OA46: What Could Donald Trump's Tax Returns Tell Us? (With Guest Tony Di Fatta) - Part 2

Transcript

This transcript was generated automatically and may contain errors — the audio is the record.

0:01:16 Thomas: Hello and welcome to Opening Arguments. This is episode number 46. I am host number one, Thomas Smith, and that is host number two, Andrew Torrez. How are you doing, Andrew Torrez?

0:01:26 Andrew: I'm great, Thomas. How are you?

0:01:28 Thomas: Doing great. Well, info. Info. We've got the interview more with Tony Di Fatta coming, part 2 coming up, uh answered a lot of your questions. By the way, quick thanks to everyone on Patreon who asked a ton of questions. Man, did we get a good response about this interview and questions to ask him. So that's a really cool thing. Again, another benefit of being a patron over at patreon.com/law. You get kind of notice ahead of time about some of the topics. And when we can, we'll solicit questions and make sure they're answered in as much as we can. So before that, we've got, well, not exactly a listener question. Let's go ahead and we'll say it's a listener question for the purposes of segment introduction.

0:02:19 Andrew: Yeah.

0:02:19 Thomas: And I'll play that little intro.

0:02:21 Clip: He who questions training, only trains himself at asking questions. What?

0:02:29 Thomas: All right. We got an email from Peter Crinklaw, which he has law in his name. So Andrew, I dunno, he might be a better expert here. We're We're going to have to reconsider the show. No, here's the selection of it. "I think that Andrew did a poor job of presenting the pro-school voucher argument. The basic idea is that we want schools to have incentives to teach well and that this will help students overall. After all, there's a lot of evidence suggesting it is not mere underfunding which leads to bad outcomes, but inefficiency. Andrew doesn't agree vouchers will achieve this and thinks that the argument for school vouchers is beneath contempt and so didn't really present it. This is why it took Thomas to cautiously make the argument before Andrew launched into a series of counter-arguments before putting the issue to rest."

0:03:21 Thomas: So, what of that, Andrew? I mean, that's a pretty critical email, but what do you think?

0:03:26 Andrew: I certainly appreciate the email. We're airing it because one of the things we try and do here is be accountable for the political positions that we do take. I don't think the voucher argument is very good, but it's a fair criticism to say we gave sort of short shrift to it. So in that light, I'd kind of like to explain why.

0:03:49 Andrew: So First, let's air the argument as best as we can, right? Right. So the argument from an economic standpoint is, if you open up public schools to increased competition, then those public schools, in order to retain students, will be subjected to economic incentives in order order to maintain their student body and will thereby have to give better service in order to withstand that increased competition, right? And so all of the things that we talked about, so what do vouchers do? We accurately described that they are a tax bonus for pulling your kids out of public schools.

0:03:49 Thomas: No, right?

0:04:36 Andrew: So you can view that as an incentive to the schools, right? Like, well, if you don't if you don't want people pulling their kids out, you better offer better services, right? So there is that kind of incentive there. I think there are a bunch of problems with this argument sort of as an argument. But I want to point out that Peter pointed us to an igmchicago.org survey that was asked of economic experts on a panel. And the question was – there are two questions.

But the first question was, "If public school students had the option of taking government money currently being spent on their own education and turning that money into vouchers that they could use towards covering the cost of any private school or public school of their choice, e.g. charter schools, most would be better off, right? Right. So that's the framing of the question. Notice, you know, we can parse the language down a little bit. That question was put to economists and the answers were 5% strongly agree, 39% agree, 34% uncertain, 5% disagree, 2% no opinion. Okay. So what I would describe as kind of a plurality of tepid agreement, a strong plurality for uncertain, enthusiastic among the economists that this is going to improve the school system, but some kind of thought of, yeah, well, you know, maybe most will be better off.

And, and, and how, right, notice that's not qualified in there, right? Like, what does that mean by how are, how are they going to be better off? In my opinion, and again, I'm a lawyer, not an economist, the reasons that I think there are many. I should I don't know that I should have to say this, but I guess we have some conservative listeners who may be looking at our general left-leaning politics. If you're a listener from the beginning, you know that Thomas and I are both capitalists. I believe firmly in the free market system.

I have been criticized by many listeners of the show for my policy differences with Bernie Sanders and for defending kind of the moderate position on, for example, increasing the minimum wage. So particularly on economic issues, right? Like, I think I'm a fairly mainstream, you know, slightly left of center, but not certainly not a socialist, and willing to look at economic incentives.

0:06:12 Thomas: Yeah.

0:07:09 Andrew: Schools are a terrible vehicle for economic incentives because they're not delivering a widget to you, Right. Like, when you have a widget, you can improve the customer service for widgets, you can make the widget better, you can make the budget cheaper, and

0:07:16 Thomas: Yeah. Well, and if you get a bad widget, you're just like, oh, darn, need to get another widget. You know, it's not like it's that, oh, a generation of children ruined, you know, like, yeah,

0:07:28 Andrew: Right. Yeah. Time To Go right. Yeah. Exactly. And and so think about how people in the present system exercise kind of their voice on school districts, which is to say, because they are funded by local property taxes and because they are drawn by, by, you know, geographical proximity, that's a question that goes into when people buy a house, right? They say, "Okay, well, what are the schools like in this district, right? Where are the public schools going to be?" And that is strongly correlative with home values. So it's kind of the primary driver, right, being property taxes is something that is, number one, it's removed from From the decision of whether to go to school or not. You know, very few people say, well, I don't want to say very few people say.

Some people do, in fact, up and move because they're dissatisfied with their local schools. But it is, the action is separated from the product that you're evaluating. And the decision is, you Know, often a kind of a multi-year decision, right? Like this is, it's not the case where, you You know, you sort of immediately get back the feedback of the widget is priced too high or the widget is defective or whatever. So I'm sort of skeptical of the ability for schools to respond to economic incentives in the first place. That's one. Number two, the voucher program is, and you see sort of how carefully they had to word this economist question, it provides a fraction of the cost of tuition for public schools. It is not a replaceable good.

0:08:28 Thomas: Yeah.

0:09:14 Andrew: The voucher in Zelman versus Simmons-Harris was $2,600. And the average tuition at private schools on the East and West Coast is over $20,000, with several of your elite schools costing as much as an Ivy League education. I think Sidwell Friends is $45,000 a year. Right. So, uh, you are subsidizing, you know, five to 10% of the cost. Uh, that's not a replaceable good. Right? And then the third issue is, uh, the reason why it's, it's not, uh. A replaceable market is, uh private schools schools have the option of taking the kids that they want to take. And public schools have the requirement to take everybody else.

