OA645: We Badly Underestimated Just How Terrible Elon Musk Is At Business

Transcript

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

0:01:17 Thomas: Hello, and welcome to Opening Arguments. This is episode 645, jet-lagged, but back in America edition for me. How you doing it? I'm Thomas. Yeah, see, I don't even remember how the show goes. I'm just I don't, yeah, I'm Tom Smith, jet lagged, not a lawyer, here to ask the questions that hopefully will help everybody understand whatever Andrew's talking about. And there's Andrew, the expert. How how are you you doing, Andrew?

0:01:29 Andrew: You don't even remember your name. That's lag here here to hopefully be rendered coherent by you. I am fantastic, Thomas. How are you?

0:01:48 Thomas: I have to say QED Manchester was brilliant as ever. It's just such a good conference. If anything, it's too good. I want to ask the organizers because there's too much FOMO. They have too many good things. Really, the thing I actually think is really funny from that gas station commercial, AM/PM or whatever. It's, there's like three to four things going on at all times. And you there's only one to two of me. No, I think there's just one actually.

0:02:16 Andrew: Well, plus or minus one.

0:02:17 Thomas: Yeah. Plus within Rounding, assume spherical cows, and one of me, um, and so it was like, there was times when there's, oh, I want to see that and I want see that. And then when I see that, and they're at at the same time, it's almost too good, you know what I mean? So I guess that's how they like it, because they never want anyone to think, oh, I have nothing to do for this hour because I don't like any of the things. But, uh, anyway, it's, it's so good, it was a ton of fun. Thank you everybody who came up to me and told me Andrew was wrong about Elon Musk.

0:02:18 Andrew: Yeah. Oh. About.

0:02:44 Thomas: We're gonna cover it. No.

0:02:45 Andrew: Being.

0:02:45 Thomas: I'm serious, we, it's good, we're covering it because it feels like literally everyone thinks that was an Andrew was wrong. We'll see if it was. My answer was like, not really, but I don't know, I could be wrong. Maybe, maybe I'm wrong about Andrew being wrong and Andrew was right about About.

0:03:01 Andrew: Wrong, yeah, all. Right.

0:03:01 Thomas: Being wrong. Yeah, you were right about being right. Yeah, didn't finish it. So again, just another big thank you to the organizers of QED because it was so much fun, just such a great conference.

0:03:10 Andrew: If I did not have work, I would have been there. And, and I am hoping to be there next year and to, uh, you know, maybe have the full, like, uh, Law Offices of P. Andrew Torres contingent there again. I don't know, it would, it would be, it would be amazing.

0:03:25 Thomas: Yeah, for anyone who saw me, I did have work, I just worked like the whole time. It sucked, I was, was actually editing for most of it. But, uh, you know, that aside, and Andrew, I know you wanted to give a little preview, a little sizzle reel for next episode, for Tuesday's show.

0:03:29 Andrew: Yeah.

0:03:40 Andrew: I am very, very excited about this. What we have for you coming out on Tuesday is your guide to watching the election returns come in on Tuesday night. Okay, it

0:03:51 Thomas: Okay, so it's how to cry in a corner and weep for the death of our democracy, is it that?

0:03:56 Andrew: Is how to put the data that will be coming at you fast and furious into its proper context, how to calibrate, like, are we having the night we thought we had? Are we having a good night, are we having a bad night, all of that stuff. And I work really, really hard, and I'm really proud of it, you know. I think a lot of folks are going to want to know, like, how do, because you know, you have 435 House races, you know, you've got 33 Senate races, you got a bunch of governorships, like, it's just way too much information. And so we, we want to give you some filter, filter mechanism to make it all make sense. And I think we're going to do that. I'm very excited.

0:04:09 Thomas: Hmm.

0:04:36 Thomas: All right, look forward to that. Tuesday's episode, or if you're a patron, Sunday night's episode. And while we're on the topic of previews, later this episode, we've got a quick interview with Liz Dye about some January 6th grand jury updates. It's kind of a, you quick little segment in that we're jamming as much as we can into this episode. As always, we are the OA brand is, is a podcast with like a belt just cinched. It's just barely hanging on for everything we're trying to shove in there. So that's lot of fun. Looking forward to talking with Liz in a few. Let's get to Elon Musk and Twitter.

0:04:42 Andrew: Oh, that.

0:05:10 Clip: Back? Well, it depends on who's a better negotiator. Dad, Mr. I'll trade you this delicious doorstop for your crummy old Danish. Done and done. Don't!

0:05:22 Thomas: So Andrew, I the brilliant, oh my God, what a funny joke. You know what joke I'm going to tell you about the brilliant Elon Musk? And his sense of humor is very sophisticated sense of humor, you see, he got a sink and he walked into Twitter headquarters carrying the sink. Because it was like, let that sink in. You really, you, spent, spent 44 billion dollars for that, or whatever it was that, uh, I did too, at, and then, then someone, I listened to a podcast and they told me it was "let that sink in."

Um, this man's brain, he look, may have been smart as we've covered. He may have inspired about some things, whatever the internet has rotted his brain. He's not, that's happened to a lot of people. Unfortunately, people we know where this like kind troll mindset has just rotted their brains. That is just not funny. It's a, you know, anyway. So when that happened, And of course, a lot of us, a lot of US listeners were thinking, wait a minute, I thought Andrew might've predicted that this deal wasn't happening. It's officially happened. Musk owns Twitter. So what, what do you think? Explain

0:05:38 Andrew: Uh-huh all right wow I thought it was a kitchen sink kind of joke but oh well I Yeah.

0:06:26 Thomas: Yourself.

0:06:27 Andrew: So let me let me unpack all of it. Certainly, the Andrew was wrong component was that I overestimated the business acumen of Elon Musk. And again, I had calibrated this really, really low. But still, he managed to sneak under that bar. We're going to talk about it. Um, and So I predicted that this would not go through because any rational business person would have gone back to the Delaware litigation with Twitter and just like sucked up, uh, whatever, you know, how and it was not going well for him in Delaware, uh, but you would have just sucked up whatever loss there is.

0:06:39 Thomas: Yeah. Yeah, no.

0:07:02 Thomas: So that you don't, you to have paid 44 billion for something worth maybe, I don't know, know, like 10 billion, I don't even Know, yeah.

0:07:07 Andrew: Tops. Yeah, no.

0:07:08 Thomas: A lot, that is a 34 Billion dollar difference, you would do a lot, Andrew, what would you do for a Klondike bar and 34 billion dollars?

0:07:09 Andrew: It's Kind of offset.

0:07:17 Thomas: Yeah. Would You debase yourself in court?

0:07:17 Andrew: Yeah, like Uh, it's Yeah, there is literally, I mean, 34 billion is a sum that people cannot, calculate.

0:07:26 Thomas: Unfathomable, unfathOMable.

0:07:26 Andrew: So let's, let's lay out kind of The outer parameters of the deal and then kind of get into what happened. First, this deal was, and I don't know why it hasn't been reported as such, way worse for Elon Musk than you just described. And I'm going to talk about, I went through all of the SEC filings. So this is a disaster. And here's how I would put it to you. If you value you democracy, civility, uh, free and open space, and you kind of like Twitter, this is terrible, right?

0:07:28 Thomas: Money.

0:07:58 Thomas: Yeah.

0:07:58 Andrew: But If you valu more, um, hating Elon Musk, uh, a, it's pretty good consolation prize. Yeah. Now you should not know, you should be, you be much more concerned about, you know, the accurate reports as as I track down that, you use of the N-word went up by 500% after Elon Musk took over. It's You going to be gross. But by the same token, right, Elon Musk is so ruined financially after this deal. And again, ruined with an asterisk, right? Right. Like, yeah,

0:07:58 Thomas: Yeah. Yeah. God. Yeah, yeah. Is he Kanye ruined or

0:08:30 Andrew: It's really bad.

