Barr Broke From Mueller On Who Calls Obstruction: Mintz

host of Politics, Policy, Power and Law. June. Have you read All Foes yet? Oh? Yes, I have. It's you know. And also we're going through it not in hard copy form but on a computer, so it's sort of difficult to read. And we don't have the color coding on the website. At the website, I know, I don't understand it. We just have the blacked out But I'll tell you it's what strikes me is that it is far different from what Attorney General William Barr painted the picture he

painted this morning. In his press conference, he talked a lot about collusion and said that Trump that it proved that there was no collusion. But Muller on collusion, notes that he did not try to prove collusion. So I thought it was kind of strange that word collusion has been thrown into this by President Trump, because, as we've said many times, it's not a word a lawyer would use. A lawyer would use the word conspiracy. So it was odd that that the a g bar used that today.

And and also, I mean what strikes me immediately is the the that Don McGan, the White House Counsel, his interactions with the President, and that he almost came to the point of wanting to step down, packing his stuff up. It reminded me it echoed Elliott Richardson, who stepped down when Richard Nixon asked him to remove Special Counsel Archibald Cox, and he said that he told the Chief of Staff Rhins pre was that Trump had asked him to do crazy,

i'll say stuff, and that he was leaving. So you have this context that really makes sort of rich what we already know the bare bones up. And to get his reaction, I'd like to bring in someone who who has been able with a prosecutor for many years. He is now the head of the white collar division at McCarter and English that's Robert Mints from a federal prosecutor. Bob, what do you have from looking at this report? What do you see that either uh supports what Attorney General

Barr said or contradicts it. Well, June, I think that the press conference held by an attorney general was a fairly full throaded defense of the president. I thought that it would have been more proper for this press conference to have outlined the process that he went through in redacting the report and in handing taking the information that he had received from a special Council and the passing that along to Congress on the public as opposed to

getting into the substance of it. I was also struck by the fact that he talked a lot about the sincere beliefs of the president, really trying to get into the president's mindset and using that as a admittedly used that in reaching his decision that he believed that there was no obstruction of justice case. Because he said that because the president sincerely believed he had done nothing wrong, that that sort of weighed in his favor in terms

of some of the conduct. And I think that's a fairly controversial statement to make you merely because someone might be considered um paranoid and be looking at what's going on and feelingly being treated unfairly doesn't necessarily mean that they're not then trying to obstruct an investigation. I think

that's really very much of an open question, Bob. The question I have going through my mind as I read this is the Special Counsel's office, the and the people who worked there seemed to struggle with whether or not there was obstruction, and they decided to leave it to

perhaps the Congress to decide that. But if this were a normal case and not a case where a president of the its states is being investigated for obstruction and cannot be indicted by Department of Justice guidelines, would this be the kind of case you would take to a jury and let the jury make this tough decision. Well, there's certainly a lot of evidence out there that I

think a prosecutor could use to weave together an obstruction case. Uh. One of the things that the president's defenders have often said is that the president doesn't fully understand the way a separation of powers works. And certainly this president has cross lines that had never before been crossed in terms of reaching into what's going on with the FBI and with the Department of Justice. UM, I think this case

could have been brought to a jury. And here I thought the most interesting statement that I've seen so far on this report on the obstruction of justice issue is that the Special Council wrote that with respect to whether the President can be found to have obstructed justice by exercising his powers under Article two of the Constitution, we concluded the Congress has the authority to prohibit a president's corrupt use of his authority in order to protect the

integrity of the administration of Justice. So it answers the question when Mueller decided not to reach a conclusion here, who makes that call? The Attorney General seemed to suggest that the call was then his to make as the as the head of the Department of Justice, whereas Mueller seems to be safe it seems to be saying that

that really is going to be Congress's decision. So there's a disconnect there between the way Mr Muller Mr Barr interpreted UM the decision by Mr Mueller not to reach a conclusion, and what Mr Mueller decided to say in his report that it really is a question for Congress to decide rather than the Attorney general. Let's also talk about Mueller's explanation of why he chose not to subpoena

President Trump. He said he had enough evidence to, you know, to subpoena him, but also he had enough evidence that he didn't need to subpoena him. And it seemed to be based on the fact that it would take too long and he wanted to get this report out. But does that leave a lot to question if you don't

have the testimony of the president, Yeah, it does. I think he understood that that was going to be a long, protracted fight, and ultimately there wasn't going to be much to be gained by getting that interview if the courts were going to were to force the President to submit to an interview by the special counsel. I think they also felt that, based upon all the public statements that the President has made about this, that they more or

less knew what his answers were going to be. Uh And so at the end, it was really kind of a cost benefit analysis. They decided that the time that it would take in order to try to force that interview was really not worth it. They had enough answers and really as they said a minute ago, the president really has got on a record when so many of these issues that have been identified by Special counsel mother as potential areas of obstruction. Thank you so much, Bob.