0:10:02 Andrew: If you ask the public school system, you know, would you like to not take the bottom third of your students? Would you like to Not take everybody that has special needs? You know, Would you Like to Not Take everybody that's going to require sort of massive expenditures? You Know, they would they would love from an economic standpoint to do that. Uh, but those are the people who are, uh, going to be stuck in those schools regardless. Uh, because private schools can say, yeah, yeah. I'm sorry. Like you have to meet this academic standard in order to have admission. So even if you have a voucher, right, it's not like you can write widgets don't require you to take an intelligence test before you buy them. But public schools, and neither do public schools. But private schools can impose any sort of restrictions that they want.

0:10:47 Andrew: So that is I have more arguments as to why vouchers are bad public policy, but that's kind of an overview. But I want to say that the primary reason I didn't launch into those public policy arguments in the discussion in our vouchers episode is because that's not the argument that defenders of vouchers have made to the Supreme Court. So, for example, we talked about the Zelman versus Simmons-Harris decision that essentially makes vouchers constitutional and provides a framework. The compelling state interest that was advanced in that case was not vouchers improve the quality of public schools. The government didn't make that argument. The government made the argument instead that the valid secular purpose was, quote, "providing educational assistance to poor children in a demonstrably failing public school system."

0:11:43 Andrew: Right. So the idea was not, this competition is going to make Cleveland schools better. The idea was, boy, Cleveland schools suck, and this is going going to help you get your kid out, right? Not it's going to make it better, this is your ability to escape. And that's not those aren't my words, right? So please, our residents of Cleveland, do not send me hate mail, send it to, uh, the Solicitor General who defended, uh, Zelman in this case. Um, it, it the the argument was not made that the secular purpose here was to improve the public school systems. The argument was, this provides a choice based alternative for some people to be able to pull their kids out of a failing system. And that, and that really gets to kind of the heart of the matter, which was the public policy argument I made in the show itself, which is, particularly in our inner city schools.

0:12:35 Andrew: You know, the email says funding may not be the only problem. And And I don't know anyone who says it is the only problem, but it is a massive problem, particularly in inner city schools. So you're depriving the worst off schools of funds. You're sticking them with the kids that nobody else wants. And even before the Supreme Court, the government's argument was not this is going to force those schools to magically be better. It was this is gonna give you an alternative to sticking your kid in a quote failing school system. So I stand by my analysis, but I always appreciate being called out and saying, hey, fair. You Let's listen to the argument for the other side. I don't think, I mean, we went through kind of the economist poll and this doesn't strike me as a great piece of data for the Other Side, right? Like economists mostly think that they're tepid in agreement that some people – that most would be better off. I don't want to phrase the question correctly a voucher system. Well, there are a lot of ways that you could view that, right?

0:13:38 Andrew: Like you could review, yeah, boy, everybody who's stuck in inner city Cleveland, they're going to be a heck of a lot worse off. But most who get out will be betteroff. So, um, don't, I didn't view that as a great argument, but, uh, but I do want to, you we try and hold ourselves accountable, uh. Politically for, for, uh considering all sides of the question. So I thought it was worth going and taking a look.

0:13:24 Thomas: Huh. Yeah. Yeah, absolutely.

0:14:00 Thomas: Thanks for keeping us honest. And thanks for that. That answer, Andrew. I think it's like you pointed out. Good to maybe explore that a little bit more. More. And while offering no apology for being liberal, at least explaining more where you're coming from on that. I found that interesting. So, all All right. Time to go to part two of our interview with Tony Di Fatta. And we answer more of your questions on what we might see in Trump's tax returns and all kinds of stuff. So here we go. Part two.

0:14:36 Thomas: Know, let me ask a general question, uh, about the audit thing, because he said for a while, he said, "Oh, I'm not releasing it because I'm under routine audit," but that was a long time ago that he said that, so, like, in your experience, if you have any experience with this, like, how plausible is that? How long would a quote unquote routine audit take? Uh, and when, I mean, shouldn't he be done with that by now?

0:15:00 Tony: The IRS can move quite slowly, not necessarily. It could drag out for years, depends on what they're auditing him for, depends if they're auditing the whole return or certain entities.

0:15:03 Thomas: Oh, okay.

0:15:13 Thomas: Do we know that? Do we know like what year he's being audited for? Do We know any of that or is it all private?

0:15:18 Tony: I do not personally know any of that information. I don't believe any of it's been made public. The IRS would take protection of Donald Trump as a person's personal information quite seriously as they should any U.S. citizen. And so they're not going to be saying, oh, we're, you know, auditing 2015's or 14's return. I don't think they would disclose that. Wouldn't shock me that he's being audited, and it wouldn't shocked me that it would take quite a while to, you know, flush out through the process. I mean, they're going to come up with changes. He's going to bounce back, and then it could go to,you know, a different audit team or,

0:15:30 Thomas: Sure.

0:15:56 Thomas: Can you give some idea of the scale? Yeah. Are you talking months, years, decades, like like maybe it.

0:15:58 Tony: I don't think It'd take decades, but months to over a year. I mean, I've had clients that have had tax problems that have been there six years. Not that they were under audit that whole time, but if they hadn't paid or they're back taxes and they keep bringing up the issue every two years, you know, in Shakespeare, you're not paying off or couldn't pay off back taxes if he were to owe any. Not that there's any indication that he hasn't paid his taxes or if he's paid any taxes at all in the last couple of years. Unfortunately, there's not a ton to go off of on particularly Donald Trump's tax returns because we haven't seen anything. So, you know, it's sort of an open ended question a lot of information.

But no, he could have very well during the campaign saying he's under audit and still legitimately be under audit. And professionally speaking, I'd probably tell him not to release it because if there was something that he had done incorrectly, either inadvertently or inadvertently, if somebody were to point it out, you know, they could be doing the IRS's job for them. And that's not to say that kind of thing never happened before, where news stories or something has broken or triggered an audit. It's actually has happened more frequently than you would think that that's how people get caught. So it's good professional advice to give him. I understand there's a political component to this, but, you know, solely as a tax preparer, I would say don't don't release it. Of

0:16:44 Thomas: Hmm. Yeah.

