• Transcript
  • Show Notes

In this episode of CAFE Insider, Preet and Anne break down former President Trump’s potential impeachment defenses, the charges being brought against individuals who participated in the insurrection at the Capitol, and the stock market GameStop saga. 

We hope you’re finding CAFE Insider informative. Email us at [email protected] with your suggestions and questions for Preet and Anne. 

This podcast is produced by CAFE Studios. 

Tamara Sepper – Executive Producer; Adam Waller – Senior Editorial Producer; Matthew Billy – Audio Producer; Jake Kaplan – Editorial Producer

REFERENCES & SUPPLEMENTAL MATERIALS:

RSVP to CAFE Live Show

Doing Justice, CAFE

TRUMP IMPEACHMENT

Article I, Section 3, Clause 6 of the U.S. Constitution

Article I, Section 3, Clause 7 of the U.S. Constitution

“Incitement of Insurrection,” Article of Impeachment, 1/11/21

National Terrorism Advisory System Bulletin, DHS, 1/27/21

Roll Call Vote 117th Congress – 1st Session – Vote Number 8, U.S. Senate, 1/26/21

Nominations Confirmed (Civilian), U.S. Senate

“Trump names two new lawyers for impeachment trial a day after his defense team collapsed,” CNN, 2/1/21

“Trump’s impeachment defense team leaves less than two weeks before trial,” CNN, 1/31/21

“What to Know About Trump’s Second Impeachment Trial,” WaPo, 1/31/21

“Rand Paul calls impeachment ‘dead on arrival’ after most Republicans signal that trial is unconstitutional,” CNN, 1/27/21

CAPITOL INSURRECTION

“Compiling the Criminal Charges Following the Capitol Riot,” Lawfare

“Two Members of the Proud Boys Indicted for Conspiracy, Other Charges Related to the Jan. 6 Riots,” DOJ, 1/29/21

“U.S. prosecutors eye 400 potential suspects, expect sedition charges ‘very soon’ in Jan. 6 Capitol breach,” WaPo, 1/26/21

VIDEO: “What Happened at the Capitol,” Rep. Alexandria Ocasio-Cortez, 2/1/21

BORDER POLICY

“Memorandum for all Federal Prosecutors,” DOJ, 1/26/21

“Executive Order on the Revision of Civil Immigration Enforcement Policies and Priorities,” President Biden, 1/20/21

GAMESTOP

“What is Robinhood? What to know about company under fire over GameStop trade restrictions,” FOX Business, 1/28/21

“GameStop Mania Reveals Power Shift on Wall Street—and the Pros Are Reeling,” WSJ, 1/27/21

Rep. Alexandria Ocasio-Cortez tweet, 1/28/21

Sen. Ted Cruz tweet, 1/28/21

Rep. Alexandria Ocasio-Cortez tweet, 1/28/21

DIET COKE 

“Trump’s Diet Coke button appears to have left Oval Office when he did,” The Hill, 1/21/21

“President Trump Presses a Button in the Oval Office to Get a Coke,” TIME, 4/27/17

How Will Trump Defend Himself Against Impeachment?

While Republican Senators look to quietly acquit Trump using a procedural defense, Trump has signaled that he may make a spectacle of the impeachment trial by furthering his big lie  — that the election was stolen from him. 

With former President Donald Trump’s second impeachment trial just one week away, his legal team is in disarray. Preet and Anne contrast the procedure of the forthcoming trial with Trump’s first impeachment trial, and discuss the former President’s potential defenses. 

Meanwhile, the Department of Justice continues to investigate the January 6th insurrection at the Capitol. Preet and Anne break down the latest charges against rioters.

Lastly, there is significant controversy surrounding the stock market GameStop saga, and stock trading app Robinhood’s decision to restrict trades of GameStop stock. High-profile congressional leaders are now calling for the launch of an investigation.

2/2/2021

Preet Bharara:

From CAFE, welcome to CAFE Insider. I’m Preet Bharara.

Anne Milgram:

And I’m Anne Milgram.

Preet Bharara:

How are you doing, Anne?

Anne Milgram:

Hey Preet, happy snow-

Preet Bharara:

We’ve got like three feet of snow. And the one annoying thing about the pandemic. I mean, there are many, many terrible things so I don’t mean to complain, but usually when you have a couple of feet of snow in the ground, school’s closed, you don’t have to teach or take class. And [inaudible] you law school went forward yesterday.

Anne Milgram:

And you know what, so did my six year olds school, they just went remote. So I think the big question is whether kids are never going to have a real snow day again, I don’t know.

Preet Bharara:

I think at some point, maybe not this winter, but I think at some point.

Anne Milgram:

Well, they’ve also missed a lot of school this year, so I get it. Preet, I will tell you one thing about the snow day, I got to catch up on some podcasts listening, and I got to hear the first episode of Doing Justice and I liked it. It’s outstanding. Congrats, and I hope everyone will get a chance to listen.

Preet Bharara:

I think it’s a great story. And I think people may not appreciate that it’s really bringing some of these stories to life from the book, to [crosstalk] experience to the book.

Anne Milgram:

Also the accents are just, so you just-

Preet Bharara:

Well, they’re real people.

Anne Milgram:

They’re real people and you just really feel it.

Preet Bharara:

Or are you talking about my accent?

Anne Milgram:

No, I’m talking about your police officer, he’s such a New Yorker. Like it’s so authentic. Yep.

Preet Bharara:

Jonah Marais is the greatest. Second episode drops Wednesday. So I hope folks will check it out, check out Doing Justice. Meanwhile, there’s another show starting soon. Do you know what that show is I’m talking about?

Anne Milgram:

No.

Preet Bharara:

The second impeachment trial of Donald J. Trump. So I guess there are various things to talk about, including the problem he’s having finding lawyers, what the process will be, what the format will be, what the defenses will be, how it’s different or similar from last time. I guess the first thing is, how will it be different?

