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Smerconish

Could Stormy Daniels Hush Money Case Be First Trump Indictment? Bank Failure is Second Largest in U.S. History; Experts Say Medical Tourism To Mexico Is Low Risk Despite Kidnappings; Malaysian Airlines Flight 370 Disappearance Remains A Mystery. Aired 9-10a ET

Aired March 11, 2023 - 09:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

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[09:00:27]

MICHAEL SMERCONISH, CNN ANCHOR: We may be about to see what happens when someone is shot on Fifth Avenue. I'm Michael Smerconish in Philadelphia.

The Office of Manhattan District Attorney Alvin Bragg has invited Donald Trump to testify in an investigation into a hush money scheme involving adult film star Stormy Daniels. That's believed to be a precursor to an indictment. Potential defendants in New York are required by law to be notified and invited to appear before a grand jury weighing any charges.

If charged, Trump would become the first former president to be indicted. But wouldn't necessarily slow his current presidential quest? I say not a chance, at least not based on this case alone. Any charges here would stem from the $130,000 in payments made to Daniels during the 2016 campaign.

Apparently, she'd been ready to share her story of an affair with Trump with the National Enquirer. But the tabloids publisher David Pecker was a Trump friend who instead helped broker a deal with Trump's then lawyer Michael Cohen, in which she was paid for her silence.

I've long thought that it was the weakest of the known Trump investigations which generally fall into four buckets. First, the events of January 6, second, the mishandling of government documents including at Mar-a-Lago, third the Fulton County DEA investigation of election interference including the so-called perfect phone call to Georgia Secretary of State Brad Raffensperger, and forth this, the Stormy Daniels hush money.

Merrick Garland appointed Jack Smith as special counsel to look at both January 6 and Mar-a-Lago. Meanwhile, the Georgia special Grand Jury investigating election interference has concluded its work and recommended indictments for more than a dozen people.

It's enough to keep awake any presidential candidate, but when it comes to Donald Trump, no matter what he steps in somehow, he seems to emerge smelling like a rose. While he was being investigated for his handling of classified documents, a process that included the execution of a search warrant at his home, classified information was found in the homes of Mike Pence and Joe Biden, not an apples-to- apples comparison but enough to muddy the court of public opinion and make it seem like he's not alone. In the Fulton County case, the grand jury foreperson gave media interviews casting a shadow on the work of that investigation, and at a minimum, giving Trump's lawyers a basis to question the process.

I've long thought that the Mar-a-Lago case was the most perilous to Trump. The facts seem pretty straightforward and damning. The Manhattan D.A.'s prosecution based on Stormy Daniels, not so much. The money was paid in 2016, seven years ago, and any prosecution would have to rely on a statute of limitations having been told while he was in office that's unprecedented and untested. It also would rely on what the New York Times calls a novel legal theory, the uniting of two cases falsifying business records, and a violation of state election law.

Only by connecting the first to the second, would it be a felony. And if that strategy should fail, the Manhattan D.A. would be left with a seven-year-old misdemeanor case, based on sex brought against a former president and current presidential candidate who leads his own party's polls.

I thought we learned in the 90s that sex scandals alone don't tank a president's popularity. Also, I find it curious that Alvin Bragg having decided not to prosecute Trump in other matters, would choose this hill to die on. Remember, when Bragg announced that he would not move forward in a case about Trump's business practices, two lead prosecutors quit the department. One, Mark Pomerantz leaked his resignation letter to the press. And it said that Braggs predecessor Cy Vance, quote, "concluded that the facts warn in prosecution, and he directed the team to present evidence to a grand jury and seek an indictment of Mr. Trump and other defendants as soon as reasonably possible."

Pomerantz has just published a book about this. It's called the "People versus Donald Trump, An Inside Account." When Bragg won a criminal case for fraud against the Trump Corporation and Trump Payroll Corporation, he did not pursue Trump personally. Instead, he seems to be honing in on a much smaller malfeasance.

It should also be noted that even after Trump left office and shed his immunity, the federal investigation of the Daniels case that which had sent Former Attorney Michael Cohen to prison in which Trump had been referred to as individual number one was not prosecuted by the U.S. attorney in the Southern District of New York who instead took a pass.

[09:05:02]

Now of course Trump seeks to exploit all of this by crying witch hunt. At Truth Social, he said, "I did absolutely nothing wrong. I never had an affair with Stormy Daniels. Nor would I have wanted to have an affair with Stormy Daniels. This is a political witch hunt, trying to take down a leading candidate by far in the Republican Party, while at the same time also leading all Democrats in the polls," et cetera, et cetera.