0:08:30 Thomas: A scale of one to yay and

0:08:33 Andrew: There's a a there's fundamental tension that I don't see how it gets resolved. Right. Which is that the Twitter troll side of Elon Musk, which obviously carries an awful lot of weight in that deliberative brain of his.

0:08:46 Thomas: It carries a sink. Did you see that video to sink?

0:08:47 Andrew: Yeah. Like are demanding conditions, conditions that are going to prevent Twitter from making money, right? Advertisers do not want to put their products on a cesspool of racism. That's why, you know, truth.clownfart.penis or whatever is doing so badly, right? And if you want to turn Twitter into that, could you do that? But you could could have done that without buying Twitter, right?

0:09:02 Thomas: Yeah. I just Want to know, before we get the emails, it's truth dot clown penis dot fart. He mixed up the URL. It's okay. Fans of SNL in 1992 or whatever, that was would have written in

0:09:13 Andrew: Okay. Okay. I I apologize for that. That Was that was definitely a Norm Mcdonald era joke, but I'm going to talk about, uh, very briefly, there are still some potential, uh, the uh various governmental agencies are talking about taking a look at this deal. Not but, but misread that. This deal is not getting unwound? Elon Musk owns Twitter right now. And that's bad. He's going to let Donald Trump back on in time for at least, in 2023. And that's bad, right?

So the bad stuff we had hoped would not happen did in fact happen. How did it happen? Let's, let's kind of unpack that, that, because, again, I still feel very, very comfortable with our analysis. We were certainly the first people to tell you in April, when the the asset purchase agreement was signed, that, you know, it was far from a done deal and, and I stand by all of our analysis, including the one that said like no reasonable business person would consummated have this deal, and I'm going, going to prove that. Number one, a bunch of people have asked the question about, didn't this still have to go to shareholder approval? And

0:10:09 Thomas: Oh. Yeah, yeah.

0:10:22 Andrew: Yep. And the answer is it did that. Isn't on me in the sense that I did not update folks. I said Twitter is proceeding in the litigation as if the deal is still going through, right? And that was the the only sentence that I said. I could have told you on September 13th, 2022, Twitter convened a special meeting of the stockholders of Twitter. There were 765 million outstanding shares, right, that were entitled to vote. The holders of 459 million of those shares were present either in in person or by proxy, and you can mail in your proxy, which is about 60% of the total voting power of Twitter. And of that, the vote was overwhelmingly in favor of adopting the merger agreement.

0:10:27 Thomas: Yeah. Of Taking way more money than you should rightfully be able to even get your hands on for this piece of crap asset. Yeah.

0:11:15 Andrew: Correct. So $453 million for, $4 million against, $2 million abstaining.

0:11:16 Thomas: Yeah. So how many votes do we have for, um, the the $4 million price tag on my 1992 Ford Taurus. How many yays?

0:11:23 Andrew: Yeah, all of the votes. So, yeah, not surprising that the shareholders voting in their own self-interest and and again, by the way, remember, like Elon Musk owned 73 million of those shares and voted them in favor.

0:11:30 Thomas: Yeah, right.

0:11:43 Thomas: Oh, did he? I was going to say, that's interesting because knowing that this deal, as you say, was terrible for business, at this point, he was still voting for yes on this.

0:11:43 Andrew: Right. Oh, yeah. He was required voting against would have triggered yet another term.

0:11:53 Thomas: Oh, it was in the deal. Gotcha,

0:11:56 Andrew: Yeah. And another billion dollar obligation. So, yeah. Approval by the shareholders went through in September. The real question, the one that we talked about, is where did the financing come from? And the answer is twofold. The answer is Elon Musk had to kick in an awful lot more of his personal money and had to go get an entirely different consortium of lenders that in order to patch this through. Here's how it breaks down. Some And of this comes from the SEC filings. They have an online platform called Edgar. And I have read every filing in connection with this merger because, of course, I have. Have Some of it has been some investigative reporting, including by Al Jazeera, I'll and link that in the show notes. The first component is $13 billion from a consortium of bank loans. Okay, you, as I list these out, you will notice, hey, um, this is a very different group of banks than were listed in April. So Morgan Stanley, Bank of America, Mitsubishi UFJ Financial Group, Group, Mizuho, those two are both Japanese banks, Barclays, and two French banks, Societe Generale and BNP Paribas.

0:11:57 Thomas: Gotcha, got cha.

0:12:09 Thomas: Yeah.

0:13:07 Andrew: And I'm sure I'm butchering the pronunciation of those. My apologies in advance. Couple of things that you should note. Number one, do not have those underlying loan documents. Those were not produced in connection with the litigation. All you have to do is produce that the banks have signed off on the deal, right? So I don't know what those terms are. What I do know is, um, borrowing money in October of 2022 is way more expensive than borrowing money in April of 2022, okay, and there, typically what you, you would do, even you're Bank of America, you don't have the vault full of billions and billions. I mean, you do, but you have reserving requirements. What you do is you then package up this loan and sell it out as a commodity to investors. You get it rated, you make some derivative securities, and

0:13:19 Thomas: Hmm. Oh, yeah. No kidding.

0:14:03 Thomas: Hmm.

0:14:03 Andrew: You sell it out. The funding is so bad that the banks are holding on to the debt in hopes of having some kind of superior business plan that they can then use in 2023 to then try and sell off this debt as a debt-backed security.

0:14:23 Thomas: Yikes. This is a real subprime mortgage situation.

0:14:26 Andrew: That's a really, really good analogy, right? Don't know what those terms are, but we can infer that they are not good terms for Elon Musk. That's kind of point one. Point two is a scary point, and you may have seen this, um,

0:14:35 Thomas: Yeah. He's getting to the point where he's trying to list all his assets of, ah, geez, I have the, oh, wait a minute. I have that car in space. How much is, how much does that, collateral you car in space? We can go get it.

0:14:50 Andrew: Certainly is some of that, right?

0:14:52 Thomas: It doesn't have a lot of miles on it. Well, actually, no, it has like billions and billions, probably of miles. Well wait, it hasn't Been driving. Yeah, does that count?

0:14:57 Andrew: Because it's been in orbit. I wonder if the odometer advances when You're in orbit, I. Okay, second category of funding comes from investors who rolled over their Twitter stock to get stock in the new private company, right? So remember, if you held Twitter stock on the day of closing, you were entitled to $54.20 for every share of Twitter that you had. These are investors who would have been entitled to $5.2 billion, who instead of cashing out, Musk negotiated privately to say, hey, why don't we roll that into shares of the new Twitter that I will own privately.

0:15:01 Thomas: Yeah. Boy.

0:15:37 Thomas: Who is this group of people that is confident that that will someday be worth more than 5420? That's whoa.

0:15:37 Andrew: Okay yeah Some people. People that are exceptionally wealthy and maybe doing a favor, including Jack Dorsey, who rolled over 18 million shares of his Twitter, Larry Ellison, founder of Oracle, and as has been widely reported, although maybe you missed this during the jet lag, Prince Alawid bin Talal of Saudi Arabia and the Kingdom of Saudi Arabia's investment funds, which I'm going to just read the SEC disclosure. Quote, immediately prior to the closing of the merger and pursuant to the equity commitment letter, the reporting person, again, on behalf of the Kingdom of Saudi Arabia, directly and indirectly contributed 34,948,975 shares of common stock. 35 million shares, that that is half of what Musk owns, that's about five percent of the company. Beneficially owned, uh, to parent, that's Musk's new company, in exchange for common stock of parent as of the date hereof. The reporting person and the Kingdom holding company, right, that is the Kingdom of Saudi Arabia, together are the second largest investor in parent.

0:16:49 Thomas: They Literally own the keys to the Kingdom is what? Wow. Do

0:16:55 Andrew: Yeah so uh the new Twitter is five percent owned by the Kingdom of Saudi Arabia.

