Cornyn and Tillis Negotiate Meaningless Concession from Blanche

Transcript

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

0:00:02 Matt: That's why we worked so hard throughout the 20th century to create a system in which, and I understand some of it's burdensome, I'm sorry, but so is having cyclospora.

0:00:17 Matt: Everybody can bet on what the weather's going to be tomorrow.

0:00:19 Thomas: Why? Yeah.

0:00:19 Matt: We have people that can tell us that. We do have really good systems that can predict earthquakes and weather. And if we turn all of this over to the market, we're way stupider than I thought.

0:00:32 Thomas: Hello and welcome to Opening Arguments. This is episode 1285. I'm Thomas Dowd over there. Is Matt. How are you doing?

0:00:38 Matt: Thomas, I don't just give that kind of information away. You're just going to have to go to Kalshi.com and put your bets.

0:00:43 Thomas: Ah, jokes on you. I bet that you wouldn't give me the information. And now.

0:00:49 Matt: That's a completely separate bet. Branching off. I've spent a little too much time looking at Kalshi. I'm not participating, but I was just looking at it today for the story that we'll be talking about. And it's weird stuff, man. It's really strange. I don't understand it.

0:01:04 Thomas: Elements of it seem okay, but then a whole bunch of it is like that shouldn't probably happen.

0:01:09 Matt: Or it's not necessary even. I mean, even apart from the really bad stuff, like the sports gambling, which shouldn't be happening. Do we really need to put a bet on whether the Wendy's earnings call is going to include the phrase crispy chicken? I probably will. I don't care. Why is that a thing I can bet on? What is going on?

0:01:24 Thomas: Yeah. I don't, I feel like those kinds of things could only be insiders. Like what, who else is making, is someone else casually like, Oh man, I bet it's going to include this. Why, why would you think you're going to win a bet if you're not an insider? Sure.

0:01:43 Matt: Or just an absolute degenerate gambler, like you have run out of things to gamble on,

0:01:48 Thomas: But there's, there's plenty of things to gamble on. If you're a degenerate gambler, like that's, this is, I just truly don't get it. Like, is it a battle of different insiders who like have different inside information? Like, I don't even understand how the market for like what someone's going to say during a thing. I don'T understand how that market would exist.

0:01:51 Matt: You would think. You would hope. Yeah. Yeah,

0:02:06 Thomas: Cause I cannot imagine betting on that unless you were an insider.

0:02:11 Matt: I'll be talking about some of those insiders and how they've profited off of all of that. But we also have to talk about the absolutely disgusting parasite, which is wreaking havoc across the United States. Oh, also the Taylor Farms Cyclospora thing, besides Todd Blanch.

0:02:23 Thomas: Yeah. Yeah, yeah. It is blowing my mind. I'm getting so frustrated seeing, I watched a whole video of Cornyn giving this like little talk about how like, all right, talk to, uh, I talked to the parasite, Todd Blanche. Well, no, he's a taenia. It's a totally different family ecologically. Uh, Matt, so get your, get your biology straight. He had a whole thing where he's like, alright, I talk to him and, um, they're not, they're Not, we've modified the settlement. That's not a settlement. Like they are, he, Blanche has apparently come to a deal with Cornyn and other Republicans about the slush fund and about the immunity. And I'm sitting here thinking, I'm sorry, didn't we do a whole bunch of Gavel Gavel about a judge saying you can't even call this a settlement? This isn't anything.

0:03:14 Thomas: It doesn't exist. And yet not only does it apparently exist in some form, Todd Blanche can make like unilateral modifications to it.

0:03:23 Matt: Well, he can't. We'll talk about it. But he has not modified the settlement agreement. He has done absolutely nothing. He put out a piece of paper that has some words on it, which we'll take a look at. But nothing has materially changed in the slush fund. And this is pathetic. This is really pathetic.

0:03:36 Thomas: I do not, I don't, this is so confusing. Like, do these Republican senators not know that the court stuff happened? Like, really? Like what do you think is going on there? Yeah.

0:03:47 Matt: I was looking at the transcript when they were growing up about this. They seemed to understand what was going on. They seemed understand that even if he puts out some kind of statement, that the settlement agreement is still going to be in effect if it's ever reversed. Now, obviously, as we know, just, you know, the court put a permanent injunction that nobody can call it a settlement agreement, found it to be completely illegal and collusive. It is on appeal. And if they somehow prevail on appeal, it could still be there. They're not even acknowledging them.

0:04:10 Thomas: It's weird to just not even, it's just a weird thing.

0:04:14 Thomas: I don't know, unless I have something completely wrong that it feels like another sign of the times that like the court has ruled on this and they're not even treating that like it's part of the equation. What the hell?

0:04:27 Matt: It is. Whatever excuse to get them through. Sad times. We'll take a closer look at that so you can see just how bad and how corrupt this continues to be. Just not getting any better on that.

0:04:35 Thomas: And after that diarrhea, let's move on to the other diarrhea. Yeah.

0:04:38 Matt: Something even more explosive yes uh this is just wanted to catch up on some of the legal issues around the cyclospora outbreak starting with why we are having it which is very much a legal issue and uh some of the class actions and other suits are starting to come out of this as well as some of the employment conditions that have been coming out about taylor farms which really should not exist in its current form as far as I can tell the people who gave us this entire thing in collaboration with RFK Jr who gave this this outbreak

0:05:03 Thomas: Jeez. Matt, I'm worried that you're in real danger of confirming all of my priors about this. I haven't looked into this at all. Are you going to say that this is a product of deregulation, of corporate greed, and of idiots from the MAHA movement who don't know anything about health?

0:05:19 Matt: Yeah you've really been paying attention all the way through. Wow.

0:05:20 Thomas: I haven't. That's the thing. I have. I've literally not not looked into this at all I'm not joking that's just what my priors would be and I'm worried that you're just going to confirm exactly what my priors are yeah well yeah there's a way I could make money betting on capitalism ruining things I that's I think the universe would fold in on itself yeah boy

0:05:33 Matt: You should take these instincts to Kalshi.com. You got this down.

0:05:45 Matt: Bet on that every time. Yeah, pretty much. Pretty much. Yeah. So we got to talk about all that. And then we've got a footnote about the prosecutions that have arisen from insider trading, some weird ones. We're ready to calcia in the other markets. Yeah so we'll finish up on that and just kind of check in on the state of that because I think that really proves the point. We'll kind of put the nail in it about why this stuff shouldn't exist and understand why all of this is just completely ridiculous. So we got plenty to cover here.

0:05:53 Thomas: Related to calci ah all right boy speaking of cornering a market kind of If Cory Doctorow inventing in shitification like that word, but it's good. It's a good thing. Well, it's too bad for him. You can't like patent a word because that would be the new iPhone. Like it's just everything is in shitified and it couldn't be a better word to describe everything that in late stage capitalism. I guess that kind of that was the trend like four years ago is to say late stage capitalism, but this is kind of the tomato tomato. But anyway, why it's in shitify. All right. All right. Reminding people that, hey, if you want to listen to the judge's amazing smackdown of a certain diuretic taint, Todd Blanche, go to Gavel Gavel. Got that all over for four episodes worth with a little surprise update that we did on real short notice. Matt was kind enough to do. Check that out. We've got, of course, a lot of awful movies. This is on Patreon dot com slash law. And you get to skip the annoying ads, which otherwise are probably going to be coming right about now. So we'll take a break and we'll get back to it.

0:06:45 Matt: Yeah, that was a fun one.

0:07:09 Ad: [Ad break 1 — ad music]

0:07:09 Thomas: All right, make this make sense, man. Man. Make this make sense. Okay. Tell me why it doesn't make sense?

0:07:09 Matt: I can't make it make sense, but I can tell you about it. That's all I can do. Well, let's go back to the beginning. Just a quick refresh. Everybody should listen to the Gavel Gavel episodes. We have talked about this on this show as well. Very quickly, a settlement agreement was reached in the Trump v. IRS case in which Trump was suing himself over the release of his own tax returns during his administration. This agreement, obviously, as we know, was super corrupt and included not just the provision of the slush fund, which essentially allows anybody who feels they've been harmed by government weaponization to come forward and get payouts. It has nothing really to do with Trump's case at all. It's just an excuse to set this giant slush fund up. And then also a completely out of nowhere immunity order from Todd Blanch, the acting attorney general saying Donald Trump and his family as entities can't be prosecuted.