That's former federal prosecutor Robert Man's a partner at McCarter and English. Lisa June Grazzo of Bloomberg Politics, Policy, Power in Law, thank you so much for that. We are continuing our coverage of the four forty eight page report from Special Prosecutor Robert Mueller. We're gonna take a look at Honeywell. Honeywell shares climbed the most in eight months after reporting that sales had surged, spurring the company to raise its full year guidance despite a global manufacturing slowdown.

That was kind of breakdown what we saw from Honeywell this quarter. We welcome back Karen uble Heart. Karen is a senior Industrials annalyso Bloomberg Intelligence. She joins us live here in a Bloomberg Interactive broker studio. So a pretty darn good quarter. I saw that the organic growth rate for Honeywell was eight percent. I can't remember the last time we saw that type of growth from one of

your industrial companies. Yeah, no, that it was. It was a much better than expected and it was in three of the four businesses grew eight and and percent real surprise. The biggest surprise was building products, where they got rid of the home um automation business because they didn't want to compete with Amazon, etcetera. Um. The buildings products business is growing at nine percent, largely due to new product launches. His top priority is growing organic growth, and I think

we're actually starting to see some of that happening. So here's my question. How much is this a Honeywell I used some credic story, and how much does this indicate that we are seeing a stronger pace of growth around the world. I think a lot of its Honeywell. I mean, aerospace is very strong. It was eight percent against a ten percent comp but aerospace is is strong for everyone. But the building to business and the safety products business

are both Honeywell driven. They did an big acquisition in the safety business, They've done a lot of new products in both, and they're both growing eight to nine percent. So that's Honeywell. So how how exposed is Honeywell to

kind of what's happening in China? Trade negotiations in terms of their global businesses, well, they said ton of was down, um a little bit actually, And and what's interesting about their guidances they didn't raise the second half and a lot of people press them on that because growth is so good. But there they are worried. They're hedging their bets for a glow you know, a little bit slower

global growth. So when you take Honeywell out of it, they think, like the core economic growth is going to be slower in the second half globally, and they're hedging their bets. Can you give us a sense of the breakdown of the geographic distribution of Honeywell's business, Um, you know, you know, China's um a decent size for them, but it's still like seven percent. It's still pretty pretty low,

but it's a good grower. Um. The US is in the forties and Europe is in the twenties, and you know, so it's you it might be up to thirty, I think, But I guess I'm wondering, is there a big divergence between the US and the performance there versus the rest of the world. Well, interestingly, Europe is not as bad so far um that as people expected. Because those are those numbers A P, M I and GDP numbers do

not look good. But you know it's hole, it's holding up there getting you know, mid single low mid single digit growth there you're us of course is the growth engine right now, although there's concerns about the second half and then ages growing. UM China is weak because of trade. So but overall a lot of this is product driven. I think you're interesting. I was looking through the report and I see that the surging e commerce helped drive

a ten percent improvement in Honeywell's SPS warehouse automation. So there's an Amazon play here for Honeywell, right, yeah. I mean they did a large acquisition, one of their largest ever in warehouse automation, a company called UM Intelligrated and it's growing like fifteen percent against fifteen percent. You know, it's it's it's growing extraordinarily well. And then they did another UH automation where he automation business in Europe, so they're growing that business and it is a it's it's

you know, double digit, nice solid double digit growth. Yes, that is e commerce. It's the Amazon play there. Make an Amazon play on anything, Lisa, anything. I'm going to challenge you. I'm going to find something and see what you can come up with. Uh, you know, I gotta say, Karen yu Buhart, you say that this is an idiosyncredit issue, Honeywell, Uh, their management actually doing a good job. Is there any takeaway that another big industrial company could take away from

this to possibly spur their growth. Well, it's really interesting because um, they're not. They didn't run out and buy things. They have so much money and they're scared to do M and A. But he really put the u you know, the pedal to the metal on on internal spending, not on capacity, on making new things. And that's and then of course they've been doing the efficiency game and margin improvement for a long time. I mean the you know ten plus years of Dave Cody was about let's get