0:17:02 Thomas: You think that'll be good for American democracy or, oh,

0:17:05 Andrew: You think it will be good that a potentially, uh, hostile foreign power and oppressive regime will have access to Twitter analytics and your privacy information oh, that'll be super duper terrible bad, but, but there we go. So five billion dollars raised by, you know, selling. Selling U.S. analytics to the Kingdom of Saudi Arabia. And that leaves about $27 billion that Elon Musk had to scrape together.

0:17:14 Thomas: Yeah that Still leaves 27, that's not even, oh my God, that wasn't even half the money.

0:17:34 Andrew: Not even half. So you file SEC Form 4 when you have a change in beneficial ownership and you are an officer or director or you own 10 plus percent of a company. Elon Musk sold off his Tesla stock in two tranches. The first came on April 26th. Now, for context, on April 4th, Tesla was trading at what is almost its 52-week high, $1,145 and a half. By the 25th, it was down to $998 a share. So basically dropped from $1,150 to $1,000. That's a pretty steep drop off. 12.6 million shares. He went from 172.6 million shares of Tesla to 160, okay?

0:17:37 Thomas: Jeez.

0:18:25 Andrew: At an average price of under $900 a share. Because again, remember, when you're selling off huge blocks of stock, you've got to take a haircut on the price.

0:18:34 Thomas: Yeah, a little bit of discount on that.

0:18:35 Andrew: Yep. So multiply that out. That's about $11 billion, as I can figure it out. That's what he raised in April, $11 billion in cash. That, That, by the end of April 26th, caused Tesla stock to plummet from $1,000 a share at close of market on the 25th to $876.50 by the close of Market on April 26. Okay. And again, it had already lost 150 points before that. A put a pit in that. The second big sell-off occurred in August. In fact, on August 4th. And by now, Tesla had recovered somewhat. It was trading at $927 a share. And in a series of transactions, Musk went from 163 million shares to 155.

0:19:26 Andrew: So he's selling off another 8 million shares of stock at an average price of about $875 a share, so he raises another seven billion dollars that again causes the stock to plummet from 927 to 864 and a half. As you're adding those together, you're like, okay, but that's still only 18, 19 billion. That's true. Remember, Elon Musk owned nine percent of Twitter, 73 million shares, that he had a right to redeem from himself at $54.20 That then got zeroed out, so that's another four billion. That gets you up to 22 billion, which is roughly the amount that he initially pledged. Uh Where he got the other 5 billion from, I can't figure it out, right? You know, turned over some couch cushions, had some private deals. I, I don't

0:19:40 Thomas: Yeah. Huh. What

0:20:15 Andrew: Know.

0:20:15 Thomas: What does it look like in the documents you looking were at then?

0:20:15 Andrew: Right. So? It? It doesn't.

0:20:18 Thomas: Just like step three question mark, step four profit or whatever?

0:20:18 Andrew: Right. There is you show the cash contribution. Right. But you don't show how Elon Musk came up with that cash. It's just a question of, OK, what what was his additional contribution? There's no specific SEC filing. Yeah.

0:20:34 Thomas: Huh. So it's just cash.

0:20:37 Andrew: Yeah. So, you know, could he have gone to, I don't know, like cash for your bones dot com or, you know, taking out a payday loan? I don'T know.

0:20:37 Thomas: Okay. Okay. Isn't, I, based on that one picture, he might have more bones than the average guy. I don't know. So maybe, This episode is brought to you by the Jordan Harbinger Show. Joe. I've said it before. I'll say it again. The average podcaster listens to six shows at least. And I bet you, if you're anything like me, you have a lot more than that. Without me alone, I think the average is like two. But then just including my podcasts that I listen to personally, it ups it to six. That's how many I listen too, so no way you're just listening to us, of course, and that's okay. So I'd like to share a podcast that you might want to add to your list. That's the Jordan Harbinger Show, a top shelf podcast named best of Apple in 2018. Time I gave you an episode recommendation. Here's a real fascinating one. Recently Jordan had on Matthew Campbell, who's a reporter, award-winning reporter, who has written a book, Dead in the Water, and it's about the the international shipping industry.

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0:24:06 Andrew: That was August 4th. On August 5th, OK, the immediate aftermath of selling off another seven billion dollars in Tesla stock, Tesla declared a three for one stock split. We actually talked about out that declaration and did not talk about the sell-off that that immediately preceded it. I should have done that. So, right, you want to criticize, uh, my report. I should have, uh, looked at the Edgar filings and been like, oh, in addition to splitting three for one, uh, Musk invested himself of seven billion dollars worth of stock. Uh, that's an indication that the litigation is not going great. That's a that's hedge

0:24:42 Thomas: Yeah. We didn't, we missed that. We didn't report it. Fair enough.

0:24:45 Andrew: That's fair, that's fair criticism, so

0:24:46 Thomas: Especially because there's never been anything else in the news that we needed to cover at all between then and now. So it really is on us. Like we just, I remember, right. We just came on and it was just like like whistling, you know, just like, ah, God, if only there was something to cover.

0:25:01 Andrew: You yeah um So my notes I had, well, you know, Tesla's dropped to about 225 a share right now, multiplied by three is 675 pre-split, which is still disastrous yeah except that, uh, as I pull it up right now as we record, they're down to 215 today One of the effects of a stock split, we talked about this when we covered it, is that it makes the price more volatile Right, more people can buy actual shares and not just fractional shares, so that increases the volatility. Um, so you put all of that together, and again, you know, I'm a lawyer, not a mathematician, not an economist, it seems as though Elon Musk's Tesla shares have dropped from a value of 173 million in April, times

0:25:11 Thomas: A, yeah, still a huge drop. Wow. Wow, mm-hmm.

0:25:47 Andrew: Times a thousand bucks a share, 465 million shares that he owns today after the three for one split, times 215 so over 200 billion dollars to under 100 billion dollars today. That's losing a hundred billion dollars, independent of having paid 44 billion dollars for Twitter. He has cut his net worth by a hundred billion. That is a hundred Norm Pattis's. Right, like that's really really bad.

0:25:55 Thomas: Oh right, Right.

0:26:20 Thomas: Wait, Norm Pattis has a bill. Oh, you scared me. I'm sorry. I am a little slow still from the jet lag. I almost thought for a second that Norm Pattis was a billionaire after that, but no, it's the amount he lost Alex Jones in a day.

0:26:21 Andrew: Right oh yeah as much as we made fun of Norm Pattas for losing a billion dollars, Elon Musk did that a hundred times over in yeah, I do

0:26:33 Thomas: Yeah. Have to do a hundred lot awful. Oh by the way, side note, someone suggested that maybe we should change the name to Lotawful Media to allow us to cover kind of whatever. I think that's not a bad idea. So we'd have to do a hundred Lotawfal Medias, which do you still do the plural because it's a plural of the Lotawfel Medias or do you stick with the plural media? Anyway, grammar people can at me. Hundred A Lotawlful Medias. Here we come. To... No, I don't want to do that. I can't take that much Elon Musk. I'm sorry.

0:26:47 Andrew: Like that I There we go.

0:27:07 Andrew: I don't think anyone can. So now we get to fill in the punchline from the beginning of the segment, which is when you asked me to predict, how's this deal going to go down? Now, my prediction was I think Elon Musk is going to stall, obfuscate and wind up back in court and fight it out in court to get out of this. And maybe he will even be on the hook for more than the billion dollars in litigated damages. Right. That was roughly what I said in that episode. If you had asked the follow up hypothetical, right. But assume Elon Musk ist willing to light half of his net worth on fire in addition to buying it. I would have said, well, OK, then fine.

0:27:42 Thomas: Yeah. Yeah, but surely surely even Elon Musk isn't that stupid narrator voice. He is that stupid.