Anne Milgram:

Yeah, that’s a good question. And one of the ways in which it’s already different is that it’s one article of impeachment, incitement of insurrection, and they didn’t do hearings in the house and so it’s not clear to us. In the first impeachment on the Ukrainian call, it was pretty clear what evidence the house managers were going to put in. And they essentially put in the transcripts of those house committee hearings, but that’s not the case here. So I think there’s a big question in my mind of what the actual evidence will be. There’s another question that I think is also potentially really different is that you’ll recall that the Democrats during the first impeachment wanted to call witnesses and the Republicans were in control of the Senate, they had a majority of the votes and they rejected that effort.

Anne Milgram:

And so I think it’s very possible we see witnesses testify at this impeachment, which would be very different. And then finally, and I’d love to hear your thoughts on all of these and what you think. And finally, I think this is going to be fast, as fast as they can make it because I think that there’s a lot of interest in doing a couple of weeks. I don’t personally think they’re going to do one week of a trial, but I think Biden, the president has now said that there’s a lot he needs to get done. There still are a lot of cabinet officials who need to be confirmed. And so I think that there’s going to be a lot of pressure to move this quickly. What do you think?

Preet Bharara:

Yeah. I agree with that. I think it may go even faster than people suppose because I think the Biden administration is in a rush to do various things, including confirm people, including by the way, the next attorney general about whom there’s been an argument of whether or not the hearings should be one day or two days. And the Biden folks were trying to get it done literally on Monday 8th, the day before the impeachment trial is supposed to start.

Anne Milgram:

It feels to me very important for the attorney general to be confirmed. And we’re going to talk today about the prosecutions of the rioters, the insurrection on Capitol Hill on January 6. And obviously they’re being handled out of the DC U.S. attorney’s office. But as people know, the U.S. attorneys report to the attorney general and-

Preet Bharara:

Some of them do.

Anne Milgram:

Yes. Some of them think they don’t, but if you read the org chart, they all technically do. But on something like this, I think you’d agree with me on something like this, the attorney general would be involved and would be being briefed at least pretty regularly by the U.S. attorney for the district of Columbia. And so that’s one of many examples of things where I think the attorney general needs to be confirmed. Also just related to that, the department of Homeland Security has put out an intelligence brief to the local officials and all 50 States basically saying, “Be on alert for domestic violent extremists.” Those are white supremacist groups that a lot of people have been radicalized and already were radicalized and have sort of become aligned with the Trump objection to the election. And so I think it’s just really important the AG oversees the FBI. It’s just really important that the AG, that confirmation get done soon.

Preet Bharara:

There’s this interesting question of what the defense will be. And we’ve talked about this a little bit before, and there are various ways to go. And part of the sort of skirmishing about who’s going to represent Donald Trump at the trial in the Senate has to do with what the appropriate defense is. And there was a vote since last time we spoke on Tuesday with respect to the constitutionality of proceeding with a Senate trial against a president who no longer is in office. As you and I have also discussed, the constitution, its language, structure, history and precedent in the Senate seems to me very clear that you can conduct an impeachment trial even after the officer has left his post. That’s especially true here when the impeachment itself occurred while Donald Trump was president and it was effectively done and properly consummated. And then the constitution says, I don’t have language in front of me, but essentially the Senate will have the authority to try all impeachments.

Preet Bharara:

There was an impeachment while he was in office. And so that combined with other reasons and precedents, I think makes clear that you can proceed. Now, that seems to be the basis on which many Republican senators will avoid voting in favor of conviction, even though it’s I think a weaker argument. And we saw that procedural vote last week, only five Republicans voted with Democrats in favor of the position that the trial was constitutional. And so I keep hearing people go back and forth, speculating about what Republican senators will do. Usually a procedural vote like that indicates where people are going to be on the merits as well. But there are some folks who think it won’t be that way. So Mitch McConnell, after making all these noises of being upset with Donald Trump and never going to speak to him again and everything else, he voted on the Republican line saying that it was not appropriate to proceed. Do you think that means that his vote is certain?

Anne Milgram:

So I find the McConnell piece very curious, I don’t think it’s certain. I think he has given himself the procedural out by voting that it’s not constitutional. Now, the other piece just to go back, and we’ve talked about this a little bit before, is that it does seem under the constitution and under existing precedent, what’s happened before that the Senate gets to decide this. And it is clear that there are instances where the Senate has held impeachment trials after somebody has resigned. And so given everything, I think this is a process issue that the Republicans are raising. I think it’s both as a legal matter very clear that this can happen. As a procedural matter, I would argue the Senate gets, they got to rule on this. They have ruled 55 to 45 that it can go forward.

Anne Milgram:

And that should be the end of the issue. If it were a real court, you would have dealt with this question before the trial began. It wouldn’t be the focus of the defense at trial. This is not a real court, this is the United States Senate, and they have the power to try impeachments. And as we’ve talked about before, the Senate makes the rules of how it works and so it is vastly different than how a court of law would work. But what becomes really interesting here is that it does allow the process, the procedure, this argument, that the Senate shouldn’t have the jurisdiction, the ability to try a case after the president has left office. It allows that to become something that the Republican senators who don’t want to address the issue of the insurrection on the Capitol, that they can just… It’s an out for them.

Anne Milgram:

And so McConnell has voted with that. Now what he does on the substance, I suspect you’re right, that there will only be five senators at the most to switch over from the Republican side to potentially convict the president. But I do think that it really is in many ways, just it’s a red herring in many ways because the people who get to decide whether or not the president can be tried, those people are in the United States Senate, the United States Senate has now by 55 to 45 vote margin decided that, and in my view, that should really be the end of it but it won’t be.

Preet Bharara:

Yeah, I think they’ve previewed how they’re going to vote on the substance. The other issue on the defense is interesting. So you could argue the procedural thing, which is that it’s not appropriate to go forward because the president’s no longer an office, and that way you don’t have to get into the merits. Second, you can argue that the statements made by Donald Trump and the intent that was in his head didn’t rise to the level of incitement. And he didn’t know there was going to be violence and he didn’t condone the violence. According to reporting, that seems not to be enough of a robust defense in the mind of Donald Trump and that he had a whole slate of lawyers up to five, who had been found for him. Some of them by Lindsey Graham in South Carolina, they fell into disfavor with Donald Trump.