0:07:56 Thomas: I mean, he drove a hard bargain. He tried to negotiate with Trump, but man, Trump was just, he's a master dealmaker. And so he ended up giving, it's not even saying like giving up the farm. Is that the saying? It's like giving Up someone else's entire big farm company. There's no relevance of what he He gave up to what the lawsuit was.

0:08:17 Matt: These Yeah, this is like Ted Turner amounts of farm. Like this is incredible amounts of farm.

0:08:21 Thomas: Gave up the concept of farming to him. Like he owns all farms now.

0:08:23 Matt: As you referenced, Tillis and Cornyn on the Judiciary Committee looked like they might be growing a spine, like between them, maybe like a quarter of a spine. And we're asking a lot of questions about this thing and saying that they couldn't really vote for Blanche given that he was. And again, this ist just one of the many things.

0:08:40 Matt: And we've discussed Todd Blanche at length many times on the show, everything from Epstein files to handling of immigration matters. We don't have time to get through all that. Yeah, we've got a very long list. Exactly. This now stands as we have already labeled it the most corrupt deal in American history. I stand by that.

0:08:46 Thomas: We don't have time for you to listen to that. We're already out of it. We've run out of disc space. Yeah.

0:08:57 Matt: It's not surprising. Of course, we expect nothing but to be disappointed by these people. But take a look at the actual order. Let's just see what it is that got them to change their vote because it must have been pretty good, right? Yeah. And it's pretty short. There's not much to it. This document on the letterhead of the Office of the Attorney General, dated August 2nd.

0:09:15 Thomas: You want me to read this whole thing?

0:09:16 Matt: Oh, just the first page.

0:09:17 Thomas: Oh, gotcha. Yeah. All right. August 2nd. Letter A. The Attorney General's May 18th, 2026 order establishing the anti -weaponization fund is rescinded and shall have no force or effect.

0:09:31 Matt: Okay, so this means nothing because the parties, Trump and the IRS and all the other government agencies involved, are still bound by a settlement agreement that says they have to set it up. That is required. We read the settlement agreement on Gavel Gavel. The language is right there.

0:09:45 Thomas: So this would just mean like this particular order. It's like if someone said, OK, we have a settlement and you're required to like start a business. And so I'm like, all right, I submitted the paperwork to start this new business entity. And then someone makes you take it back. You're like, oh, OK. Disregard that paperwork. It was like, well, you could just submit a new paperwork. Right.

0:09:49 Matt: It's iteration. Right, that's right. The settlement agreement itself is found to be illegal and collusive, and it is now on appeal to the 11th Circuit. I don't think it has much of a chance on appeal, just because I think Kathleen William's order was so beautifully put together. And I don't see how you can really argue with the 35 federal judges who got her to that point. But if the 11th Circuit were to reverse and to find that this actually was something the parties can do, this would be back in effect and the federal government would be required. And Todd Blanch would suddenly be standing up and saying, well, I have no choice. The settlement agreement binds me.

0:10:34 Matt: I can't unilaterally cancel it. So it doesn't matter that his May 18th order is rescinded. It's completely meaningless. Let's take a look at the next section.

0:10:41 Thomas: B, for the avoidance of doubt, nothing in this order is intended to contradict or otherwise be contrary to prior representations by the Department of Justice that the fund is not operative. Does that mean anything?

0:10:53 Matt: I guess just he's saying that, like, don't read this to mean that we had started doing it. We just rescinding it. And we didn't ever use it.

0:10:57 Thomas: Okay. No members were appointed, no funds were transferred, no process for receiving claims was established, no claims were paid. Nevertheless, several frivolous lawsuits have been filed challenging the fund, and at least one court has declined to dismiss those claims as moot. This order establishes beyond any doubt that there is no fund. And then see a bunch of citations.

0:11:18 Matt: And you know when they're saying it that directly um there's probably a font you know what that means I just kind of it makes me think of like somebody who's just been drinking heavily all night and like somebody takes his keys away and is like fine okay I don't have the keys I'm not driving and of course he's got other keys somewhere that he can easily get to right it's just something like that I mean this is meaningless it means nothing at all the next page is a press release that they put out which explains or their version of what they're doing and there's one very notable thing here, because you'll notice, of course, that this A and B thing, this memo, which is completely meaningless, does not mention the immunity deal, which was, of course, the most important part of this for Trump. But this next part, I don't know what to call this. I guess it's a memo. It looks like a press release. It's sort of a summary or explanation of what they're doing. There's an interesting little bait and switch here. If you want to read the first two paragraphs, it's worth a look.

0:12:05 Thomas: The heading is Department of Justice rescinds anti -weaponization order and addresses the May 19th release. Oh, naming it. The Department of justice today announced that the acting attorney general Okay.

0:12:11 Matt: The May 19th release is the immunity thing. But he's not going to address it under protest, obviously. The next sentence is really something. This is incredible. This is incredible lawyering, I have to say. So as we discussed in the Gabble Gabble episode, the settlement agreement has the plaintiffs releasing all claims against the defendants and saying, we're not going to see you anymore. We are satisfied with things that are being set up in the settlement agreement. The May 19th order is the one in which the defendents are releasing all claims againstthe plaintiffs, which is much a bigger deal. That's a much bigger deal because as we've established, the plaintiffstidn't really have that much of a claim to begin with. The defendants, potentially, the many, many hundreds of entities that could be covered, and all of Trump's family members and him himself. When you're talking about mutual release of claims, that's really quite a thing to call that. It says, part of a settlement agreement, the plaintiffs generally do have to agree they're not going to pursue anything further. The defendants do not have to disagree to this, to what they've agreed to. It's incredible.

0:13:37 Thomas: Is it not? It's weird to even say how this typically would go, because like, you know, I've been in a settlement and there's this super broad, like any and all prior claims thing forever, which was kind of interesting. And it didn't have to be related to the dispute at all. Is that is that this or what is that totally unrelated? What is this? What kind of release are they talking about? If it's mutual release of claims, because if it was just related to like this, whatever you want to call it, like this incident, then I guess that wouldn't really matter.

0:14:13 Matt: Right, but we know it's not.

0:14:15 Thomas: Okay, how do we know it's not? That.

0:14:16 Matt: The May 19th order that he's talking about is not being rescinded.

0:14:18 Thomas: So I'm saying further, let me read it again. May 19th, the order regarding a mutual release of claims applies by its terms only retroactively. So, I'm saying, when it says a release of claims, are the claims, is it only claims related to the tax return that was stolen kind of thing, like that incident?

0:14:38 Matt: No, because the May 19rd order is much, much broader than that. It should. By the terms of the settlement agreement it should, but Todd Blanch had to go and create the broadest possible grant of immunity and release all claims the government might have against Trump. And the fact that he's just saying that it's only retroactive, that's pretty obvious from the language, that it'S not prospective. It's not covering him forever going forward. I don't think that was really that much in doubt. And it's just like a weird bait and switch to say, don't worry about it. It's retroactive. He's not rescinding it, of course. He's only rescinding the May 18th order, which is the one that created the fund. This is meaningless, and it's worse than meaningless. He's actually doubling down.

0:15:12 Thomas: Yeah, I think what I'm seizing in on, and maybe, again, I could just be not reading something correctly, but what's the wording of this May 19 order? Where can I find this? Is that somewhere in I see. So it's like in the original May 19th order, which we did, we have read this before, but just refreshing on it. He did make it as broad as possible where the claims are like if you get through all the other language, it's any matters that were raised or could have been raised in this case or pending agency claims to lawfare and or weaponization or three, any matters currently pending or that could be pending, including tax returns filed before the effective date before defendants or other agencies or

0:15:22 Matt: That's the one we've read a few times now. Or, incredible. That's so broad.

0:15:54 Thomas: Departments so that's where it just it gets to be anything like it's just like pretty much okay

0:15:59 Matt: Anything at all. Anything. And potentially, yeah, any agencies or departments, and the defendants are the United States. The acting AG is signing on this, and it's not IRS, it's the other defendants. So it's ostensibly the United State of America releasing Trump and his family from pretty much anything they've done. The headlines have been this is about tax audits and SEC stuff, possibly, maybe, but I think they could try to interpret it for a lot more. And any future administration can certainly decline to enforce this. I mean, this is silly.