You have to wonder what Merrick Garland, Jack Smith and Fani Willis were all thinking when news broke that it's Alvin Bragg who might get the first bite at the apple. If each of the others is seriously contemplating indicting Trump, you'd have to think they'd rather the first claim be the strongest. The Stormy Daniels case, it sets the wrong tone. It's the one that most plays into Trump's claim of a politically motivated prosecution whether that's true or not. It could define all those that follow.

All now in the context of a presidential race well underway, Ron DeSantis arrived in Iowa on Friday, Donald Trump is headed there on Monday. It's time for all of these prosecutors to play their hand or fold.

Joining me now is Renato Mariotti. He's a former federal prosecutor himself, legal affairs columnist for Politico, co-host of the podcast, it's complicated, and a partner at a firm called Bryan Cave.

Renato, welcome back. What's your take on this week's developments?

RENATO MARIOTTI, FORMER FEDERAL PROSECUTOR: Well, I agree with you, Michael, this is the weakest of the cases against Trump. That said, I think it causes problems for Trump. In other words, you know, you laid out this array of potential charges. I will tell you. It is always difficult to try to fight a multi front war and anything that Trump says or does in relation to this case, it just makes it more complicated if he ultimately faces charges in Fulton County and elsewhere. Certainly, I think he will unfold.

SMERCONISH: If in fact, he's indicted on multiple fronts, does it matter which goes first? You heard my take on this, I think to lead with the week might tank those that follow, perhaps you disagree?

MARIOTTI: It does matter but it's more complicated than that. In other words, there's often a very careful dance that's done by defense attorneys to try to slow down one case and speed up another in order to get the trial in one case before the other. You want -- the defense wants the trial and the weaker case to go earlier. But that's not always -- doesn't always work out that way. And so, you know, it'll be interesting to see how that all develops.

I agree with you that, you know, certainly Jack Smith would prefer that these other prosecutors aren't out there. Of course, I'm sure you know, some of the prosecutors let's say in the R. Kelly (ph) case -- cases were didn't want all of those other prosecutors charging as well. It's just it's part of how the system works.

SMERCONISH: Renato, why do you think that Alvin Bragg having passed on, I think what you and I regard as better cases would have chosen this one to hone in on?

MARIOTTI: Yes, it's interesting, Michael. I originally thought that Alvin Bragg made a very brave choice by deciding to take a pass on what appeared to be stronger charges against Trump. These are the charges that ultimately were taken up by Letitia James in a civil case.

But you know, later on he -- I think was misleading the public regarding whether or not that investigation was still ongoing. It just made me wonder whether or not public pressure, because he's obviously an elected official had something to do with that. I don't know whether that had something to do with the -- with him deciding to go forward with this prosecution. But I think it's a legitimate question.

SMERCONISH: I said that Ron DeSantis was in Iowa yesterday, I perhaps also should have said Nikki Haley was in Iowa yesterday, Donald Trump will be there on Monday. Of what concern or consideration is the fact that this race is beginning to both Merrick Garland and to Jack Smith? How does that impact their decision making and timetable?

MARIOTTI: Well, it's a great question. I do think that the fact that that race is ongoing is what caused Merrick Garland to appoint Jack Smith in the first place. And I think what Mr. Smith has to weigh is whether or not this is going to be seen as an attempt by the Justice Department to impact the presidential race. And really, he's going to have to consider the long-term impact on the department because ultimately, the Department of Justice wants the public to have confidence that it's outside of politics.

I agree with you that the Mar-a-Lago case was by far the strongest. It's clear that Jack Smith though working up to January suits case in an aggressive fashion as well. I think if he indict soon, it won't be seen as too close to the election, but obviously he's on a bit of a timetable.

SMERCONISH: Renato Mariotti, thank you, as always, we appreciate your expertise.

MARIOTTI: Thank you.

SMERCONISH: What are your thoughts? Hit me up on social media. I'll read some throughout the course of the program. What do we have Catherine (ph)? From the world of -- I don't see it. Maybe it's Twitter, maybe it's not. No?

[09:10:10]

All right. We'll go right to the poll question. There it is. Every legal development with Trump bolsters his claim that prosecution has morphed into a persecution by his enemies and improves his chances of reelection.

