This is Bloomberg Law with June Brusso from Bloomberg Radio.
New York City Mayor Eric Adams appeared in a Manhattan courtroom today for the second time in a week. Adams was indicted last week on federal corruption charges in a widespread criminal investigation in which top city hall aides have had their home searched and phone seized by investigators. Adams
pleaded not guilty and his resisting calls to resign. Meanwhile, his lawyer, Alex Spiro, has rolled out an aggressive defense, asking the judge to dismiss part of the case right away, accusing federal prosecutors of leaking grand jury information, and holding a press conference to attack the indictment. Spiro said the mayor's flights, upgrades, meals, and hotel rooms do not count as bribes under federal law.
Congressmen get upgrades, they get corner suites at better tables at restaurants, they get free appetizers, they have their iced t filled up. That's just what happens. That's the truth. And we don't in the law leave these public servants to be asking themselves every single time, every single day they have been any interaction with the public is accepting this or taking that appetizer or not waiting in line a violation of federal law.
At the hearing today, federal prosecutors divulged that they're pursuing several related investigations that could lead to additional corruption charges against Atoms and quite likely will lead to indictments for people in his orbit. Joining me is former federal prosecutor Jennifer Rogers, a lecturer in law at Columbia Law School. The defense is being very aggressive. They made a motion to dismiss part of the case within days of the indictment.
The defense attorney held a press conference. Is this for political purposes, a political strategy or is there a legal strategy here?
Well, I think they're trying to do all of it, right. I mean, he's a sitting official, so clearly they want to work on the political side. But you know, this is a legal case. There are legal motions to be made, and you know, even the notion of him aggressively saying he's going to stay in office has legal implications because resigning could be part of a plea agreement, maybe getting him a more favorable deal if he wanted to do that. So I think it's all part and parcel of an
aggressive overall defense strategy. But they really are being aggressive. I mean you rarely see the motions about the grand jury lease alleging that prosecutors or agents somehow the government leaked information out of the grand jury. So I mean they're firing on all cylinders right now. It's going to keep the Southern District busy for sure.
I mean that was a point blank accusation that the Southern District had been leaking information about Adam's alleged care for nearly a year.
Yeah, I mean, I don't know what they're basing that on, and I think, you know, they better have receipts if they're going to allege something like that. So we'll see what they say. That would be unprecedented for the Southern District to be found guilty of something like that, So you know, my inclination is to say that that it's not true and that they won't find any basis to believe that that happened. But you know, obviously you never know.
I mean, there could be a bad seat somewhere, but that is so opposite of the ethos of that office that you know, it would shock me if that ended up being true, So you know, we'll see how it plays out.
Well, so far, they've just pointed to all the different news reports that came out over the last year. They haven't pointed to any evidence they want the judge to do an investigation about that. Do you think that's something that a federal judge would engage in.
That seems very unlikely to me. I mean, if all they have is that things from the grand jury have made their way into the public realm. I mean, witnesses are allowed to talk about what happens in the grand jury. It's only prosecutors that are forbidden to share information like that. So if a witness goes in and testifies, then or she's allowed to speak about that public ways they wish. And so that is the most common way, the most usual way that information like that would get out into
the public realm. And in a case like this, where everyone would be interested in it. He's obviously a public figure of public official. I wouldn't be surprised if some witnesses wanted to talk about what they had said in the grand jury. So, you know, I suspect the judge will not launch an investigation unless they have more than just the grand jury happen, and some information from that process made its way into the public realm.
When a defense attorney does something like that, you know, accuses the federal prosecutors of wrongdoing, does that set up an even more adversarial relationship with the prosecutors?
I mean it can it can? You know, listen, people are only human, and if you have someone on the other side who's accusing you of bad things and being unpleasant or whatever the case may be, it could impact your interactions with that lawyer. But at the end of the day, prosecutors want to resolve this case, they'd prefer to do it by plea if they can, because that's more efficient. So they're going to work with whoever is there.