Preet Bharara:

Because it appears that the former president wants them like he’s wanted other people to not only argue the procedure, not only argue about his words on January 6th, but also argue in favor of what lots of people call the big lie that Donald Trump actually won the election, that Donald Trump actually won in a landslide. And that was reportedly a bridge too far for these lawyers and they weren’t prepared to make those arguments. And I don’t know how in good faith anyone does make those arguments. And this whole business about Donald Trump having won the election by a landslide there having been millions of votes, that’s all wrapped up in the factual allegations of the article. You can’t have one thing without the other. The fact that he and also Josh Hawley and Ted Cruz have been perpetuating this lie about the election is the thing that was the predicate for riling up lots and lots of Trump supporters to the point where it boiled over and they decided to engage in violence.

Anne Milgram:

So I think we should break this down a little bit more. The first five lawyers who the president had brought on for trial have quit and they quit because clearly they didn’t agree with their client and their client former president Trump wanted them to argue the big lie that the election was stolen, and essentially in my view, to argue that the insurrection was justified, I don’t think it can be both things. If Trump is doubling down on the big lie, then I think if that’s his defense, his assertion really is, the election was stolen from me. That is correct, and again, as a factual matter I agree with you that they will not be able to prove that there is zero factual proof. And if again, this was a real trial that would not even be allowed in because it’s just speculation and allegation that is not founded but here again, it’s the Senate and the Senate can let in that evidence.

Anne Milgram:

And so you could end up with a situation where the president is really saying I did it, but almost truth is an absolute defense. Like this sort of idea of but the election was stolen from me. And if you play that out, he would essentially be saying the election was stolen from me, therefore I was justified to tell people that they needed to act. And this end result is patriotic and justified, which is what the president essentially is saying. It’s crazy, but we should play this out. And again, there are now two new lawyers, they’re real substantive lawyers, they’ve had a lengthy careers. And so that’s not to say that they won’t agree to do the president’s bidding, but it’s not clear to me yet what they’ll do.

Anne Milgram:

But there is a way in which we may be seeing on the Senate floor, a legal insurrection, the sort of legal version of what we saw on January 6th. And I don’t know what you think about this Preet, but substantive defenses, there aren’t that many when. When you really come down to it at a trial, it’s often I didn’t do it meaning I wasn’t the one in the Central Park Zoo when the penguin was stolen, it’s a case of mistaken identity or yeah, I was there, but I wasn’t involved in it. There are different variations on it, but the, I didn’t do it, I didn’t steal the penguin or the, I did it but thee penguin’s back-

Preet Bharara:

Wait. You’re pandering to the audience-

Anne Milgram:

The penguin’s back, it’s been a long time. Well, it’s a lot to just get muddled in rioters and insurrectionists, but I’ll come back to them in a second. So one defense is I didn’t do it, the other defense is I did it and I was justified. And that could be, there are all different kinds of versions of that, self-defense somebody attacked me first. Usually it’s some form of, I used force because somebody else had used force or was threatening force. But here the president’s argument, it’s hard to put into words what I think he’s doing well.

Preet Bharara:

Well, somebody had a good analogy and they called to mind a few good men with Jack Nicholson and Tom cruise. Remember Jack Nicholson, playing Colonel Jessup on the stand, and at some point he says, “You’re damn right I ordered the code red.” And that’s a little bit of what Donald Trump is doing here, “You’re damn right I said the things I said, you’re damn right that I was justified in doing so because I did win the election, I was robbed and I was trying to save democracy, not hurt democracy.” And I think you’re right. And the one question I have is that was setting the procedural vote. Is it possible that his lawyers at Donald Trump’s urging will make such a preposterous and insulting argument, and abuse the facts of the case so much so that some Republicans who are going to vote for acquittal based on the procedural argument, or maybe even some substantive argument are offended enough that they changed their vote.

Preet Bharara:

Because not only is it I think bad legal strategy, not only is it not a good substantive legal or constitutional defense at the trial, it also persists in driving a wedge into our politics and keeping us at odds with each other and serves the purpose of doing what? Like the trial itself, which is about incitement to violence and about perpetuating this lie could itself, if the defense urge by Donald Trump is pursued assiduously, could do further damage in the exact same vein. It’s getting very muddy, you could have subsequent impeachments, arguably based on the continuation of the lie and a kind of incitement, political incitement. But Donald Trump insists on what Donald Trump insists on, and I don’t know how it’s going to play out. Maybe it’ll turn off some Republican senators who were otherwise persuadable.

Anne Milgram:

I think you’ve come to the exact right question of what the Republican senators do. It is terrible for the Republican senators to have former president Trump doing what he’s doing because Trump in essence is doing, he’s repeating the big lie. He’s driving that wedge, as you say, and it’s good for one person and that’s him. And it’s good for riling up the base for keeping this current, for keeping him in the news. And he doesn’t ever want to be seen as a loser as someone who shows weakness. And so in some ways it’s very consistent with the Donald Trump we know and have come to know over the last four years, it is a terrible defense. And in fact, in some ways, it is the one thing that I think Trump could now do that could end up getting him convicted. Because if it’s a process question, I think Republicans are then dodging the question of what happened on January 6th.

Anne Milgram:

And we can argue about whether they’re not doing their constitutional duty or whatnot, but at the end of the day, there’s that sort of process procedural out that exists, that they’ve created for themselves. If Trump makes this about the big lie, then in my view, they will be forced to address that and to decide are they going to basically go with the president’s version of events that the insurrection was justified and essentially was a righteous insurrection? And there’s no way that’s accurate. I also think just in terms of the process, I don’t know what evidence you get that you could actually offer to support that. The court cases have been knocked out, there has not been an eyewitness who has come forward with any sufficient evidence to sort of prove the vote or fraud allegations. So it becomes really a false-

Preet Bharara:

But they won’t do that.