0:17:35 Thomas: And that that might answer why the IRS came out and said, oh, no, you can release it.

0:17:40 Tony: Course. Yeah. Have more eyes scrutinizing it.

0:17:40 Thomas: Maybe they go ahead. Yeah yeah.

0:17:44 Tony: I mean, you may not like Donald Trump, but that, you Know, as a taxpayer, I wouldn't say the same thing to anybody. You know why give more eyes, a chance to pull this thing apart.

0:17:57 Thomas: Yeah actually that makes sense. Yeah good good glad I asked that question. You know there's another question question here by Steve Kaplet. And it's involving, I just kind of want to turn it into a general question about that operating loss in, I guess in general, that that alarming to you as a tax professional? Is that, is that something that, that I think you referenced earlier that it maybe wasn't that out of the ordinary. Could you talk about that a little bit?

0:18:26 Tony: Number being large has a little bit of shock value even to me, but not having a full understanding of Donald Trump's assets and holdings, I will speak to the more general sense of a sophisticated entrepreneurial tax preparer. Posting a large loss in a given year does not shock me. I've done a number of high net worth individuals that maybe are constantly investing. And I'll also slightly speculate, Donald Trump holding potentially a lot of real estate, that kicks off what's known as tax depreciation, and as long as he's at risk for the loans, and it would make the argument that he's a qualified real estate professional, he would be entitled to take those losses in a given year.

0:18:26 Thomas: Oh,

0:19:20 Tony: So posting a large loss, no, that doesn't really shock me. Does a billion dollars shock me? Yeah, I'm a human being too and a billion is still a billion, but without knowing more, it wouldn't also shocked me that if a few years later that had been used up,

0:19:37 Thomas: I was going to ask that. So do you know offhand how long he possibly could be using that loss to offset his tax returns?

0:19:45 Tony: Believe the rules were different then. I think at that time it was 15 years, now it would be 20, um, so you could carry that loss forward and you could have carried it back as well for two years. Again, the rules are a little different, and in 1995 I was still in grades or uh middle school, so you know, forgive me not having that instantly off the top of my head I was pressed. I was not. I was now preparing and signing tax returns at 1995, but I read somewhere that the rules were a little different than, um, in the 90s as they changed. Um, a quick also point, even though you get to offset it, there's the alternative minimum tax, and that only lets you use 90 of the NOL. So say, I'm going to use a round number, say he, he had made $10 million, he could only use $9 million in a given year to offset. So you still would pay AMT taxes on a million dollars, and

0:19:45 Thomas: Hmm. Oh, wow.

0:20:08 Thomas: You say you weren't preparing tax returns at that time okay Oh

0:20:48 Tony: Then you have an AMT under

0:20:48 Thomas: So each year he can only uh offset 90 percent

0:20:51 Tony: AMT. So in our tax code, because it's needlessly complicated, which is a far larger discussion, there's regular tax, and then there's alternative minimum tax, and you pay the greater of.

0:20:56 Thomas: Okay

0:21:05 Tony: So even if he did have legitimately this huge NOL built up, but then had income in future years, he still might pay AMT taxes those years, even if you still got some NOL left. So then you've got to start tracking his NOL and then his AMT NOL. Well. It

0:21:21 Thomas: So he's not, essentially, are you pretty confident that he won't have paid zero

0:21:26 Tony: Seems unlikely to have not paid any taxes between 1995 and this year, I'm only speculating.

0:21:28 Thomas: Okay Fair enough. Eric Brewer asks, what smoking gun might we find that would almost certainly disqualify him? So I don't know, Tony, do you have an idea of like, maybe what the worst thing we could, we could find on the tax return would be from your perspective?

0:21:51 Tony: That's a tough question to answer so open-ended. I would post this more from a a political standpoint than more a criminal standpoint. And if I can answer the question in that way, I don't think you'll find anything that's going to be, oh, we get to impeach and throw Donald Trump in jail. I just don't Think that's on there.

0:22:03 Thomas: Right. Sure. Yeah, because he's had tax professionals on his side. I mean, he's hiring people to know what they're doing, I'm assuming. Right. Right.

0:22:20 Tony: You would think. I mean, objectively speaking, I don't think you're going to find anything like that. You might be. And I think it probably would have been more damning to his campaign if it was released prior to the election, um, because then frankly there's a large part of our population that's not sophisticated, doesn't understand how to read a tax return, doesn't get what's in it. They just see uh low effective tax rates or maybe huge NOLs and say, oh, he's not paying taxes or he's a tax cheat, or he just uh, and that may have been more politically damning to him than criminally damning to him. Uh, you know, I think it kind of affected Mitt Romney some when, you know, he had like a 14% effective tax rate because a lot of his income was kicking off from dividends and capital gains and he gave a lot to charity.

0:23:10 Tony: Something like that might be spun from a political standpoint. Honestly, I don't really know what releasing his tax returns now after the election would really do to Donald Trump. Um, in my professional opinion, you know, would be like, okay, he didn't pay little taxes or he paid no taxes last year, long as it was following the Internal Revenue Code. Other than a news story, I don't know what that really tells you.

0:23:37 Thomas: Yeah. I guess the only things I could think of that would be like real red flags would be receiving stuff we've kind of touched on already, but receiving large payments from foreign governments or something, or being, what if he had like just a crushing amount of debt, or would that even, maybe that wouldn't even come through on the tax return, would it?

0:23:55 Tony: If he had a crushing amount of personal debt, that really wouldn't be on the return other than uh personal home mortgage, mortgage. Maybe if he had some single member LLCs, you might get some information on that if he was at risk for those entities. But you wouldn't get a clear picture. You might get some pieces to the puzzle. And he did release, so I took the liberty of looking this up, he did release some financial disclosure data, just not in the form of a tax return. And there is his disclosure that he has holdings in entities overseas. I sent Andrew the link to that. So I don't think it's really fair to say he didn't disclose that he had investments abroad. He just didn't release them in the form of a tax return.

0:23:56 Thomas: Right. OK.

0:24:43 Andrew: To me, I think the value that I am taking away from this, and I wouldn't have thought this prior to our discussion, so been valuable at least to me and sort of my understanding, is one of the things that look for as lawyers and even as civil litigators, as somebody who does not do any kind of criminal law, is that when somebody has lied to an authority, right, be it the police or the IRS or what have you, requiring them to talk more about the details is sort of where the story starts to break down.