And you really can't punish the defendant for his counsel being a jerk or you know, making accusations, So ultimately they're professionals. They'll work with mister Spiro and his team no matter what he says. But they may not like it as much as they would if someone was, you know, a little less accusatory and more pleasant.
They're making a motion to dismiss the bribery charge, and the defense attorney said that doesn't amount to a federal crime at all. First, they're saying there's no quid pro quo, and he mentioned at the press conference that there was no contemporary exchange of this for them, and that Adams allegedly received these benefits over years and it wasn't connected sufficiently to helping Turkey open its consulate. I mean, does there have to be a contemporaneous quid pro quo?
So you have to have an agreement to do something before you give over whatever the benefit is. The Supreme Court ruled in the last term that it can't be a gratuity, which would mean kind of a tip after the fact. It has to be an agreement before. But I think the defense is being a little too aggressive with what they're saying. It has to be right. They're providing a more strict reading of the statute than is in the statutory language and then has been blessed by
the Supreme Court. What has happened in the last fifteen years or so is all of these public corruption statutes have gone up for interpretation of the Supreme Court and have been narrowed and made more strict, except this one,
which is Section sixty sixty six Federal Program bribery. This is the one that hasn't really been considered by the court yet on this point, So you know, listen, they're kind of pitching an interpretation of this statute that it's theoretically possible the Supreme Court could agree with if this case or another case like it gets up to the Supreme Court. But where the law sits now, I think
they're being overly strict with what they're saying. So I think what's going to happen is that the judge is going to reject this motion right now and say it's a question of fact, and the jury will have to decide whether or not they've met the quick pro quo requirement in this case per the statutory language. And then if Adams is convicted, as he appeals up the chain afterwards, then we'll see whether the Second Circuit and ultimately the Supreme Court are you know, more in his mindset as
far as what the statutes should be. But I think for now they're on safe ground with the charge as it is.
Also, what Mayor Adams has said and what his defense attorney has said, is that courtesies to politicians are in federal crimes. His attorney, Spiro said, Congressmen get upgrades, they get corner suites, they get better tables and restaurants, they get free appetizers. They had their iced tea filled up, and Adams said, if everyone who did this was indicted, you know, you'd be stopping politicians from helping their constituents.
Yeah, okay, but you can't do it in exchange. You know, you can't offer benefits in exchange for those things of value that you're taking. There are also rules that apply to Adams that require him to file disclosure forms about benefits that he's getting over a certain amount of money, and he didn't file those forms properly with respect to
all these benefits that are listed in the indictment. So you know, there's a non disclosure part of this that makes it look more suspicious that he understood that these were things that he should not be taking. And again, it's all about the exchange. Like, could he take an upgrade if randomly he went to check in for his flight and someone said, hey, you're a great mayor, we'd
like to upgrade you to business class. If there wasn't anything about and I expect something from you in return, then sure that wouldn't be bribery, but that's not what's being alleged here. So you know, part of their job is to try to kind of pooh pooh the allegations and make it seem like no big deal. So that's what they're doing here, and I understand that. But when they say things kind of generically like oh, it's like filling up your ica, it's not like filling up your iced.
Coming up next on the Bloomberg Law Show, I'll continue this conversation with former federal prosecutor Jennifer Rogers. The defense wants to finish the trial by March. Is that doable?
I'm June Grosso and you're listening to Bloomberg. New York City Mayor Eric Adams has launched a legal attack on the federal corruption case again against him, with his attorney asking a judge to toss out bribery charges, and Alex Spiro said the other charges against Adams that he solicited and accepted foreign donations and manipulated the city's matching funds program, would soon be revealed as equally meritless.
But Eric Adams obviously had no idea if that occurred, whether that occurred, and so the remaining allegations in this case rely on the testimony of one staffer. Just think about that one staffer who has already lied.
I've been talking to former federal prosecutor Jennifer Rogers, so the donations from foreign sources through straw donors seemed to be a different story. And there his defense attorney is indicating that the charges were based on the testimony of one Adam staffer who lied.