respectable margins. He did that, although there's room to go, and now this guy's let's get growing. So I see the stock up. Just put up the stock the five year chart on the bloomber terminal and Honeywells, you know, looks on a five year basis that it's high here. Uh, you know, up another percent this year. Maybe did they

you start thinking about using their stock for acquisition currency. Uh, you know they won't because they're sitting on their sitting on ten eleven billion in cash and another seven billion in debt capacity because their leverage is pretty low. So I don't think they will. In fact, they're they're buying backs a ton of stock because they don't know what to do with all this money. So um, I don't

think they would use stuff. This is really interesting to me that they spent their money on actually making stuff. Are we starting to see companies get rewarded by shareholders for deploying their cash into R and D. Well, it's funny because three M always gets paid for being an R and D and I t W I mean and paid in terms of margins outstanding margins, and there is

a payback on that. I don't think people spend enough time noticing that, um, just across the board, but they will notice the organic growth going up and and uh so I think they will. They are getting rewarded for that. So coming. I mean, you think about your industrial coverage. You cover these big diversified manufacturing companies. It's big agricultural guys that making the deers this and so on and

so forth. Given that word, your ten of this cycle where like what your day when they get orders, they get big orders that people are buying submarines or they're buying tractors, or they're buying you know, big stuff. Again, ten years into the cycle, are we still seeing decent demand globally for a lot of your industrial companies. Yeah, you know, it's been a weird cycle because my cycles are usually in industrials are usually boom bust, you know, and we we didn't really have boom. I mean we

had in certain cyclical markets we did, you know. Um, but it's been a long cycle. But it's been sort of moderate um growth, you know, with some blips up and down, but so's it's usually a ramp up and a rampdown and so um, it's been long, but it's more like a slow and steady rather than a real rod bust. So I think there is going to be slower growth, um, you know. And I think we're talking low single digits. We're you know, we're not talking high high um single digits as we have been looking in

overall growth for these companies. But I still think we're gonna see growth. Just lastly, here, I'm wondering who is Honeywell beating out in terms of competition. In other words, who are they taking share away from? If this is not a story, worry just about generally strong economic growth globally building products would be like a Johnson controls UM you know, uh, you know Emerson to some degree. And

then in SPS it's a lot of technology companies. Um, Dana hars a small business a compete in, but it's a lot of smaller technology companies actually. Karen ubal Heart, thank you so much for joining us on Honey Welso good numbers, stock trading up. Karen Uberhart, senior analyst at Bloomberg Intelligence, covering all things industrial, all things Middle America.

She joins us on Bloomberg eleven three oh Studios. Let's bring in Jacob Frankel, who is a former federal prosecutor with an independent Council who is familiar with writing such reports that are delivered to Congress. He is now a partner at Dickinson. Right, Jacob, thank you so much for being with us. I want to start at first with the Attorney General's press conference. What did you glean from the tone of that and sort of the nature of how this investigation is being spun from a partisan level

on both sides. I actually tried to separate out the partisan component of the press conference and focus on what was the substance to what he was saying about the

process of the investigation. And I was actually somewhat refreshed by his decision to focus on process, because the biggest concern in what was going to be coming out of this report, what would the redactions look like, was really a focus on who ultimately was making the decisions, not only in terms of the report itself, but what would be reported and how it would be reported. And I know, you know, to your point about my having been part of an independent council, you know, they're always was a

lot of deference, you know, to the career prosecutors. I found refreshing Attorney General Bars reference to that, specifically that it was the career prosecutors in the Department of Justice, and that he and Rod Rosenstein disagreed with some of the premises that were that were established by by Special Counsel Muller and his team, but nevertheless deferred to them.

So I found very helpful, you know, that reference to the level of deference, and when I, as with all of us were just beginning to look at the report. When I look at the report, you know, we're really talking about a robust narrative. Because the other point that I was looking for was is this going to be a spin news conference as it has been, you know, as was sort of projected, or was this going to

be sort of laying the groundwork for a report. Because again, what I was waiting for, which is why I have sort of yet to have been exercised by a lot of findings, is a lot of the you know, expert commentators have spent the last two years speculating as to what would be the evidence. Up until now, the only evidence that I've been able to discern is what has come out with what has actually been published in the indictments.