And assuming that there is an active IRS audit, It seems to me that a lot of the, the value here in requiring disclosure is not going to be that all of a sudden there is a document that's a smoking gun that we can release to the news and release kind of – but it's that by releasing those documents, the IRS agents who are taking a look at it, or IRS agents who have looked at previous tax returns, may be able to kind of put together the results of their audit, plus those new disclosures, plus the public statements that Trump has made, and sort of look for, a look for holes in the story, look for documents that seem, seem to contradict, what he's previously said in prior audits or, you he's kind of failed to, you file an amended return or something like that.

0:26:28 Normalandrew: I'm curious thoughts on that, Tony. Um, yeah, that goes to my point, Andrew, that, you know, more reason, as a professional, I would tell him not to release the

0:26:37 Thomas: Yeah.

0:26:37 Tony: Return, you as much as I might want it as a U.S. citizen. If I was advising Donald Trump on his tax return, you know, I'm sure there are positions that his accountants have taken that they're prepared to defend, but you know, you don't need more scrutinizing eyes because, you know, I think we'd all say that every person would be looking over those returns with a fine, trying to find anything they can. I think would be minimum that you could get from the personal returns. I think more of the meat and substance would be more of the corporate and partnership levels, honestly, not even in those tax returns, but the detail that went into them. Because you're not going to get things like source documents and work papers released, least.

0:27:25 Thomas: Yeah, OK. So here's one that I think is a pretty clear no based on what you've already told us. But just for the sake of answering another listener question here, would Trump's tax returns have any information that can be used to discover the extent to which he or his businesses stifled contractors and other people who did work for him? In other words, would the returns contain any relevant information on the people he promised to pay, the amount he paid versus the amount he promised to play, etc.?

0:27:53 Tony: The only thing I would say, you kind of answered and kind of got my general theme of no, but uh, I would say if there were any debts that he got forgiven on or uh they walked away from, there could be some disclosure of cancellation of debt income, and that's my only no, but maybe you could get a little bit of some debt, right?

0:28:10 Thomas: Right. But if he's stiffing someone, then that's probably not going to be a cancellation of debt, right? Because they would just be like, we still want this money.

0:28:23 Tony: And let you know that that would not really, you're not going to see on the return there, I didn't pay this contractor

0:28:28 Thomas: Yeah.

0:28:29 Normalandrew: Of this builder, uh, that's not going be in there, you don't become a business owner without having somebody say you owe them money. I just need an office building, and Andrew, uh, has joined us there, and there's already some squabbles and people we disagree on, who, who we owe money to and don't, didn't really order a change order that was part of the contract. So, you know, some of that's, it's just normal business. You don't go around the block that long without making somebody think you owe them money, when you can disagree with them or not. Yeah, sure. And again, I would have less of a career if that weren't the case. But let me ask it this way. Take this hypothetical, contract, right? Donald Trump owes this particular vendor a million dollars under the contract.

0:29:21 Normalandrew: Trump declines to pay, there's a lawsuit, and then Trump settles that lawsuit for $250,000, right. Right. Is there any way how does that payment get recorded on or does it get recorded at all on on Trump's taxes? Is there Any way that we would see, you if there were hundreds of these kinds of settlements or something like that? If you were to get to the partnership level return, if they booked a accrual for it, you know, legal pending, you lawsuits, there might be some of that. But if you paid out, it could very well easily be buried in, let's say it was a contractor that was doing a build out.

0:30:06 Normalandrew: It could very well be buried in one of those numbers and you would not see the detail. The tax return is a summary. It's not data. If you look, actually, you probably get more looking when When Donald Trump's hotels and casinos were publicly traded, which I think ended in 2005, you can look at the 10-Ks and get more of that information than you are from current tax returns. OK. And those I mean, I've I've dug through 10 case, but for our listeners, those are publicly available documents. And we could have investigative journalists digging through those disclosures right now. Right. Yeah, absolutely. Yeah. Those are filed with the SEC. You can do a quick Google search and you can easily find them.

0:30:53 Andrew: Yeah, it seems, it seems to me that David Farenthold and some of those guys ought to get on that, because it would at least help sort of flesh out that story. I mean, maybe, maybe the thought process is, you know, he won, so no one cares. But, you know, it

0:31:11 Thomas: I'm curious why someone wouldn't have done that during the election. It seems like everybody was already trying to do everything they could. Well, I got one more I'm looking at here, and I'm not totally sure this will be something you can comment on, but hopefully it will be. Sakashite Fukasumi asks, would it really have been feasible for Trump to liquidate all his assets and place them in a trust beyond his knowledge and control? His holdings are massively larger and more complex than Jimmy Carter's peanut farm. And that's something we've referenced elsewhere in this show. So what do you think about that, Tony?

0:31:16 Normalandrew: Can I

0:31:47 Tony: That's more a legal shell game to say who owns it, than uh, to say he really liquidated. He probably just put it in trust, and you know, say he's not holding it anymore, the trust is holding it. Without reading the trust documents, I mean, yeah, I'm sure the lawyers could draft something up that says he did that, but I think it's more, more, a paper shell game than, you, then a substantial difference, uh, to say he's not holding it, to say his trust is holding it. Okay. You know, what does that practically mean? I don't know what the trust is saying. The, what happens to the income? It's, it, it, it's tough to tell, uh.

0:32:25 Thomas: Okay.

0:32:26 Andrew: Can I take a crack with this one? And this may

0:32:27 Thomas: Sure.

0:32:28 Normalandrew: Be because there's a there's a legal component to it. So feel free to punt. But Sure, I'll punt if to the lawyer.

0:32:36 Andrew: If you were advising President Trump And this is, some might say, a bizarro world, President Trump, who wanted ethically to continue to have his businesses and everything else, but really wanted to divest himself of any sort of actual conflicts of interest while he was president. I mean, one of the things that was tossed around was placing his businesses in a blind trust. I was thinking about it from the previous question. We know our actual world, Donald Trump, has not done that and that his children will continue running his businesses. Uh, but what would you advise this bizarro world Trump who wants to, ensure uh, that he's free of any actual, um, conflicts of interest while he's president?

