Trump Losses May Cost Taxpayers & Superstar Lawyer Goes to Prison

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1:43This is Bloomberg Law with June Grosso from Bloomberg Radio. There's been an unprecedented deluge of hundreds of lawsuits challenging the Trump administration's boundary-pushing uses of executive power, increasing the amount of taxpayer money at stake. The U.S. government is on the hook for potentially millions of dollars in legal bills demanded by successful challengers to some of the administration's most controversial executive actions and policies. According to a Bloomberg news analysis of court records, attorneys have sought fees exceeding$100 ,000 in at least 10 cases over the past year, totaling more than$2.5 million.

2:30Joining me is Bloomberg legal reporter Zoe Tillman, who's crunched the numbers. So Zoe, how much could the government be on the hook for legal bills for opposing attorneys who won their cases? Yeah, you know, it's hard to say. You know, we started with the place where we're at now, which is potentially millions, because we've flagged at least a number of cases where there are outstanding pending requests that total more than$2 million so far. But that's only in 10 cases. And we know that there are a number of cases where the Trump administration has lost in the district court is appealing those losses and where attorneys have made clear, you know, should we prevail on appeal, an attorney fee motion is coming.

3:14And there's always this delay with these types of requests where you can't get paid until litigation is completely over. So we may not see the final dollar amounts tally up until, you know, two, three years after this early deluge of litigation against the administration. But, you know, we're certainly dealing in the realm already of millions of dollars. So tell us about the Equal Access to Justice Act of 1980 and what it requires. So the thinking was at the time that, you know, individuals, ordinary Americans, small businesses, nonprofits, entities that, you know, are not deep pocketed, may not be able to hire big law firms and lawyers to vindicate their rights, that they should not be priced out of pursuing what otherwise be legitimate claims and grievances against the government.

4:08And the thinking by Congress was, you know, if they set limits on who would be eligible to recover their fees. So it's, you know, there are net worth caps for small businesses. There are employee caps for nonprofits, employee caps. So the idea is to keep it to people who entities that, you know, are not big corporations that obviously, you know, may not need the government to pay back their legal fees. And the thinking is, if you're a prevailing party, and the government's position in litigation was not, quote, substantially justified, which has been interpreted pretty broadly by courts, you know, even if DOJ says, we made a good faith argument here, if they were found to have certainly done something obviously unlawful, unconstitutional, courts have been pretty willing to say, you know, that was not a substantially justified position that you took in this litigation.

4:56And the courts can award fees. The amounts tend not to be very high in doing the historical analysis. In most cases, setting aside Social Security and veterans benefits cases of which there are thousands and that's sort of a different animal from what we're talking about here. Most of the time, these fee awards fall below$100 ,000. So it's not a lot of money, but for an ordinary everyday person, tens of thousands of dollars, if they had to lay out that money to vindicate their rights is certainly a significant amount of money. So, Zoe, in looking at the list that you have in your story about the requests for fees, the top requests have to do with cases involving research funding cuts.

5:39And the nonprofit Association of American Universities is looking for more than$1.5 million for its attorneys. Of course, one of their attorneys is Paul Clement, the former Solicitor General, who's argued more cases before the Supreme Court than anyone else. Right. That's the four cases that deal with the rate that agencies reimburse research institutions for the indirect costs of doing government research. So, you know, the costs of running these labs of, you know, the sort of overhead, not the core funding for the project. So the agencies have tried to cut that rate down. And research institutions have said, this is the lifeblood, our ability to function depends on getting reimbursed, not just for the hours that we do the experiment or the research, but for the cost of doing business of research.

6:31So, yes, those were the four cases by the Association of American Universities where Paul Clement, who is, you know, boldface name in legal circles for many years, is among the lawyers, which include other very accomplished lawyers, other big law firms in Washington. But this is some of the highest dollar requests because it has involved these very experienced veteran Washington lawyers. Well, I was going to say, are they looking for$500 an hour for Paul Clement? Because that's sort of a drop in the bucket for him, isn't it? It's not really what he would normally charge. I mean, they charge thousands of dollars now.

7:06That's right. So the Equal Access to Justice Act does set a baseline for fees. And normally, I think the baseline rate is it's like$125 an hour with wiggle room for cost of living. So I think the actual baseline year to year tends to be closer to like$200 and$250 an hour. But the law allows for some discretion. If lawyers can say, you know, there was special expertise that they brought, it was extraordinary litigation involving novel questions of law, you know, if it was a heavier lift than your ordinary lawsuit against an agency, there is this ability to ask for higher rates. Now, the government will come back sometimes and say, those rates are too high.