0:27:53 Andrew: That Let's, let's get, you know, James Earl Jones in here to be like

0:27:56 Thomas: Again, you always say that. I'm sorry. The, the, reference now, well, Morgan Freeman works, but clearly I wasn't doing that. It was doing the rest of development one. I don't. I actually don't know if it's okay for me to do a Morgan Freeman impression. Like, you

0:27:59 Andrew: Freeman Yeah, I still have not seen Yeah, I That, voice is sui generis, like Yeah, it's good.

0:28:13 Thomas: Okay. Okay. So it's not, I won't get in trouble. All right, I'm still not going to, out of safety, but so that's why I stick to the Ron Howard from Arrested Development. He was that stupid. Hmm.

0:28:21 Andrew: We go. Okay, Ron Howard has So a couple of follow-up questions, right? Number one, as I hinted at the beginning of the episode, uh, there's a Washington Post story that says that the, um, Treasury staff at the Committee on Foreign Investment in the United States, CFIUS, have not yet determined whether Musk's purchase of the social media platform could trigger a national security review, according to one person familiar with the matter. Musk is a U.S. citizen. And typically the CFIUS reviews are used when, have when the purchaser is a foreign national. So, you know, some ambiguity there.

But again, any investigation by the SEC or by the Treasury Department will be ancillary. They may result in fines. It may get worse. It is not going to unwind the deal. Do not think that we're going to get Twitter back. Um, there are a couple more things that make that this unbelievably super bad for, for Elon Musk, and that is, um, I rate it as not implausible that shareholders of Tesla could sue Elon Musk. Okay, that is a, what we call a derivative lawsuit. Um, I take this from information that they have made public in their public filing, so their latest 10-Q, link in the show notes. So

0:29:07 Thomas: Yeah,

0:29:33 Andrew: In their latest 10Q, two there things here that the company has said publicly that Elon Musk has signed off on, uh, that would provide for some of the basis of alleging that Elon Musk had signed, breached his fiduciary duty to Tesla shareholders to maximize the value of their stock. Doc, I'm going to read the first one because it shows you just what an unbelievable egomaniacal clown he is. Right. And so he's named himself Chief Twit at Twitter. Right.

0:29:57 Thomas: He is. Yeah. I I haven't heard something that funny since the sink joke. It's

0:30:06 Andrew: Yeah. You would Not Believe the title that he holds at Tesla in addition to chief executive officer. So I will just read it to you from Tesla's 10 Q quote. This is under the section risks related to our operations. That is Tesla's operations. So this is disclosing to investors, hey, these are material risks that are out there that could cause the stock to drop. Quote.

0:30:27 Thomas: Just a picture of Elon, yeah.

0:30:28 Andrew: Yeah, well, basically, the loss of the services of any of our key employees or any significant portion of our workforce could disrupt our operations or delay the development, introduction and ramp up of our products and services. In particular, we are highly dependent on the services of Elon Musk, techno king of Tesla, that is, I am not kidding you, what he calls himself, and our chief executive officer. Uh, blah blah blah, we are highly dependent on the service of Elon Musk, Technoking of Tesla, it says it twice, and our chief executive officer. Although Mr. Musk spends significant time with Tesla and is highly active in our management, he does not devote his full time and attention to Tesla. Mr. Muske also currently Currently serves as chief executive officer and chief technical officer of Space Exploration Technologies Corporation, a developer and manufacturer of space launch vehicles, and is involved in other, quote, emerging technology ventures, end of quote.

0:31:18 Thomas: I know you've probably seen the tweet, but I want to reiterate it here, uh, the tweet was, what I gather from someone being CEO of three different companies is maybe CEOs don't do a whole lot, you know? You can't, it's, it's pretty difficult to have three, I don't know, like full-time jobs. At uh, Starbucks, for example, can't really do that because, you know, you have to actually work. Um, and time is finite. But apparently you can be CEO of three different companies where he's the genius CEO doing everything. That's amazing.

0:31:46 Andrew: So, yes, and that's funny. But, but notice, right, there was a public disclosure that says, hey, our stock price is highly dependent on Elon Musk being invested in this business. And that, sets you up for an argument that says, hey, if you've checked out, right, know, you are you have not disclosed and are in breach of your fiduciary duty and obligations to the shareholders to maximize the stock price. So the second, and I think much stronger, is risks related to the ownership of our common stock. And it says, Yeah.

0:32:19 Thomas: Again. A picture of Elon. Yeah.

0:32:23 Andrew: Right, certain banking institutions have made extensions of credit to Elon Musk, our chief executive officer, a portion of which was used to purchase shares of common stock in certain of our public offerings and private placements, at the same prices offered to third-party participants in such offerings and placements. We are not a party to these loans, which are partially secured by pledges of a portionof the Tesla common stock currently owned by Mr. Musk. If the price of our common stock were to decline substantially, mr Mr. Musk may be forced by one or more of the banking institutions to sell shares of Tesla common stock to satisfy his loan obligations if he could not do so through other means.

Any such sales could cause the price of our common stock to decline further. And I read you the history of the sell-off. So there is, I think, a very strong argument to be made. Now, look, shareholder derivative suits are super complicated the scope of this segment it as draws to a close. But put all of that together and you have a cost that nobody else in the media is reporting, people right? Have not looked at. I'm sure there will be a retrospective when Forbes puts out its list of the richest people in the world and

0:33:03 Thomas: I feel like the evidence is pretty good there. Oh, Yeah, he will have fallen some

0:33:30 Andrew: Yeah, yeah I think that's right. And people will say, wait a minute. I thought he was worth, you know, $300 billion. Well, you know, when you tank the stock price of your majority asset, turns out you're worth less at the

0:33:31 Thomas: Ranks. I think has No one, yeah, he is worthless. I agree. Has nobody, um, done that, like, back of the envelope kind of, like, you've done with this, and been like, hey, this is what, his net worth is probably right now, that

0:33:56 Andrew: I haven't seen that. There you go. Was I was wrong. I was certainly wrong in expecting Elon Musk to behave more rationally than he did, uh, but if you, uh, could ask the hypothetical, right? Right, but assume that Elon Busk is a terrifying man baby who does not care about plummeting his net worth in half, uh, then maybe I was not so wrong after all.

0:34:15 Thomas: Yeah. Also, I mean, I think a component of the coverage, at least after the kind of things started going south, a component of what I took away from your coverage was, he can't just get out of this deal. And that's where I think it went the other way. So at first, my memory is you were the first one to say, hey, this deal might not be so solid. At first, and sure, like, I get that people would get the impression that therefore once it went through, that meant we were wrong. But then when it sort of flipped the other way, because every headline was, oh, Elon is doing this trick where he's going to say there's too many bots and then he's out of the deal. And then you were like, no, no, that doesn't get you out of a deal. So, just in, it's general, things are way more complicated than these top-line things.

0:34:57 Thomas: But I think the whole time we've had a solid grasp of what's going on based on your breakdown. I know I'm sounding like an Andrew apologist. But like, I don't know, it's, I, pretty solid to say you were predicting he would not, his net wealth drop by potentially, potentially over a hundred billion dollars, do, do, I am I remembering that right? I I do not blame you, and gonna go ahead I'm, and let you off the hook for thinking a hundred bazillionaire would try to protect a hundred million dollars worth of wealth, uh, and that's why you made that prediction that way. So, uh, yeah, works for me. Anyway, yeah.

0:35:16 Andrew: Well, You You are remembering that correctly.

0:35:31 Andrew: And again, no need to be an anthropologist. I know, I don't want to be a self-apologist. The other thing that I feel really good about in our coverage was that the news coverage shifted, shifted from, Musk Busk is gonna get out with Twitter bots, to, oh, well, okay, he's gonna pay the billion dollars in damages and then walk away. And

0:35:46 Thomas: Yes. And I thought that, and I asked you that, I was like, well, so you can just pay that, it'd be worth paying that. And you, you said no to that too, which was very accurate because you have to assume he would have done that if he could.