Anne Milgram:

Right, they won’t, they can’t.

Preet Bharara:

They’ll just, it’s just rhetoric. It’s just going to be rhetoric. It’s just going to be the lawyers pretending like they’re on TV-

Anne Milgram:

And that’s why the first lawyers quit.

Preet Bharara:

Yeah. They’re just going to say random anecdotes, there was this story and there was that story and there was the ballots in the river and there was this thing and that thing, and it’s all just mucking it up. They won’t have the goods, they won’t have the proof, they won’t have the evidence. The other thing you’re going to see, I think is some peculiar argumentation. I saw David Schoen, who’s one of the new lawyers, a clip of him on TV, perpetuating this misunderstanding about what this is. You’ve said a few times absolutely correctly that the trial that’s going on in the Senate, we call it a trial but it is nothing, and this is by design in the constitution, it’s nothing like an actual civil or criminal trial in a million different ways.

Preet Bharara:

And one of those ways is that have jurors who are not selected based on not knowing anything about the case and their ability to be fair and impartial. All of them are biased, all of them have been in favor of the president or against the president. It’s even worse than the first time around where people have opinions and they’re going on television and talking about their opinions and prejudging the evidence. In this case, all of the senators are arguably victims of the thing being adjudicated, they’re witnesses and they’re potential victims, because their lives are potentially in danger. It was their Senate floor that was desecrated and defiled. You have a couple of them who are arguably in cahoots with the president on this, Josh Hawley and Ted Cruz.

Preet Bharara:

And so you don’t have partial and unbiased jurors in so far as the Senate goes. And this guy David Schoen on TV was making the point, I guess he only would make half the point that you have democratic senators who have made their opinions known about the evidence and that maybe they should be called as witnesses at the trial to explain how it is they can be fair. He’s leaving out by the way, that there’s an equal number of Republican senators about whom the same thing could be said. And so it’s a wash. That’s how it works, that’s the political system that was set up in the constitution by the founders. When you have one political branch adjudicating an issue with respect to another co-equal branch of government, it’s not like a trial people like to say it’s like a trial. Sometimes they use that as an excuse to not comment about what their vote is going to be, and other times they don’t worry about that at all. It’s not a trial in the pure sense that we think about it doesn’t mean it’s not okay.

Anne Milgram:

So Preet, what do you think if Trump argues the big lie? If it’s trial by lie, essentially that’s the defense or the defense is two parts, which I expect it would be. The process, you can’t do this because I’m a former president now. And by the way, the election was stolen from me. And I believe that, and my words were not intended to incite violence, they were just intended to make clear to the supporters. Or even if he goes farther and says, as I think is possible that he says, “Yeah, the election was stolen from me. And yes, I called people to Washington DC with my tweet for January 6th. And I did all these things, we funneled money to support these rallies or whatnot.” If he does that, what does that do for possible prosecution of him on insurrection or sedition?

Anne Milgram:

Because it feels to me like there’s this key point here, which is under the law, if you’re going to prosecute someone like Trump, you would have to prove the intent to incite violence. It’s not enough just to have said something that results in somebody becoming violent. And so what does that do for a possible… And I’m not saying that I think Trump is going to be prosecuted criminally. I just think that sort of doubling down on the big lie, it’s almost an admission in some ways, if he really went full into that saying, “Yes, the election was stolen from me. And yes, I wanted people to go to the Capitol because this is what Patriots do. They had to take the law into their own hands.” Where would that us on a criminal prosecution of Trump?

Preet Bharara:

Well, I don’t know, I’ve been asking this question a lot of related question of whether or not, if there’s an acquittal in the Senate, should there even be consideration of criminal prosecution by DOJ with respect to insurrection or a seditious conspiracy? I think the best answer is probably it should not affect that deliberation. I’m not saying it should necessarily happen, but because it’s not really a trial because it’s a political act and a political procedure where you’re not going to get the kind of investigation you would otherwise get. There’s no grand jury, there may or may not be witnesses, that the determination of whether or not there should be a future criminal trial under actual federal criminal statutes should be independent of what happens in the Senate probably.

Preet Bharara:

It is true that if there was such an investigation and some future proceeding like a trial in a criminal court, the statements made by the president in connection with this trial probably are admissible and would come in and the more extreme has position, the more it will hurt him. It seems to me that in a normal process with a normal client and with a normal jury, you would make I think the following kinds of arguments. You would say, look, the president of the States made some statements based on a genuine belief that there were irregularities in the elections in various States. He did not call anyone to violence. He did not tell anyone to engage in violence. He did not tell anyone to invade the Capitol. It was not foreseeable. And I think there’s counter-arguments to all of these, obviously, but I’m just making the best argument that I would think reasonable defense lawyers would make. It was not foreseeable that they would engage in violence. He didn’t hear the people in the back of the crowd saying that they wanted to do various things.

Preet Bharara:

He didn’t tell them to visit violence upon Mike Pence. And when the time came, he made a statement saying, go home. Now, the counter to all that is the reporting is that he was actually kind of joyous about the violence that was taking place. There were a million different ways in which it could have been foreseeable. It’s all prefaced by his calls to the secretary of state in Georgia, where he’s trying to undo the election that no reasonable person could have thought that he really did win the election. That’s all a lie to perpetuate himself in power. So there are responses, I think more powerful responses to all those arguments, but those are the kinds of arguments that you and I would have expected to see if this were a normal proceeding, not a circus with a reasonable and normal defendant.

Anne Milgram:

Yeah. I agree with that. And I think you’ve articulated what the strongest defense would be along with very much the process, procedure defense of this can’t be done against a former president.

Preet Bharara:

So Donald Trump is not the only person about whom we’re talking about accountability. They’re also all the people who actually engaged in the violent insurrection on that day. There are open cases on hundreds of suspects, the first conspiracy charges were brought. So now we’re a few weeks on, how do you think the Justice Department is handling the cases against the individuals who invaded the Capitol?

