This is Bloomberg Law with June Brusso from Bloomberg Radio.
I was astonished when you began your examination by commenting on the defendant's post arrest silence.
That's basic law. It's been basic law in this country for forty years, fifty years. We're used to seeing judges yelling in court, reprimanding, even berating. What we're not used to is judges crying in court, especially when telling the defendant the good news that he doesn't have to go to prison. But that's what happened when Brooklyn Federal Judge Pamela Chen sentenced Alejandro Burzaco, a banker turned sports marketing
executive turned star witness at two FIFA corruption trials. Joining me is Bloomberg Legal reporter Patricia Hurtado, who was in the courtroom. Patty tell us about Brazaco.
He has been one of the most prolific and helpful witness,
says the US government has ever had. I've never covered a case where at the sentencing, the federal judge who presided over two trials and saw Berzakos on the stand for fourteen days as a witness for the government, she actually cried and had to stop and grabbed the tears away as she told him how proud she was, some privilege she was to see and hear his testimony, and then she continued, but as you were speaking, mister Brazaco, I felt some bit of privilege and pride about being
able to participate in this role in this system, because this is a great justice system, and I think the finest in the world, and it does, I hope, always reward people for doing the right thing. And it was extraordinary. As a reporter for decades of experience, I've never seen that.
I haven't either. It's stunning what the.
Government said he did is he helped them basically uncover the fraud and rampant bribery that was in international soccer. That there always been these rumors but no one had ever been willing to come forward, and that Brazaco had helped the US government disclose the actual fraud that was involved in bribery. And after the trials has happened, there was one in twenty seventeen that went on for weeks and weeks, and the second trial that just finished was
like a twelve week trial. Earlier this year, she said that now the truth is out that was bribery in soccer. People couldn't deny it any longer. After all these witnesses testified.
What was he accused of.
Brazoco was accused and pled guilty to paying tens of millions of dollars in bribe. Is sports marketing executive. It's a very odd world. But basically, if you want to get access to events, players, and you want to broadcast those rights and endure certain teams, these bribes were paid to the soccer bosses that were the heads of these different soccer entities. So basically, these soccer bosses were taking
bribes from these corporations in exchange for are extraordinarily lucrative broadcast. Right.
So the judge said that by cooperating, he put his life in danger.
Yeah, And the first trial actually had all the trappings of a mafia case where witnesses, especially Brazaco, who were basically escorted to and from court under guard of SBI agents. The jurors were anonymous and their identities were not disclosed, which is what you see in a mafia trial, you know, a terrorism case. And he testified that because he was cooperating, he was terrified for his own safety as well as
the safety of his family. His family was still living in Argentina and some of his children still live there. So in fact, his sentencing memo and the government's memo everything is under steal and the court has refused to release it. The allegation was that he and his family had actually received death threats. So here's a guy that basically can never return home to Argentina.
So he was on the stand a total of fourteen days, two trials. What was he like on the stand?
He has a phenomenal memory, and because it was a former businessman in banker, he knew about all the transactions and he could talk about the financing. But then he was I thought extraordinarily smart and down to earth guy that knew how to communicate two jurors. He remembered people's conversations. You remember the nicknames of some of these soccer bosses.
One of the guys in Argentina ran the empire from a gas station and he was called in Spanish the Pope, and he wore a big signet ring and people he used to come and pay tribute to him and they would have to kiss his ring, just like you have to go when you see the Pope. So you can see that there's all these anecdotes that Burzaco had at the tip of his fingertips just off his memory, and
he could recite whole parts of conversations. He remembered details about sitting in a restaurant and where they were sitting Seventh Avenue in Manhattan near the News Court building. When when were twenty first century Fox executives talked about paying bribes to get lucrative broadcast rights, including some of the allegations the government alleged was the rights to the twenty twenty two World Cup.
How many people were convicted because of his testimony.
Dozens, more than two dozen were convicted. The soccer bosses were convicted three a trial, two were acquitted. So of five that went to trial, dozens and dozens pled guilty. Sports marketing companies pled guilty. One of them is actually trying to get out got convicted at the first trial. Some of the biggest guys in the sports were ousted also, like step Blatder, who was the boss of FIFA. He was president for seventeen years and was kicked out of
the job. So prosecutors said that without Brazaco's help that international soccer the true dirty underbelly would have never been exposed.
Tell us who he was in the courtroom for his sentencing.