0:16:23 Thomas: Yeah so what's so funny is that these idiot republicans who are pretending they care I guess were to believe that was what mattered oh okay we were worried this was immunity forever going forward now it's actually just immunity forevergoingbackwards yeah

0:16:33 Matt: And it it clearly says that. It's no question. So it's a total bait and switch. He's pretending that that's the issue and we're moving on and we'RE not talking about it again. Obviously, the right thing to do would have been to rescind this as well, but no, they're not going to do that.

0:16:50 Thomas: Yeah I didn't realize that this is what happened okay

0:16:54 Matt: It's bad. It'S very bad.

0:16:55 Thomas: Well are we saved by the fact that again legally this doesn't exist this isn't even happening

0:16:59 Matt: Yeah, it doesn't. But the immunity order still does because that's its own thing.

0:17:04 Thomas: Well that's not part of the settlement that the oh

0:17:08 Matt: That's always been the problem.

0:17:08 Thomas: Really oh so you're saying that the judge's thing that we went through doesn't apply to that holy crap I did not I matt I don't think I understood that

0:17:13 Matt: No. This is completely gratuitous. This was was totally unnecessary. Oh yeah.

0:17:19 Thomas: Wait how is that even possible

0:17:22 Matt: It's just a little gift that was thrown in. Well, it's a huge gift, but the settlement agreement talks about the plaintiffs and they're releasing their claims. It does not talk about the defendants doing anything for the plaintiff's in this direction. And here we are. No, it does not.

0:17:33 Thomas: So this is like a separate order so is it even part of that lawsuit if it's not a part of what what the judge has evaluated as the settlement, then it's literally just nothing. It's just like, hey, this federal agency decided one day to write a letter to a particular citizen saying we're not going to ever hold you accountable for anything.

0:17:55 Matt: I suppose the attorney general could do this for anybody if they wanted to. They could just put out a statement saying that we're releasing you.

0:17:59 Thomas: Right. I don't see what this even is. That's really weird. And I guess if that's true, is there a weird silver lining in which like, if that'S true, then this is nothing more than just like a memo. It'S not attached to any suit, right? That was what you're telling me.

0:18:14 Matt: Basically binding agreement. That's what I believe. And that's the way I understand it, is this is completely just its own thing. Right. Exactly. Yeah.

0:18:20 Thomas: There's also no consideration. It couldn't be a contract. It's just like, we're giving you something for no reason. Okay. Well, in a weird way. Yeah. In a weird way that makes me feel a little better because it, because for one, they weren't going to do anything to Trump while they, Trump was in power anyway.

0:18:27 Matt: And we're stapling it to this and we're pretending. And this has always been the trick. Sure.

0:18:39 Thomas: And it feels like this, then correct me if I'm wrong, feel free to rain on my parade, but it feels like This would be way easier for the incoming administration, assuming it's different, to just be like, what's this stupid piece of paper? Throwing it away.

0:18:51 Matt: Yeah, exactly. Yeah. I'd love to see them raise this and see how that goes in a federal court, that this thing that was stapled onto settlement. Yeah? This memo to self, basically. I don't know, a memo to file? Like, I don't know. Yeah, it's posted. Yeah. Right. Totally.

0:18:58 Thomas: What would they even call it? Yeah, this is just Todd Blanchard's reminders. It's like a calendar item.

0:19:11 Thomas: Wow, I totally didn't gather that. Wow, all right.

0:19:14 Matt: Sorry. I thought I said that.

0:19:14 Thomas: You might have said it, but I didn't understand that that would even be possible. Like, I guess. Yeah, it's just like, again, we're dealing with stuff that makes no sense ever. So it's like hard to hard to put it all in your mind the right way.

0:19:25 Matt: And why would the United States gratuitously release them from all of this? It makes no sense, right? You would think it would have to be related to settlement agreement, but no, it is just, this is why I have said from the beginning, I think this is pretty much the point of this. I think why it was all done was just to get to that part where they could sneak in this thing and people would talk about it and lump it in with the settlement fund, which I I think they knew from the beginning. I think they knew the fund wasn't going to happen.

0:19:28 Thomas: Yeah. For no reason. Maybe. Yeah I don't know. I don' know. Huh.

0:19:49 Matt: They knew there'd be a challenge immediately. But this, Corn and Tillis, not that I expected anything from you at all, but come on.

0:19:56 Thomas: This is ridiculous.

0:19:58 Matt: This will really put the nail in it. Take a look at this. This is released August 3rd. This is the official joint statement from John Corn and Tom Tillis explaining why they're going to change their vote now.

0:20:07 Thomas: Oh, boy. U.S. Senators John Cornyn and Tom Tillis released the following statement announcing the successful negotiation of a legally enforceable document clarifying the anti -weaponization fund and the IRS audit release included in the settlement agreement. Agreement. Well, that's saying it's included.

0:20:25 Matt: It's not. The audit release is not.

0:20:27 Thomas: Okay. Signed by acting attorney general Todd Blanch last May. Quote, from the outset, we were clear that we needed a written document addressing our concerns on the IRS audit agreement and the anti -weaponization fund that included constraining the scope of audit protection by limiting it to the parties. What the heck is a sentence? Sorry, hold on. We were clear there that included restraining this. Okay, so the, sorry. So we we needed a written document is what they needed. Blah, blah, blah. That included constraining the scope of audit protection by limiting. That's a weird, that's bad, right? Am I wrong?

0:21:04 Matt: It's also not the question. The question isn't whether it was limiting it to the plaintiffs.

0:21:08 Thomas: Sorry, I'm hung up on what the literal sentence means. I'm just sorry. I like actually just trying to read it. Okay.

0:21:10 Matt: Yeah, it's a dumb sentence, but I'm with you.

0:21:14 Thomas: So that included constrained the scope of Audit Protection by limiting it to the parties of the settlement agreement. And wow, wow. Way to, way to, you know, strive there. Way Way to reach for the stars. Hey, we're going to, we know we're putting our foot down. You're no longer allowed to just say like random people also will never be audited ever.

0:21:37 Thomas: It's got to only be the people that for no reason you're doing that are related to Trump. It's like, cool, man. Yeah. Wow. Did. Wow. Yeah. Because this feels like it was, it almost feels like their concerns that they're saying they cared about were just stuff that like was misinformation about it.

0:21:45 Matt: That was not in question. We already knew it was limited to the plaintiffs, but okay.

0:22:00 Matt: The Blanche statement doesn't say that. It's a bait and switch once again. They're just pointing at something different that they can say that they're doing this over.

0:22:07 Thomas: Well, yeah, that's what makes me wonder, like, because I actually did sort of believe that Republican senators at least seem to be upset about like they didn't go along with this. They seem to me upset about the fund. But this makes me think like, was this intentional in that they're just saying, OK, we've limited him to stuff that wasn't happening already anyway, which isn't anything.

0:22:30 Matt: Yeah. I'm looking at the press release because the first thing, the actual signed order from Todd Blanche has nothing to do with the immunity thing. The press release addresses the immunity things, but just says it's only retroactive. It does not mention that it's limiting it to the point of switch. Again, we knew it's limited to plaintiffs which are Trump and his organization. And that's a lot of people.

0:22:48 Thomas: What where did anyone get that it wasn't limited to the plaintiffs? Like, where's that even coming from?

0:22:53 Matt: That's not even a question. That wasn't a problem. That is the problem. It's limited to the plaintiffs because it's a lot of people.

0:22:59 Thomas: What the hell? This is just weird, man.

0:23:00 Matt: Yeah. It is just meaningless. And again, this is kind of how things are going now is that reading comprehension apparently is just this bad in this country that people will just be like, oh, well, I guess they said it was okay now. Yeah. Well, willful. It was very willful in their case, I think.

0:23:11 Thomas: Yeah. For senators, that's what's killing me. Like, what the hell?

0:23:18 Matt: I had this feeling when I posted about this in Blue Sky and I was looking at this the other day where I'm just staring at it. I'm like, where is the rest to this? What is the thing you're actually talking about? I don't understand this. How are you saying this is what this is?

0:23:28 Thomas: So they've accomplished less than nothing. Like I, like I almost was thinking, okay, maybe they accomplished, like, at least we'll have a little bit more to point to when, when, uh, Blanche, you know, maybe you could think about saying he committed perjury once he goes back on this, but I don't know. I guess there's kind of that, but when it comes to the immunity thing, that's like nothing. This has accomplished absolutely nothing.