Anne Milgram:

I think there’s still a lot to come. And so it’s been reported, and I don’t think anybody’s given an exact number yet, but it’s been reported that there were 800 or 1000 people who entered the Capitol on January 6th as part of the insurrection. And that 200 individuals have been charged at this point in time and almost 200 people… And that there are about 400 individuals total who have cases opened on them. Meaning a lot of people have had cases open because they were identified as having been in the Capitol or been in Washington that day, but those individuals haven’t all been charged. So we know we have almost 200 people charged and we have started to see some more serious charges. We’ve seen some individuals charged with assaulting one of the police officers who had his shield taken, and that shield was a video that many of us saw where the shield was then used to break one of the Capitol windows.

Anne Milgram:

We’ve seen some former military individuals and some law enforcement folks who have since been fired, individuals who were charged with federal and local crimes. What we haven’t seen yet, and by the way I should note, that we’ve also seen and I think we’re going to see more of this, we’ve seen individuals associated with white supremacist groups, hate groups who have been charged. And so we’ve seen Oath Keepers, Proud Boys, Three Percenters, and I think we’re going to see more of that. What we haven’t seen yet and I think is still coming, we haven’t seen charges in the death of officer Sicknick. We haven’t seen charges related to the pipe bombs that were left outside the Democratic National Committee and the Republican National Committee. And we haven’t seen the seditious conspiracy charges, which are essentially two or more people coming together to try to overthrow the government of the United States or to delay, prevent or hinder the execution of any U.S. law or using force to seize, taker or possess property of the United States.

Anne Milgram:

That seditious conspiracy is a very serious charge. It has imprisonment up to 20 years, and I think we will see some of those charges brought against the ringleaders. So I think we’re seeing that the FBI is blanketing the country. There’s something like, I don’t know if you’ve seen this, there’s something like over 200,000 tips and images that have come to the FBI. A lot of folks have come forward to identify people that they know who were part of the riot, the conspiracy that day. And so I think that there’s just a lot left to come. And you and I both know and I’ve heard some people sort of asking the question of why haven’t we seen the more serious charges, and it does appear that there are some groups and some individuals who were planning this for a long time.

Anne Milgram:

This was a concerted effort, there were maps of the Capitol and the Capitol tunnels being distributed amongst individuals online. And so this is going to have turned out to, I think, have been a very strategic and thoughtful through insurrection on behalf of many people. Those charges will come, but as you and I both know, and it’s worth I think just reminding folks, investigations take time, you want to build your case. Because people haven’t been arrested, they weren’t arrested that day, the FBI has time to pull phone records, pull internet comments, talk to witnesses, view video of that day. So they’re able to do a really thorough job, and then those cases are then brought to the grand jury. So I wonder what you think, but I think we’re about to see a lot more serious cases within the next sort of three or four weeks.

Preet Bharara:

Yeah. No, I think that’s right. There’s a lot of people to pursue and there’s a lot of evidence because it was done publicly. And for a period of time, people were very openly talking about what they did and sharing videos of what they did. The other thing that may be relevant to future trials is the perspectives of some of the victims. I don’t know if you saw this last night, but it was trending on social media and it got a huge viewing. AOC, Alexandria Ocasio-Cortez, Congresswoman from New York did an Instagram live last night that is incredibly compelling where she goes minute by minute through her day on January 6th, talking about how harrowing it was and how she really thought that she was going to die that day. And I think there are still lots of testimonials like that, that bear on the urgency of that moment and how terrible it was and how close we came to just utter complete deadly catastrophe.

Preet Bharara:

Five people died, but it could have been a lot more than that. And I think that’s still not sinking in completely into the American consciousness and I think it will. And when you see these trials play out, real trials, not like the thing that’s happening in the Senate, that is a bit of political theater. I think we’ll have a better sense of what happened when prosecutors marshal their case, marshal their evidence, give a lot more details. Talk about the communications as you describe, I think it’s going to be very compelling.

Anne Milgram:

I saw only a very small amount of the AOC Instagram, but I agree with you. I thought it was very compelling and I thought she did the right thing in one very important sense, which is to say, stop asking me to move on, stop sort of telling me that I should let this go. We haven’t had an accounting for January 6th, we have to deal with it and it’s critically important. And to sort of talk through and to just remind us what it was like for the individuals who were there that day, all of whom didn’t know what was going to happen, didn’t know if it was going to end up okay. And again, five people died, I think an additional Capitol Hill police officer has committed suicide, maybe two. And so it’s a devastating tragedy that I think could have been even worse than what we’ve seen.

Anne Milgram:

And I think her argument, which is that it’s not time to turn the page yet. This was traumatizing and there’s something real here that we need to reckon with, I think is completely right. And so I thought it was very powerful. I also think Preet, we are going to see trials to your point about we’re going to watch evidence go in, there are going to be members of these hate groups in particular that want their moment, and that want to take the stand and argue for white supremacy and argue in favor of this lie that Donald Trump won the election. And so I expect that we’re not going to see 200 trials. Many of these individuals will plead guilty, the cases many of them will be disposed off, I think probably fairly quickly, but there are some particularly the individuals who end up being charged with very serious federal crimes like sedition or homicide.

Anne Milgram:

Some of those individuals I believe will go to trial, not all, but some will. So I think we are going to watch some of this play out. I guess one question for you that I’ve thought a lot about recently is that I think we have this tendency to look to criminal cases just to answer systemic problems. And my view is that criminal cases are critically important for individual accountability, a conviction of an individual doesn’t solve a systemic problem in the same way that legislation or a 911 type commission that leads to changes in policies and procedures or really deals with underlying challenges could do. And so I sort of feel like I think it’s really important and I’ve been following the riot cases very closely, but I don’t want people to think that that’s enough. That even if all those cases are successfully prosecuted, I don’t think it’s enough to answer the questions about how this happened, what went wrong and sort of where do we go from here?

