Is Musk Getting Cold Feet About Acquiring Twitter?

the number of sort of fake or spam accounts on Twitter. Um, and Twitter is refusing to tell us. And then a Musk attempt at some legal ease. You know, it's a material adverse, uh misstatement. You know, if if if they in fact have been um vociferously claiming less than five percent of Vega spam accounts, but in fact it is four or five times that number, of perhaps ten times that number. This is a big deal. Joining me to help pass through the latest from Musk is Eric Tallely,

a professor at Columbia Law School. Eric Musk even made a comparison to buying a house with termites. Does it sound like he's trying to give some legal reasons for getting out of the deal. It sounds like it is. It sounds like he has been undergoing some coaching, possibly therapy by his lawyer. The grounds that he is now fighting, he's starting to invoke some formal legal terms that are part of the contract that he signed with Twitter related

to what's known as a material adverse effect. Now, what this basically is, it's sort of an act of God type of provision that says, if something, you know, crazy happened, there is something that is really awrived from what we thought we were getting into, then the buyer or the

seller can walk away. However, the usual has to these sorts of provisions is that they are hard to invoke, and if you're going to try to use one of them, you actually bear the burden of demonstrating that there was this incredible surprise that one would never have expected that now has materially undercut the value of this company. And there, I think that's going to be an incredibly difficult pill

for Musket to surmount. The main thing that he is citing is that various securities disclosures, Twitter misstated the number of their bots. But if, first of all, if you actually read the disclosure, they say in a very lawyered way that you know, we've tried the best we can to determine how many of our accounts are bots and how many are not. And this is actually a really hard thing to figure out. We may not be getting it right. But what we've come up with with our

sampling is that fewer than five percent. But just realized that we might be wrong, and it maybe is it the best way to measure there's something up and on the way that we've measured it. This does not strike me as the type of claim that is analogous to saying I hereby proclaimed that there are no termites in out. It's almost like proclaiming there might be termites. We haven't seen any. We looked, we had a particularly strategy for looking for him. We didn't see any, or we didn't

see that many. But our strategy might be wrong. So you've got both a standard for a material adverse effect that is very very high, something that's going to have to be borne by him that he's going to try to make this argument in court, and a glaring alternative theory as to why he doesn't want to go through with this deal, which is the fact that the prices have fallen in the text sector since he signed up the deal at fifty four dollars and twenty cents, and

he now has buyers remorse and therefore is looking anywhere to try to find an escape hatch to jump out of. But this one does not strike me as one that is going to be all that friendly for him. There was some talk about renegotiating the price when the house has termites, although according to Bloomberg sources, the deal is still on track as is. There's always a possibility of recutting the price of a deal, but it's always done in the shadow of what are the likely rights, duties,

and obligations that the parties have if they don't. Based on this particular assertion by Musk, it seems like a notably weak case for him to be able to walk away from the deal, very low probability, and therefore, if everyone knows that he's bargaining not holding an ace in his hand, but holding a tool of club, he's not going to be able to bargain for very much. If the Twitter board is doing their job, Is any of this really surprising given that his approach to this deal

has been unconventional from the start. But the one thing that is maybe a little surprising about his tactics is that he has ended up seizing upon something that looks like it is going to be a very difficult to engineer theory. The material ever's affect the argument very much is stacked against him, I would have thought, and in fact, I think it may well be the case that this strategy may shift if he continues to want to either get out of the deal or to go back to

the bargaining table. Another aspect of this deal is that he could potentially walk away, or maybe only walk away and have to pay a billion dollars if the financings that the deal falls through, And there it seems like there might be more rooms for things to happen, particularly if the folks who have agreed to lend thirteen billion dollars into this deal get cold feet, either get cold feet by themselves, or get cold feet after having been

encouraged to get cold feet from Elon buskinself. So I'm going to guess that if this melodrama continues to play out, it may end up shifting away from the Bot issue, which in my view is a bit of a side show, and this financing contingency may take more center stage. Former President Trump said, there's no way that Elon Musk will buy Twitter such a ridiculous price. Do you agree with that. It's seeming more and more unlikely that Musk is going

to buy Twitter. Well, at last I checked, former President Trump had not been to law school. And one of the things that is considerable complication here is that Elon Musk has already entered into a contract in which he substantially obliges himself to make steps towards buying Twitter at a cash price that he's already stated. So the economics of this deal, I think are probably causing Elon Musk to think twice about whether he really has buyer's remorse here.