0:23:52 Matt: Even if it did say what it says, it's only a press release. It's not even in the order that he signed. So I don'T know what they're talking about.

0:23:59 Thomas: Well, he says that they got a written document. Are we to assume that that's between them? He sent me a note with his signature. Yeah.

0:24:09 Matt: Those two pages that we just looked at are what were released on X under Todd Blanche's name to be the thing. Of course, that's how we do it now. We put it out on X, but that was supposed to cover it. Reading on in their statement. Additionally, the department has acknowledged in a binding written order, the audit settlement is limited to the plaintiffs and the scope does not extend beyond the defendants in the lawsuit, the IRS and the treasury. It doesn't say that either. It just doesn't say that.

0:24:30 Thomas: This is such a mess. It's hard to analyze because we're so out in crazy town. For a second, I was like, well, wait, how would a judge analyze what is actually, and then for a minute, I went to like T3B, like Thomas takes the bar exam, like what modifies a contract when a senator has put out a press release saying what they think it says, but then it's, is that going to be binding on someone? I'm like, wait. This isn't a contract. It's also a nothing. What is anything? Now I'm spinning out and I'm a robot malfunctioning on an old cartoon tune because I don't understand what this is.

0:25:06 Matt: I'm going to look at one more thing here because the other thing is at the end of the press release thing, he says, we've attached the transcript of Todd Blanche's testimony, obviously with Senate Judiciary, and that we're standing by everything he said in the testimony, which is pretty weak tea. That's just restated. If you're actually saying something, say something. And I think what they're saying is that they could cobble together what he said in his testimony to say the thing, but that's not what this document says.

0:25:31 Thomas: I'm lost. Okay. Wow. So yeah, I guess I'll return back to, hopefully I'm right. And let me know if I'm wrong, that it feels like if this, again, if it's not part of the settlement, then truly this is just nothing. This is just paper. And I guess that means we'll be able to get out of this part of it later.

0:25:48 Thomas: I don'T think we were getting an audit of Trump now anyway. Like it's not like under Trump administration, anything was going going to come at all. So I guess maybe that's my bright line or my bright side of this. What do you think?

0:26:01 Matt: Yeah, it is meaningless in terms of getting actual justice at some point when we have an administration that's ready to hold these people accountable. They're not going to feel for a second that they're bound by any of this, but it is also setting all kinds of precedent for what DOJ thinks it can do and the ways that they can lie to the people yeah oh yeah

0:26:17 Thomas: God. And just the way it's debasing the Senate to have this be how they negotiated anything.

0:26:25 Thomas: It's just, yeah, this whole thing is bad.

0:26:26 Matt: It reminds me of the uh the fbi investigation of brett kavanaugh is what it reminds us of

0:26:30 Thomas: Oh, yeah. And then it turned out just like didn't really happen. Oh.

0:26:34 Matt: Yeah just a few token things and we can come back and say okay well it's been investigated we're moving

0:26:38 Thomas: This sucks. All right. Well, we've got to move on. Let's take take a break and then we'll get to uh some diarrhea lawsuits right I don't want to hear anyone make any Taco Bell jokes I've had it with that I care a lot about this hold on let me make a passion speech if you're gonna make a joke that taco bell causes you diarrhea regardless of this lettuce thing that something's wrong with you man taco bell doesn't cause diarrhea I donno why that became a joke sorry since Taco Bell is the best vegetarian fast food I feel pretty connected to of this you know all the jokes people make it's like maybe you need more fiber maybe there's something wrong with your stomach because it doesn't give me diarrhea

0:26:48 Ad: [Ad break 2 — ad music]

0:26:51 Matt: On yeah yeah yes thank you yeah they have just installed a Taco Bell within the last few months uh next to my train stop and it is takes a lot of willpower not to just kind of throw the app up on my on the train you know it's a five -minute train ride home and just pick it up on the way home but I love it

0:27:27 Thomas: So nice and the idea that it's their fault that a stupid corrupt shitty farm is giving people diarrhea it's not their fault what are they the lettuce inspect the lettuce police they have a supplier of lettuce how they would what do you think taco bell is microscopes in their and testing

0:27:46 Matt: No. And part of what I understand is that they were reporting earlier, so they kind of got blamed because they were some of the first to actually be honest about it. I could be completely wrong about that. But let's talk a little bit about cyclospora and where we're at with all of this. So first of all, about a year ago, we made some jokes about this, about big listeria taking over the FDA. And we knew at the time that the CDC was going to be setting ourselves up for disaster because there's something called FoodNet, which has been a very successful program that monitors eight different bacterial things, including this parasite, Cyclospora, which, as I'm sure you've heard, is particularly awful. We'll talk about some of this in a second. They went ahead and on July 1st, 2025, they made reporting about all of these things, all but two of them. They made it optional.

0:28:02 Thomas: Kits uh yeah Yeah. Great.

0:28:27 Matt: So that included Cyclospora. And at the time, of course, I'd never heard of Cyclospora when I was looking at the list, and now I wish I still hadn't, but it exists and it is not being reported. That is impossible not to see the direct line. And from what I understand from experts and from the congressional letters I've seen on this, it's just completely inevitable that this could could have been caught earlier at the very least.

0:28:47 Thomas: It's almost like there's a reason the experts do the things they do.

0:28:51 Matt: Yeah. And that we have these very successful things that don't actually cost that much for relative to what we're doing and the good we get out of it. There's just no reason to do this except obviously to please your corporate masters. So just starting at that where the blame lies, the blame really lies with Taylor Farms, as you said, but in terms of them being allowed to do those, because Taylor, this is not the first time, by the way, Taylor Farbs has had cyclospora outbreaks within the last 15 years, several several times. It's particularly awful because this comes from iceberg lettuce. As far as we know, that was the main outbreak. It is something that very much has to do with the way they are running the farm and their labor conditions and everything else. 10,000 confirmed cases, about 12,000 unconfirmed cases, probably thousands more. That is just what the CDC knows about in

0:29:33 Thomas: When we just had the first deaths. Yeah, oof.

0:29:35 Matt: Michigan. It just is a particularly awful condition from what I can tell. It takes two to 14 days even for anything to show up, so it is very hard to track. But it can last for a month, and it is just an uncontrollable experience. It sounds pretty bad. I also just just learned from these lawsuits that I'm allergic to the main treatment for cyclospora, which is sulfa drugs, the old -fashioned antibiotics, sort of the first -line antibiotics from World War I. Apparently, it's the most kind of brute force approach for this. And so I can't take it if I get it.

0:29:53 Thomas: What? Oh, wow. Holy shit.

0:30:05 Matt: And the other stuff is less available.

0:30:07 Thomas: Literally.

0:30:07 Matt: Yeah. So good to know.

0:30:08 Thomas: That's not good, Matt. Don't get it.

0:30:10 Matt: No, not at all. And that's part of the lawsuit here. Taylor Farms, let's talk about for a minute. They are big Republican donors, no surprise, about 4 million since 2020. Yep. They spent about, I have here, $810,000 on lobbyists just to regulate food safety at the federal level. Of course, that was in early 2025, just months before the FoodNet testing standards were dropped, that I just told you about. So they're very much responsible for putting the pressure on and convincing the FDA, which probably didn't need much convincing that the CDC needed to drop this. It gets worse too, because when this was just coming out in mid -July, a lobbyist actually got a direct call with the White House and forced the FDA basically to announce it without mentioning Taylor Farms.

0:30:53 Matt: They allowed the company itself to come forward with a recall, call, but the FDA didn't blame them at the time. And this is all because they paid for this. They got to have the smoothest and softest way out of this they could. Also, let me look at the product announcement here. The Cyclospora information hub that they set up on their website, the Taylor Farms, yeah. I'm just going to send you the product recall information because this is kind of a nightmare. I guess maybe in the food service industry, you're going to immediately recognize what these products are, but I don't know how consumers are supposed to know. It's basically like all of their salad mixes, but they're all very specific names and salad mixes. I would pretty much just throw away your salad mixes, I think is what it comes out of this. So we've got a class action out of California, three separate cases from Michigan, which is the epicenter of the outbreak. California, I Think, has some good points here with this class action about consumer protection, breach of warranty, unjust enrichment, and obviously straight up negligence. I learned from this that public health authorities have tied Taylor Farms produce to prior outbreaks, including a 2013 cyclosporiasis outbreak from salad mix and a 2024 E. coli outbreak linked to their onions. They've been on notice for a while. They're at contamination risk. There's another lawsuit right now pending about their horrific labor conditions no surprise of course they're treating immigrants the way they are forcing them to skip meal breaks and packing them in also creating conditions that are going to lead to these kinds of things

0:31:07 Thomas: Who's they? Yeah, I think it isn't this. They can only live in like humans. So it's definitely like a human

0:32:12 Matt: Yeah yeah that's that's the only good thing about this is actually pretty hard to spread so if you're living with somebody with it you're actually pretty unlikely to get it and somebody's staying clean it's really when it's on food that it starts to

0:32:12 Thomas: Feces contamination scenario. Yeah. My point is like that, that means whatever's happening at this farm must be pretty bad. Right.