Preet Bharara:

No, I completely agree with that. For years I’ve been saying, particularly when I was in office, that prosecutions are not going to solve systemic problems in society, whether it’s corruption in Albany or corruption on Wall Street or addiction or the opioid crisis, it’s a part of the solution, but it in no way solves everything. And here what you have is a subset of the population who’s prepared to believe a lie. Who’s prepared to believe that violent overthrow of the government is okay. And another subset who believe in the conspiracy theories of QAnon, and that’s not going to be solved by some prosecution.

Preet Bharara:

In fact, arguably if you’re just combating those kinds of divisive forces in our country with legal prosecutions, it might rile those folks up more. And I’m not smart enough to know how you heal the divide. I know that Joe Biden keeps saying helpfully and appropriately, but it’s not enough that he plans to be the president for all Americans, not just the people who voted for him and that’s a start. But I think we have a long way to go and I think we’re going to have a lot of problems along the way so long as you have people like Donald Trump, even as a former president riling people up, up to the point of incitement.

Anne Milgram:

Well, also this defense, the big lie defense is just pushing the country farther apart. And again, this sort of desire to turn the page and to sort of move forward with unity, it’s not possible right now given where we’re standing, particularly with Donald Trump saying, “I want my lawyers to argue that the election was stolen from me.” It’s sort of putting that pressure on the constant polarization and it’s going to force in some ways the Republican senators and others to go on record on this. And again, look, I think Joe Biden is saying the right things. I think the call to unity is the right one, I also think that there does have to be a reckoning for what happened. You can’t turn the page and pretend something horrific that is a deep existential threat to the U.S. democracy didn’t happen.

Anne Milgram:

And I think if you don’t understand it and really make the effort to see what went wrong, because a lot of things went wrong that got us to that moment, then it’s going to be really hard to prevent it from happening again. And I think that the goal of all of us, it’s not to punish people, in some ways, obviously under the law in criminal cases, it will be to punish people and to hold them accountable. But the purpose of this larger compensation is not to vilify members of the Republican party, it’s to really understand what happened, what decisions were made, whether sufficient checks and balances exist to prevent this from happening again.

Anne Milgram:

And again, there’s an argument for national reckoning. The difficulty is, and just to be really fair, we’re also in the middle of a global pandemic, which is exacerbating everything. And we’ve seen hundreds of thousands of deaths in the U.S. very struggling vaccine effort up until really now. And I think there’s still a lot of challenges. So I very much think that there are a lot of questions of how this gets dealt with that will impact our country for years to come. Impeachment is just one of them, cases against the rioters is just one of them, but there’s a lot here that needs to be worked through.

Preet Bharara:

So there’s other legal news, including all these efforts that Biden has been making to undo things that president Trump did when he was in office. And one of the raging controversies has been how to handle the border. What do you think of the actions of the Biden administration there?

Anne Milgram:

Well, I think one of the first things that Biden, president Biden did was to do the executive order on immigration and propose potential legislation on immigration. And then we’ve now seen the Department of Justice rescind the Trump administration’s Zero Tolerance, border policy. And you and I spent a lot of time on CAFE Insider talking about the fact that, that Zero Tolerance policy, meaning every single person who crossed the border, who could be charged with a federal of illegal entry, had to be charged. And that’s what led to the family separations because the parents were being charged criminally and the kids were being separated. And so what DOJ has now done is they’ve gone back and said, we don’t have a Zero Tolerance policy. We look at each case and justice requires that it not be this blanket policy that every single person who crosses the border gets charged, we’ll look at each case individually do what’s right under the facts of that case.

Anne Milgram:

And that Zero Tolerance was what had sort of directly led to the child separations. And so by removing that Zero Tolerance, it’s a really important step back from the family separation policy. And again, the Trump administration had stepped back largely from that following the outcry, but there were still some children that were separated and DOJ is basically saying, “No more, this goes against what we believe in as people who enforce the law with justice and fairness.” And so I think maybe in some ways it can be seen, some people have argued it’s symbolic, but I personally think it’s more than that. And it was an important statement by DOJ that they’re not going to just blanket do what the Trump administration did.

Preet Bharara:

Yeah. I think they made that clear from the beginning, and I think it’s a point of great controversy and shame for our government. So yeah, I’m all on board. In this time of the new administration and looming impeachment and executive orders and debate about the prior election, you think it’d be hard for some other story to pierce through, but that happened last week with respect to the stock market. Lots of people have been asking questions about it. I think a lot of this is still murky, and I’m not sure that there’s any fundamental criminal case that could be made out of it, but we should talk about it for a second.

Anne Milgram:

We also had a listener question from @cdurso96, “One of the biggest questions on my mind in this whole GameStop saga is if any criminal charges may be possible against any parties? Always value your thoughts and insights.”

Preet Bharara:

And it’s not just GameStop, there were some other companies, including Blockbuster and BlackBerry and AMC Theaters. All companies that are not doing well, all companies that don’t have a business model that’s conducive to profit in the pandemic and in the modern world. Obviously people are not going to see movies during the pandemic, people are not going to brick and mortar stores and malls like GameStop to buy video games when you can just download them on your computer. And because they’re not well-performing stocks of companies, there have been a lot of institutional investors who have taken what are known as short positions in those stocks. Meaning that rather than what normally people think of when they think of buying stocks, ordinary investors usually buy long positions, you buy a certain number of shares in a publicly traded company. And if the company does well, and it makes more of a profit and more revenue, and it looks like it’s a promising company that has been run well, and it continues be run well into the future.

Preet Bharara:

It goes up in value and each individual share goes up in value because the company as a whole goes up in value. You can take the opposite position, which is known as a short position, such that you can make money if the company goes down in value. And lots of, as I said, institutional investors including hedge funds had taken short positions on companies like GameStop. And in recent weeks coming to a head last week, lots of individual investors, retail investors by kind of banding together on a site called Reddit, decided whether to be disruptive or for some other reason that they were going to drive the prices of some of these stocks and most notably GameStop up. What does that do? That helps them increase their value in their own long positions as they’re buying stock in GameStop. But the other effect it has is by dramatically increasing the value of these companies in which hedge funds had short positions, many hedge funds, not all, but many hedge funds had short positions, it ruins the investments of those hedge funds.