Man I suspect he does, if for no other reason, because he ended up paying a price that was probably higher than it would have been had he just waited for a few more weeks. That having been said, the history books are filled with people who are buying companies who then get some buyer's remorse and try to get out of that. But the contracts that they've entered into make it either hard or impossible to get out of it.

So one big factor here is trying to determine to what extent the deal that Must ended up entering into with Twitter is gonna end up tying his own hands later on or forcing a fairly difficult renegotiation with the Twitter board sitting on a fair amount of bargaining power. If you just sort of stare at the document itself, this is a document that looks what they say in the industry, relatively seller friendly the company that's selling itself,

there aren't that many ways that Must can walk away. Now, there are some aspects to it that make it look like he could. Right. There's a termination fee that he would have to pay of a billion dollars if he were to walk away, But that's really only one of the provisions in the deal. And another one which is far more important, is a provision that's called a specific performance provision, and that's just legal ease for the either side.

If the other side wants to try to back out, they can essentially force the party or get a court order forcing the to go forward. And that's a provision that's in this deal. It doesn't provide that many outs for Elon Musk. The one that it might help provide is if for some reason he's unable to secure financing for the deal, then that might allow that specific performance

provision to fall away. So, you know, I think a lot of people are sort of thinking that the disclosure he made this weekend about you know, whether Twitter has more than five percent spots type or automaton type accounts was essentially trying to set the stage for possibly engineering a failing of the financing of the deal. Now that one itself is kind of complicated for at least two or three reasons. The first is there isn't a lot

of financing left on this deal. It's still a fair amount of financing, but most of this deal always has been Elon must buying a bunch of stock of Twitter, and he's been conscripting a bunch of co investors to come on with him and actually reducing the amount of debt that he's pledging his Testla shares to help secure. So he's been actually reducing the debt that's part of this deal, and that's going to make it even harder to you know, engineer a situation where the lenders get

cold feet and walk away. The second thing is that the provision that he's you know, evidently complaining about is something that has been in Twitter's disclosures for a long time. It's a heavily lawyered provision that says, by our account, we don't have more than five percent of these thoughts who are account holders, but realize that there are just a bunch of different ways to count this up in the hand, other ways of counting it up may differ.

So it's a heavily lawyered disclosure, one that I don't think anyone would really rely on per se. And yet this seems to be the attack that Musk is taking, either so he can figure out a way to walk away himself or give his lenders a pretext to say we refuse to lend from here on end. But it looks relatively thin. It has a very pretext little aspect

about it. Given what we've always known about Twitter, when would must be forced into specific performance and when would he be allowed to pay the billion dollar breakup fee? So if, for example, some of the things that were warranted or represented in the transaction didn't materialize, or if some of the structures that were part of the deal just couldn't come together, he might be able to walk

away and pay this termination. See on the other hand, that termination is clearly subservient to this specific performance provisions. So a lot of people have sort of thought, oh, he always has this option just to walk away and pay at the excellent That's only true if the specific performance provision is not in play, and that provision turns out that you can draft them in a bunch of different ways, And a lot of these contracts have specific

performance provisions. Some of them have more escape hatches than the others. By my read of this specific big performance division, the only real escape hatch is a failure of financing, and so the specific performance aspect of this contract is very much a strong hand that the Twitter board is going to be able to play. You know, the one thing that he might end up trying to do is

to attempt to be active in engineering. A failure of financing essentially a you know, bring the dog to the homework, you know, put some dog food on the homework and has the dog eat it. But that raises a bunch