0:35:49 Andrew: Yep. That's exactly right. So, Yeah. Oh, There's no doubt in my mind, if, if he could have gotten out by just paying a billion dollars, uh, you could, again, I shouldn't say no doubt because I'm looking at this, but

0:36:06 Thomas: No, yeah, there's a slight amount of doubt.

0:36:08 Andrew: Wow, you would have to be even dumber than the Elon Musk I just described, um, to, not pay the billion, to be like, okay, you know what, had a bender, Call that a billion dollar bad night and, and, and let's walk away. That would have been the ideal situation for everyone.

0:36:09 Thomas: God, it for him. It's amazing to Think it would have been way better for Elon Musk to be like, "All right, let's just count that as a billion dollars blown away for nothing." And that would've been so much better. How do you sleep at night knowing you have reduced your net wealth by a hundred billion? Has anyone ever done that in such a short Maybe if, somebody was heavily invested in Enron or something, and like the next day after it collapsed, I don't know, like I this is losses on a scale potentially that we've never seen, god.

0:36:25 Andrew: Yeah.

0:36:41 Andrew: No, in the history of humanity, no. No, I think it's unprecedented. So, yep, I think that's right.

0:36:56 Thomas: I, there are still what I can only assume are 13 year old boys defending Elon Musk is, like, amazing business person of all time, um, that's, incredible, that's amazing

0:37:04 Andrew: So To put that into perspective, Elon Musk would have to triple Twitter's value from the purchase price, right? So people are saying he's going to have to double or triple it to be worth what he paid, he would have to then triple the value on top of that to break even for how much this has cost him in secondary losses, so I don't think that's happening and I don't think eight bucks a month for the blue checks is gonna, is gonna bring that in, so uh

0:37:12 Thomas: The purchase price, wow.

0:37:24 Thomas: That's not happening he's yeah he wanted to charge everybody $20 a month and then Stephen King yelled at him and he was like, "All right, how about eight?" Like, it's just, he's just, he's not sending his best, I don't know, he's just not he he's just not a brilliant businessman, I'm sorry, he's not, all This episode is brought to you by Bombas. Look, gifting is hard, but Bombas makes it easy with socks, underwear, and t-shirts that feel good and do good. They feel good because they're thoughtfully designed with the softest materials, and they do good because for every item you purchase, Bombas donates another to someone in need. I love that about Bombas, I said it last time, wife and I have both loved Bombas since long before they sponsored the show.

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0:41:28 Clip: We got it!

0:41:34 Thomas: And we are joined by Liz Dye, I had to ask Andrew if you've been on the show, but I realized it was just because I listened to Clean Up on Aisle 45, so I heard you be on with Andrew. I was like, crap, am I forgetting that you've been on this show? No, I think it's first time on this show. Welcome, Liz DYE.

0:41:42 Liz: There you go. Hey, thanks for having me.

0:41:49 Andrew: Yeah, thanks for coming. I am a huge fan of your work. You can be found over at Wonkette and at Above the Law and covering the barrage of stories that we get bombarded with every day. And you have done such a tremendous job kind of piecing together the factual developments that that underly what's going on with the January 6th, the grand jury. So I thought it would be an excellent time to kind of bring our listeners up to speed. And why don't you kind of get us started?

0:42:19 Liz: Okay. So it's a threshold matter. We could, you know, I assume everybody sort of understands executive privilege. Um, but if you wanted to talk about it, we could.

0:42:27 Andrew: Yeah. So executive privilege is the attorney-client privilege. It's an analog to attorney- client privilege that exists between the president and, I guess I have to say his advisors. I wish I didn't have to. The president and his advisers, and we've talked about this on the show, that notwithstanding the fact that Donald Trump abused and broke the system, that this is a really, really important thing that presidents be able to trust that they can come into a room and go, I don't really know what to do about Ukraine. I'm thinking about bombing Russia. How would that how should that go over? Right. And get candid advice from their advisers that say, well, Mr. President, that would be a disaster

0:43:09 Thomas: But I've kind of been paying attention to all this stuff, and so I've learned that executive privilege, I think if I were to define it, it means if you have ever known the president, known of the president or or been anywhere near the president anything you've ever said is privileged I think right okay good good

0:43:25 Liz: Yeah. If you live in, if you live Trump land, that's what it is. Anything that could possibly embarrass the president is, is, ma is magically immune and you can never be subpoenaed to talk.

0:43:26 Thomas: Yeah bad anything bad is executive privilege

0:43:36 Liz: Totally. Sure, um, when your cronies are in charge of the Justice Department and the White House Counsel's Office, that's a good plan. You know that they're not going to force you to disclose anything to Congress and they're they're going to lock you up for contempt of Congress if you just give Congress the finger, which is pretty much what Trump's people did for four straight years. Yeah. So you remember the House Oversight Committee would send a request and White House Counsel Pat Cipollone would fire off a nastygram and asserting this preposterously broad definition of privilege and saying basically, you and what army? And he got away with it. Remember, it took four years to get, or thereabouts, to get Don McGahn to testify in the Russian investigation. I suppose it was two years. And the White House completely stonewalled all the congressional subpoenas in the first impeachment and refused to hand over any documents or send anybody over to testify.

0:43:36 Thomas: Yikes

0:44:23 Liz: They basically said, fuck you, what are you going to do about it? And the answer was, you know, nothing, because we didn't control the Justice Department.

0:44:29 Andrew: And the House, I mean, if I recall correctly, the House made criminal referrals in connection with those refusals, exactly like the House criminal referrals for Steve Bannon and Mark Meadows that have produced a Bannon conviction and ongoing litigation with respect to Meadows. So, you know, kind of makes a difference if we do hold the House. Doesn't it?

0:44:50 Liz: It absolutely does. You should probably vote Democratic next week on Tuesday. But anyway, So this strategy of telling Congress to get bent works pretty well if you're in the Oval Office, but it's not as effective when you're just a jackass on a golf cart in Florida. I mean, Trump's still running that play, even though he lost when he did that with the archives.

But he has had some success when it comes to the House's January 6th investigation because he could ask his loyal minions to tell the House that they weren't going to answer, to claim executive privilege, and they would more or less do it. Cipollone did it. Mark Meadows did it, a bunch of the other attorneys did it they and were reasonably confident that if they didn't totally blow off Congress like Steve Bannon and Peter Navarro and just refused to show up, they weren't going to get arrested.

They'd be fine. And they were. That more or less worked because you can tell Congress to get lost, but you really can't tell a federal grand jury to get lost because Benny Thompson and Liz Cheney can't lock you up at a federal judge can.

0:44:55 Andrew: Thank you, Liz.

0:45:49 Liz: And now there are at least two grand juries investigating Trump in the archives dispute and the January 6th investigation. So those same minions who are happy to, you know, tell Liz Chaney to piss off are in such a a good position because Uncle Merrick can do a lot more to compel testimony than Auntie Nancy. I

0:46:04 Thomas: Yeah

0:46:07 Andrew: That's excellent background so uh and again you know I mean we should point out that eventually you know Pat Cipollone decided that he was going to cooperate with the January 6th committee I don't know if you have particular thoughts on that uh move or not um

0:46:21 Liz: Think that was more of a political move. I think if you remember listening to those hearings, at the conclusion of every single one of those hearings Liz Cheney put him on blast and said, basically, I'm going to make you a household name and I'm going to call you a treason weasel in front of the entire world every time you don't show up. And eventually he did, although he negotiated pretty aggressively to make sure that he wasn't going to have to discuss one-on-one conversations with Trump. And it worked. And they both did it for of the House investigation. He And and his deputy, Patrick Philbin, when Trump told them to assert executive privilege with respect to the ongoing January 6th grand jury, they both didn't. They They because, know, they're loyal you little henchmen.

0:46:30 Andrew: Yeah. Yeah.