0:32:28 Matt: Grow yeah right and like whatever they're spraying the lettuce with and you know that standards are using yeah no for sure so I I hope that these people are able to get some justice. It sounds really awful.

0:32:37 Thomas: Sorry. Who's suing?

0:32:38 Matt: So there's a class action for everybody affected in California, out of California. And then we've got the two cases out of Michigan. I'm sure there's more to come.

0:32:40 Thomas: What's what's everybody. Oh, okay. And is it like people who've actually caught it or is it Like, Hey, I had to throw away my lettuce, you know, give me some lettuce money.

0:32:51 Matt: Recompense for my bag of lettuce. Apparently, if you can prove that you got it at Taco Bell, there's a specific Taco Bell suit. There's a Walmart and there's Taylor Farms, of course, itself.

0:32:59 Thomas: Yeah, a Taco Bell suit. So how does that work? Do they have to sue Taylor Farms to be like hey this is your fault actually hmm oh

0:33:05 Matt: Yeah. They're just going to have to figure out chain of custody, I guess, on this stuff. There is some allegation that Taco Bell might have known earlier was covering it up or didn't report it the way they were supposed to.

0:33:13 Thomas: Okay well that wouldn't be good yeah

0:33:13 Matt: So there is some of this. We'll keep watching it as it comes. Olivia found a particularly interesting response from an expert I sent you here on this podcast as a food podcast. I wanted to play because this really sums up the whole thing pretty well about how the consequences for this kind of thing work.

0:33:27 Clip: So Taylor Farms in Mexico was already implicated in a 2013 cyclospora outbreak. Once a big farm is implicated, what is the punishment? Does the FDA do a review before they can start shipping product again?

0:33:47 Thomas: What the hell is that

0:33:48 Clip: There's a punishment in the marketplace.

0:33:50 Matt: There you go.

0:33:50 Clip: I think that's the main force we have right now. There's lawsuits and there's, yeah, there's marketplace disruption.

0:33:58 Matt: So that was the expert. That was the Expert Opinion. And that no, I think, really says it all. That was a very specific kind of no of someone who's completely defeated and understands that there are no consequences. So yeah, as she said, the market and the courts.

0:34:10 Thomas: Well that's even under normal circumstances like even in non -trump times

0:34:13 Matt: It's, yeah, even in normal circumstances, yeah. 2013, right.

0:34:17 Thomas: Well I get it if it's like okay something's an accident I guess but I mean at a certain point there's got to be like negligence right

0:34:25 Matt: There should be an FDA investigation. There should be some kind of safeguards in the future to make sure this doesn't happen again. There should be penalties if you find that it was reckless. This is why we have regulation. It's why we worked so hard throughout the 20th century to create a system in which, and I understand some of it's burdensome, I'm sorry, but so is having cyclospora.

0:34:42 Matt: It seems like an easy one to me. And the costs, as I said, of keeping food net active versus having to deal with this in the national level with these recalls and these illnesses and people, you know, just not not eating produce anymore. It's just pretty obvious. We'll keep watching these seats. I just wanted to kind of get some of the legal issues out on this, but it's not great, folks.

0:34:59 Thomas: What do you think will be the legal outcome of this if they're not violating any sort of regulations because we don't have them anymore is it just they have to To do a theory of like some normal. Right.

0:35:09 Matt: Consumer protection and negligence. And I think that from what I understand about how Taylor Farms has managed this stuff and the fact that they've been on notice for a while that they might have an issue here, I think they've got a pretty good case. I think this is a pretty easy class to form since this is pretty rare and it seems like it's pretty trackable. I mean, again, it's hard to track because it takes so long to kick in, but It's not something that you find very often out there.

0:35:28 Thomas: The whole thing where they're like, actually, it wasn't Taylor Farms. That was entirely just bullshit.

0:35:33 Matt: Yeah, it seems to be. I don't... It seems like the experts are agreeing that's mostly where it'd come from.

0:35:37 Thomas: So they literally had a meeting, seems like possibly influenced Trump, maybe, to be able to get them off the hook, but it's still them. I guess what I was confused about with that, and, you know, I usually wait to get my information from opening arguments. I was convinced about like, how would they think that would work? Like, you know, if there's lawsuits, if there's whatever, like still physically it's going to be tied to them. They can't just like bribe their way out of having caused the diarrhea lettuce. Right?

0:36:08 Matt: But they can do what they can to soften the blow in public perception. By the time we get around to understanding what happened, there's not a clear statement, clear headline. Yeah, and that's why they pushed so hard on the FDA not to include them in that initial announcement, and they got to come forward with a recall. The first cases came in May 13th, and the recall wasn't until July 17th, so it's been out there for a while.

0:36:16 Thomas: Oh, news cycles moved on. Yeah. Wow. Oh yeah.

0:36:30 Matt: Again, it takes time. It's not like they necessarily knew as of mid -May. I don't know that they knew, but I have to think point there's a lot we don't know yet there's going to be a lot of discovery that comes out of this I think it's a suit that's worth following but I just wanted to point out this is at least one very good use of the courts because as that expert just said there's no other way to get consequences yeah

0:36:47 Thomas: They need to be sued to oblivion. Oh, discovery would be very interesting on this. If a suit went forward, I would think discovery as to like the communications with the FDA and all that would be relevant. Right? Very interesting.

0:36:59 Matt: And internal obviously and what they knew when so that's our first of two stories about the horrors of not regulating things the second of course is calci itself I've been digging into the legal issues around calci now we've talked about it as a prediction market that is regulated by the ftc it's such a weird thing because these are basically contracts that you're trading on about the likelihood of something happening and you're forming. It's not like sports betting where there's a book here or the house controlling something. You're making a contract. They get a tiny percentage of that contract, but they've taken the joke way too far because now you can make a contract on tonight's game, any given game and what's going to happen and all of the things you'd expect to bet on, you know, including the spread or who's going to score, how many goals are going to be or whatever. All this stuff is now something you can bet on on Cal sheet. And I sort of took some time plumbing the depths of Cal sheet, getting a sense of how it works and what kinds of contracts are out there. As I mentioned at the outset, there's a whole section just on mentions. And a lot of these are on sales calls, which as you said, can only really lend itself to insiders. There's just a lot of really weird pointless stuff. The defense of Kalshi, from what I can tell, I listened to a couple of interviews with the CEO last night. I was just trying to understand where they're coming from about why they think this is legal. Because again, this is clearly gambling. That is what you're doing. You're gambling on the odds of something. And I don't think it really matters that there's not a house or a bookie. Let's check out this interview though, because the CEO of Kalshi, who's a pretty well -spoken guy, seems to know what he's talking about. He's had plenty of time to think about this, and he's going to give his answer as to why this isn't actually gambling.

0:37:35 Thomas: Interesting and

0:38:25 Clip: In the case of the stock market is allocation of capital, which is very important. In the case of our markets is this idea of pricing the future, of making humanity a little bit smarter about who's going to win the next election, if inflation is going to go up, if an earthquake is going to hit a certain city, and so on and so forth. And that makes our markets, financial markets, are not gambling.

0:38:42 Thomas: If an earthquake is gonna

0:38:45 Matt: You caught the same thing I caught, which is, yes, elections are the classic thing that prediction markets have been doing since the 60s. But I don't believe in the wisdom of the crowds or predicting an earthquake. I don'T think there's any value in that. And I mean, it's amazing because one of the other examples, I'm reading some of the briefing on this.