of risks itself. It maybe that some of these lenders, maybe the whole reason they came along is that They just want to make sure that they stay in in Musk's good graces so that next time Twitter needs some financing, or next time SpaceX or the boring company needs to do some deals, they're going to be in his role of decks and they don't want to, you know, push him back, And so it might be that they'll play ball with possibly you know, sort of faking their way

to a refusal to finance the deal. But that comes with risks as well. You know, those banks also have other clients that they want to maintain reputations for, and you know, when they come in to finance a deal and say, no, this financing is firm, do they cannibalize their own reputation by having a case in the past where they just change their mind willing nearly on the hest of an important client that causes them to lose

credibility in the market. Possibly just as important is that if these third parties play an active role in trying to gin up kind of a fabricated case for why financing is impossible anymore, that could put them in some legal peril themselves for basically playing an active role in effectively helping someone else breach a contract. And so there is a little bit of exposure if you're too willing to play ball with the elon Musk, even if you

really want to preserve those later potential fields. So where does this all add up the Twitter board. If they want to play our strong hand, they're going to be able to play a strong legally. They've got a very

good position from which the bargain. On the other hand, you know, Musk is a guy who clearly has shown himself to be disruptive in all walks of life, including various other people out there who are his adoring fans and who might take it upon themselves to have a personal mission to you know, crash Twitter stock if things go poorly, and so that type of disruption is probably the main thing he's going to bring to the table of that potential for disruption. It isn't a legal claim.

You know, Well, he's got a couple of windows of opportunity. Maybe they are relatively narrow, and most people, I think, don't sort of think that that's going to have much of an effect. But his broader sort of you know, social influence, you know, no doubt, could throw some turbulence into these negotiations. My sense probably what's going to end up happening is that they will go back and they will sort of consider whether there's a deal to be had.

I don't think the Twitter board is going to give up much, if anything at all. Possibly there will be a small readjustment to price, simply so everyone could claim victory and walk away with their arms in the air. But I don't see this. I don't see this price migrating very far below the price. I mean, the Twitter board was forced into a green and musque, weren't they, I mean, do they want musk? Well, the irony of this is that they hadn't put up this poison pill

before they finally reached an agreement to busk. And the usual reason that a board will put up a poison pill is to say, look, we're not going to allow this person to manipulate our shareholders into selling it too low of a price. So we're putting up the poison till so we can bargain for a better price so that this potential acquirer doesn't go around us and end

up manipulating our shareholders. When they finally reached the deal, one of the things that a lot of people were surprised at including myself, is that the price that they reached didn't change at all from the very price that

he offered them to begin with. And so there was almost a sense in which a lot of people were thinking, hey, Board of Directors, if you did the poison pills so that you could have a lot of bargaining power, you sure didn't seem to exercise very much when the same terms that he offered came out the other end of the bargaining. And so, weirdly enough, the twitter A board was already taking a little bit of heat for being too limp when it came to bargaining with Elon Musk.

And now how fortunes have turned now that seemingly limp deal that they reached with him, that they didn't really extract that much more from him, is now looking like it was certainly a fortuitous, if not a genius move

by the board. So there's almost a sense in which, you know, I think part of the you know, part of the board sort of fighting to reclaim their honor right that said, no, we we really engaged in heavy bargaining is going to probably push them to dig their heels in a little bit more than they might otherwise do do they have also fiduciary duties that they have this offer at and if they go much below that, are they for going their fiduciary duties to the shareholders. Yeah.

Once a company has decided it's going to sell control to someone else, it is under a heightened form of fiduciary duties. It's sometimes called Revlon duties. It has to do with a famous case in involve Revalent back in the nineteen eighties. And when you are under those sort of heightened fiduciary obligations, you're under an obligation to take to only take steps that are going to reasonably maximize

the benefit to your shareholders in the short term. So right now, if they're sitting as the board and they've got a fifty four offer that has been signed up, that is on the table, that doesn't have very many closing conditions associated with it, it's going to be really