Preet Bharara:

I think by one analysis, GameStop had its shares go up about 1700% just in the last number of weeks and similar rises for AMC and for Blockbuster and other companies. And so this has sparked a great controversy. Is there something unlawful about this? Does it reflect a kind of reverse manipulation of the stock market by individual investors, which maybe shouldn’t be blamed so much because after all institutional investors like hedge funds have been known to manipulate the market, and this is payback or comeuppance. Then there was a follow on controversy of once the price of GameStop went through the roof, a popular individual platform on which people buy stocks, Robinhood stopped all trading in GameStop. And then the question there becomes, why is it the case of the individual investors who decided to drive up the price of GameStop, not be able to get out of their positions if they wanted to, when the same prohibitions didn’t befall the institutional investors who were trying to work out its positions.

Preet Bharara:

So a lot of people are flapping their gums about this, a lot of people are talking about it. A lot of people in both parties… The interesting thing about Robinhood’s decision to haul trading, I think has been condemned by all sides. And just to make the bridge between our prior conversation about AOC and Republicans to this issue, you would think there would be no crossover or no bridge to these two topics. But AOC, the Congresswoman in responding to this issue of GameStop said, “This is unacceptable. We need to know now more about Robinhood app’s decisions to block retail investors from purchasing stock while hedge funds are freely able to trade the stock as they see fit.” And she goes on saying, “We should do something about this.” Ted Cruz replied, “Fully agree.” Maybe a moment of opposites on the political spectrum being able to get together in a bipartisan way.

Preet Bharara:

You know what AOC’s response to Ted Cruz was, “I am happy to work with Republicans on this issue where there’s common, but you almost had me murdered three weeks ago. So you can sit this one out. Happy to work with almost any other GOP that aren’t trying to get me killed. In the meantime, if you want to help, you can resign.” So it’s united a lot of people in I think a view that there should be a hard look by the SEC of the stock market, how manipulation gets done. Elizabeth Warren has been talking a lot about reform, she would like to see more precise rules about market manipulation. But at the end of the day, thinking about it, myself, having overseen financial fraud cases and actually talking to some people who are still in that business, probably not the case that there’s a violation of a federal criminal statute, but we’ll see there’s much more to that to learn. Did you have any reactions to this?

Anne Milgram:

So I do have a few reactions. The first is I didn’t realize that BlackBerry was still a company. I sort of, I have to be honest, I knew GameStop and AMC were struggling companies-

Preet Bharara:

Well, Blockbuster is now a penny stock and it’s like in liquidation.

Anne Milgram:

Yeah, that’s another one I didn’t realize was still a company. But besides that, I think it’s very interesting, the first sort of GameStop question is this question of you’ve got these small retail investors who make a decision to work against the hedge funds that have shorted these stocks very aggressively. And there are questions, I think something like 100% of GameStop’s stock was eligible or available to be shorted, which is unusual. So there are some questions just about things like that, but more or less you do see these individual retail investors joining together and pushing back against the hedge funds. And I think there are questions of was their market manipulation, the people who led that, but also just a broader question about what hedge funds do, how they short stocks and how retail investors often when they’re on their own, they can’t push back, but when they’re joined together, they really created what was an incredible rally and incredible surge.

Anne Milgram:

And so I think that that’s one set of questions. The second set of questions that I also find really fascinating, and I do think requires a deeper look is what Robinhood the app did. And so sometimes the SEC will stop trading. And we’ve seen this before, when the market is absolutely crashing, the SEC will sort of put a hold on market trading and they’ll do that for a short period of time to stabilize and to basically sort of stop a run, but they do that. It’s very rare that they do it, but they do do it sometimes, here, the SEC didn’t do that. Robinhood, which is an app and their funding stream is very interesting. So they’re free for users and that’s why a lot of individual investors, retail investors, people sitting at home in the pandemic trading, doing day trades, they use Robinhood a lot.

Anne Milgram:

And so you’ve got that app that gets a lot of its funding through different structures, including some of the institutional investors seem to be contributing or sort of some percentage of the buys end up going back to Robinhood. And so that leads to this question of, is there this unholy alliance between Robinhood and these institutional investors like Citadel and some other big hedge funds and venture capital firms? And sort of that I think is where this question with Robinhood really comes to a head because if Robinhood stopped trading and it was completely neutral and they didn’t have any financial payments from the hedge funds, that’s one thing. But here, it’s pretty clear on its face that there is this financial relationship of some sort. And so that’s why I think it warrants more questions. And again, I also think they’ve stopped the retail investors they can sell, but they can’t do additional trades other than sort of getting out of the stock.

Anne Milgram:

And so I do think that there are questions that need to be answered particularly, upfront there’s a question of was there market manipulation, and that will be for the SEC and potential criminal investigations or congressional investigations to look at. And then there’s this separate question, which I think is a really important question in terms of apps and the internet, which is what do you do when in order to make something free, you’re taking a percentage or there’s some remuneration that’s coming from a big investor who then… Obviously the hedge funds, and I saw that Robinhood said, “Nobody told us to stop trading,” but I personally do not believe for a second that calls were not made to Robinhood saying, “You got to stop this. This is crazy.” And the hedge funds are losing billions-

Preet Bharara:

Yeah. Look, Melvin Capital lost $2 billion. I think there’s an even more fundamental question that lawmakers and others in the marketplace need to think about. It’s long been said, it’s been said more recently as well, that the stock market is not our economy, it’s not reflective of the economy, it’s a different thing. Whereas to think about the strength of the economy, you look at things like GDP and job growth and unemployment claims, and you look at various sectors whether they have strength or don’t have strength, energy, retail, et cetera, the stock market is essentially a set of bets that people make about the future of companies. But I think even more interestingly we see in the last week, the stock market in some ways is not even reflective of the market. In an ideal world, I think economists would say, and I’m not an economist and they don’t trade individual stocks.