7:50You've put in for working too many hours on this. We don't think that's reasonable. In those cases, they're also arguing that this association is not eligible to get fees, that they were really suing on behalf of their members. The association has said that's not what the standard is. There's litigation about this. So, you know, we're seeing some cases where the government is reaching settlements and acknowledging that there is this law that compels them when they lose, in many cases, to pay up, but also in some cases, exercising their ability to back and to say, you know, even if we do have to pay fees, it should not be that much.

8:27And so if they can't reach a settlement, a judge will decide on the amount? That's right. They'll decide, you know, were they a prevailing party? Was the government's positions substantially justified? Are the requested fees reasonable? And then, you know, ultimately, a judge will enter an order saying, I find the government has to pay, you know, yes, you have to pay Paul Clement, but only$350 an hour, not$500 an hour, they get into that kind of granular level of this. Now, immigration cases, the Supreme Court is going to hear a case involving the Equal Access to Justice Act and immigration? That's right.

9:06So, you know, we've got a couple of different buckets here, and that's part of where our estimate of this potentially being millions of dollars at stake also includes these other cases where if you have your standard, you know, I sued an agency because they did X with grants and we won and now we get money. Second category is habeas cases, where the Trump administration has enacted a very aggressive push to ramp up immigration arrests and deportations. And that has resulted in a concurrent, you know, increased explosion, really, of litigation to try and free people from immigration custody while they are fighting whether they can be deported.

9:44And in cases where the government has lost, where judges have said, you know, you have to release this person, not necessarily that they can't be deported, but, you know, they can't be in custody. Circuits have split about whether that counts as a, you know, prevailing party substantially justified or not under the Equal Access to Justice Act. And some courts have awarded fees and the amounts tend to be smaller than the six figure requests that we're seeing in these really high profile cases. But there are a lot of these cases. So, you know, the stakes are also high for what the Supreme Court does with this next term.

10:21You know, if it's 500 cases with a couple thousand dollars in each awarded, you can see how the financial stakes there balloons if the court says that they can recover these attorney fees. Now, we should say, you know, this court has, with a conservative majority, has largely sided with the government on issues related to immigration. So it does seem like there is an uphill battle for advocates here who are arguing that this law should cover people who successfully sue the government to get out of custody. But it's a big ticket issue on many levels, both in terms of the rights of people in these cases and also the amount of money that is at stake if the government loses.

11:03Explain what the judgment fund is and how it's different from EJA. They're mostly separate. EJA fees are typically paid by the agency that was sued and that lost. So there are each year, you know, it's analysis of how much each agency has had to pay in EJA fees and how many claims they've had to pay out. The judgment fund is sort of separate. When you sue the government because you tripped and fell on the National Mall and you got hurt because a government employee in a car hit your car, you were in an accident. or as we've increasingly seen, you know, cases against the government for damages for certain types of constitutional violations, other types of damages, harms, tort actions.

11:53Those are not EJA cases. And when you get attorney fees for winning against the government in those types of cases, or if you reach a settlement, that money typically comes out of the judgment fund, which is a central pool of money. It's an indefinite permanent appropriation from Congress that makes money available to the government to pay court judgments, which can include attorney fees. Sometimes there is some overlap depending on how cases are styled against the government. But when we're talking about sort of bread and butter, suing agencies for carrying out policies that this administration's opponents contender unlawful or in any administration, when they win attorney fees, it tends to come out of this EJA bucket as opposed to the judgment fund bucket with the understanding that there is some fuzzying of those lines sometimes.

12:45I was surprised in your story. You also talk about there's a jazz musician who's looking for$250 ,000 in legal fees. Tell us about that case. Yeah. So this is a case involving the Kennedy Center in Washington, which is, you know, it's not a federal agency. We called it a quasi-public institution. It was created as a living memorial to the late President John F. Kennedy. The board is largely appointed by the president. It received some federal dollars. There is some degree of federal oversight, even though it isn't an agency within the executive branch in the traditional sense. So this case was sort of interesting as a Trump adjacent legal fight that has also now resulted in a fee issue where after the board voted to put Donald Trump's name on the Kennedy Center and to add him to the official name, a number of shows and artists pulled out of performing at the center.