0:33:27 Normalandrew: Yeah. What would you advice him advice to I do? Don't think that could practically be done uh quickly I mean from I mean unless he was just having an absolute fire buyer sale. He would have legal obligations, I'm sure, and debts he'd have to satisfy before he could get released. They may not be able to actively find a buyer immediately. Even still, sales of that magnitude would take due diligence periods. He could not, practically speaking, speaking overnight, completely divest himself from all his business holdings. It just would not be theoretically feasible in my professional opinion. I'm sure he, just looking over his disclosure documents he has, he has pages upon pages of LLCs and corporations that he's got a significant share or even a minority share.

0:34:24 Normalandrew: There could be first rights of refusal. That he couldn't just sell to any old third party. I'm sure Andrew could attest to that. It would be a full-time job, frankly, forget being president, to liquidate Donald Trump's holdings. I don't think it realistically could happen. So, I just want to make sure I understand. Is the answer really the only way to ensure that there isn't a real conflict of interest would be for him to divest himself of these holdings? But that, you know, that would require, that would be such a lengthy multi-year process that, that you, it wouldn't be feasible upon assuming office. It would not be feasible upon assuming office unless he did it before he ran. And I don't

0:35:10 Thomas: Yeah.

0:35:10 Tony: Believe that was a requirement. So I don't think

0:35:14 Thomas: Huh.

0:35:15 Normalandrew: It's theoretically possible. But, but it, but it does suggest, right. It suggests, as voters, and whether that next candidate is, you Trump re-election or, you know, some uber wealthy Democrat, that, you know, when we're looking at political candidates, that, but that if they're in that stratosphere of wealth, that, you know, maybe that should start to be part of part of the expectation on good government. Maybe should be that in addition to disclosing your tax returns, which you sort of let us know the strengths and many weaknesses of requiring that, that we should be looking for our uber-rich candidates to kind of put the wheels in motion to divest themselves of these holdings if they're running for president.

0:36:01 Normalandrew: Well, that, unless there's a law to the contrary, that goes to what type of person you want to vote for. You know, I know when Kerry ran, I don't believe there was any call for his wife to divest herself of all her holdings. And I kind of found it was a cop out that from the returns that I was able to find years ago, which I could not seem to recall. Call he filed separately which is sort of like yeah you're disclosing your tax return but not really uh no, that's a really good point. I'd like you to go into that a little bit. From my understanding you know his wife I don't remember her name it was Teresa Heinz Kerry. Of as background, right, she's the heir to the Heinz ketchup fortune. And so John Kerry is wealthy as a civil servant, but she's Mitt Romney levels of wealthy, right?

0:36:56 Normalandrew: And so with that as background. Sorry, go ahead, Tony. Yeah. So that being said, and it's kind of funny because I looked men when years ago at different presidential tax returns. And it's kind of fun because I could not refine that tax return. But I I remember seeing, well, that's kind of a cop out. They filed separately, which is totally permissible. But if you're trying to not hide how wealthy she is, you know, and I'm the first to say that, it doesn't really show the full picture, but you're not even starting to see the pieces to that puzzle. And I don't really recall there being a call to arms about that. But I don'T really feel that that's a problem. If I mean, my my voting sense that a candidate has held business interests in entrepreneurship, may not like that candidate or may not vote for that candidate for other reasons.

0:37:49 Tony: But that in itself does not bother me that a candidature has been successful in the business world, whether it be, you know, the Heinz estate or, you know, Romney or Trump, that's you, one piece of their life story. I don't think that should affect your sole decision to vote or not vote for them, that to speak on Jimmy Carter's personal life, you know, the story is he always sold his peanut farm.

Well, that tells you a lot about Jimmy Carter, his character, and that may or may not have been a reason you wanted to vote for him, that he wanted to be perceived as so of conflict of interest that he was willing to do that.

And you may decide, well, I'm not going to vote for Donald Trump, because he's not willing to do that, or he's going to do it in a sort of a paper sort of way instead of, you know, realistically liquidating all his holdings, so I'd leave that up to the voter to decide that on the person, from my experience, you know, judge them on that, but I don't know if I necessarily care, but to each their own, everybody has their, their own voice and own opinion on that matter. I

0:38:57 Thomas: Yeah, that's good insight there. You know, with that said, I think that's about all the time we have. So, thank you so much to everybody who asked questions on patreon.com/law that really helped give us a good show and make sure we answered everything people were interested in. So thanks so much, Tony, for fielding these questions.

0:39:14 Tony: No problem. Thanks for having me, guys. And look forward to people's responses.

0:39:19 Thomas: Absolutely. Is there anywhere you want to point people to? Anything you want a plug online while we're at it?

0:39:24 Tony: You can reach me at www.tonydefata.com or give me a call at 443-791-5726.

0:39:33 Thomas: There you go. You earned it. If you need tax help, call them up. We'll put that in the show notes as well. So Tony, thanks so much for coming on. All So, Andrew, we've got a new sponsor for today's show, and it is really cool. I think it's a cool project. The Atheist Candidates Project. You want to tell us a little bit about it?

0:39:41 Tony: Yeah, thank you very much.

0:39:56 Andrew: One of the things that you and I have talked about on the show is combining literacy about political and legal decisions and, you know, helping you make sense of the news with activism and with sensible. And we've tried to, you know, direct people away from some kinds of activism and towards others. The Atheist Candidates Project is a portal that is designed to connect atheist candidates for political office who have no religious affiliation with the resources and professionals that you need when you're running a political campaign and to thereby sort of lower that barrier of entry.

0:40:41 Andrew: Right. So if you're an atheist, you're listening to us. You're thinking about running for office in 2020 or 2018. And, you know, you might be thinking, gosh, I don't know, how would I even go about like finding, you know, campaign staff and press people and, you know, people who've done this before. And that's, um, uh, Andre Saleh is the head of the project and he, uh has, has put together, uh, this portal at atheistcandidates.com to help, uh connect atheist candidates with those kinds of resources.

0:40:54 Thomas: Yeah.

0:41:11 Thomas: Yeah. We need representation. You know, it's The it's first step toward achieving sort of equality and at least being more considered in our politics is more representation in government. I mean, it's hard to imagine that with how few atheist representatives there are at any level of government. I mean there's so few. It's hard to imagine that we're ever going to be considered in policy. So I think this is a great idea. Idea. It's a way to not only connect people who might want to run, but it's also a way for any atheist listening to pull together resources and crowdsource the political process to help these atheist candidates.

0:41:54 Andrew: Yeah, that's exactly right. And right right now already the Atheist Candidates project has, um, they're working with seven former candidates, uh, five current elected officials, uh. And they have 28 prospective candidates who are going to run for office in like 13 or 14 states. It's really, it's really great, including a pretty large contingent in Texas.