Well, so this is interesting. I mean, and they want to say something about every part of the case, right, They don't want to concede anything at this point. What they're saying about this part of the case is what you would expect when there's a cooperating witness. Okay, there's evidence against our guy. Okay, this looks really bad that that person is a liar. That's the oldest argument in the book, right, and that is clearly a question of facts.
Is going to be for the jury at trial. There's no way that piece of the case is getting dismissed at this point or any point before trial and the jury. We'll have to sort it out when this person testifies. Do we believe her? Is she credible? Is there other evidence in the case that corroborates her, and prosecutors, as
you know, will be working hard. They already have been, I'm sure, but will continue to work hard to find corroborating evidence that they will present to the jury so that they can say it's not just her, it's all this other information. It's text messages, it's you know, other people testifying similarly, and so on. The one thing about this piece of the case, which generally I think is quite strong given what's listed in the is that it's not all that much money, at least as they've laid
it out so far. I mean, they talk about ten million dollars in matching funds that the campaign received, but that's the overall amount of matching funds, not the amount of funds that were foreign donors or the use of
straw donors. So that amount seems to be much much smaller, and so it'll be interesting to see as this case developed, if they will come up with more, you know, if they're currently scrubbing all of his donations to try to see if there were other straw donors or other foreign donors, because I think they will want to get that to
be as big a number as possible. Otherwise you risk the jury saying really, only you know, fourteen thousand dollars or whatever it is, that's not a lot of money to be taken from the city.
Is this count the straw donors count? Is that a more straightforward count legally than the bribery, whereas it's more factual.
Yeah, that they're both factual, But this one is cleaner. I mean, if the people who gave the money were foreign, you can prove the straw donor scheme, and you prove that Adams knew about it and had his people do it purposefully, then that's it. You don't have to worry about, you know, the timing of the exchange and was this for that? And it is a little cleaner, I think,
which is why I say it's stronger. And the only concern that I have about that piece of it is that I just don't think the amounts seemed to be very high. Now, the foreign element of it, the fact that there were foreign donors, the amount doesn't really matter. I mean, you're not allowed to accept money in your campaign from foreign people or or even non New York
City residents. I mean it's not just out of the US, it's you know, these people have to be New York City residents in order to get the matching funds, so that doesn't really have an amount tied to it per se, But for the New York City residents for whom matching funds were given at an eight to one ratio, So if you give up to two hundred and fifty dollars, it's matched eight to one and you get two thousand
dollars from the city. That's where I think they don't have a high number of straw donors that they can say definitively, at least in the indictment. Now were straw donors from these foreign donations. So I'm looking to see if they actually come up with a bigger number as they continue to investigate.
And Jennifer, what do you make of the fact that they say that Adams tried to hamper their investigation? For example, he gave over a cell phone but claimed that he didn't remember what the code was to open it. Is that just something for the jury or might they bring obstruction charges?
Yeah, we'll see. I mean, it's currently more atmospheric than anything, but if they get enough, they could bring an obstruction charge. They wouldn't bring an obstruction charge based on the fact that he says he couldn't remember his past code, because how were they really going to prove that that he can't remember it. I mean, we can all roll our eyes and say that's ridiculous, but that's a different matter from proving beyond a reasonable doubt that he purposely obstruct
an investigation. So I'm sure they're continuing to look. And you know, one of the things that always happens after you bring an indictment is that people come forward, right So people who were previously maybe afraid to talk will come forward. People who think that they're now in danger of being caught up in the case themselves may actually start to cooperate. So as you get more witnesses in
and you learn more, you may find out things. You may find out that when this investigation broke and they started talking to people that Eric Adams are, people close to him were contacting potential witnesses and telling them, you know, not to cooperate, to wipe their phones, et cetera, et cetera. There's already some evidence in the indictment about you should erase all your text messages with me, et cetera. So as those sorts of things are percolating, and more and
more people are coming forward with information. They'll see whether they could actually bring an obstruction charge. I'm sure they're looking to do that if they can.