13:44And this musician who had performed, I think, a Christmas Eve concert for many years was one of those artists who withdrew and canceled his performance. So the Kennedy Center sued. And he had said at the time there were public statements, you know, and news reports that it was because of this renaming move. move. He's defeated the lawsuit in D.C. Superior Court, the local court here. Judge found that the Kennedy Center was unlikely to win its breach of contract claim, and also that this was what's often referred to as a slap action. And there was an anti-slap law where the court found that they sued this guy specifically because he was exercising his right to advocate on public issues of concerns.

14:27Judge tosses the case. And he's now arguing, his lawyers are arguing that the Kennedy Center is on the hook to pay their legal fees to the tune of more than$250 ,000. Kennedy Center is not represented by the Justice Department in this instance. It's not quite the same as the other cases that we talk about in the story, but it did seem like this extended universe of when we talk about really the cost of the way this administration has done business and how much of the actions have wound up in court. Can you put a dollar amount on that? And it's a question that I get a lot and I'm always interested in ways of answering, which is, you know, what is the cost of the way that any given administration and president conducts themselves?

15:14And, you know, the Kennedy Center was this example of Trump sort of expanding his reach into different artists around Washington and that getting smacked down. And now the Kennedy Center is potentially on the hook to pay these legal fees. Great research, Zoe. Great story. Thanks so much. That's Bloomberg Legal Reporter Zoe Tillman. Let's talk about health care for a second. It doesn't always work the way people expect it to. If you've ever waited on a prescription refill or had a hard time getting the care you needed, you know the feeling. The system should just work better for everyone. That's exactly what the people at Optum are trying to do every day.

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18:08Tom Goldstein was a star of the Supreme Court bar, appearing 44 times before the high court. But he was living a double life as a high-stakes poker player. And now Goldstein is in prison, serving a six-year sentence for tax evasion and mortgage fraud. The 15-day trial included testimony about multi-million dollar poker pots, Goldstein's lavish lifestyle. And there was even testimony from Hollywood star Tobey Maguire, an avid poker player, who enlisted Goldstein's help in recovering a gambling debt from a billionaire. Goldstein says he'll appeal the verdict. Joining me is Bloomberg Law senior reporter Holly Barker.

18:52Holly, tell us about Goldstein, the Supreme Court litigator, before the scandal. So Tom Goldstein is a prodigious Supreme Court lawyer. he's argued more than 40 cases before the high court. He also founded a website called SCOTUS Blog, which was really a groundbreaking website for access to the Supreme Court. It was launched at a time where the Supreme Court itself wasn't very easy to navigate. He built a reputation for himself in sort of an unusual way. He didn't go to the usual sort of Ivy League schools. He didn't clerk for a Supreme Court justice, but yet he built this really grand career and really great reputation in sort of a scrappy way.

19:40So for legal nerds far and wide, he was sort of a household name long before he was indicted on tax fraud charges. Yeah. So explain the reaction when he was indicted on tax fraud charges. People were really shocked. So in January 2025, at the tail end of the Biden administration, an indictment dropped and it was originally 22 counts. It was winnowed down on the government's own motion to dismiss some of the counts down to 16. The allegations for the tax offenses really revolved around Goldstein's ultra high stakes poker habit, which, you know, there had been some reporting on, you know, people knew he played poker, but I don't think that there was any appreciation for sort of the real scale of what he was doing.

20:30So that aspect of it, I think, alone was shocking. But then also this idea that this really well-respected lawyer may have been engaged in dodging his taxes was, you know, obviously shocking in its own way. So a six-week trial. Tell us about the highlights of the government's case. The government presented lots of evidence that Goldstein had won tens of millions of dollars, sometimes in a single hand, playing poker. And they showed that his office managers, his accountants were in the dark. He wasn't proactively sort of telling them what they needed to know in order to classify his taxes properly.

21:11And at sentencing, what they basically said was that this was a decades long intentional effort. Any omission was by design. He was intentionally opening foreign bank accounts. He had no reason to think that sort of the people he delegated responsibility to for his taxes would be privy to the information that they needed in order to get it right. And, you know, he should have known better. And they also pointed to he had IRS tax audits and people had sort of flagged for him, professionals had flagged for him more than 10 years ago that he needed to be sort of cognizant of these special reporting requirements for gambling and really needed to be careful.

