and he won, even though there was
a fair amount of documentation produced in which severance plans
were outlined and mentioned.
Speaker 5 (20:37):
Now that case is on appeal at the Ninth Circuit
right now, but the district court decision right now prevails,
and there are.
Speaker 2 (20:44):
Other suits by high level employees.
Speaker 5 (20:49):
Correct. There are several different cases, really at least four
that sort of mattered to some of the issues at hand.
You have people that claim that essentially they were forced
to resign after deciding to stick around because they were
ordered to do illegal things. You have another group that
talks about having reasons concocted to terminate them for cause
(21:11):
because which they were never told what that cause was,
to deny them severance payments. At the very very end
of the period, you had this class action which you
just mentioned, which was for six thousand employees, which they
claim outlined a severance plan and that Twitter essentially renigged
on it gave them a fraction of what they say
(21:31):
they were owed. And then you have a separate one
which is personal to a Twitter senior official who claimed
that she was stripped of her severance because of something
involving Trump's Twitter account.
Speaker 2 (21:43):
This is not a buyout. This is not what a
buyout looks.
Speaker 5 (21:45):
Like exactly, And that's a really important distinction, especially since
that term has been used pretty liberally. This is not
a buyout offer. A buyout offer, you would get legal
paperwork which you would have a pretty decent amount of
time to assess. It might be thirty days, it might
be forty five days. It would very carefully outline the
(22:08):
terms in a binding way. It would have opt out clauses,
all of those kinds of things. And certainly, when I
was in the newspaper business, I saw multiple rounds of buyouts,
so I know what the paperwork looks like. Yes, this
is a deferred resignation. That was the term they used.
That's what this is. So then employees are being put
(22:28):
in the position of trying to figure out with really
no particularly legal backup, and with a very short time
for decision to decide, well, what is this really? Am
I really resigning right now on the spot? Are they
really going to pay me through September thirty gain? What
is there that finds them to actually pay me aside
(22:49):
some promise email? Those are pretty tough decisions to have
to day this kind of notice.
Speaker 2 (22:55):
I don't think you even need a lawyer to tell
you that something's pfishient here. Thanks much, Bernie. That's Bernie Cone,
editor at large of the Bloomberg Industry Group. The Trump
administration fired a group of prosecutors involved in the January
sixth criminal cases on Friday. Now, thousands of FBI employees
(23:16):
who participated in investigations related to the January sixth riot
are being asked to complete in depth questionnaires about their involvement.
This as the Trump administration Justice Department weighs disciplinary actions
that could result in firings. Joining me is former Palm
Beach County State Attorney Dave Ehrenberg. The acting FBI Director
(23:40):
Brian Driscoll, in an email to all FBI employees, and
he said that the FBI was told to turnover by
Tuesday all current and former FBI staff who worked on
investigations or prosecutions related to the Capitol riot. He said
the request covered thousands of FBI employees around the country,
including him.
Speaker 1 (24:00):
Knew it was going to get bad, and he said
that I will be your retribution. So we can't be
too surprised that he's going after the people who went
after him. But when it gets real like this, it
is quite a moment because we've never seen this before.
This is the weaponization of government. This is what the
(24:20):
other side keeps claiming that Joe Biden and Mary Garland
did weaponizing the Department of Justice. No, no, no, that
was projection. What they're doing is creating the DOJ as
the Donald Trump defense team, like his own law firm
and as part of his own law firm. He needs
investigators who are loyal to him. So that's what this
(24:41):
is about. And if you, especially if you worked against
him even though there was evidence, and they're just doing
their jobs and their career prosecutors and FBI agents who
have worked in multiple administrations, including Donald Trump's administration itself,
then you're the enemy.
Speaker 2 (24:56):
I think that most of these top level people are
going to have an easy time I'm finding a job
in the private sector right with their experience, right.
Speaker 1 (25:04):
But you know, as a former prospert myself and I
was a state attorney for twelve years, this is their passion.
This is what they want to do. They could have
always made more money in the private sector, but they
have a passion for justice and for just waking up
every day to try to do the right thing, to
stand up for victims of crime, and to hold wrongdoers accountable.
And now one of the wrongdoers is now the head guy,
(25:28):
and he is going after them for doing their jobs.
And so it is to them probably just like the
bizarre world where they get punished for doing the right thing,
for doing their jobs, and you got to believe in
They just think that at some point that this will
(25:48):
will be over that the bad guys don't win in
the end, at least not according to the to the
books that we read, the nursery rhymes and pro wrestling
and for wrestling.