hard for the other side to get out of. If they end up sort of backing out of it, that could put the board itself into peril for not having a backup plan yet letting go of what is clearly now emerged as a relatively good offer better than anything else that twitters can have. If you kind of combine that with the fact that you know, in the days, you know, leading up to Musk's um suddenly getting cold feet, the senior executive riggs that at Twitter looked like a

rotisserie oven. They were moving, they were moving out old ones and moving in new ones almost start only at the hest of trying to get this company ready for its take over by Elon Boston, some of the people that you know he was going to clearly butt heads with. So there's a sense in which now Twitter has effectively morphed itself enough into something that might even be damaged goods to anyone else who is going to buy the

company later on. And I think that gives the board m an additional reason why they should fight right and not concede, because if they concede, it may not be very long before a plaintive attorney says, hey, what were you doing? You have this great deal signed up and now basically, you know, gave away the farm with no backup plan. What do you make of this? Elon Musk tweeting Twitter Legal just call to complain that I violated

your nondisclosure agreement by revealing the box check sample sizes one. Yeah, so we don't actually know what's in the NBA because that's not been disclosed us. But there probably is an NBA that has to do with some aspects of the due diligence associated with the deal. So anytime you are buying a company, you usually want to do a fair amount of investigation on some of the aspects of what

are inside the company. That's usually why these deals end up taking a fair amount of time, because the buyer is trying to satisfy themselves that they're getting something that's valuable. In this case, it appears that that musk not only didn't try to do a lot of that due diligence, but he also didn't extract a contractual warranty in the contract itself. A says you know, don't worry, we have at most five percent bought. You can't find that in

the contract itself. That's one of the reasons why you know he's sort of you know, casting about the securities markets disclosures. So there's a sense in which you know, this dog ate my homework thing really is resonant. There's there's essentially nothing surprising in any of the disclosures, he talked about it. It was out there in plain sight

for everyone to see. You know, there had even been a public dispute about the number of boss that members the Twitter hand, so you know it's he was suggesting he didn't bother doing his diligence of the deal, or he didn't intend to do any diligence on the deal. And he also didn't bake in any promises to the contrary in the contract. So it has a lot of the trappings of a fairly hastily entered into contract that was for cash, that didn't have too many contingencies in it.

And now he's starting to feel like, oh wow, maybe I don't really want to go through with it, or maybe I can threaten to walk away and get a better price. In most universes, given the documents that I've seen, that that is a pretty speculative bet. But you know, who knows what to expect in the Elon Musk universe. We've already learned that it is somewhat of a parallel universe from the one everyone else of us lives in.

Looking at the paperwork it's or looking at the deal, what do you think the chances are that he will actually buy Twitter. I think they are still pretty high. I think the specific performance aspect of it is going to play a fairly large role. Ultimately, it may take a while, and they may end up, you know, trying deciding to grease the wheels and having a light break in price. Much is going to turn on whether the lenders that are lined up to lend money for this

acquisition themselves get cold beat. And if they do get cold beat, do they do so sort of honestly or do they do so in a somewhat of a managed and engineered way. If they do so and do so honestly, that's the only contingency I can see in which this deal doesn't end up closing. I think a lot of people out there sort of feel like it probably will end up closing. And I think this is all a big dance to see if he can get a slight price reduction. Thanks for being in the Bloomberg Law Show, Eric.

That's professor Eric Tally of Columbia Law School. On Monday, the Supreme Court, by a vote of six to three, struck down another campaign finance law, adding to a line of rulings throwing out campaign finance restrictions. Republican Senator Ted Cruz had challenged the two fifty dollar cap on candidates using political contributions made after an election to recoup their

personal campaign loans. The this vision was along ideological lines, and Chief Justice John Roberts wrote the majority opinion, finding that the provision burden's core political speech without furthering an

anti corruption goal. Echoing what Roberts and Justice Amy Coney Barrett said during the oral arguments, there isn't a sufficient corruption anti corruption interests sort of up to two thousand, but then all of a sudden there is says that this doesn't enrich him personally because he's no better off than he was before. It's paying alone, not lining his pockets,