0:42:16 Thomas: So A special note for people living in Texas. I know this is a little short notice, but today, the day this episode airs, February 24th, Friday, there is an Atheist Candidates Project meet and greet in Dallas. And it looks like it's at 6 PM local time. So maybe you can check that out. I know it's short notice, but maybe you can get out there. If not, I hope it went well. I hope that it's a chance for everybody to meet these candidates and really see what kind of support we can give people who are trying to seek more representation in government for atheists.

0:42:16 Andrew: Um, Um, that event is on facebook.com slash elect atheists, and you can RSVP and find out, uh, the information about the venue, if, if you can attend today, um,

0:42:59 Thomas: So, here's what you can do for the Atheist Candidates Project. The project needs need support from concerned citizens like you who are demanding equitable representation. Politics, unfortunately, Andrew, as we know, politics is not a cheap endeavor. You need funds, you need support, you need grassroots support, all that stuff. So if If you have the resources to make a small donation, uh, however much you can afford to atheist candidates dot com slash donate, that will have a big impact on this project.

0:43:00 Andrew: Yeah.

0:43:17 Andrew: Atheist Yeah, I mean, what I like about this project is it is a, it's a multi-candidate platform, right? Like, you're not just helping one candidate in one race, but you're building the infrastructure that, you know, has already recruited 28 candidates. And, you know, these are folks, uh, it, I am sure, you know, we'll all have political disagreements with each and every person on the list. Right. But, uh. The first step towards political visibility, towards not being a zero when you call your representatives, uh is to have people like you who are out there and who are are non-theists openly identifying who hold office and are, you know, willing to go to Capitol Hill and represent that people like us exist and seek office. So I

0:43:47 Thomas: Yeah. Yeah, normalizing

0:44:20 Andrew: Strongly support it.

0:44:20 Thomas: It, I think, is a Big key because once maybe, uh... religious people see that, oh, this guy's an, oh this, this candidate's an atheist and they did a good job and it's fine. You know, like it might be a good way to make it into not being just the absolute barrier that it is for a lot of positions right now. Like it's a, it's an near impossibility for a lot of different positions of government, but it would be nice to get it to be just at least a possibility, something people would consider and work from there.

0:44:21 Andrew: Yeah.

0:44:47 Andrew: Yeah. I totally agree. So we're going to be making a donation at atheistcandidates.com slash donate. We encourage you to do the same. You can also get updates on the project by texting atheist, A-T-H-E-I-S-T, most of us know how to spell that already, but you got to spell it out, to 24587. So text atheist to 24587. Throw these guys a a couple of bucks. See if you can't help them out and we can't make a difference in terms of recruiting non-theistic political candidates for the next couple of election cycles. I think we're going to need it.

0:45:22 Thomas: Absolutely.

0:45:25 Clip: The law breaking down

0:45:32 Thomas: All right. It's time for our second listener question, or maybe our first, depending on how you define listener questions. Uh, Zabby asked us if we could talk about this HRO in Jacksonville, Florida, which added LGBT protections. This was something Zabdy was excited about, a lot of people were excited about, uh, and here's a little quote from an article I saw, just to give everyone an idea, before maybe Andrew breaks it down for us a little more. The expansion would add sexual orientation, gender identity, and gender expression to the list of protected categories under the ordinance, which ensures that people aren't discriminated against in the workplace, the housing market, or public accommodations like restrooms, locker rooms, and so on.

0:46:17 Thomas: So, shadows reminiscent of something I've talked about over in Serious Inquiries Only, which is a Canadian law, C-16, I think it was, and then and there's... there's, there have been others in, in the U.S. as well. Certain people get kind of scared about stuff like this, but we won't, maybe we won't get into that right now. So, uh, can you talk about this, Andrew?

0:46:41 Andrew: Sure. Sure. So I really liked the question because it helps us illustrate something we've talked about on the show, which is the interplay between federal laws, state laws, and local laws. And so what we have here is a local ordinance. It applies to the city of Jacksonville. Alex, my son, who discovered that Jacksonville is the 12th largest city in the country. That's pretty huge. Population of 868,000. Obviously, we know Florida was a Trump state. Jacksonville was pretty heavily for Clinton. So, you know, fairly liberal metropolitan area. It illustrates—so this covers almost a million people. In my view, an unambiguously good thing.

The way in which civil rights protections work is that the federal government establishes a minimum floor. The primary act here, we've talked about this before, is the Civil Rights Act of 1964, which is codified at 42 U.S.C. Section 2000E and then forward. And Title VII prohibits discrimination against an individual on the basis of race, color, religion, sex, or national origin. And you'll notice that there are a lot of things that are missing from those list of protected classes. And I should say, ties into, Thomas, your comment about the misinformation on Canadian Bill C-16, which you just did a fantastic job in covering on Serious Inquiries Only.

0:48:17 Andrew: If you haven't listened to that episode, you should go back and listen to that episode talking about Jordan Peterson and Sam Harris. These apply in places of public accommodation, right, or acts undertaken by the government. It's not – they do not apply to, you know, I'm walking down the street and you look at me funny or whatever. But that in employment, for example, uh that, um, Title VII of the Civil Rights Act, which covers employment, uh leaves out, uh sexual orientation. It leaves out gender identity. Now, there's an executive order that is subject to being overturned by the Trump administration that directs the Justice Department to construe sex as including sexual orientation. And there is some case law by courts that support that, that the idea of discrimination by sexual orientation is the same as discrimination by sex as in gender. But there's cases going the other way.

0:48:30 Thomas: Yeah,

0:49:16 Andrew: Right. You can see how the argument, right, that sex that is not sexual orientation. Right? You can say I'm hiring men and women equally. I'm just firing all the gay men. Right, and in in 30 states... there's no statutory protection for sexual orientation or gender identity in 20 states. There are California and Maryland are two of them. So, you know, yay us. But lots of people, you know, sadly, like the areas where it is most needed are the Areas that are least likely to have the laws protecting it. So you have a federal minimum statute. It doesn't include sexual orientation or gender identity. States can then pass laws that supplement but do not contradict that federal minimum statue. So in other words, you can add to it. You can say, we're also going to protect on these additional protected classes, right?