Well. At the hearing today, the federal prosecutors said they're pursuing several related to investigations which we've heard of that could lead to additional corruption charges against Atoms and quite likely indictments for people in his orbit. So it is going to expand.
Yeah, and that's the way that they work, That's how I would expect them to do things. I mean, we know already that there have been investigations into other people members of his administration, and those may be unrelated to Adams, so you know that may not result in any more charges for him. But I also think, as I said,
they will try to expand this particular investigation. The indictment suggests that there were numerous other people who were involved in this game, right, who were helping him, not just the one aid of his who seems to have been kind of a translator and conduit to the Turkish folks, but other people as well who were involved. So I would think that there will be more people charged or if not charged along with atoms that they would please separately and become cooperating witnesses.
Do you think from the indictment that they already have cooperators?
Yes, yes, it looks like they do. It looks like the woman who was this conduit liaison person is likely cooperating, and probably others as well.
So would you say it's very unlikely that any of the charges would be dismissed at this stage?
I think so. I don't think anything's going to be dismissed now, because now you can only dismiss things. It has to be dismissed on the law right. If there any questions of fact anything for the jury, then you don't get it dismissed. So this is just this charge is legally unsupportable. You cannot support this charge with the law as it stands now. And you know he can make arguments all he wants about oh he wasn't the
mayor yet, he was only the Brooklyn Borough president. But you have to think he had won the Democratic primary. It was close to a certainty that he was going to be the mayor. So then you get into a question of fact. Would people at the Fire Department have felt that the certain mayor in a few months is putting pressure on them. That's going to be a question of fact. So anything that's the question of fact means
that it's not appropriate for dismissal at this point. And as I said, as much as we may think that someday the Supreme Court may narrow this statute in a way that matters to this case, it hasn't happened yet. And so for those reasons, I think the motion to dismiss will fail.
The defense attorney said he wants to finish the trial before the March deadline for candidates to be certified for the ballot. We don't want this case dragging, he said, I mean, is March doable?
It is? I mean, this is another very aggressive move. Usually the defense wants time themselves because they're usually, you know, not taken completely by surprise. But once the case is brought, you know, they have a lot of work to do. But it keeps the prosecutor's seat to the fire. It potentially hinders them from investigating as thoroughly as they might want. Right if they have to go to trial sooner rather than later. The Speedy Trial Bile Act gives seventy days.
There's a lot of time that will be automatically excluded from that that it will extend that time out, like time for the briefing and decision on motions and that sort of thing. But if the defense comes in and says, listen, we want a speedy trial, we want as little time excluded as possible, we want to move, the judge is likely to do that for them. So we're in the beginning of October. I think they definitely could get a trial in say February, that would allow them to be
done by March. I mean, the defense usually gets what they want in these senses, because the criminal system gives defendants a lot of right and you know, as they should.
Finally, the judge Dale Ho just took the bench in August of twenty twenty three, so not very experienced. Do you think that this case will be a lot for a new judge to handle?
Yeah?
I do, I do. I mean, I really don't know much about Judge Hoe. You know, he comes from the ACLU and barely got through because the Republicans didn't want him in, so he's bought to be, you know, really on the liberal side. I don't know how that cuts with a democratic Mayor as the defendant. And you know, as you said, he hasn't been on the bench for very long. This is high profile, it's complicated with some of these legal issues, with the statute and the public
corruption realm. So I do think it's a challenge. You know, I'm sure he's smart and capable, and he has lots of colleagues on the Southern District Bench who have handled all sorts of cases, so you know, I'm sure he'll he'll consult with some of them, and yeah, it'll be it'll be fun to watch how he handles all of it.