0:38:46 Thomas: Yeah I mean like sure on the first few yeah an earthquake huh yeah cut to like the sandra's fault betting insider oh man I'm gonna to make so much money on this

0:39:04 Matt: Yeah, that's right. Reading some ofthe briefing on those, like they're one of of the examples they give is that everybody can bet on what the weather is going to be tomorrow. We have people that can tell us that. And we're cutting funding to most of them and privatizing it at the federal level. But we do have really good systems that can predict earthquakes and weather. And if we turn all of this over to the market, we're way stupider than I thought. That was Tarek Mansour, the CEO of CalSheet. And in his other interviews, when he's talking about this, when asked about how do you deal with the fact that this is actually gambling, his universal answer for the most part, when He's not talking about predicting earthquakes, earthquakes is he says, well, you know, people want this. The market will catch up. It's like Airbnb or Uber that, you Know, people didn't want it at first and they thought it was illegal. And now it's legal because they caught up. What they mean is of course, we're going to capture the market. We're going To capture the regulators, which we already have. The CFTC has reversed itself already, as we're Going to talk about here. The idea here is that we have a lot of Difference, about 19 that I could count lawsuits from the States. And there's a super interesting Legal issue at the core of this. If you can step back sort of from the absurdity of Calci itself, And that is a direct conflict between the police power of the states, which inherently allows them to regulate things relating to morality or to other things that might affect public policy. And gambling is one of the classic examples of police power. And then the exclusive jurisdiction of the Commodity Futures Trading Commission, which under the Commmodity Exchange Act in 2008, Kalshi is trying to argue that Congress somehow secretly did this, which is ridiculous. This is the major questions doctrine. This isn't what Congress hasn't clearly spoken. What are we supposed to take from congressional intent here?

0:39:11 Thomas: Why yeah that congress did

0:40:38 Matt: That Congress somehow meant to displace state law. Because in every one of these cases, this is super interesting to me because it's not just the usual civil suits. It's not just the unusual kinds of injunctions that we're trying to get. Every one of these states is saying that Cal State is committing a crime, that it's committing serious gambling crimes, especially as to sports betting. That's where they have it strongest. Massachusetts actually had the first one. This has stayed right now, but there was a finding from Massachusetts Superior Court in Boston here that this is gambling. And as it relates to sports, there's an injunction that went into place that said that no Massachusetts resident can do any kind of calci betting that involves sports. That was stayed. New York has filed a similar suit now, kind of learning from what's going on around the rest of the country. I was looking at it. I think it's pretty strong. There is a lot of argument here. There's a lot interesting stuff. I just want to kind of outline some of this. The idea with preemption, of course, is that Congress wants to preempt the field of contracts commodity trading. We don't want to have 50 individual markets where you can do this. I understand that. We don't have 50 individual stock markets. Some things have to be regulated at the federal level. But this stuff with the prediction markets is so obviously supposed to get around state gambling rules. It's so clearly the point of it when you can do this individual sports betting that looks to me, and again, I'm not a better, as you know, no good at math, but it doesn't look that different. I mean, obviously the technical aspects of how it works are different, but the basic question of, is this team going to win or lose? What's the spread going to be? How many goals are going to being scored? Who's going to score the goals? Those are all things, as I understand it, you can go to a bookie and bet on.

0:40:52 Thomas: What oh yeah yeah that's betting

0:42:08 Matt: And so, yeah, that's straight up betting. It doesn't make a lot of sense that Congress would have secretly changed the law somehow to allow the federal government to have exclusive preemption over this stuff, because that would mean essentially, if I'm reading the argument to its logical extreme, I haven't really seen anybody articulate this right, but the way I'm read this, it seems like you could make a pretty solid argument that you've got 40 states right now that are in violation of federal law, who are all being preempted by federal law, that they shouldn't be doing this. Sports betting itself is pretty new, as you might know, at the state level. In 2018, there was a case, Murphy v. NCAA, a Supreme Court case that essentially returned sports betting to the states. It overturned part of a 1992 law that had said that this couldn't be done. It could only be done at the federal level. That's why the sports betting market has exploded since 2018. That's an especially compelling argument because Congress changed the law in 2008, and the Supreme Court reviewed it in 2018 and didn't say anything about this, about how this stuff would be primped. So I don't see it just based on what I saw. I do have some bad news for you as to one of our heroes and crushes.

0:43:10 Matt: Elizabeth Prelogger, unfortunately, has filed the leading brief for the leading amicus brief in the Sixth Circuit on this.

0:43:10 Thomas: I saw this man yeah got

0:43:16 Matt: It's pretty decent. I read it, but it's also, you're the former Solicitor General of the United States. You can do anything you want. Why are you doing this, Elizabeth? Yeah.

0:43:21 Thomas: That money yeah I was hoping I dreamed that

0:43:25 Matt: But that's just a side note. But no, no, sadly, I read It. Actually, I went into Pacer and got it. It wasn't publicly available anywhere. And I downloaded it. I paid $3 to read it. Calche wins again. A couple of bright spots on this. Obviously, under Loper Bright, with the end of the Chevron Doctrine, the agency's own reading of the rules don't really matter, right?

0:43:45 Matt: So all the federal courts can find their own way. The Third Circuit is the only court to have ruled on this, unfortunately, they have found for Calche for now on a preliminary injunction. And they found that it appears that they do have preemption, and that they can do sports betting, essentially, and the states can't stop them. That is pretty contentious. I think think that there's going to have to be a circuit split on this sometime soon. There are several other cases working their way up. The New York one looks like one of the strongest to me of the ones that I was looking at. But as soon as there's a split, it's goingto have to go to the Supreme Court. And I'm not too optimistic because this is exactly the kind of thing the Supreme Court probably would love to find in favor of. It's a major corporate answer. It'S about a billion dollars a year just in calcium alone.

0:43:45 Thomas: Dang yeah well I guess I don't know conservatives don't usually love this kind of thing like a morality thing a vice

0:44:26 Matt: No, but it is also good money and it's become kind of a cause. The CFTC, if they were acting like regulators, which just like the FDA and CDC, nobody wants to be irregular anymore. They're all captured by these own industries. But if they wanted to, Congress gave them a special rule, which allows them to find that some kinds of contracts are contrary to public interest.

0:44:44 Matt: The last time we talked about Kalashian in regard to betting on the death of the Ayatollah, that's not something you can do. You can't explain. So the bet was obviously whether he's going to be in office or not, because you can't bet on death assassination war. And the other thing along with death assassination war is gaming. So there's a special exception. The fact that Congress thought to carve out a special exception for gaming, and I don't see how it's not really gaming. The fact that there is this special rule that allows the CFTC to find certain kinds of event contracts, essentially just contrary to public interest, if it involves some kind of gaming or some kind unlawful activity or something else that really is not supposed to be the purpose of these contracts, which I think that Kalshi has more than pushed the limits on what these things are supposed to do. I just don't think there was ever supposed to this idea that you can bet on tonight's game. That to me, I can't get around it. The argument is that it's a swap, that it is just like a regular swap kind of contract and that That because of that, it doesn't matter what the contract does or what it says, just by definition, categorically, Kalshi's argument, and the Third Circuit majority, unfortunately, has accepted this, is that these contracts are swap contracts and that it's deliberately broad and it doesn' t matter, that it' s clearly supposed to be a loophole. The argument, of course, is the Congress established a federal gatekeeper. It doesn' T matter if the federal gatekeepers not doing their job, that' s how it's supposed to be. But I think the arguments against this are very strong. They expressly preempted state law as to some kinds of gaming, but that definitely doesn't reach sports betting law. There's already cases on this. Sports betting was returned to the states explicitly in that case I told you about. It has been extremely regulated by the states. There's kind of a similar issue happening here. I just learned about something called historical horse racing.