So now that we got a report that more robustly talks about the findings, to me, this is really the first opportunity to see what the evidence actually has revealed. So Jacob special counsel Mueller h and the report suggests that Congress could take action on at least ten instances where the President sought to interfere with the probe. What

do you think Congress will do? How aggressive do you think they'll be that's a great question, And I think what you're I think what we're really talking about there is deference to the language of what is the standard for impeachment high crimes and misdemeanors. And of course, as we know from you know, from two years of discussion in this and and and a lot of the narrative, the term of what he is a misdemeanor really is

somewhat unclear. And I and I interpret that to be a you know, a reference to Congress being able to make a determination independently that even without an affirmative finding of conduct that would rise the level of criminality. That is that they're being specific intent, which to me is the type of issue that would actually be the determinant if I were trying to decide whether this what or would not be presented to a uh, you know, in

in trial indicted and to a jury. On the other hand, Congress has the authority to a to apply a lesser standard in determining what constitutes a misdemeanor. So what I read that to mean that if Congress really wants to do so, it has the authority to begin impeachment proceedings based on the evidence is actually narrated in the report. Whether it chooses to do so, that is a political decision.

That's a any big statements saying that basically they do have enough to start impeachment, even if it isn't necessarily a criminal act that could be prosecuted otherwise. One thing that I'm curious about from your perspective going forward, are we gleaning any information about the nature of what the Muller investigation referred out to other prosecutorial offices. I think

this other district or the Eastern Eastern District. I think I'm not far enough into the report to make that determination, but I certainly think by the nature of the redactions and the UH and the efforts by Attorney General bar to protect UM, the you know, the referrals and the and the content of referral related information UM, I think we may be able to discern some of what really is the basis for the you know, for the referrals UM. But in terms of beyond what has already been referred,

I don't know that we can. But I also think that we have to be mindful that you know, we're taught. Unlike the Dependent Council Statute under which I lived here. Everything has been conducted within the framework of the of the Department of Justice. So as we know from just our conversations over the years, in the context of white

collar cases, one case will spawn another. So as you know, as grand juries, as prosecutors, as the FBI continue to look at evidence and gather information and possibly additional cooperation,

we can still see the spawning of further related cases. So, Jacob, from your perspective, your experience, are you surprised or disappointed or dismayed that Mr Muller did not choose to appine on the obstruction issues, I'm actually not well, you know, I'm I'm not surprised given that he has actually laid out the evidence and has stated that based on the evidence that was presented, it was sufficiently ambiguous at least with respect to intent, to enable him to reach a conclusion,

because that is the exact type of deliberation that that career prosecutors and even non career prosecutors are supposed to engage in in making in making an ultimate charging decision. So I think by laying out the evidence and not expressing an opinion so as not to color or otherwise influence the decision, that ultimately could be made by a charging body, which in this case would be a deference to Congress to undertake that role if it were to choose to do so. I think he really did strike

the appropriate balance based on the evidence that he had developed. Jacob, thank you so much. Jacob Frankel is a formal federal prosecutor with an independent council now a partner at Dinckinson. Right, we're monitoring markets in one very active area has been the marijuana stocks. Pot stocks surging today after Cannopy Growth agreed to buy acreage holdings for three point four billion dollars.

This is a massive cross border cannabis deal that is conditional on the US eventually legalizing pot for recreational use. Joining us now to talk about this is Christine Oram. She's a Canadian cannabis and equity reporter for US here at Bloomberg in Toronto. So Christine, can you just give us a sense why is this particular deal, Canopy buying acreage such a big deal. Well, it's the first major cross border deal the cannabis industry has seen, and it's

structured in a very complex and interesting way. So basically, um Canopy is going to pay three hundred million dollars up front, but the remainder of the transaction, the rest of that three point four billion dollars, won't happen until if and when the US legalizes cannabis at the federal level. So essentially the deal is set to expire in about

seven if that doesn't happen. So these two companies are making a bet that sometime between now and seven UM, at which point we will have had another whole presidential term and a half uh pot will be legalized, and therefore they'll be able to truly close this transaction. But in the meantime, they're very restricted in what they can do because of that federal illegality. So you can kind of see that uncertainty in the way that shares the

reaction today. Reacting today, Acreage was initially up twenty one but now it's only up about one and a half percent, so clearly shareholders are still trying to digest this and figure out exactly what it means for the company. So, Christine, sounds kind of like a call option on buying this company,

you know, kind of a multi year call option. What are the where are we in terms of the federal legalization process in the United States for marijuana, Well, there are a lot of bills that are currently working their way through various congressional committees. Um, there's the two main ones being the Safe Banking Act, which would essentially open