It was kind of wild because he not only had his lawyer, all of his family was there from Argentina, his children, I understand, maybe two x wives and his fiance and then you know, as reporters who cover courts, you always hear these people that suddenly do good deeds just ahead of their sentencing, where you know they're working in a soup kitchen or working with a homeless or
something like that. Right, well, Brazaco actually had some of the co workers from the food pantry he works with, and there was a soup kitchen he works with where he's so vigilant about working with him. From the description of his lawyer, Jim Walden, it sounded like he had felt so responsible after turning rogue as the former City Group banker you know, turns bag man paying money millions of dollars in Bride. He decided to turn over a
new leaf and cooperate with the government. But it didn't just end there with help being in testifying as a government witness. Here he is doing this good work for years and years and years. So it's been eight years since that raid at the five star hotel in Switzerland when all the FIFA bosses got arrested, right he somehow was in the dining room, but they didn't get him
for some reason. I don't know why. But he walked out the back door and immediately went to the Swiss Italian border and called his lawyers and immediately came in and offered to help and then secretly pled guilty and has been on Team America right helping the government. But
here he is for eight years. He's also been working in the suit kitchens and food pantries, and he wanted to make amends in such a way that when he saw another guy at the soup kitchen getting attacked and somebody was stealing his motorbike or his bicycle, Brazaco stepped in to stop the crime and stopped to protect the man it was getting hit by chains and call the cops.
And then when the DA found out who the witness was, she had to tell the Manhattan Die's office who exactly they wanted to call as a witness, that they couldn't use him because they would interfere with their criminal case. So Brazaco found another witness and convinced that guy to come forward and testify against the wrongdoer. So his lawyer called him the Superman of cooperators, and it really did make him sound like Superman of all this good deeds
that he'd done that weren't just idle. You know, let's do it for a weekend on Thanksgiving, and let's get done with our public service. This is a guy who's been committed for the last eight years to helping people.
Patty, besides family members and co workers at the food kitchens he's worked at. Who else was at the sentencing.
That was the other extraordinary thing to see Rose and rose of former prosecutors who've been on the case for eight years and left the US Attorney's office and they're sitting there and FBI agents I haven't clapped eyes on in years, and they're sitting there, and all of them had worked in the case, and they all came and
show support to him. And everyone said to me afterwards, you know that you don't often see a federal judge crying, And there she was crying about how proud she was to have seen his testimony, and she noted that some of the defense lawyers availed his credibility and called into question his motives. He was assailed as a liar who was fingering these other upstanding members of the community in the soccer world just to get even or to hide
his crime. But you know, the judge said she had not seen evidence of that and these guys, I mean, it was just I've never seen anything like it. It was quite the spectacle.
So tell us about what he said at the sentencing.
It was very emotional, you can tell you know that this whole aspect of leaving one's country and his family behind and trying to do the right thing and make up for his crime weighs really heavily on him. He seems a man who's very tortured and affected by the remorse he feels. It was definitely palpable. He has to pause. He reddened in the face at some points in time. I mean, he got very emotional and his voice choked up with emotion trying to talk about how horrified and
remorseful he was about the crimes he committed. And you know, he had to live alone in the US and facing the prospect and then imagine that you're on hold, you have everything to put on hold. Well, you wait for these two trials to go through the system, and so the first one started in May twenty fifteen. The first trial started in November twenty seventeen, so we're talking two years later, and the second trial didn't happen un till
twenty twenty three because of the pandemic. So imagine having your life and being put on ice like that, and then you're having to stand by. He thanked everybody, you know, He says, I want to say to all the victims, I fully accept to take responsibility for the crimes I've committed. I understood it was bad, and no one forced to do me to do it, and I know my conduct
was wrong, it was very wrong. He apologized to the soccer world, to the members of the soccer clubs in South America, who he called the real shareholders of these clubs, and these people who loved the sport, who were basically betrayed by this fraud. Talked about how was his motivation,
why did he engage in this fraud. My conclusion is that at the beginning of my career in the soccer in industry, I was motivated by a desire to be close to the people in the industry and He basically wanted to get in where all the decisions were made in big soccer. And of course what happens is when he joined this company, Torneo Si Comenthensius, the soccer management company, the people were paying bribes and it was sort of like the way you had to do business to succeed.
So he saw firsthand what was going on, and then he knowingly went along with it. So, you know, he said, I was motivated by greed, and I deeply regret my actions, and I was selfish, and I am ashamed of it, and I'm still ashamed of it, and I want to tell the victims. I've dedicated my last eight years to repair this. It just was extraordinary. You don't most of
the time. I call it the Great American Apology. Mistakes were made, things happened, but I don't have anything to do with it, because that's the way some people act after getting caught and pleading guilty. You know, they minimize their role. He was definitely not that kind of guy.