But you can't say it's perfectly okay in the state of California to discriminate on the basis of religion, right, like the federal statute creates the floor, the state law sits on top of that and supplements. If it contradicts the federal law, then it is, there's a doctrine called preemption, and it means what it sounds like, which is to say that law would be preempted, would would be of no effect uh by the federal law.

0:49:45 Thomas: Yeah, yeah. Right.

0:50:34 Thomas: So the federal law sets your Baseline. Line you can't Discriminate if the federal law is protecting against it, but there's no, the states don't have to go any further than that if they don't want.

0:50:35 Andrew: Yep, right. Right.

0:50:46 Andrew: And then they can, state laws sit on top of that, can go further, local laws sit on top of both the federal and state. Laws and are subject to the same thing, so a local ordinance can't contradict a state law or a federal law, but it can, like this ordinance in Jacksonville, go further than either the state. Which, you know, has been a swing state with mostly Republican governors. If you find yourself in a more liberal locality, you can pass additional protections that apply within the boundary of that political unit. This is a good reason to continue. You know, we've talked about things you can do if you are, you know, on the left and you are discouraged by President Trump. Right. Like this is part of why running for local office and voting for local offices matter, because you can, doing things like this. So so what is the ordinance? The ordinance is 2017-15. And it was just it was passed by the city council. And then the mayor took no action.

0:50:54 Thomas: Yeah. Yeah.

0:51:48 Andrew: I don't know why, you know, refused to.

0:51:50 Thomas: I Would Yeah, I wanted To ask you about that, uh, because I was confused as once again a lay person, it said something like the mayor returned it with no signature. I would have thought that that means it's not law because, cause he didn't sign it, but, but that's not how it works.

0:52:03 Andrew: Yeah, that's there's this sort of pocket veto by the president, which is kind of roughly analogous to that. The city charter of Jacksonville provides that unless you affirmatively veto the bill can pass without the signature. Right. Like so you get the opportunity to say no.

0:52:20 Thomas: Is this his way of, he doesn't really want to put his name on it apparently, but he's not going to fight it. Is that essentially what that means?

0:52:23 Andrew: Right? Yes, that's exactly right. And so this ordinance amends various section of the city's laws, including equal employment opportunity, public accommodations, fair housing, it provides as follows, right? So it's a standard anti-discrimination law. It doesn't apply to, you all the kind of weird, stupid hypotheticals that Jordan B. Peterson likes to come up with. Uh, and it says, uh, so section three says the following sections of the ordinance code are hereby amended as follows. Wherever definitions are provided, the definition of sexual orientation shall be added and shall mean an individual's actual or perceived orientation as heterosexual, homosexual, or bisexual. No, no protection in there for gender non-binary, uh but, you know, nevertheless, uh a step in that direction.

0:52:27 Thomas: Okay.

0:53:16 Andrew: Uh, wherever definitions are provided, the definition of gender identity shall be added and shall mean the gender related identity appearance or expression of a person. Gender identity may be demonstrated by a person's consistent and uniform assertion of a particular gender identity, appearance or or expression, or by any other evidence that a person's gender identity is sincerely held, provided, however, that gender identity shall not be asserted for any improper, illegal, or criminal purpose. I'm talking about that last clause in the end there. But again, you see this sort of responding to the arguments that people on the right have made, right? So So gender identity is not, is uh, expressly not recognized as fluid in this, uh, in the statute. Uh, it says it says you have to have a consistent and uniform assertion of an identity.

0:54:03 Andrew: Um, and that you can, you can almost see that kind of pushing back against, uh the arguments, both real and imagined that have been made against gender identity. And then there are a bunch of exceptions. And I want I want to talk about those. So there's an exemption for religious institutions, right? Religious organizations such as churches, synagogues, mosques and schools of religious instruction and nonprofit institutions affiliated therewith are exempt from the provisions contained herein. There's an exemption for employers less than 15. There is a section that says nothing herein shall prohibit a business or place of public accommodation from providing single sex restrooms, locker rooms, shower facilities, bath houses, health spas, dormitory lodging facilities, and similar facilities that are by their nature distinctly private. It. Nothing herein shall prohibit a business from establishing and enforcing a dress code for its employees, provided that such dress codes shall not be based upon sex stereotypes. So, you know, you see, and I, yep.

0:55:03 Thomas: Yeah. They're really trying to preempt a lot of the, the typical, I guess, criticisms. Interesting.

0:55:08 Andrew: So if you were to ask, did all of that preemption, did that win over the conservative Christian right? Did they say, "Oh, look, well, thank you for making those accommodations"? Um, take a wild guess. Yeah.

0:55:21 Thomas: Well, I mean, at least it's passing. I mean that, that means something.

0:55:24 Andrew: We did But You know, so For example, the largest uh opponent group was a No to HRO, a group called the Florida Family Action, uh, which said, "Members of the Jacksonville City Council have just filed the bad Human Rights Ordinance bill, which was defeated twice before thanks to your efforts." And in bold, underlined letters it says, "Do not be fooled. Despite the claims of, quote, 'new compromise language,' the new Human Rights Ordinance still puts women's privacy, safety and dignity at risk while using showers, locker rooms, spas and bathrooms by allowing men to use these intimate facilities." So it seeks to allow the government to punish businesses and Christian ministries, which simply wish to live, work and serve their community in accordance with the district of their faith, with the dictates of their faith.

0:55:25 Thomas: Yeah. Oh, those poor people. I need to, do I need need to find a world's smallest violin sound to put in during while you're reading this

0:56:14 Andrew: So I You know, look, we read the act, we read the exceptions, and um, like to think, and I don't think we have to think, because we have found examples where uh people on our side have invoked hysteria and have mischaracterized laws, and we call those people out, right? Like, like we called out Jill Stein. We called out the people who were saying Trump's filing of his, reelection campaign early was going to, I don't know, I forget, like some Illuminati something or other. Right. Like we're out there trying to bring you the truth. And I will say this, like when you have an organization that is designed to lie about the content of legislation, like, you know, we have some conservative listeners, like, doesn't that bother you? Right. Like, when you look at this, and they've completely mischaracterized the nature and the content of the legislation, like, what, you know, what does that say about the merits of their argument, right?

0:56:18 Thomas: Yeah yep

0:57:13 Andrew: Like, there is nothing in the bill that would prevent, I mean, it explicitly says, you may have segregated, sex-segregated bathrooms, right.