0:47:02 Liz: But Eric Hirschman, was who the memorable one, he was the one with the Justice Department bat who told John Eastman to get a good fucking criminal defense lawyer. You're going to need it. He refused to go along with it. He told them, like, I don't trust you guys. And in fact, the New York Times got these great emails from August when Hirschman told Evan Corcoran, I know your favorite, Andrew, and John Raleigh, that he wasn't going to do it. He said, I'm certainly not relying on legal analysis from either of you or Boris, who, to be clear, I think is an idiot. And that was a reference to Trump's, you know, goon Boris Epstein, who ran point on the fake electors and had his phone seized. And he said, I'm not going to rely on your say-so that privileges apply here and be put in the middle of a privilege fight between DOJ and President Trump. Because Eric Hirschman is not an idiot.

0:47:02 Andrew: That's a good point.

0:47:46 Andrew: Right. Right.

0:47:47 Liz: Didn't want to be in that position telling the of DOJ to get bent. And that forced Trump's hand. So he had to send Corcoran and Rowley to D.C. to to make this argument in federal court that they really did have a privilege to assert. So Philbin and Cipollone, who both look like Milhouse from The Simpsons, were willing to assert privilege on their own. And so were Greg Jacob and Mark Short. They were Mike Pence's top aides. But the DOJ pushed back and they wound up in front of Chief of Judge Beryl Howell in the US District Court in DC.

0:48:19 Andrew: Show favorite. We love Beryl Howell.

0:48:20 Thomas: Can

0:48:21 Liz: I do love her. And she said, you know, no, and overruled the privilege and told at least Jacob and Short that they had to, get you their asses down there and testify fulsomely. And he refused to stay the order. So Trump kind made a of feint toward the DC circuit, but he did not get a favorable panel. So Short and Jacob did testify. I think that it's still ongoing as dispute over the millhouses. So Trump lost. And if Beryl Howell or Judge Howell is going to force Jacob and Short to testify, it's pretty clear she's, you know, she's not going to let anybody else off the hook. She's not gonna let Mark Meadows assert privilege and certainly not as to his conversations with you you know, the riot organizers or the congressmen. It's just not going to fly. Right. So all of this is happening behind closed doors, because, you know grand jury testimony is secret, and the arguments over grand jury testimonies secret, but being DC, nothing is really secret.

0:49:15 Thomas: Quick clarification for somebody, uh, yeah, who's who's not as steeped all this. Were you describing, um, like, what timeline were you just describing? Was that in the past? Was that now? Was over

0:49:25 Liz: So that's been over over the summer, the, yeah. Right. So remember in August, Hirschman said, you know, I'm not going to do this. You guys are morons, which he's not wrong. And, so it's been ongoing on September 28th was was the ruling from judge Howell that short and Jacob had to testify. And they testified just within a couple of days of that.

0:49:27 Thomas: The summer okay

0:49:42 Liz: Yeah, well,

0:49:42 Andrew: Just to be clear on the timeline, that was essentially contemporaneous with the last January 6th committee hearing, which basically tread no new ground other than they were going to issue a subpoena to Donald Trump that, know, will still be summarily ignored.

0:49:59 Liz: You know they say that he's negotiating to do it. Alina Haba, Trump's sparkle magic lawyer, swears that he's just dying to tell them the truth. So I bet it'll happen during infrastructure week.

0:50:07 Thomas: Yeah. He's also going to pay some of his contractors, I think, the same day. He is going to do both those things.

0:50:13 Liz: For sure. 100%. So anyway, these lawyers, trustee, and when they bring Lindsay Halligan, the property and casualty lawyer, the apartment lawyer, she's pretty noticeable. So when they show up, there's, yeah, no comment. So CNN basically camps out in in hall near the grand jury room. And when they show up, Caitlin you Paulance notices it and she writes about it. Also the DC reporters who watch that courthouse watch the federal docket. And so political reporter Kyle Cheney saw that there was correspondence between these two particular sealed grand jury dockets and when Corcoran trustee Rowley and Halligan show up at the courthouse. So that's kind of, you have to pay attention to these guys, because if you see somebody like Alina Haba pop up in a courthhouse, you know some crazy shit's about to go down.

0:50:27 Andrew: So so when was that? When were they spotted?

0:51:05 Liz: Don't know the specific dates, but he saw them in DC during September on dates that were contemporaneous with the grand jury docket entries. So he kind of matched it up time-wise in that calendar. And I believe that was in September.

0:51:18 Andrew: Gotcha. OK, so, yeah, I just, I want to make sure that we're unpacking for the listeners sort of how, with no leaking of any sealed grand jury information, which, again, you know, Merrick Garland takes very, very seriously that, the the DOJ speaks through its court filings and uh by and large that's been correct, right, like this has been, I think, an a unusually tight uh Department of Justice in terms of avoiding kind of potential leaks like that.

0:51:28 Liz: Right, right.

0:51:45 Thomas: Is that unusual or just a usually thing? Like, do they normally leak?

0:51:45 Liz: Think it's pretty usual.

0:51:49 Thomas: Yeah. I think that's pretty usual thing. Yeah, yeah.

0:51:49 Liz: I, and In fact, is, Trump's people often accuse the Justice Department of leaking in these really incendiary ways when it's really clear that the leaks didn't come from I mean, sometimes they do, but mostly it appears to come from witnesses to these grand jury. I mean, you can't stop the grand jury witnesses from talking. It's bad form, but they do it. Anyway, so on the 18th, October 18th, Kyle Cheney sent a letter to Judge Howell requesting that she unseal some information about the privilege dispute. And he described it as a historic ruling that bears on the ability of former presidents to control and even silence ex-advisors in matters of urgent national significance.

And indeed, it is pretty significant, right? We're talking about the January 6th attack on the Capitol. And on October 25th, the New York Times reporter Charlie Savage also filed a suit access to to the court's deliberation. And he said that the Times is looking for dockets, court opinions, orders, legal briefings, and argument transcripts about the scope of executive privilege invoked by former President Donald Trump or former Trump administration officials redacted to remove factual material that is properly subject to secrecy under Rule 60 of the Federal Rules of Criminal Procedure.

Just to So be clear, he's not trying to get at the testimony. Like, I also would like to know, you know, what Short and Jacobs said, but I know that we are not entitled to know that right now. It's a pending criminal investigation. What the reporters are trying to kick loose is the fight about executive privilege because,

0:52:29 Andrew: Yeah, yeah.

0:53:17 Liz: You know—obviously, it's always funny to see what batshit arguments Trump's lawyers make because they're always so crazy. But also, like, it is important, right? Country The was attacked, and this was like a coup, and we are now seeing the former president invoke executive privilege to cover up evidence of crimes against the waiver of the sitting president. Biden has said, no, I do not assert executive privilege. So that's just crazy and also really important. So that is the part they are trying to kick loose suits. With And more to the point, or also, grand jury stuff is supposed to be secret, but in fact, it's not secret. Like, everybody already knows about this because every outlet in, you know, the New York Times and the Post and Politico and CNN have all covered it. So none of this is secret. It's already kind of, everybody's slip is showing. So it's, you Know, that rationale is basically gone. So

0:53:25 Andrew: Yeah, right.

0:54:10 Thomas: Just, I know this is going sound really basic, but you throw a lot of names around and for somebody who's not steeped in, it's hard to keep track. Who who did you say is trying learn the, inner workings of these privilege claims that you were just referencing?

0:54:14 Liz: Sorry.

0:54:22 Thomas: To reporters.

0:54:21 Liz: Right,

0:54:21 Andrew: There are two reporters. Yeah, go ahead, Liz. Yeah,

0:54:23 Thomas: Okay.

0:54:23 Liz: Right. So the New York Times, Charlie Savage, and Politico's Kyle Cheney.