It sounds like it was an extraordinary sentencing. Thanks so much, Patty. That's Bloomberg Legal reporter Patricia Hurtado. The Supreme Court upheld California's new humane pork law, rejecting an industry challenge in a ruling buttressing the power of states to impose rules that have a broad economic impact on other parts of the country. The ruling could force pork producers to implement costly changes to keep selling in the world rol's most
populous state. The industry argued, unsuccessfully that California is violating the Constitution by regulating commerce outside its borders. Justice Neil Gorsuch wrote for the five justice majority, saying the poork industry would have us cast aside caution for boldness by intervening where Congress had declined to act. The ruling cut across the Court's left right divide Justice as Clarence Thomas, Sonya Sotomayor, Elena Kagan, and Amy Coney Barrett joined Gorsuch
in voting to toss out the lawsuit. Although the majority splintered in some of its reasoning, for Justice's Chief Justice John Roberts and Justices Samuel Alito, Brett Kavanaugh, Katanji Brown Jackson said they would have kicked the case back to a federal appeals court for more scrutiny. My guest is Harold Krant, a professor at the Chicago Kent College of Law. First of all, tell us about California Proposition twelve, which is one of the nation's strongest farm animal welfare laws.
California's PAS Proposition twelve to ensure sort of humane conditions for pigs, and the problem was that pigs are usually put in and tends very close to other pigs. There can be violence, pigs don't get exercise, and so in terms of cruelty, made people think that those kinds of conditions should be banned. And California is not alone. There are laws against cruelty in terms of raising food in
Massachusetts and Florida and other states. But this one is noteworthy because California is such a large market and so it decides that pigs have to be housed in humane conditions. That's going to cause a huge ripple effect into the pork industry as a whole.
The argument in this case is about this arcane constitutional doctrine called the dormant Commerce clause. Explain what that is.
So we have a commerce clause in the Constitution which gives Congress the ability to regulate amongst the states, and that's not at state care and that's not controversial. But the Supreme Court later in its history decided to read a negative implication into that clause, suggesting that some kinds of state regulatory actions, even if they're based upon public policy,
can't have the impact of interfering with interstate commerce. And so the Court on its own will sort of judge whether a state regulatory effort is discriminatory against out of state commerce and therefore violates the spirit of the Constitution by picking and choosing which kind of producers to value from which states there should be an accepted commerce in the states.
And what was the argument here by the pork industry.
The pork industry had two or three different arguments, depending upon how one counts. The first might be called an extra territorial print, so that any kind of state regulation that has the impact that is felt mostly externally should as a per se matter be found to be unconstitutional. A variant of that is the fact that in this case it wasn't just a state regulation, it was a
moral regulation. And both and Mikai as well as the park industry said, look, if you allow California to impose a kind of moral principle in terms of humane treatment for pigs. What's the stop California from men saying is a moral issue. We only want to deal with employers who are fair to their employees, or we only want to have products from employers that are fair to employees. So we only want to deal with products in companies which bide by the privacy rights of their female employees.
So the fear was that this kind of case opened up the Pandora's box and giving sort of a green like to states to impose all sorts of regulations that have ability to do with the morals of the state as opposed to any kind of legitimate protection for their citizens, such as from poison or pollution or something along those lines. So that was one argument, and as probably that's why this case got so much attention because of this extraterritoriality
aspect of it. The second one was just a plain balancing test, and in prior cases the court had held that when the burdens of a state regulation are excessive in comparison to the in state benefits, that that state rule also violates the dormant commerce clause of which we've been speaking with the second argument, there are some the court that want to get rid of it, and this
balancing test was severely limited by the court. It wasn't by a majority of the court, but three members of the court or suggested that they'd get rid of this balancing test in a proper case, and other members of the court enough to get a majority, said that the port producers had not demonstrated such a huge excessive burden
in this case. So that coalition, which led on the second point this balancing which is called the pipe test, led to the court ruling against the pork industry on that one as well.
This was a weird lineup that cut across ideological divides and resulted in five separate opinions. So what was the strand in the majority?
Well, its trand. Majority held that you cannot parse a state regulation and say that it's having to do mostly with morals as opposed to protection for the citizens of the state. So that distinction that was forwarded by the port producers was clearly rejected by a majority of the court, Which is the controversial aspect of the decision, because then it does open up states to enact morals legislation, which
has an impact upon out of state commerce. Because again, on the face this regulation Proposition twelve is neutral because it would apply to pork producers in California as well as pork producers outside. It's just that there are almost zero pork producers in California, so obviously this had a great out of state impact. So at least on the first question, it's whether, if you have this kind of huge impact, is that a per se violation of the
negative commerce clause. The court clearly came down no. On the second issue, it had to do with this balancing of in state benefits versus out of state burdens, and that's where the court was fractured. On that case. Three of the justices said, we get rid of this balancing test. It's inappropriate for courts. How can you balance benefits and costs?