but in a blistering descent. Justice Elena Kagan, writing for the liberal justices, said that it doesn't take a political genius to see the heightened risk of corruption from donations made after Accountada has won and can quote return the favor by a vote, a contract, and appointment. Here are Justices Kagan and Sonya. So to mayor, if I have a debt of ten thousand and dollars and somebody comes along and says you're doing such a good job. I'm going to read, I'm going to pay that debt off

for you. Isn't that a financial benefits to me? Of course it's a gift. But you just said the magic words to make a contribution to the winner, not too a campaign and for instance, but for the pockets of the winner. My guest is Richard Brafald, a professor at Columbia Law School. So the court struck down another campaign

finance rule. Are you surprised at all? Not at all, Both based on the oral argument, which pretty much telegraph where it was going to go, and more generally based on the court's philosophy of the last pen plus years, the court has been pretty hostile to campaign finance law. I don't think it broke any new ground in this case. It's kind of deepened the ground that was already there.

Tell us about the rule that the court struck down, right, So this was a part of a m can findal law adopted about twenty years ago now which basically limited the ability of campaigns to repay loans that a candidate made today a campaign to pay for the election. So currently a candidate can spend as much money as he wants on an election, and the candidate can lend as much money as he wants to his own campaign and

the campaign can pay him that. But the problem is that the campaign starts to pay him back with donations received after election day. So under the law, the campaign can repay the candidate only up to tun fifty dollars with donations that come in after election day. They can use any amount of money from donations that came in before election day, but only after tune with donations that

came in after. The concern was that after election day the donor know who's who won, so it's more likely that the money is being given to influence the candidate. And if the money is being used to repay a loan to the candidate, in any ways, the money is almost like a gift to the candidate. The money is not going to be used actually for campaigning the election is over, it's going to be used to repay the candidate.

So those are the two ideas behind having this special restriction on the use of post election donations to repay loans. To tell us about the reasoning, and the Chief Justices majority opinion for the Conservatives, So basically, the Chief Justice reiterated ideas he's put forward in the past that although some contribution restrictions can be upheld, they present the First Amendment problem because they make it harder for candidates to

raise money. That this rule in particular was a problem because by creating the possibility of a limit on the repayment of a loan, it makes it less likely candidate will make the loan, which means will be less money for the candidates campaign. So he emphasized that there is a First Amendment Burton posed by this restriction on loaning payments, and then he basically dismissed the argument that there is

any special corruption danger coming from post election contributions. In his view, the other rules dealing with contributions, the fact that no donor can give more than twenty nine dollars under federal contribution restrictions and that any contribution that is made will be disclosed, that those are enough to deal with the corruption problem. That the government failed to show that there's any special corruption problem from post election donations

to repay a loan. The average person may not see this explain how the court sees campaign finance restrictions as violations of the First Amendment. In the fourth view, campaigning is speech. The spending of money to support a campaign is speech, and therefore the raising of money to support a campaign supports speech, supports the candidates speech, so that anything that burdens the ability of the candidate to campaign, to um to spend money in support of the candidates

campaign raises a First Amendment problem. The Court has up held some restrictions. It has up held limits on the amount of money a donor can give directly to a candidates campaign because of the danger of what the court calls quick broke corruption and the courters that pulled disclosure requirements. But the Court has struck down any slimits on candidates spending, any limits by organizations that's the port of candidate, but don't literally give money to the candidate, and other kinds

of restrictions in this area. And basically the Court said that if you can show that the donation really raises a serious danger of what the quirt calls quit pro

quote corruption, you can limit it. But the Court basically says that other kinds of concerns the public has on equal amounts of money, or the fact that campaign contributions raised dangers of unequal influence or access that influence our access are not themselves something that Congress can regulate, only something that they call quit pro quote corrussion, which comes close to an outright bribe. Did Justice Keigan wrote a blistering dissent, saying the donors know as they paid him,

so he will pay them well. She basically says that the special corruption potential for donation is given after the election is over, when the donor knows who the winner is, and it's going to be used to repay a loan made by the candidates, so it's going basically directly back