It's certainly shaping up to be an interesting trial. Thanks so much for your insights, Jennifer. That's former federal prosecutor Jennifer Rogers. Coming up next. The dock workers strike. This is Bloomberg Job Union doc workers at whort it's from Maine to Texas are walking picket lines in a strike that could reignite inflation and cause shortages of goods if it goes on more than a few weeks. The strike, affecting thirty six ports, is the first by the International
long Shoremen's Association since nineteen seventy seven. It's not only about wages, but about the workers demands that automation not be added to the docks. Blaine Erlick heads the New Orleans chapter of the ILA. The truth is robots do not pay taxes and they not spend money in their community. Joining me is Jonathan Todd, Vice chair of the Transportation and Logistics Practice Group at Binesh Law, tell us about the reasons behind the strike.
So port dispute happen, and we hear of these every few years across the country. Usually it is a pay issue. What's unique about this dispute is the ILA is challenging not only the pay that they're receiving under their contracts, but also the use of automation at the ports. And it's an interesting character because this introduces the idea that you protecting traditional labor itself is valuable. And this has reminiscence of the actors strikes of a few years ago.
I think it's fascinating because we'll probably see more of this, right But that's the challenge that I think is going to be difficult. That this isn't the traditional issue of do we pay more and if so, how much? This is an issue of exactly what we want from labor at our port.
The president, Harold Daggett said, we want absolute, airtight language that there will be no automation or semi automation. Is that trying to keep the docs you know from modern innovations that would move things faster.
It's interesting, right, because the world is changing and there's been automation for a great period of time. But today the capabilities that ports could have to automate what was traditionally done by labor, and by you know, more labor than could otherwise have, which of course has costs. It is greater today than it was. We'll only see that grow and so it really is almost unexistential question of the degree to which, you know, we value labor in this country and traditional jobs.
As far as the pay raise they offered them something like fifty percent raises over the life of the contract, with the union on seventy seven percent, that's right.
I think it is more of a question of, you know, what the union would be comfortable with in terms of the financial side of it. But the real challenge that I see is the question of the degree to which
we can employ humans in traditional jobs. That's I think more fascinating than the question of whether we land at fifty percent or seventy seven percent, which are some of the numbers on the table, But it all has a and that effect of driving you know the cost of the service and ultimately you know the cost to land product in the US or export product from the US. You know, this really is essentially a precipice of what we intend to see in terms of human labor at
our ports. On the East Coast in the Gulf.
They did settle a doc worker strike on the West Coast.
One thing I will say is the West Coast tensions of late we're interesting in the sense that the unions took a different strategy. So the IWLA introduced a rolling strike on a on a port support basis, which was resolved, you know, relatively quickly, without a great deal of interruption.
The reason that this approach is you know, very serious for the American consumer is because we're talking about a strike you know, in mass across thirty six you know, major port in the East Coast and the Gulf, and of course that accounts for around fifty percent of import and export traffic. So the strategy that's being deployed here is very different than has been deployed in a recent memory on the West Coast.
Yeah, I was going to say that it seems like a more traditional strike than the West Coast and then the UAW employed when they went on strike.
That's right.
Let's talk about in theory the authority of the president to stop the strike.
So that the president does have the power under the Taft Hartley Act to essentially enjoin the strike and require a cooling off period when labor would resume and the parties would come to the table and discuss the path forward to resolve the dispute. This president has on multiple occasions said that he does not intend to exercise that power, which leads to the really big question for domestic supply chains,
which is how long will this last? When when clients asked me that, and have asked me that in recent years, my answer is typically, you know, to expect, you know, maybe one or two weeks. And the reason that I say that is the last you know, very major strike that had implications, you know, such as this was in two thousand and two on the West Coast and President George W. Bush did exercise half partly and the strike was resolved in eleven days. In the absence of that
kind of action. However, it's essentially anyone's guests as to how long this strike may last.
And the president could, if you wanted, get a court order for a cooling off period, right, so.
There would be a federal action and there would be an injunction ending the strike, and then the parties would have eighty days as a cooling off period to negotiate a resolution.
So there are a lot of different factors here. Does it seem like the union has an advantage in a way because of the supply chain is under pressure in the aftermath of the hurricane, and you know, it's peak shipping season for holiday goods, and it's a presidential election coming up soon, so there might be political factors as well.