Speaker 2 (25:58):
What's happening is they're transferring a lot of these people,
for example, attorneys, attorneys that are handling environmental matters for years,
attorneys that are handling cartel matters, for example, in the
antitrust department, and they're sending them all to this Sanctuary's
City team. But what's happening is a lot of them
(26:19):
are resigning rather than go into the Sanctuary Cities team.
So it's a way to get them to resign without
any legal hassles.
Speaker 1 (26:27):
Right See, these are career service people. They've got career
service protection under the law, so if they get fired,
they can sue and get their job back. But for
all practical purposes, their days are numbered in this administration,
because even if they get their jobs back, even if
they successfully bring an action against the Trump administration, they'll
be stuck counting paper clips in the basement. They're going
(26:48):
to be stuck at a department in an area that
they don't want to be in. And so they realize
that they're going to have to find something else now
if they want to stay around they really believe, Like
the head of the FBI said that I dug a foxhole,
I was staying in it. It sucked, but what had
to be done during wartime. Well yeah, but this is
four years as opposed to four days or four weeks.
(27:11):
And so that's why I just think it's a no
win proposition. We should all be appalled at what's going on.
But after all, Donald Trump told us he would do it.
Speaker 2 (27:20):
We don't know exactly what the extent of it will
be at this point, but do you think there are
enough layers in the FBI that it won't affect the
bottom line?
Speaker 1 (27:30):
I do worry that the FBI's mission of working with
intelligence agencies, and not just for domestic law enforce but
on counterintelligence, that that will be curtailed. Cashpttella said the
FBI should go back to being cops. But remember the
reason why the FBI has such a broad jurisdiction, a
broad mission is because of nine to eleven, there were
forms put in place to make sure we don't miss
(27:52):
out on intelligence where we could actually save lives and
prevent a terrorist attack. So that's why the FBI's mission
was broadened. Now, if you want to circumscribe their mission
and make them into just a domestic law enforcement operation
at the behest of the president, that is going to
jeopardize national security. And so I would hate for a
(28:13):
tragedy to happen for us to realize the error of
their ways.
Speaker 2 (28:17):
So cash Ptel testified that all FBI employees will be
protected from political retribution and no one will be terminating
because of the specific cases they worked on. But that's
outright contradicted by what happened after that testimony.
Speaker 1 (28:34):
People will say anything to get confirmed. Ask Supreme Court
justices who said that roversus Wighed is settled law. When
you're there trying to get the votes, you say anything,
and then you get in, and yeah, good luck trying
to impeach these guys after they're sworn in. So yeah,
they'll say what they have to say and then they'll
do something different. But yeah, he may be right that
we're not going to fire you, but you're going to
(28:56):
essentially be sent to the office in Fargo to write
a two hundred page term paper that'll take four years.
Speaker 2 (29:06):
Forget about the conspiracy theories, forget about the red promises
of retribution? Is he qualified to run an agency as
big as the FBI?
Speaker 1 (29:14):
Talking about Cashpitel, well, I know Cashpitel. He used to
be a public defender in Dade County, so I knew him.
He doesn't come from the bureau, so in that sense
he would not be But now these days, expertise is disfavored.
This is the era of hey, I'll do my own research.
I think that he will get confirmed because he is
(29:36):
team Trump. I think the other two controversial ones, the
most controversial ones, RFK Junior and Tulsea Gabbard are not Republicans.
They're not part of the team. And if you're part
of the team, yeah, you're going to get through. They'll
find a way to get you through. Pete Hetseth got through,
but Gaberd was a Democrat who ran against Trump. RFK
Junior was a Democrat. So they don't have the loyalties
(29:57):
amongst the Republicans that a born and bred Republican does.
There's an old adage Democrats fall in love, Republicans fall
in line, and the centers will find a way to
confirm cash Pattel and I love that he walked away
from words he said in his own book. It reminds
me of when Charles Barkley was criticized for some of
the stuff he wrote in his own autobiography, and Barkley
(30:19):
said out he was misquoted.
Speaker 2 (30:21):
Charles Barkley can get away with that stuff, though, I'm
not so sure about Cash Patel. Now, one of the
complaints you hear is that if Patel hads the FBI,
there'll be no independence from the White House. Is that
really a big problem? There have been other times when
the FBI and the White House were aligned.