to the candidate. She says that the special corruption potential there is self evident, that it's obvious that there's a real problem here, and then she actually goes and finds examples and basically news accounts as instances, I mean states in the past hasn't happened federally because the law is

prohibited until now. The instances in the past where you have particularly sleazy situations of donors giving money to a candidates campaign after the election and then basically getting some kind of reward from that candidate a governor who is able to steer certain contracts in certain directions. She basically says that the potential for corruption here is obvious, that

there's evidence is support it. And she also returns to the themes she's used in the past, which is and trying to figure out whether something really does present the Corrussian danger, you should defer to Congress. You should defer to the politicians. They have a better sense of whether something is likely to read a Corrussian problem than the Court,

which is removed from the political sphere. And so again she has made these arguments in the past that the Congress is a better judge of what graces of corruption danger, that the Court is basically missing this and its willingness to strike down restrictions that serve interests in public confidence in government. Is campaign finance an issue that always divides the liberals and the conservatives? And if so, why it's certainly been true for about the last almost twenty years.

Further in the past, I think it was more complicated, and you did have some judges, some of the Republican appointees in the past, famously Justice O'Connor, who had been an elected official. I think she was the last member the Supreme Court wod actually been an elected official. Sharing some some of the concerns that support campaign finance regulation.

And you have had some liberals in the past worried about the potential for limiting the ability of nonprofits and independent groups of the campaign, but it really has solidified in the last twenty years along the conservative liberal divide. The conservatives are concerned that any kind of government regulation here will interfere with the free movement of the political process, and the liberals see that by giving a total green light to money that striking down campaign financed laws kind

of has the potential to corrupt the political process. Ted Cruz engineered this legal dispute, and the Biden administration also argued that he lacked legal standing to challenge the provision. If the court had wanted to, could they have taken an off ramp here and just said he doesn't have standing here. Yeah. The argument was that he basically gave himself, just loaned just enough money to his campaign to make

this a real dispute. Remember I said that the cap on the amount of money that could be refunded in post election contributions was two in fifty dollars. Well, he loaned his campaign tour in the sixty they repaid in the two fifty, so it was really about the remaining ten. So it really it did look as though it had been engineered to generate a case rather than be the source of any real problem. So that was that was argued and the court rejected. Interestingly, actually, Justice Kagan and

her Descent didn't really go there. I think she was willing to defend the statute on the merits rather than just say that there was no standing. There's also another even more obscure question in the case, which is whether the All Britain and cruise came from the statute or from some implementing rags of the Federal Election Commission, including which which had put in a time deadline for the repayment of the loan and which was not actually in

the statute. The Crews needed to challenge the statute to get what's called a special free judge court and a direct appeal to the Supreme Court, rather than go through the normal district court Court of Appeals court process, which he wouldn't have had it he was only challenging a regulation.

So there were some kind of technical issues in the case, but in the end, I think the Descent really just went with the substance and and the majority also spent the little focusing majorities on the substn As you mentioned, this adds to a line of Supreme Court cases striking down campaign finance restrictions. The Chief even said this case was a logical progression in a series of cases. Tell us about some of them. Tell us about some of the ways the Supreme Court has cut back on campaign

finance restrictions. Well, what's interesting a number of things interesting, but a couple of them is the way that the Court has in the Buckley decision, which is now almost fifty years old, forty or five years old, the Court to a sharp line between expenditure restrictions and contribution restrictions. Consistently is struck down expenditure restrictions except for the ones thing with corporations, which lasted until City the United ten

years ago, and consistently upheld restrictions on contributions. What's been happening now is they now beginning to strike down some contribution restrictions as essentially unnecessary. So this decision invalidated a contribution restriction effectively, you know, restricting the use of donated contributions to repay a loan. Had nothing to do with spending.