0:44:43 Thomas: Thing hmm right hmm

0:46:17 Matt: They're trying to install this. I've told you before about the years I spent trying to keep casinos out of Boston because they're doing it in the most exploitative way possible. Casinos are some of the dirtiest industries in the country. There is a last minute bid here in massachusetts to try to install something called historical horse racing machines which are basically just slot machines taking all of the fun out of slots I don't think slots are the least bit fun but it's like slots that take minutes to do and you're just basically watching a 90s video game recreation of horse race except it's anonymized it's you can't even like google the horse race or get biff's almanac to find out what happened in the horse race you have to actually know yeah

0:46:42 Thomas: Hmm what but you're forming a contract with the machine that no I'm just kidding what

0:46:53 Matt: Basically well they're saying it's paramutual betting that it's like you're betting it's not bidding it's the house you're bidding it the other people who are participating it looks honestly these machines look awful like they look like no no fun at all. I don't think any of this stuff is fun. So that gets around slots, the slots licensing. So they're saying they can just install unlimited

0:46:57 Thomas: In the world what does that get around oh right

0:47:08 Matt: Numbers of these because they're not slot machines because they like this whole secret third thing. And Louisiana has already found that that is not a thing, that these should be subject to gaming licenses. We don't really have to do anything in the community here because the casino companies are already up in arms about this. They don't want this to happen because they worked hard to get their slots licenses.

0:47:24 Matt: But this reminds me of that. This rhymes with that, right? You create a kind of machine that looks like a slot, plays is like a slot, but you can say it's not slots because technically speaking, it's like does some other thing. And that's what these things are. Like, yes, technically they're event contracts and they're in the prediction market, but they're clearly supposed to be a way to do sports betting when sports betting is heavily regulated by the States. And That's New York's point. And all the other States that have brought this, the fact is we all know that CFTC isn't going to regulate this administration is not going to calculate. We have to at least get a ruling about the sports part of it. I think, because I think that's really destructive. I mean, it'S, itS really unhealthy. I don't get moralistic about this stuff. I just think that as a matter of public policy, I think it's very bad to have wide open public sports betting. I didn't really care what you do in your office pool, but I just that it's really bad. If you have states that are clearly trying to stop it and to regulate it and do whatever they can to make their own money off of it, I don t think we should be able to have a market that's explicitly trying to get around it.

0:48:18 Thomas: Wait what about all the obvious sports betting markets that are happening now are they trying to end

0:48:23 Matt: States are saying, basically, we have a monopoly on this. Sports betting is up to us. We should be doing this. There's the 40 states or so that have legalized it. They're

0:48:27 Thomas: Those right right oh so that's why those apps are everywhere now it's not like the uh DraftKings or whatever is that not sports betting or it is sports betting but they've decided it's fine

0:48:42 Matt: Still regulated by the So like DraftKings is regulated by Massachusetts law as a sports betting thing, right?

0:48:45 Thomas: Now yeah okay so they've decide it's okay so it's sports betting so they're allowing sports betting so what's the distinction here it's that Kalshi has gotten by by not being considered sports sports betting.

0:49:02 Matt: Yeah, that they've created this loophole that they're saying can only be federally regulated. They're very happy to say that the CFTC regulates this and we are held to their standards, which are nothing. They're just nothing.

0:49:12 Thomas: Gotcha.

0:49:13 Matt: The CFTC has the authority to say this is not something that falls within these markets, but they're not going to do that. They're not. They're going to just not. And we all know it.

0:49:21 Thomas: Okay, so that's how they've gotten around. I'm sure states have tried to stop them, and they just aren't doing that.

0:49:27 Matt: Yeah. So that's what all these lawsuits are for, is saying that, I mean, it's not even lawsuits, they're just saying you're committing a crime. And so Cal State has actually gone, for example, in New York, they went to New York State and they said, I want an injunction to say that we're not doing sports betting. And they actually couldn't get that, which is a good sign. And that's going to go up to the Second Circuit. And So that that's why I think New York felt like they could file the suit to come forward and say, these are all the crimes you're committed because Cal State wasn't able to get that protection. Another thing to point out is that generally speaking, speaking, you have to be 21 to be engaged in any of this stuff. And Kalshi's minimum age is 18.

0:50:00 Thomas: For gambling? I thought it was 18.

0:50:02 Matt: Just looking at the chart here, it's 21 for land -based casinos for most places, but there's also online.

0:50:07 Thomas: Yeah, like the riverboats.

0:50:07 Matt: I don't understand any of the stuff. Again, it is just all these ways to do end runs around what the law is supposed to be, what the states are trying to do. Even though I clearly have a side on this, I think it is fascinating that you have this push and pull, a very direct push and pull between the state police power to regulate this stuff and the federal preemption, where arguably Congress may have allowed this to happen by opening up these markets.

0:50:31 Thomas: So how did they allow it to happen?

0:50:33 Matt: The change to the Commodity Exchange Act in 2008, which Prelugger and the others in support of Cauchy are saying was actually a change which preempted this kind of thing, which pre -empted any opportunity for the states to say that they have the exclusive right to regulate this kind betting. The amendments in 2008 created this excluded commodity idea so that there's exclusive jurisdiction that fields out state gambling laws. You just basically have federal control. But again, as I said, the logical extreme of that would be that all of this state -based sports betting regulation is actually illegal and it should all be done at the federal level, which makes no sense. That can't be what's happening. What we know about the major questions doctrine and congressional intent and how they actually are supposed to design these things and looking at the statute as I have, I just don't see why Congress would carve some of this stuff out. And I don't trust the CFTC's own interpretation of any of this. The CFTC, by the way, has also reversed its position within the last couple of years about sports betting. They said before that it did not preempt in 2024, and then suddenly Trump is president, and now it does. Strange how that works. So like I said, the Third Circuit is the only court, and they've only found that a preliminary injunction that Kelshi wins so far. But I think that there's going to have to be a circuit split. It's goingto have to decide about the Supreme Court about whether there is a full preemption of this kind of stuff. And the sports aspect of it is the strongest part. And we might might end up with a split in which there's only a finding that Kelshi can't do sports betting and everything else is still on, which

0:51:55 Matt: Would be better than nothing. But I just think this whole thing is ridiculous. At the same time, I do understand there is some value to prediction markets, I guess, and they're not any sillier when it comes down to it than commodity markets, which, as we've discussed before, are pretty silly. That's my take on it so far, is that the sports stuff is probably in danger for them.

0:52:12 Thomas: All All right, well, we'll take a quick break, and then we got a footnote.

0:52:16 Matt: Yeah, I think this footnote will help to illustrate a little better some of the problems with all of this.

0:52:23 Ad: [Ad break 3 — ad music]

0:52:23 Thomas: All right. Footnote away, sir.

0:52:25 Matt: All right, well, I've got three quick cases here. I was looking at and prosecutions involving insider trading involving Kalashie. So the thing that got my eye the other day was Gabe Perez was Trump's teleprompter operator. You might have seen this. He was running Trump's Teleprompters since 2016. Talk about a job from hell. You have to stand there. Not only do you have to watch Trump talk, but you have to try to manage the teleprompter.

0:52:48 Thomas: Or it's the best job, because he just stops using it, and then you take a smoke break. You just do whatever. You eat a sandwich. You just gamble on calci.

0:52:51 Matt: It's true. He's just vamping. That's true, just tune out completely. That's True. Yeah. Yeah. So this guy already makes $175 ,000. He doesn't have the job anymore.

0:53:04 Thomas: Holy shit.

0:53:04 Matt: He was fired. He's now under investigation because they discovered, Cal State discovered some very unusual trading patterns and realized that he was a federal employee. Bad idea. As the guy who manages and sets up and runs Trump's teleprompter, he knows exactly what Trump is going to say. So he had those mentions markets pretty well cornered. This is exactly the problem, right? And this is actually the least of it. The other stuff we're going to talk about is much worse. But the fact that you can have a guy who just happens to have some information. Did you see about the truth social API thing? This is related. Yes. For a hundred thousand dollars a month, you can have early access to Trump's ridiculous brain droppings.

0:53:11 Thomas: Shit oh where they're trying to sell the like earlier access to us yeah oh geez

0:53:43 Matt: Yeah. The only reason that you'd be doing that is to do insider trading, is to get ahead of things. And there's absolutely no reason anybody wants to read those posts except to find out what the oil market's going to be like tonight. I know we just keep saying this, but the depths of corruption that you can have, a company majority owned by the president or that he has some massive share share in, in which they're going to be selling off information, access to the president, essentially, and access to The President's thoughts. There has to be consequences for this. Again, not under this administration, but just add that to the Nuremberg pile once we get through all this. That was one that caught my eye. That Was kind of a high profile, obviously, this guy we'd never heard of. Then I read about Gannon Ken Van Dyke. He was the first person to be prosecuted, actually prosecuted. And it's very likely that Perez is going to end up being prosecuted just under investigation right now. But this is a problem. This is a special forces soldier who was on the mission to capture Nicolas Maduro.