Speaker 1 (30:41):
Yeah, even though JEdgar Hoover was independent of the White House.
And so there is a long history of independence. Remember
the whole kerfuffle with James Comey. I mean, we've seen
this over and over again that the FBI actually has
had more independence from the president than the Attorney general has.
In the DOJ John F. Kennedy appointed his own brother
(31:03):
to be attorney general. President Obama and Eric Holder were
very close. Eric Holder referred to President Obama as his wingman.
So we've seen this before. Jimmy Carter's attorney general was
a boyhood friend of his from Georgia. So it's not
unusual for a president to appoint an attorney general who's
close with and so the whole thing about independence, Yeah,
and theory, that's great, but not everyone's going to be Jannerino.
(31:26):
With Bill Clinton, that was truly independent, Mary Garland, truly
independent when you go after and prosecute the president's son.
But we had that choice in the last election. We
had the choice between independent DOJ and independent FBI, and
a choice between that and Donald Trump, who said they're
going to essentially work for me and I will be
a retribution, and the voters chose the latter.
Speaker 2 (31:46):
So I know, you know Pam Bondy, but it seemed
like she did benefit from the fact that the person
who was initially chosen to be the attorney general was
so out of so out of the mainstream, so out
of most people comprehension, that she sort of got I
think a benefit from that because people were like, she's
not Matt.
Speaker 1 (32:05):
Gates, right right.
Speaker 5 (32:06):
Yeah.
Speaker 1 (32:07):
Reminds me of the person who became mayor of Washington,
d C. After Marion Barry. When your predecessor is caught
on camera smoking crack, you know you've got a low
bar to exceed. So that was Pam Bondi having to
to exceed that Matt Gates bar that was going to
be an easier get and Pam A. Bondi is someone
I know very well. I ran against her than I
worked for her, so I know that she does believe
(32:28):
in the rule of law. And people are asking, well
she should resign now, well, she hasn't even been confirmed yet,
and if she's not approved, and if she decides to resign,
out of discuss who do you think he's going to
a point? He's going to a point like Rudy Giuliani
or like the MyPillow guy with a degree from Trump
University or something. Who knows. So it's not going to
(32:50):
get better. Pam Bondi, I think is the best nominee
that Democrats could hope for, because she at least as
someone who is qualified. She's a twenty year prosecutor, she
believe in the rule of law, and she's hired Democrats
like me to work with her. So I do think
she will serve as somewhat of a check on some
of the real radical abuses. I got to believe she
would never have supported the full pardons for all these criminals,
(33:13):
these rioters, these insurrectionists that Donald Trump pardon including those
who beat up police officers.
Speaker 2 (33:19):
One thing that a lot of people found concerning Democrats,
I'll say is that she would not say that the
twenty twenty election was fair.
Speaker 1 (33:28):
Yeah, she went further than most. She said she accepts
the results. And yeah, but yeah, I mean, if you're
going to wait for a Republican nominee to say that
Donald Trump lost a twenty twenty election, you're gonna be
waiting for a long time because he would never appoint
someone who's not going to at least give lip service
to the big lie. This is the reason why he
appointed them, because they're gonna be loyal to him, and
(33:49):
you can't be loyal to him and actually say the
truth about the twenty twenty election. So yeah, you can
just hope for the best that we can get, which
is someone like Pam who can say that I accept
the results of the election. And she never used the
F word when she testified fraud. She didn't use that word.
She didn't say she saw fraud in Pennsylvania. She says
she saw things. Okay, take what you can get.
Speaker 2 (34:10):
She'll have control over the FBI, it's part of the DOJ.
Speaker 1 (34:15):
She'll have some level of control over it. Ultimately, the
power to prosecute comes from her, not from the FBI.
But there's an old adage you can beat the rap,
but you can't beat the ride. And that's where cash
Btel can be really dangerous. Is that, even if Pamboni
does not approve of the actual indictment of going to
a grand jury, cash Motel as the head of the FBI,
(34:36):
can investigate and make any target's life miserable.
Speaker 2 (34:40):
The investigations and the build up to possible prosecutions can
not only be nerve wracking, but very expensive as you
hire lawyers to defend yourself. Thanks so much for coming
on the show, Dave. That's Dave Ehrenberg, former Palm Beach
County State Attorney. And that's it for this edition of
The Bloomberg Law Show. Remember you can always get the
(35:01):
latest legal news on our Bloomberg Law podcasts. You can
find them on Apple Podcasts, Spotify, and at www dot
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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