up banking to cannabis companies across the US. Currently, very few banks will work with these companies because they're worried that they could get into trouble around money laundering or other federal issues, and so many of them have to pay their employees and their taxes in cash, which has been a very awkward and kind of semi dangerous proposition

for some of them. So that's the one, and the other is the States Act, which would have been essentially say that if the federal government will take a hands off approach and let the states make their own decisions on legalization. So but essentially if that happens, most people say that's equivalent to federal legalization, and that would probably be enough to get this deal done. The House seems

very open to working on and passing these deals. I think the more difficult proposition will be getting them through the Senate. Well, this is really interesting that this deal is conditional on the legalization of farrijuana because Acreage specializes in medical marijuana use right, which has been more widely legalized throughout the States. So I'm wondering what this says about the business prospects of companies that specialize in medical

marijuana use. Is their future really conditional unrecreational use? Well, I think, I mean there's an assumption that medical uses more politically palatable, and you see that with Acreage. I mean it has former U. S. House Speaker John Bayner on its board. It has former Canadian Prime Minister Brian Ulrooney on its board. So these are political heavyweights who have a lot of contacts and cloud on both sides

of the border. Um. And clearly they wouldn't be on this company's board if they didn't see real prospects for legalization. And they have both come out. These are two people who were pretty opposed to the idea of legalization in the past, and they've come out and said what they're really um, the reason they support Acreage and what they can really get behind is the idea of medical use for you know, people like veterans who are struggled stuggling

with PTSD for examples. So the fact that you have people of that caliber getting behind this, people who used to be a post legalization does indicate that I think there's there's a real prospect for medical approval, probably before recreational approval at the federal level. So, Christie, what's been some of the early feedback from some of the states that have legalized marijuana. I'm thinking Colorado for example. Is it they seen a big pickup in demand in sales

and usage? Uh? Definitely over time in demand in sales. Um. Canada is in the very early days of legalization up here. We just legalized in October, and all of the states that have legalized in Canada as well have gone through initial supply shortages. It's like the companies haven't been able to produce enough to to keep up with demand and didn't really know what demand was going to look like.

So once those supply shortages get worked out, which usually takes a year or two at the state level, that's

what we've seen. Uh, then they hit sort of a steady state, uh set of demand where essentially, you know, there's still some people using the black mark it and for the most part, from from what I've read, it's people who were previously using black market sources who have converted to the legal market, not necessarily getting a lot of new users in UM, but we'll see if that changes in Canada over time as we get more supply

in stores. We're currently speaking with Christina Orum, she's Canadian cannabis and equity reporter for Bloomberg, and we are awaiting comments from President Trump, who will be speaking at a Wounded Warrior project. It will be his first comments publicly made after the Molo report press conference, at least by

Attorney General. The Attorney General. So, Christine, I want to get your sense of what the business case is for a big merger for consolidation in marijuana firms, right, I mean, my my question is, is the big concern that now Tria Group or Philip Morris is going to get into the business and just absolutely dominate because they already have the distribution networks. Yeah, that's a really good question me.

Cannopy is an interesting illustration because they currently have a major investment from Constellation Brands, the alcohol company that makes Corona and Modelo beer UM and they're also now pursuing this cross border transaction. So it indicates that I think a lot of these really large Canadian based cannabis companies and can and Cannopy is the biggest cannabis company in the world, with a market value about twenty billion dollars

or close to it now. Um, you know, I see that they have to be in the US in the future to really dominate globally. I mean, Canopy has isn't just in Canada, has operations in Europe, Latin America. Um, They're really they become a truly international company. But without that American present, it's very difficult to to generate, uh, you know, real brand revenue in those margins that come from the U S consumer market. And so that's the

case for the cross border transactions. We haven't seen many of them because the federal illegality, but I suspect this will kind of form the the impetus and the structure that others can follow to do other similar deals in the future. Christine or Um, thank you so much for your time. Christine or Um covers then Canadian cannabis an equity business for us here at Bloomberg. Thanks for listening to the Bloomberg P and L podcast. You can subscribe

and listen to interviews at Apple Podcasts. Or whatever podcast platform you prefer. I'm Paul Sweeney. I'm on Twitter at pt Sweeney. I'm Lisa abram Woyit's I'm on Twitter at Lisa abram Woits one before the podcast. You can always catch us worldwide. I'm Bloomberg Radio