0:57:24 Thomas: It exempts religious, uh, it exempt churches, right? Yeah

0:57:27 Andrew: Yeah, and done.

0:57:27 Thomas: I Like it, I like that ending, uh, perfect. So thanks again, thanks to Zabby for all your support and for uh pointing out uh that that happened and allowing us to shine a little light on it. So some positive news in the country amidst all the Trump misery, at least. Uh, but yeah, thanks Abby. All right. It's that time where we've got to thank our top patrons, our all-time greats, our Hall of Famers over at patreon.com/law. And again, getting close to that next goal. So that this is a, this is critical, especially these top patrons' support. And they are Roger Metcalf, Dan Irizarry, Eli Bosnick, Dave Nichols of Positively Doubtful Podcast, Steve Sigmund, Jim Grove, Desecrator, Patrick Fussell, Amanda Lipnack, La Bibliotecatrice, Heather Loveridge, Geeker41, Sean Pitti, Ian and Allie, Matthew Vernon, Violet Pagehall, Heath Enwright, Jeffrey Maynor, The Wayward Willis, and Detective Matthew Maxson. Why don't you take it from there, Andrew?

0:58:30 Andrew: Uh, thank you also to Zena, Dave, lovely Danny Baker at Combat Nonsense, the Net Sec Heathen, Sharone Frankel, Squick Thinger, Ian, Ryan, Matthew Hillier, Aaron Graddy, you are here, Aiden McCool, which now gives us the entire Mccoo family as Hall of Fame patrons, uh, John Bodley Esquire, Hunter Ash, Kylie Riser, Jeff S, Sakashite Fukasumi, Philip Stromberg, Michael Schaefer, Michaela, the Electronic Frontier Foundation at eff.org, Melissa, Alexa McCool and her fabulous snarky publishy stuff, The Inciting Incident Podcast, Frederick Alstromer, Sammy, Michael Conrad, Michaels, and the aforementioned Zabby, who is our top patron. Thank you all so much. We uh, we We really appreciate it.

0:59:16 Andrew: Hopefully, all of the bonuses and everything help to show a little bit of our appreciation. But we couldn't do the show without your support. Many of you have been supporting us all the way back from the beginning. Are really insufficient. It really means a lot to us.

0:59:30 Thomas: Absolutely.

0:59:31 Clip: Oh, no associate of this firm has ever failed the bar exam. No kidding.

0:59:37 Thomas: And now's that time. Oh man, I need, I need to recover. I need a positive step. I needs to get a question right, Andrew. Here we go. Get my head in the game. I've done my training montage. I lifted a bunch of heavy law books. I was all oiled up and I looked great. There's no pictures, but just assume I looked amazing. So after my training, montage, here we go,

0:59:56 Andrew: Yeah, and may consider me the Ivan Drago of coming back with a 400 PSI law school question.

1:00:08 Andrew: A witness sees a murder in the park and is called to testify in the criminal case. Can the defense attorney ask her on cross-examination about her habit of feeding the pigeons? The defense counsel knows that she was cited several times for illegally feeding the pigeons. Defense counsel tried to ask, quote, "You have a longtime habit of feeding the pigeons, don't you? You have, in fact, been ticketed several times for feeding pigeons, haven't you? And yet you persisted in doing it. Isn't that so?" End quote. Will the trial court likely allow the witness to be questioned on these matters? Okay. So is the court likely to allow that? And the answers are: no, because the question has no probative value regarding the credibility of the witness or the guilt of the defendant; no, because a witness can never be asked about personal prior bad acts; yes because the statement indicates that the witness's attention was always focused on feeding the pigeons; or yes, because feeding pigeons in the park and persisting in it after being ticketed may show an anti-social trait of the fitness.

1:01:15 Thomas: All right. You know what? I'm going A. I'm hoping this is one of those no brainers that you gave me an easy one to to respond back with. But A seems very straightforward to me. I already forget what it is, but I remember being very convinced when I heard it. No, I mean, I, I think this is, it's gotta be irrelevant. Uh, B is a never answer and I'm almost never going to use. Never are always answers now that I've learned that, we'll see, uh, depending. And, uh, the other two, I meantime, they sound absurd. I'm really hoping this is just one to, to boost my ego and get me back into it. So I'm going with a, uh.

1:01:28 Andrew: So.

1:01:52 Andrew: So Thomas has selected A, no, because the question has no probative value regarding the credibility of the witness or the guilt of the defendant.

1:02:00 Thomas: Yeah. I really can't imagine that it does. I think that's the right answer. That's it. Final answer. Lock it in. Regis.

1:02:07 Andrew: All right, that is locked in. If you want to play along with Thomas in Thomas Takes the Bar Exam, I would encourage you to play on Twitter in which when we send out a tweet announcing episode 46, quote and retweet that tweet, include in it your answer. You can do that by including a graphic that contains a lengthy answer or just a pithy response. Sometimes we pick the pithy ones, sometimes we pick the lengthy ones, and share and spread the word.

1:02:07 Thomas: Yep.

1:02:38 Thomas: And if you would like to play on Facebook, just share the post. Use the "share..." dot dot dot option on our post that posts each episode, and the dot dot allows you to put a little post of your own when you're sharing it, which is where you can answer our, uh, Thomas Takes the Bar Exam question. I would encourage you to answer question A, because it's definitely right this time, and, uh, and even if it's not, if everybody says A, maybe Andrew will be convinced that it actually is the right answer. So that, that's, you know, I want to have that going for me. No, answer however you believe, whatever, uh, whatever you think is right, and and we'll pick a funny one, a good one, a smart one, whatever, whatever stands out to us Right, well, that's our show for today. Thanks so much for listening. Thanks so much for our fine patrons over at patreon.com/law. And thank you, Andrew, for being such an expert week in, week out.

1:03:18 Andrew: The line.

1:03:36 Clip: This has been Opening Arguments with Andrew and Thomas. If you love the show and want to support future episodes, please visit our Patreon page at patreon.com/law. If you can't support us financially, it'd be a big help if you could leave us a five star review on iTunes, Stitcher, or whatever podcast delivery vehicle you use. And be sure to tell all your friends about us. For questions, suggestions, and complaints, email us at openarguments@gmail.com. The show notes and links are on our website at www.openargs.com. Be sure to like our page on Facebook and follow us on Twitter at OpenArgs. Until next time. This podcast is a production of Opening Arguments Media, LLC. All rights reserved.