A few years ago, the court struck down a rule that have been in place really since the since Buckley, since the original Sattal Campaign for Men's Law, which limited the amount of money a donor could give in total to all candidates. So federal law restricts the amount of money a donor can give to one candidate on individual restriction, but there was also an aggregate cap on the amount

of money wealthy donors could give to all candidates. That cap had been raised substantially in the McCain fine Goal

law and has been adjusted for inflation. But the court in this case, which is called McCutchen, which is now about six years ago, so there was no justification for that that the only justification was the potential corruption of individual officials and the fact that a wealthy individual could give to a hundred officials so long as that those donations are under what is now the twcount there's no

danger of corruption. And then in another case involving a public funding law that Arizona adopted law that basically allowed that allows the state that will authorize as the state to give money to candidates if candidates raise a certain amount of money and private donations uh, the state will give them public funds as a way of reducing the need to raise campaign contributions and maybe reducing the dependence

on campaign contributions. The state also said that if the publicly funded candidate was facing a candidate who chose not to take public funds and as a result, was able to raise more private money, or is being the publicly funded candidate was also being hit hard by independent spending, the state would give that publicly funded candidate additional money.

This didn't restrict any contributions to or expenditures by of the other candidates, but it basically said that we're gonna, in effect, helped maintain a fair fight for people who take public funding. The Core said that also has to go because that operated as a ways to discourage spending by candidates not taking public funding. So in some ways, what you're seeing is that they're expanding the notion of what constitutes a limit to address something which in that

case wasn't a limit at all. It was a support for the speech of publicly funded candidates, but the court treated that as a limit on the privately funding candidates. And I'll give you one last one, which was part of the McCain fine Gold Law was something similar, which said, we have these campaign contribution restrictions, but that loss of it is a a candidate is faced with an opponent who is self funding to an unlimited amount, to a

very high level. You remember the Supin Court and Buckley said that you cannot limit how much money candidate can can spend on his own campaign. Congress in two thousand and two Pastball basically saying that we're going to raise the contribution restrictions, the restrictions on contributions to candidates who are relying on contributions if they're being opposed by the candidate who is raising his own money to a very

high level. The so called millionaires Amendment if your opponent a millionaire obviously wasn't really about millionaires themselves, but if you had a very wealthy opponent was spending a huge amount of his own money or her own money into her campaign, we would allow you to raise larger contributions than we normally would. And the court struck that down again.

It was really in some ways the liberalization of the law for the candidate depending on on donations, but the court said that also operated to discourage the wealthy candidate from spending more money. So, um, it wasn't a limit on the wealthy candidate, but the court treated it is

as like a limit on the wealthy candidate. So these decisions really, going back over the last decade or more, that decision, I think, with some late to thousands all kind of reflect this pattern of saying that he ben even cases in which candidates get more money, which was that case and the Arizona public funding case, or cases in which what we're really looking at is money that isn't really restricted, that we're looking at contribution restrictions rather

than spending restrictions. The court has has invalidated all of those restrictions. The Supreme Court that upheld the bulk of the McCain fine Gold campaign finance law in two thousand three was a very different court. I just wonder if if they would do it now. Oh, these courts almost certainly would not. And I think one of the interesting things is, I mean, some of those restrictions remain in place.

They're less effective because of other developments like the rise of independent spending, and Congress has changed the laws in some respects, but there were still in place restrictions on donations to political parties and so called soft money restrictions, as well as older restrictions like the limits on direct contributions to candidate. So there are some elements of the

law they're still in place. But yeah, the current court that was a five four decision back in two thousand and three, so Connor wrote much of it, and she of course has left the court. And look, I mean the conservative majority is now. It seems very likely that if some of the elements of that case that came back, they would probably be struck down today. Thanks for your insights as always, rich that's Professor Richard Brifault of Columbia Law School, and that's it for this edition of The

Bloomberg Law Show. Remember you can always get the latest legal news on our Bloomberg Law Podcast. You can find them on Apple Podcasts, Spotify, and at www dot Bloomberg dot com, slash podcast, Slash Law, and remember to tune into The Bloomberg Law Show every week night at ten BM Wall Street Time. I'm June Grosso and you're listening to Bloomberg