Yes, and he -- you know, he has good luck. I mean, who would have thought, as we were debating and discussing the fact that the feds had executed a search warrant at Mar-a-Lago, that Joe Biden and Mike Pence would be sitting on classified information of their own in their respective residences. Now, as I said, is it an apples-to-apples comparison? Seemingly not because at least in public, we believe they cooperated, he didn't, potentially he obstructed. But it muddies the case, in the court of public opinion.

Still to come, it's the biggest U.S. bank failure in more than a decade and the second biggest ever. Friday, California regulators seized Silicon Valley Bank citing inadequate liquidity and insolvency. So, where did the more than 200 billion and assets go? And what might this mean for the economy?

This brings us to this week's poll question @smerconish.com. Please go there. You can use the QR code if you choose and answer this week's poll question. Is the failure of Silicon Valley Bank an isolated event? Or will there be broader financial contagion? Go cast your ballot?

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[09:15:19]

SMERCONISH: The fall of Silicon Valley Bank in just 48 hours is the second biggest bank collapse in U.S. history and it sent shockwaves from Silicon Valley to Wall Street to Main Street.

SVB was known as a tech lender and held more than $200 billion in assets. It was hit by a bank run and a capital crisis as well as rapid rising interest rates. The failure sent bank stocks plummeting customers withdrew a whopping $42 billion in deposits by the end of Thursday. In Massachusetts, customers were turned away from accessing their cash and were told to come back on Monday.

Deposits are insured by the FDIC up to $250,000. The FDIC said all insured depositors will have full access to their insured deposits by no later than Monday morning. And it would pay uninsured depositors a, quote, "advanced dividend within the next week." But for corporations, it's a different story.

For instance, Roku held approximately $487 million, a quarter of its cash at SVB. And Roku said most of its deposits with the bank are uninsured. Could this the second biggest U.S. financial institution failure since the crisis of 2008 lead to a larger systemic failure? That is this week's poll question. If you go to smerconish.com and cast a ballot, and I hope that you will, is the failure of Silicon Valley Bank an isolated event or will there be broader financial contagion?

Joining me now to discuss is Aaron Klein, a Senior Fellow at the Brookings Institution and former Deputy Assistant Secretary for Economic Policy at the Treasury Department. Thanks so much for being here, Aaron. What's your answer to this week's poll question, isolated or more contagion?

AARON KLEIN, SR. FELLOW, BROOKINGS INSTITUTE/ FMR. DEP. ASST. SECRETARY, U.S. TREASURY DEPT.: Well, look, I don't think this is the type of contagion that's going to lead to a horrible disease that's going to bring down the financial system as we saw in 2007 and in '08. However, I'm not sure it's completely an isolated incident either.

Look, Silicon Valley Bank isn't the first bank to go under this week. Silvergate, a smaller bank that had leaned heavily into crypto self- liquidated and went down a few days earlier, there are a couple more dominoes that could fall. So, I'm not sure this is a completely isolated one-off event. But I also think the regulators have been telling us that the contagion from crypto is contained within parts of our financial system. And Silicon Valley Bank is big, but it's not like other banks of its size, the large regional banks, so they have a different business model.

SMERCONISH: Aaron, I've read that nearly all, I don't know how this can be true, but nearly all of their depositors are in excess of the FDIC limit.

KLEIN: Yes.

SMERCONISH: Does that sound right to you?

KLEIN: So it does, because this isn't -- look, it's a $200 billion bank, which is what we would call a large regional fifth, third, key bank, Huntington ,those big banks that you see kind of in large portions of America. Those banks are about the same size, but they have about 1000 branches, Silicon Valley only had 16 branches. Despite being the 16th largest bank in America, how could that be? Well, they didn't take that much money from regular consumers. They took it more from companies.

They banked startups. And as those startups got bigger, they kept those relationships. You mentioned Roku who is a perfect example of something like that. So, companies tend to have money in excess of deposit insurance.

Whereas ordinary Americans, regular viewers rarely have more than $250,000 in the bank account. Frankly, a lot of Americans would be happy to have $250,000 period among all their assets.

SMERCONISH: Aaron, "The Wall Street Journal" today in its lead editorial on this raises the question of how will the government respond? I want to read you a paragraph from that editorial, put it up on the screen. It says, but if SVB was doomed, it is better to let it fail than have the government bail it out despite what one hedge fund lord suggested this week. Didn't we learn from the 2008 crisis that the Fed's rescue of Bear Stearns encouraged everyone to believe that Lehman Brothers would be rescued too? Your reaction?