Preet Bharara:

What you want to have happen, I think is that a stock price should reflect the value of the company. And obviously there are a million ways to reflect the value of the company. And sometimes companies are undervalued and so smart investors buy low and then when people come around to the view that that company’s stock is undervalued, then the price goes up and that’s all well and good. But what happens when you have things like this that look like market manipulation, maybe don’t meet the statutory definitions, but when prices of stock move up or down completely out of whack compared to value of the company, it causes people to wonder, what is up with this stock market? And lots of people have been using the phrase casino in the last week, I think it’s a fair use of the term, no matter where you stand on the spectrum on stock trading.

Preet Bharara:

And it causes people to wonder, is it a game even though real people with real money, billions of dollars, both on the retail and on the institutional side can sway in the wind. Why is it the case that a company that’s failing suddenly based on nothing other than the whim of a bunch of people deciding to invest, cause that stock price to go up dramatically. Now, I don’t think there’s a law against doing that. I think it’s another one of those things where you think about the institution itself, how you can foster good conduct and rational conduct. But I think it also scares people away from the stock market. The other thing I’ll say I’m echoing what some people have said, who I think are very smart about the markets.

Preet Bharara:

There’s some sense of jubilation on the part of the people who did this “disruption,” and people can be stuck in these positions that they’ve taken in GameStop and these other stocks, because maybe they’re not as sophisticated as the institutional investors. And so it might feel good for a moment for some of them to have busted some of these hedge funds, but people should be very, very careful going forward about engaging in this kind of activity, because you can be going into a stock sort of after it’s already risen a whole bunch and be stuck in the position when it goes down and you can lose your shares and the retail investors, unlike the hedge fund folks, probably don’t have the wherewithal to sustain a big gigantic loss.

Anne Milgram:

And they don’t have places or other investors that can shore up their losses for sure. I think that’s a great point. Look, I also think it’s a great point that it raises a lot of questions about the stock market and I think it’s so wise to sort of make it clear that the stock market is not the economy. Because I do think, look, even if you look at the way the news covers the stock market, it’s often the sort of increases and decreases. And sometimes those are motivated by changes and things like the unemployment numbers. And so there’s obviously a correlation between those things that you talked about, the GDP, job growth, unemployment, the sectors, some really critical sectors, but they’re not the same thing. And I think that’s a really important thing to note.

Preet Bharara:

Anyway, look, there’s lots of calls for looking at this from the Democrats and from the Republicans. And usually when both parties say they should take a look, probably there will be a look and we’ll come back and report on what happens with the whole GameStop scenario.

Anne Milgram:

So Preet, there’s one other thing that’s happened recently since January 20th, actually that I think we have not yet talked about but really should because when Donald Trump moved into the white house four years ago in 2016, reporters who visited the Oval office noticed a strange object sitting atop the resolute desk. And as you know, the resolute desk is the desk that the president uses in the Oval office, Joe Biden is using it now. One reporter, the Financial Times’ Demetri Sevastopulo wrote, “My eyes were drawn to a little red button on a box that sits on his desk,” talking about a little red button that was on the resolute desk when Donald Trump was in the white house. And so this reporter jokingly asked Trump if it was the nuclear button and Donald Trump reportedly responded. Preet, do you know what Donald Trump said?

Preet Bharara:

I do because I have this story in front of me too, Anne. He was like, no-

Anne Milgram:

I’m going to let you play Donald Trump again, it’s been a while.

Preet Bharara:

Yeah. Thanks. I’m not going to do the accent. He said, “Essentially no, everyone thinks it is. Everyone does get a little nervous when I press that button.” And then he pressed the button, and what happened?

Anne Milgram:

A butler swiftly brought in a diet Coke on a silver platter.

Preet Bharara:

That’s how I get my diet Coke served to me.

Anne Milgram:

You’re a diet Coke-

Preet Bharara:

I’m drinking a diet Coke as we speak.

Anne Milgram:

You’re a diet Coke aficionado.

Preet Bharara:

Yeah, it actually made me kind of upset when I found out that Trump drank a lot of diet Coke, so I almost kicked the habit.

Anne Milgram:

Yeah. So it turns out that president Biden, I don’t know if he’s not a fan of diet Coke or if he just doesn’t want there to be a red button on his desk that has essentially a butler bring in a diet Coke at his beck and call, but he’s gotten rid of the diet Coke button.

Preet Bharara:

Good for him.

Anne Milgram:

I agree.

Preet Bharara:

Change.

Anne Milgram:

I don’t think there’s going to be another button.

Preet Bharara:

Well, when the next we speak to you, it’ll be the morning of the impeachment trial and we’ll see what developments occur between now and then. And if there’s changes in the president’s legal strategy, or there could be a whole new set of lawyers in a week also.

Anne Milgram:

That’s right. And this Thursday Preet, I’m going to log on to watch the CAFE live show that you’ve got coming with Barb McQuade, Melissa Murray, Asha Rangappa, and Joyce Vance at 6:00 PM. And folks who want to join me in watching that can sign up at cafe.com/live.

Preet Bharara:

Yeah. Please join us, it’s going to be a lot of fun.

Anne Milgram:

See you soon.

Preet Bharara:

Take care, Anne. That’s it for this week’s CAFE Insider podcast. Your hosts are Preet Bharara and Anne Milgram. The executive producer is Tamara Sepper, the senior producer is Adam Waller, the technical director is David Tatasciore. And the cafe team is Matthew Billy, David Kurlander, Sam Ozer-Staton, Noah Azulai, Nat Wiener, Jake Kaplan, Geoff Isenman, Chris Boylan, Sean Walsh, and Margot Maley. Our music is by Andrew Dost. Thank you for being a part of the CAFE Insider community.