And then two members of the court said, well, we need to keep the test, but it's a narrow test and the Portunustry did not demonstrate the excessive burden in this case, and to dissenting justices, they would have at least held that the pro producers did make a facial claim as to a substantial burden and that should be remanded back to the court to make that kind of
balancing tests. Though they agreed that the test of balancing burdens and benefits was difficult, but they said it wasn't impossible, and that's what the lower court should undertake.
Do you have any inkling as to why this opinion was so fractured and cut across ideological lines?
Well, I think in terms of ideology, what's interesting is you have the kind of liberals who you might think would be in support of California and this kind of moral legislation. But then again you have the traditional stage writers who believe that the dormant commerce clause should be very limited if it exists at all, and therefore because now would give more power to the states as well.
So you have two different types of movements which would suggest that the states should get more power than they have in higher commerce clause challenges. And of course the line up on the other side cuts across ideological lines as well, with Justice and Jackson agreeing with Chief Judges Roberts saying that we ought to keep the balancing test.
That's the proper way to understand limits on state authorities, and if the state action does have a disproportionate impact outside the state, then that measure runs a follow dormant commerce clause, and so again you had both Chief Justice Roberts as well as Justice Alito and Justice Jackson, all on the same side.
You don't often have the Supreme Court making decisions in the animal welfare area. Is this a victory for the animal welfare movement in more ways than one?
Well, it's absolutely theigory formal welfare sanctioning any kind of state efforts to try to ensure that animals are housed or slaughtered in a humane manner. You know, there are states that ban the stale of horse meat, and obviously states if they want to take other kinds of measures to protect animals, they can do so. And maybe there's true for fish farming too, but who knows.
Do you buy the pork producers saying that this is going to increase prices for consumers and drive small farms out of business and increase consolidation in the industry.
Because California is such a large market, its impact will be felt in the industry. And I do think that Proposition twelve US will give rise to higher prices because you know, once you have to spend more money in terms of housing pigs and ensuring exercise and so forth, that is going to raise costs on doing business. So how big of an effect is unknown, but it is logical economically to think that this is going to drive court prices up.
Also, just as Kavanaugh referred to the slippery slope argument in his opinion, And there are some concerns that the reasoning here, you know, the core issue the ability of states to take actions with impacts beyond their borders, could also be used by states in their efforts to restrict or expand abortion access.
I'm skeptical that there'll be a direct impact here on the question about what states can do in terms of either ensuring the delivery of the abortion pill or precluding it. That has to do with the Privileges and Immunities clause and how that's developed in terms of the rights between
those in one state and another state. I think the commerce issue here is distinct enough that there won't be any spillover into the more contentious issue of what kind of impact can one state have on citizens of another state or prevent their own state from unveiling themselves of the options available, whether it be marijuana or abortion services in a different state. So I'm skeptical then there will be any kind of carryover effect.
So how much does this buttress the power of states to impose rules that have an impact and economic impact on other parts of the country.
It's a huge win for states. States can take the signal in the poor producer's case and decide on a whole variety of local welfare type of regulation which has the practical impact of imposing more costs on out of state producers. They can't discriminate. They have to treat in state producers the same as out of state producers, but with that bare sort of minimum. It gives the states rights to do that. Now that always is subject to
preemption by Congress. Congress under the Commerce power can say that those kinds of restrictions are not conducive to free flow of commerce from place to place, but subject to preemption, that the states can make those decisions and impose as long as they don't do so in a discriminatory manner.
It was interesting because the reason why this was controversial is because of the sort of moral extra territoriality effect of California's law, and yet all the members of the court refuse to strike it down on that ground, seemingly inviting the kind of retaliation or tit for tap. That may well arise as states begin to regulate more in the social area, whether it be an ESD type stuff or another kinds of context.
Does any other red state have the economic power that California does.
No, That's the underlying thing is that this gives big states the advantage, particularly when it's talking about environmental pollution or other kinds of activities. California can make a difference just because of its size. Rhode Island and Arkansas aren't going to have that kind of national prominence.
Well, we'll see if other states make any moves. Thanks so much. How that's Professor Harald Krant do the Chicago Kent College of Law. 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 podcasts. 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 weeknight at
ten pm Wall Street Time. I'm June Grosso and you're listening to Bloomberg