0:54:25 Thomas: That's right. That's right, okay. So why, I guess, legally speaking, it sounded like you were saying, okay, yeah. Factual matters, all that should stay under wraps. But why is the thing they're trying to get categorically different than that?

0:54:36 Liz: Because that's an argument about whether Trump's minions should have to testify. It's not about the testimony itself. It'S

0:54:46 Thomas: Okay, So it wouldn't affect any like investigation or anything like that. That is

0:54:52 Liz: That depends on who you ask, right? The Justice Department is probably going to say that it does. The Justice Development is reflexively secretive, protective of its own prerogatives, protective Of the institution of the presidency, and will probably try very hard to keep that secret. The reporter's argument is a that it's not secret, because we already know about it from the contemporaneous reporting, and B, that it's not the grand jury testimony that's the secret. It's the argument about it that they're trying to kick loose.

0:55:02 Andrew: Specifically

0:55:24 Thomas: This a FOIA request or is there some other like action that

0:55:27 Liz: No, I think it's a request under the Criminal Rule 6E, which discretion whether to reveal grand jury ceremony or other ancillary stuff related to it. There

0:55:35 Thomas: Okay so

0:55:40 Andrew: The Local. So we talk about on the show, kind of the baseline, the Federal Rules of Civil Procedure, the federal rules, a criminal procedure. Procedure, every court also has its own local rules that sit on top of that, they, right, can modify that in substantive ways. Right, like you could have shorter deadlines in certain courts. It's one of the we've not had a chance to kind of talk about this as a function of practice, but this, um, is really good tip for the lawyers, law students listening out there. If you're in a new jurisdiction, the very first thing you should do is read the local rules. Right, District Court for the District of Columbia Federal Court has its own local rules, and one of the rules that it has is Local Criminal Rule 6.1, which says a motion or application filed in connection with a grand jury subpoena or other matter occurring before a grand jury.

0:56:28 Andrew: So that's the jurisdictional element. That's how they get in. All other papers filed in support of or in opposition to such a motion, and all orders entered by the court in connection therewith, shall be filed under seal. Such motion or obligation shall be assigned to a grand jury case number and assigned to to the chief judge, Beryl Howell. All hearings on matters affecting a grand jury proceeding shall be closed, except for the contempt proceedings which the alleged contemnor requests a public hearing. Papers, orders, transcripts of hearings subject to this rule, or portions thereof, may be made public by the court on its own motion, or on motion of any person, upon a finding that continued secrecy is not necessary to prevent disclosure of matters occurring before the grand jury.

0:57:04 Thomas: So any person. Yeah.

0:57:05 Andrew: That's how You kind of tie all that together. Yeah, yeah, yeah. So that's procedurally the mechanism by which that gets heard. And also the standard to which Liz was referring, which was, look, look, you will not invade the secrecy of grand jury testimony by describing the arguments that Evan the Cork and Lindsay Halligan and, you know, these losers representing the president are making in favor of absolute immunity. Right, these are purely legal arguments, so, so that it does not invade the key purposes of grand jury secrecy in the first place. Make

0:57:06 Thomas: Gotcha.

0:57:41 Thomas: Thanks both of you, that all makes it way more clear to me what's going on. So, uh, where are we at now with that? Are we just waiting for a ruling on whether or not this stuff is going to come out for for these reporters, whether they're going to get their hands on on it, or has that already happened? My

0:57:54 Liz: No, um, Judge Howell ruled on, on one of the requests, but she's now got this case before her. So she's consolidated the Politico and the New York Times cases and set a briefing schedule. So they're both going to brief this month. The government's going to respond on the 15th and the plaintiff's reply is due on the 29th. The reporters are going to tell the court on the 99th.

0:58:14 Andrew: Of November. Yeah.

0:58:15 Liz: So it'll be this month and then after that, she'll make a ruling as to whether she's going to unseal any of it. I think it's a safe bet that the government is going to say, no, we you know, we don't have this in public just because that's the reflective posture of the the, reflexive posture of the Justice Department. But Trump is crazy, which is like the premise of all of these things. And sometimes he backs the government into a corner by running his mouth.

Like if he shuts up the way he did with the the E. Jean Carroll case, then he can kind of stand behind the Justice Department as it its regular posture of protecting the institution of the presidency, which is what it did with the E Jean Carroll defamation suit, where he said, I was just doing my job as president when I said this woman was too ugly to rape, and so the government has to defend me and, in fact, stand in my shoes, which was gross. Gross. But even after the Justice Department changed hands and Bill Barr wasn't in charge, Merrick Garland has kept up that posture and fought it and appealed when they lost.

0:58:15 Andrew: Yeah we've and we've covered that. So, yeah, I

0:59:18 Thomas: God that's right yeah it was one of those Those counterintuitive ones where it seemed like it was a really bad thing and then it wasn't.

0:59:24 Liz: I mean, it could still be a really bad, it depends on your, I personally don't think that was part of his job as president. But okay, I do understand that having the, you know, the Justice department defend the president when he is doing his job is probably on balance a good thing. But Trump kind of pisses that away, that advantage because he's, opens he his mouth and he vomits out the details of the case. So he forfeited that advantage with the Mar-a-Lago raid by, um, going on his wacko platform, his wacko fake Twitter platform and accusing the justice department of planting evidence. Um.

And that put the justice department in such an untenable position that they actually turned around and said like, yeah, okay. Unseal the warrant, unseal it all, knock yourself out, because we're not going to defend you if you're going to lie about us in public. So in this case, right, if Trump can shut the hell up for five minutes, he can probably count on Merrick Garland to run point for him, if only because the Justice Department always will keep it secret. And they'll probably argue that they want to keep the details of this pending investigation under wraps. But if he starts shitposting about Judge Howell, which he does, he

0:59:48 Thomas: Yeah. Yeah.

1:00:27 Andrew: Right.

1:00:28 Liz: Does on the regular, right? He's in Judge Engeron's court today in New York State, and he's been posting nasty shit about Judge Engeron. So if he can keep his mouth shut, huge if, he can probably stand behind Merrick Garland's skirt. But if he doesn't, then all bets may be off. And Judge Howell doesn't actually seem all that well disposed against him anyway, so it would behoove him to shut up. But we will see.

1:00:28 Andrew: Right, right.

1:00:54 Thomas: Boy, that's the understatement of a lifetime about Trump for the last however many years. Oh,

1:01:00 Liz: Yeah.

1:00:55 Andrew: That has exactly what I was going to that that makes total sense out of want that. I to thank you, Liz, for coming on and the details, making that makes it really unpacking the investigative side in addition to the legal side. And. And because we lack the time to get into it, you made a reference there at the end to Trump appearing in Judge Angeron's court in New York. As we went to record today, we are dealing with the aftermath of the lawsuit filed last night in Florida by Donald Trump against New York Attorney General Letitia James, yeah, I'd love to cover it. I will tell you liz has done an amazing job breaking it down on twitter so I want to include her twitter feed link in the show notes because uh it it is just uh your analysis there is is fantastic and we we Don't have time to cover the latest bonkers lawsuit that Donald, Trump up his file so

1:01:37 Thomas: I haven't even heard about this. Jeez. Oh, I will check that out.

1:01:47 Liz: Thanks. Thank you.

1:01:58 Thomas: Opening arguments. Not having had time to cover the latest bonkers, whatever Trump has done. Trademark 2016. I think that's been our...

1:02:06 Andrew: 17, started January 20th, 2017.

1:02:11 Thomas: I I think we covered some campaign stuff, if I'm being honest. But yeah, that's okay. Oh, yeah, Liz, thanks so much. Anything else you want to plug we're here?

1:02:17 Liz: No, thanks for having me.

1:02:19 Thomas: At $5 Feminist, number $5 spelled out. Feminists spelled out, thanks. Thanks much, hope to have you again soon on the show, maybe with a little bit more time.

1:02:29 Clip: Oh, no associate of this firm has ever failed the bar exam. No kidding.

