Gates Turns Against Manafort on Second Day of Trial

is to blame Gates for all his crimes. Joining me as former federal prosecutor Jeff Kramer, Managing director at the Berkeley Research Group, Jeff, whenever there's a witness who's cooperating, you hear people ask, but will the jury believe someone who admits to committing crimes and juries? Do it all the time? The best example I can think of his Sammy the Bullgravana, who admitted to nineteen murders and they convicted Gotti. So what steps is the prosecution taking here

to make sure the jurors believe Gates? You're exactly right, I mean, that is always the question. But um, you know that's the standard prosecutorial playbook. You know, this flipper is testifying, right, now and hundreds of cases in the US UM and you have to corroborate that witness and and that's what they're doing here, and that can be done, you know, you organized crime context usually corroboration with tapes or other witnesses, and fraud cases like this usually there's corroboration,

if not from other witnesses in documents. And that's what we have here. So when Mr Gates says we set up fifteen, fourteen or fifteen overseas companies to facilitate the payments, and the prosecutors have documents showing fourteen or fifteen companies were set up overseas well, that corroborates, That corroborates Mr Gates. Gates did testify yesterday that he lied in a deposition in a civil case against Maunt of Fort. Is that going to create a problem for his credibility? You lied, Gants?

What are you lying? Now? It's definitely fodder on cross examination. There's ample things, not only that Mr Gates has lied before, but it turns out he was taking money from Mr Manafort unbeknownst to Mr Manafort. But again that's hardly you know, a man bites dog story. There's a guy in the stand who is committing crimes with with Mr Manafort with respect to fraud, the fact that he's a fraud ster and a lawyer is not shocking. Uh. Jury is not gonna like Mr Gates. They're not going to trust them

with their last dollar or their investment portfolio. But will they believe him? I think once he's corroborated by the documents and other witnesses and just the logic that it's doubtful Mr Gates would be the mastermind of a twenty or thirty million dollar scheme in order to benefit Mr Manaford. You know that's a hard lift for the defense. Now, I just want to get your take on what's going on as far as the body language and the looks between Manafort and Gates. Many people have said that Manaford

is sort of shooting Daggers, staring Gates down. But Gates is not looking at at Manafort as a prosecutor. What would you in sucked your witness to do exactly what he's doing is you look at the person asking the questions, you look at the jury. He don't get involved with the defendant at all. And again, this is not shocking.

There's someone on the stand that Mr. Manafort trusted for literally a generation, they've been doing business together, so he views this as a betrayal, which in some respects it is. So it's not shocking he's throwing him daggers because Mr Gates, with every time he answers a question again that's corroborated by other witnesses or documents, is really just building another brick and with the prosecution's case, so Mr Gates is doing exactly what he should be doing. Tensions seem to

also be high between the judge and the prosecutors. The judge has been on the prosecutor's case to move the trial along, not to call people oliguarts, even not to make faces. And there's some odd things like the judge yesterday suggesting that the prosecute one of the prosecutors was crying and the prosecutors saying, no, I'm not what's going on here? This judges is pretty active and on trial,

some judges are more active than others. Uh, this one seems to be holding the prosecutor's feet to the fire, especially because they're the ones. The prosecutors are the ones they're gonna be dictating the time they're the ones that will be calling the witnesses and have to get through

certain things. So if you want to keep this trial moving, especially in August, which this judge does, you're gonna be on the prosecutors, the faces, the crying, there's some other odd things coming from this judge who's been on the bench for a while. That's just he's a character, for lack of a better term, And again, this is not the prosecutor's first first rodeo. They've been in for in front of difficult judges before. At the end of the day,

it does not matter. The judge does not determine guilt. You're just arguing to the people in the box. Only about thirty seconds here, Gates didn't specify what how much the prosecutors would give him for a prison sentence. If you know, he went forward with his testimony, do you think that that's already been hammer down with his lawyers or that's up in the air now It is up in the air. If it was hammered down, he would have to say, you know, I've been promised ten years

or whatever. He's been giving what's called basically a discount based upon his testimony. Needs to be truthful, so the prosecutors will see how the testimony goes, not if there's a conviction, just if he's truthful. Will make an argument to the judge, but it's up to the judge to agree to a sentence. All right, Thanks so much, Jeff, I have so many questions. That's Jeff Framer, managing director

the Berkeley Research Proop. Just after Judge Richard Leon cleared the billion dollar deal between A. T and T and Time Warner, A T and T S lawyer Daniel Petrick Shelly talked about the court's verdict the government could present no credible proof in support of any of its theories. This decision was a sound and proper rejection of all