KLEIN: Well, look, I would say the following. There are just under 5000 banks in America and about the same number of credit unions. The right answer for the number of banks to fail on a given year is greater than zero. If you have no bank failing, then you probably have bigger problems in the economy.

Look, the first time in American history we went a year without a bank failure was 2005, 2006 was the second year and the regulator's told us at the time that they'd won they This was great regulation, see no one was failing, the system couldn't be safer. Kablooey. So, what you have to say to yourself is, look, banks take different types of risks they run different types of business, models some of them fail.

[09:20:06]

That being said, you do need to be careful that the failure is borne by the loss of the risk takers at the bank and less so by companies that are just seeking a bank to do their general business. I am very concerned with how regulators handled the explosive growth of Silicon Valley Bank, and its reliance on unusual funding sources to maintain and handle that growth. So I think there are a lot of important questions to be asked, you know, as we uncover this failure and lessons to be learned.

SMERCONISH: Aaron, thanks for the insight. We appreciate your expertise.

KLEIN: Pleasure to be on.

SMERCONISH: More social media reaction from the world of Twitter, I believe, what do we have? Clarence, no, we don't use money in heaven. George Bailey, oh, yes, that's right. I keep forgetting. Comes pretty.

No, no, no, you're quoting the right movie but the wrong scene. The right scene is the run-on Bailey Building and Loan. Right? Oh, my God, that's heresy.

A colorized version. We're showing a colorized version.

Anyway, more to the point. Remember what ends up happening, George (ph) has to explain like, no, I don't have your money here. Your money is in his mortgage, your money is in her mortgage. And then remember, Ms. Davis (ph) is the one who says a George says like how much do you need? She says 1,750 and he gives her a big kiss and a hug. It brings tears to my eyes to watch that scene, 1750 it is

Please go to smerconish.com and cast a ballot on this week's poll question. Is the failure of Silicon Valley Bank an isolated event? Or will there be broader financial contagion.

Up ahead for Americans who went to Mexico so that one could get a more affordable Tummy Tuck wound up getting kidnapped, two of them killed. Rising healthcare costs have led to a boom in such medical tourism. There's a whole cottage industry, I didn't know anything about it. Did you? More on what's going on in these Mexican border towns from someone who lives right there.

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[09:26:23]

SMERCONISH: Despite the deadly kidnapping of four Americans on medical tourism trip to Mexico, experts say U.S. citizens are still flooding the southern border for low-cost cosmetic surgery. Data shows more than a million Americans go to Mexico every year for medical tourism. And the Mexican government says medical tourism brought in over $137 million in 2021.

In fact, it's so common there that these dedicated traffic lane at the San Diego, Tijuana border designed to speed American medical tourists into Mexico. These people are traveling to what's known as Mexico's health clusters. That's where dental procedures cosmetic procedures fertility treatments, even veterinary care are typically cheaper than in the United States on average. Americans can save up to 60 percent on the most common procedures received by medical tourists in Mexico.

The more frequented and reliable destinations are Mexico City, Cancun and Tijuana. There's also an area in Mexico near Yuma, Arizona known as Molar City for the 300 dental offices there.

But Matamoros is not considered a primary medical travel destination mainly because there are no internationally accredited medical centers or specialty clinics there or in the immediate region. But that is where this group of American friends were so that one of them could get a tummy tuck. The procedure typically costs about $9,000 in the United States, but it's half that price in Mexico. Other examples include a tooth implant with an acrylic crown that would cost $3,400 in the U.S., but it's less than $1,700 in Mexico, a coronary artery bypass would be $73,000 here, it's a little more than 27,000 there.

Overall, up to 70 percent of the medical tourism trips to Mexico are for dental care, 15 percent are for cosmetic care, 5 percent are for weight loss surgeries. The remaining 10 percent are for a variety of procedures led by orthopedic care.

As for security, there are shuttles provided for patients crossing at the Texas border, although many Americans prefer to arrive by private car so that they can shop and dine at the restaurants. Officials also say that there are federal security forces to guard the Medical District in addition to state and local police. The founder of the group Patients Beyond Borders says that since the kidnappings, he's been inundated by requests from people seeking medical care across the border and not expressed any concern about the violence there because the risks are just astronomically low.

Joining me now is Katy Moreau. She lives in Texas near the border and has seen the practice firsthand.

Katy, tell me about what you know of this.