1:02:35 Thomas: Now it's time for t3be each week I attempt to answer a bar exam question a real bar bar exam prep question, I guess. A real fake question. But nonetheless, a real bar exam prep question from a real book. I attempt to do so using only what I've kind of learned from this show that I immediately forget within weeks. And that's it, actually.

1:02:57 Thomas: That's all I use. And yeah. And last week, you'll remember, Andrew Seidel and I were both the winners. Let's see what happens this week.

1:02:56 Andrew: That's it all Yep. Thomas, A 15-year-old girl wrote an entry on her internet networking page. I Love that. I think it's, let's say it's Facebook or Twitter, right? Right. Claiming that her former boyfriend was a murderer who once cut another boy into pieces and buried him In a landfill.

1:03:12 Thomas: What? Oh, wow. Geez.

1:03:23 Andrew: After reading this, the former boyfriend's new girlfriend threatened to leave the former girlfriend. If the former boyfriends says I'll kill that and then insert gendered slur that I don't think would appear on the real bar exam. But

1:03:38 Thomas: Wow. Geez, do we get the, like, NC-17 Barg's book? Where did you buy this book, Andrew?

1:03:41 Andrew: Yeah. Yeah, I bought it from a reputable authority, but I was surprised to see the B word in a question. So if the former boyfriend says, "I'll kill that," uh, gendered slur for a woman, uh, A, the statement does not make the former girlfriend guilty of a crime, B, the statement makes the former boyfriend guilty of attempted murder, C, the statement may make the farmer boyfriend guilty of second degree murder, or D, the statement has not been proved beyond a reasonable doubt.

1:04:11 Thomas: What?

1:04:12 Andrew: Out.

1:04:12 Thomas: A. Is this the same country's law as the previous question? This book is just so different. OK. Doesn't seem to me to be clear based on the facts who the gendered slur is directed at. I don't know if I'm supposed to be able to know this and this is another, you wristwatch situation because there's a 15 year old girl who wrote an entry on the networking page. Then after that, it says former boyfriend's new girlfriend threatened to leave former boyfriend if the former boyfriend says, I'll kill that gendered slur. Doesn't I can't tell if that's directed at the new girlfriend or the 15 year old girl who might have caused that. It doesn't say so. Maybe. Yeah, I don't know if I'm supposed to know that or not. A, the statement does not make the former girlfriend guilty of a crime. Hmm.

1:04:58 Thomas: That's solid. I think that unfortunately we live in a world where people say things like this probably every day. So A is solid to me. That seems like a solid possibility. B, the statement makes the former boyfriend guilty of attempted murder. Murder. What is Just saying I'll kill that B word doesn't seem like attempted murder to me at all. Nothing else has happened that we know of in this fact pattern. So I think I'm solidly eliminating B. C. The statement may make the former boyfriend guilty of second degree murder. Oh, this is this is diabolical. Am I to read that may as if then somebody kills the person or if then. He, the former boyfriend then kills the person that's asking a lot out of a may.

1:05:44 Thomas: Um, and D, the statement has not been proved beyond a reasonable doubt. None of this makes any sense, nothing has happened. All he did was say something that's admittedly, uh, not a great thing to say. I don't see how anything but A could be correct. I, what I do, I'm going to go between A and C. If it's C, I'm quitting the bar exam, I'm not doing this book anymore and buying, I'm serious, buy a new book, because may, if may can include postulate a set of facts that makes anything true, then that's a worthless question, like any, any may would therefore be correct, um, so I'm gonna go between A and C, just in case it's C, shenanigans, but A, the statement does not make the former boyfriend guilty of a crime, I mean, I don't, I don't see how he's guilty of a crime, he's, nothing's happened, so, hey, and

1:06:27 Andrew: Right, and if you want to play along with Thomas, you know how to do that, just share out this episode on social media, include the hashtag T3BE, include your guess, your reasons therefore, we will pick a winner and shower that winner with never-ending fame and fortune, fame and fortune not guaranteed.

1:06:40 Clip: And thank you, Let's go!

1:06:42 Thomas: Time to thank our new patrons at patreon.com/law. Hope you're enjoying all the goodies the Lot Awful Media, which included the brilliant, breakdown of Law, Law and Legitimacy, I had to remember the, the true Orwellian name of that podcast, uh, by one Norm Pattis, of course, with ace associate Morgan Stringer. If you haven't caught that, definitely pledge at patreon.com/law and go catch that Lot Awful Media. It was a ton of fun, it's hilarious. And I'll start us off. Thank you to Kathy Bazylewicz, Anish Patel, Bob Hodges, Jonathan Ballinger, Lesley Berkowitz-Zak, Sam Howard, Nathaniel Arnold, Donald, Mysterytea, Tenants-in-Ramen, I've Got Ranked Choice, Bunch of Coconuts, They Are Marked Off in a Row, there they are marked off in a row is actually, I skipped some words there, but that's good, Genevieve H.

1:07:36 Thomas: Klump, merely the washing instructions on the marvelous tapestry of life, Luke McGlynn, temporary.reality (pearce), Nelson W, Sophie S., Christian Hernandez, Andrew White, Brett Kasper, Artie Jay, Kenneth S Star, oh, that's, that's not the actual Ken star, is it, because okay Brendan Hey, if that is the real Ken Star, uh, thanks for becoming a patron, F you for everything else you've ever done, yeah it's The first good thing you've done, Brendon. Guessley, I'm just here so I don't get crimed. J, JJ, Jolly Jim, Rutherford B. Hayes, the most okayest president, Doug Powida, Apple Ventus, Knowledge First, and David Looney, and your turn, Andrew.

1:07:54 Andrew: Let's hope it is not but yeah your entire miserable life, yes and A big thank you to Doddle Lawyer, Phillip Guyton, TallTallSkye, Beth Anne, Marilyne Lemieux, elena mapley, Justin Scott Woods, christine brean, thanks to, how about an OA live show in Rochester, someone grab the garbage plates, I'll bring the cream ale, that's the Genesee Brewing Company up up there in Rochester, uh, Wendy Hughes, Anna Epps, Mark Hogue, Colin Rymer, Zachary Youngblood, Happy Pirate sad parrot, cruz perez, Mj Hinman, Kristopher Pratt, Phillip Tigel, magat exterminator, and that's M-A-G-A T, so I, that's funny, Kate S, John Weinberg, Joe Mercadante, I Like Big Pods And I Cannot Lie, yeah, we are a thick pod, I will tell you, that's a two C's on that, yeah, Dillon Kladivo, David Crafti, All your patrons are belong to us, I got that reference, and that, and Wungavu T Dimps, thank you so much for supporting the show.

1:09:09 Thomas: Whoa.

1:09:23 Thomas: And that's our show. Thanks so much for listening. Action-packed one. Thanks again, of course, to Liz Dye. I hope you enjoyed it as much as we did. And we'll see you next episode for a midterm election guide that you're going to want to hear. See you then.

1:09:36 Clip: I move for a bad court thingy. You mean a mistrial? Yeah, that's why you're the judge and I'm the law talking guy.

1:10:10 Clip: www.openargs.com. Be sure to join the Facebook group at facebook.com slash groups slash Yodel Mountain and follow us on Twitter at OpenArgs. This podcast is a production of Opening Arguments Media LLC, all rights reserved. It is produced with the assistance of transcriptionist Heather Leverage, production assistant Ashley Smith, and additional contributions from Morgan Stringer and Debra Smith. Special thanks to Teresa Gomez, who runs our live shows and heads up the OA Wiki, follow at OA Wiki on Twitter. Additional thanks to the moderators of the Opening Arguments Facebook community, Emily Waters, Alicia Cook, Eric Brewer, Natalie Newell, Brian Ziegenhagen, and Teresa. And finally, thanks to Thomas Smith, who edits the show and created the fabulous theme music, which was used with permission.