of the government's arguments to stop this merger. But the government says it could have presented that proof if the judge and constrained its presentation of evidence, and it's appealing its decision even though the deal is done. Joining me is Nicholas Economy. He is professor at m y U Sturn School of Business. Nick Unsealed transcripts of the trial show that during private the sidebar conversations, the judge repeatedly shot down the prosecution's arguments that he decided were repetitive

or unhelpful in lines of testimony. Is that a strong argument that the prosecution is making. Uh. No, I think that by itself is not going to be able to reverse the decision. I mean, it's true that the the judge did not allow the government all the time the government wanted to present its case, but this actually happens in trials. I mean, it's up to the judge. I I don't think that's enough to to reverse the decision. What could make the difference is that the judge was

pretty absolute in the rejects of the government's theory. Um. That is, he said, the judge said that the merger will not will not lead to any increases in prices to consumers. Uh. That's a bit extreme, and he, you know, to reject the government's position that does didn't have to conclude that. All he needed to conclude was that the

increases would not be substantially reducing competition. But he went to the extreme and said there would be no uh increases at all in prices to consumers for for delivered content, for for cable service. So UM, that is something that um is weak. So it is conceivable that the Court

of Appeals will reverse based on that point. What about the government's claim that the core ignored fundamental principles of economics and common sense, is that in addition to what you mentioned, Well, I don't think the judge understood at all the government's case. Didn't understand the economics of bargaining. So that's why the government comes now to the Court of Appeal and says, look, I mean this judge didn't understand the economics of bargaining. The economics of bargaining are

an important part of mainstream economics. Uh, therefore you should reverse based on on that. At the same time, to a large extent, it's a government responsibility to explain these economics to the judge, who is not an economist, right he's he's a judge. So the government should have explained much much better, Uh, these economics of of bargaining and how they apply. So one thing is how they apply.

The other thing is what are what they are. If the judge completely ignored significant parts of economic theory, that would be grounds or reversal. On the other hand, if the judge understands the basic idea of economics of bargaining but rejects the way the government specifically interprets the facts that could not be reversed. Well do you do you from looking at the evidence, do you think that the judge didn't understand the economic theories? I actually think that

the economic theory went way over his head. Yes, I could think he understood it. Now, a T and T S General Counsel David McAtee said in a statement, appeals aren't due overs, which exactly what appeals are. But what do you expect a T and T to our unit's response, Well, a D is going to say, well, the judge understands

the basic theory. He doesn't need to understand anything more than what he understood, and that, in fact, uh, the interpretation by the judge of the various facts was correct, and the in fact, nothing bad is going to happen because of this murder. I mean you have to keep in mind that the judge side with a T and T. So a T T will find nothing wrong in what the judge said. Now, so, Nick, the deal is already done. If the government does win, what will happen They'll have

to unravel the deal, They'll have to sell time Warner. Yes, they I don't think when you say the deal is done. Yeah, the deal is done on paper, but the disagreement between the government and A T and T that time Warner will be I think until the end of February of nineteen run as a separate company. So I don't think there is going to be anything that cannot be reversed. So what are the odds that this will be reversed? I would say the probably that the Court of Appeals

will reverse this is small. I mean I would say it's it's it's teen percent or or less. I wouldn't say that it's much more on that. So they have to find an error of law. And if they if they find that there are there are a lot of inequities in the trial, might that be enough? My that add up to enough? Uh? It's it's hard to It's hard to say. Uh. Ultimately, it will depend on whether the general theory of the government makes sense to the Court of Appeals, if they think, if we were the judge,

we would really rule completely differently. There is its possibility, but usually courts of appeal try to be very specific to the case and try to limit their intervention two very specific actions of of the judge. Nick, do you see any signs in the market of reactions or the ramifications of this deal being approved. Well, I mean, you have to keep in mind that somehow the market in the very beginning thought that this was a good deal

for a t n T. I'm not completely sure. Suppose that there is no legal challenge and it goes through, is it clear that a tm T is going to be able to run Time Warner. A tm T is a company that is great in engineering and has great lawyers, but there has no expertise whatsoever in running a company like Time Warner. Right. Thanks so much, Nick, It's always a pleasure. Nick Knamti is Professor M y U. Stern School of Business. Thanks for listening to the Bloomberg Law Podcast.

You can subscribe and listen to the show on Apple Podcasts, SoundCloud, and on Bloomberg dot com slash podcast. I'm June Brosso. This is Bloomberg