Everything you said is exactly right. This is a perfect storm of events. We have the presidential race, which you know, probably to some degree, influences the executive branch logic on how to handle this issue. We also have peak season coming particularly for retailers. This is exactly the time that retailers are looking to build up inventories so that the stores have everything they need to sell through the holiday season. Much of that has occurred, some of that has actually
been front loaded for a number of factors. One of those is that the Biden administration rolled out additional duties on China goods in September twenty seven, and so all these things are coming together that led to additional inflows
in the West Coast. But it's very very challenging. The idea that we no longer have capacity as a country to move essentially fifty percent of the goods that we would otherwise move into and out of the country is economically challenging, and it's important for people to bear in mind also that this isn't just an import problem. This isn't just ensuring that Americans have all of the goods that they would like to buy now and through the
holiday season. It's also an export problem. There are high export volumes at these ports, and so you have a number of industries that are impacted, particularly agriculture and the auto dutry, where it's now an increased challenge to sell domestically produced or domestically manufactured goods around the world due to the strike.
How automated are foreign ports.
So the degree of automation can be very surprising.
Uh.
The the idea that you need an individual for example, in equipment at the ports to to visually inspect what they're doing and ensure that containers are are offloaded and loaded correctly. With the technology we have today, that that's not exactly necessary. There are foreign ports, for examples, that have individuals that essentially work remotely, meaning that they're not you know, at the port on the ground of managing equipment to to offload containers and load containers onto vessels.
So the idea is that you could dramatically reduced headcounts and dramatically increase efficiencies with technology. It's happening right now, and you know, one way to think about is is
in many ways analogous to you know, remote work. Generally, you know, there are things that technology can do where we no longer need individuals or what you hear more frequently is that the technology can assist you know, an individual in being more productive, maybe moving more containers, maybe not physically being in a dangerous position as they're doing their work at the court, and those things you can understand an abstraction and elsewhere, you know, may be attractive,
which is why here, you know, we as a nation are now confronted with the question of exactly what do we want court labor to do and to what degree do we feel that that is, you know, valuable because you can do a lot of the work with less of the labor than you otherwise would.
What are the estimates for how long before a strike affects the supply chain?
Right so there is disruption right now. I have clients who are receiving force majeur notices from the steamship lines, essentially saying that you know the anticipated delivery times for their containers, and even you know the cost of receiving the containers cannot be observed because of course many vessels can no longer call upon the ports that they that
they otherwise would. Those clients who are moving you know, cargoes into and out of the United States and are are confronting this right now, have a number of tools in the toolbox, and this is really a time when you know, the logistics industry can do what it does best. Some of those tools we saw during COVID and during other disruptions like the Baltimore Bridge collapse, for example. I'm aware of some in this trees that are using air
cargo more than they otherwise would. You know, you could move a number of goods, especially lighter goods, smaller goods by our cargo. It's much more expensive, but it is reliable in an environment like this. I'm also aware of some domestic UUs industries that are looking at options beyond just diverting vessels to the West Coast because this is
you know, costly and time consuming as well. I know some folks are exploring perhaps landing cargoes in Canada or Mexico and then moving those containers cross border by motor carrier or by rail. That there's really not a good answer right now in the sense that all of that is difficult and time consuming and costly, and expectations for when you will receive inventories or have let's say inputs for your own domestic manufacturing, you know, those expectations you
know very well may not be met. But I viewed as a short term and long term problem. Right so, there are there are inbound and outbound movements right now that are absolutely interrupted. Some client supply chains got in front of this by moving cargoes to the West Coast instead, but there's absolutely disruption today.
Thanks for being on the show. That's Jonathan Todd of Banesh Law and that's it for this edition of the Bloomberg Law Podcast. Remember you can always get the latest legal news by subscribing and listening to the show on Apple Podcasts, Spotify, and at Bloomberg dot com, slash podcast, slash Law. I'm June Grosso, and this is Bloomberg