0:54:36 Matt: He was actually on the mission. Nobody has more insider information than this man about what's going to be happening in Venezuela. He put up $32 ,000 on Polymarket on the bet that Maduro was going to be ousted within a certain period of time because he knew when that was going to happen. And he won over $400 ,000 when that actually happened because he helped to do it.

0:54:52 Thomas: Wow cut to the trump administration being like actually this is how we're going to provide health insurance for our veterans so you can't this is complete capitalist hell Well,

0:54:59 Matt: Right, exactly. To give them these opportunities. Yeah. And I guess technically speaking, once again, like the thing with the Ayatollah, you're not betting on war or an assassination. You're just betting on whether he's going to be out of power, which he was. But he got caught because he used his personal email to sign up for this. Pretty bad idea, I would think, if you're knowing that you're betting. But I can also see, exactly, this is exactly why I want to end with this. Because think about all the different opportunities that so many people have. You feel like your third cousin is in some of this stuff, and you just find out about something at a party. There's so many different ways.

0:55:20 Thomas: So how many people are we not catching then? You know, that's why I just again, I want to come back to there's some things where I think I'm with you. Like in terms of the regulation of this, it seems insane. There's a certain amount of it that I'm like, well, people should just not be betting on this.

0:55:46 Matt: Yes, it shouldn't exist.

0:55:46 Thomas: Like there shouldn't be the only person who should feel like, all right, I'm going to bet $10 ,000 that Trump says a certain word. The only person should be the teleprompter guy that's it and the speechwriters the teleprompter guy should be betting against trump speechwriters and then he messes up like he'll put something else in this bit that's those are the only people who should feel like they have any reason to bet on this thing that they know otherwise what are you doing I don't I don' t understand it so much of this stuff is so bizarre like I I feel like regulation I mean I'm not going to be against like, like this shouldn't exist for the most part. I think some parts of it are fine. I think we're pretty much in agreement there, but when it comes to some of this, I'm like, well, I almost feel like in a weird way, the market should work itself out. Like people should realize this is a stupid thing to spend money on because you're just betting against insider tradings. You know, it's one thing with stocks with insider trading, there's a stock there. There's an asset that's valuable

0:56:15 Matt: Yeah. Agreed. Yeah.

0:56:44 Thomas: And you could be an investor wanting to invest. And also if you're you're a completely sensible investor. You own a chunk of a lot of stocks just through ETFs and whatever. So like, there's a real thing there that's always going to exist. And if someone's manipulating that, the answer isn't, well, no one should buy stocks. Like that's not the answer. When it comes to this, it's just like, no, one should be buying this. There's no one should be betting on what Trump's going to say. That's a really stupid thing. So maybe no, no. Maybe it's a victimless crime in a way. I don't know. What do you think?

0:57:15 Matt: Yeah, no, yeah, I agree with all of that. It shouldn't exist. And these examples should really help people to understand. I'm going to talk about a couple more. One of them, George Santos, I just caught this. Did you see this? George Santos of course has to find one more way. One, one of the, one, the most it's right. He's totally now,

0:57:28 Thomas: Yeah if there's a crime he's committing it like if there is this kind of on brand for him you don't even you're not even mad anymore you

0:57:36 Matt: This is pretty funny. Actually. One the predictions were, it was for attendance at the state of the the Union.

0:57:36 Thomas: Know like whether he would be there or just anybody oh okay

0:57:44 Matt: Yeah, at the time. At the time, he was somebody who was eligible to go to the State of the Union, so he posted a video saying he was going to be there, and then he claimed he missed his flight, and he rigged the odds.

0:57:51 Thomas: Oh wow and then didn't go all right I love that at least he got creative with it that guy, you know, that you need, it's hard to be mad. It's almost hard to be mad, I feel like you need a few lovable rascals like that, you know, there's just like, all right, yeah, God,

0:58:10 Matt: And he's just out there doing it in public in his own name, so of course, Calche immediately froze his account, and it's been referred to DOJ, which I'm sure is going to do nothing about it because they love this stuff, but you know, again, at least his account was frozen.

0:58:21 Thomas: That's so funny, he said he missed his flight, oh, that is so good,

0:58:22 Matt: That's like, what kind of country, what is going on when you can be in Congress and you can rig a bet about whether or not you're going to show up to the State of the Union.

0:58:33 Thomas: I want to know which people were like, alright, because when you are managing this stuff, you want to have a, you are like, okay, here is the sure thing, we are going to going to put some amount of our money. This George Santos guy said he's going. So we're going to like, yeah, exactly. So like, that's the non -risky part of my little thing here. I'm going to put some in that. So I'm diversified. Like who, again, who are the people who are doing that?

0:58:47 Matt: Yeah, right. A name we can trust, George Santos. Yeah.

0:59:00 Thomas: Do they think like, oh, I saw, I'm a smart investor in this. I watched his video. Whereas other people probably are just guessing or something like, what is this market?

0:59:12 Matt: Categorically, if it is something that one person can easily control, you shouldn't be betting on it. That's just not any more than you should be betting that I'm going to get hit by a car tomorrow because that's something that somebody else can control, and it's likely anyway. Way. But one more example, Michelle Spagnuolo at Google. I have to admit, I don't know who D4VD is. That's a person apparently.

0:59:31 Thomas: God. Isn't that the murderer guy?

0:59:34 Matt: He probably is because he was the most top search person of 2025. He's some sort of singer.

0:59:38 Thomas: I think he murdered a girl and she was found in a car. I think it's that one.

0:59:43 Matt: Yes, you're right.

0:59:44 Thomas: Well, that's awful. Already, whatever this bet is, is awful.

0:59:47 Matt: So this was a Google employee who had access to back -end user data and was able to correctly predict that he would be the most Googled person of 2025 and made a bunch of money off it. So there's the other person being prosecuted along the special forces soldier.

0:59:54 Thomas: Oh, I see. Okay. Okay, so they're about to release these rankings and people are betting on what's going to be the most Google... What? Well, don't they have the Google Trends that are public anyway, can't you? No, whatever.

1:00:08 Matt: Apparently whatever data she had is, yeah. Yeah. Yes. Except except for corruption. There's no other reason. It shouldn't exist. And I thought I should save these examples.

1:00:09 Thomas: It's just, again, why is anyone betting on this? Wow.

1:00:18 Matt: I know that all the legal stuff is a little confusing, but I think the law is against them. I think ultimately it has to be. I don't know what the Supreme Court's going to do, but these examples should stay with you. People, they just do not allow this to happen. There are just so many opportunities for corruption in so many different directions and so many places probably haven't been thought of yet that are so far beyond insider trading at the usual level.

1:00:38 Thomas: I think where I'm struggling, and not to go on too much, is if you're just going to say corruption's the problem, then that sort of implies like, well, the thing that needs to happen is we need a healthy market about whether George Santos is going to go to this, you know? It's like, that's not really it for me. It's, like, yeah, yeah.

1:00:56 Matt: I'm I'm saying categorically it shouldn't exist like you shouldn't be able to make these bets like anything like that where one person can control it easily we should really limit prediction markets to things like I don't know elections sure whatever or you know the future of the stock market whatever else you want to bet on yeah real stuff that's connected to real things that are outside their control of one person

1:01:06 Thomas: Yeah, the prices of wheat or whatever that we actually use it for. Yeah. Huh. Yeah.

1:01:15 Matt: And earthquakes of course because that's the only way to predict an earthquake I made a video that's

1:01:20 Thomas: Well, the earthquake said it was going to be there. I trusted it. And then it said it missed its flight. Yeah. All right. Well, that is it. That's our show. Thanks so much to all those who bet that we would finish a little over time this week. I, uh, or no, sorry. Thanks to all those who bet we would finish on time this week. Cause I took the other end of that and made sure we didn't. So I'm, I'm just raking it in. Yeah. Hey, look, you know, it's a tough podcast market out there. We're gonna have to find a way. This is my health insurance.

1:01:39 Matt: Right enjoy those winnings

1:01:49 Thomas: It's how I do it. All right. Uh, thanks Matt. Thanks everyone for listening. And, uh. We'll see you on Monday.

1:01:49 Matt: Yeah all right later shout out to gary sisigal

1:02:33 Thomas: What is anything I, now I'm spinning out and I'm a robot malfunctioning on an old cartoon.