21:52And the government says that instead of sort of responding to that advice and being compliant, he shifted to a new accounting firm and sort of started all over and hid it all from them, too. That was sort of the thrust of it was to the extent that it looked like mistakes or omission or just incompetence or that this guy just wasn't paying attention to his taxes. That was really all by design. And Goldstein had argued that, you know, look, you're right. I did win a ton of money and I didn't always understand exactly how I was supposed to report it. But my losses offset most of my winnings and I was doing what I thought I needed to be doing.

22:31Yeah. And so he gambled and took the stand. And, you know, as we've discussed, when you take the stand, sometimes the jury just focuses on your testimony and everything else goes out the window. So what was he like on the stand? I thought he presented well. He seemed very well prepared. It is a gamble, of course, to put somebody on the stand. But I do think that they sort of needed to do it because nobody else was going to be able to explain what losses he may have had, for example, that would have offset. But there's no other evidence other than his testimony to really cut against what the government was presenting.

23:09So he had to get up there. And I think he did well, but I don't think it was enough. And, you know, I do think oftentimes one of the big risks with testifying in your own defense is that you might get if the court doesn't believe you and the jury doesn't believe you, there's a risk that on the back end at sentencing, you're going to get hit with like an obstruction finding, which can increase your points. for purposes of what your sentencing guidelines range is going to look like. And he did get deemed for obstruction here, but incidentally it had nothing to do with this testimony. Instead, it had to do with representations that he'd made to government agents, like IRS agents, after he knew he was under investigation.

23:51But she actually didn't make a finding of obstruction with respect to his testimony. So it looks like there wasn't sort of a penalty on the back end for having taken the stand, at least beyond how it may have negatively impacted the outcome from his perspective. Now, at the sentencing, the prosecutors wanted eight years, and they said that his motivation was singular, pure, unrelenting greed. I thought he had a gambling addiction. Did Judge Lydia K. Grigsby take into account his gambling addiction when sentencing him? Well, so he has an expert, apparently. The details of all this, the public isn't privy to.

24:33But he has some sort of authority that has prepared a document saying that he's been struggling with addiction. And it seems like there might be other mental health issues that were discussed under SEAL. But the government has suggested at sentencing that it sort of isn't buying it. They actually mentioned that they had tried to subpoena this expert. And the expert had acknowledged receipt of the subpoena, but then just didn't show. So the government actually wanted to call this expert to testify, but it just wasn't available. I think that would have happened during the sealed portion of the hearing.

25:06But I mean, to the extent your question is, did this get factored into his sentence? Grigsby did say that she was considering what she sort of generally specified as mental health issues that were discussed during the sealed part of the hearing and deviating downward from that sentencing guidelines range. And I should say that, you know, the max was higher than the eight years that the government asked for. But the government was asking for the maximum of the guidelines range as it had calculated it. And Goldstein's camp contested the way that it was calculated and said it was inflated. But by the government's assessment, the Senate should have fallen within at least the recommended range was 78 to 97 months.

25:49And we wound up with 72. So Grigsby deviated downwards from that. I mean, I was surprised that they asked for that much and that the judge sentenced him to that long because it's a first offense. What about his career and all the good he's done in his career? And I think he also mentored people. I mean, it almost seemed as if he was being punished for having achieved so much in the law instead of getting a break for that. I think, you know, some of that cuts both ways. When she imposed a below-guideline sentence, she did say she was taking into account his lack of criminal history. And that already gets factored into her actual guideline score for that range.

26:30But she said she was thinking about it again in terms of where she was ultimately going to sentence in. And she also said, yes, he's done a lot of charitable work. He was a great mentor to a lot of people, which came out during trial and in the letters of support that she received for purposes of sentencing. And she describes SCOTUS blog as groundbreaking. So she was giving him some credit for that. But, you know, earlier when she was justifying sort of the need for a custodial sentence and a significant sentence, you know, she said it's extra disappointing when a really accomplished officer of the court engages in conduct like this.

27:10So, you know, while his sort of being a zero point offender, being this really accomplished lawyer, that can help in some ways, you know, maybe because of the charitable work that he did, his mentorship. But it also sort of makes you wonder, well, you knew better. Right. So I think it cuts both ways in that respect. And he spoke at the sentencing? He did. So when he stood up, he explained that because he was planning to appeal, there's only so much he can say. He doesn't want to say anything on record that might upset his appeal or even come into play should he win a new trial. So it was more circumspect, I suppose, than it may have otherwise been.