KATY MOREAU. LIVES NEAR MEXICAN BORDER: Hey, good morning, Michael.

It's not a weird thing for anybody in the surrounding communities to Matamoros on this side of the border or on the other to go there for dental surgeries, for dental work, such as fillings. It's pretty normal. Everybody does it. It's a lot more affordable than it is here in the States.

And honestly, a lot of the dentists that work there have gotten their education and their certifications here in the United States and just chose to run their business in their home of Matamoros.

SMERCONISH: I was going to ask, you know, how do you -- how do you have confidence in this? How do you know that you're receiving the requisite standard of care but you're answering that question? In other words, you can go online you can look at the websites, you can see the accreditation, the curriculum vitae, the background of these particular practitioners.

MOREAU: Yes, and locally here a lot of us aren't even going that route of picking out a dentist. You usually know somebody, a family member, a friend that goes, oh I have a dentist I could recommend, and I can tell you where his office is Matamoros. I've had all my work done there.

[09:30:00]

And so, you usually take their advice and go, OK, cool, let me get their information. And you go down there and you check out your bags. And of course, if that's the one that you decide you don't want to go with, there's many other options in that area that you can pick from.

SMERCONISH: Katy, I was blown away by discussing this on radio and receiving so many calls from so many people, you included, who said like, this is no big deal. This is what we do. We live in the border communities and we save a hell of a lot of money by going over there.

I was unaware of the common usage of this, and also the fact that people will make a day of it, right? You go over, you have dental work done, maybe go to a restaurant and have a margarita.

MOREAU: Yes, have a margarita, grab lunch, do a little shopping. Aside from just the dental work, there are people that will go over for medications. That you can get over the counter like antibiotics. And they cost less there and you can bring them back across legally. If you need some antibiotics, it's a good choice to be able to go there and get them.

SMERCONISH: Given the horrible case that we're all familiar with from this week, what's your level of concern for security? Do you think it's going to change the frequency with which a million Americans cross the border for medical treatment in Mexico?

MOREAU: I think it might change temporarily. I want to say my wife showed me an article a couple of days ago that was written since this occurred with the four Americans that the sales in Matamoros have been down about 50 percent in the past couple days just because of so much national attention on it. But I wouldn't say that it's any less safe than traveling to a larger city in America or abroad. Not knowing the language and not knowing your way around, there's always going to be a level of risk.

SMERCONISH: Katy Moreau, nice to see you. Thanks for your insight.

MOREAU: Thanks so much, Michael.

SMERCONISH: Checking in on more social media reaction. What do we have, Catherine? From the world of Twitter.

It is truly sad that people feel compelled to seek inferior medical care in dangerous places because it is so expensive in the USA. Medicare for all.

OK. Nostradamus, I get that there is -- that there's a lesson here about the United States' health care system. But to hear Katy tell it it's not inferior. I've gone online because I was shocked by this and looked at the credentials as they're presented of these practitioners. And the data I don't think supports the view that it's so inherently dangerous. I know this one God awful case just happened but maybe it's not all driven by the factors you identify.

Up ahead, nine years ago this week, nine years ago this week MH370 vanished. Despite a search costing hundreds of millions of dollars authorities -- they never found the plane. What do we know of its fate?

Plus, if Donald Trump doesn't win the GOP nomination, could he still upend the race by running as a third-party candidate? Well, not if you do a close reading of several state laws in place. They are called sore-loser laws and I shall explain.

In the meantime, please go to my Web site at Smerconish.com, register, by the way, for the free daily newsletter, and answer this week's poll question. Is the failure of Silicon Valley Bank an isolated event or will there be broader financial contagion?

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[09:37:45]

SMERCONISH: March 8, 2014, a date I remember well. It was the launch of this program, my program on CNN. Also the day, more importantly, that MH370 disappeared, which marked the start of one of the biggest aviation mysteries of all time. The plane carried 239 passengers and crew members. It was set to arrive in Beijing that morning after departing from Kuala Lumpur but has never been seen since.

Coverage of MH370 then took over our air waves and everybody else's for months after that. And yet despite launching the largest aviation search in history, virtually nothing was found of the aircraft. Theories on how a plane could vanish into thin air have gripped the world for almost a decade, but so far none have been proven.

Now, Netflix is streaming a brand new three-episode docuseries. It's called "MH370, The Plane That Disappeared" investigating the still unsolved mystery. Jeff Wise is an aviation journalist who plays an important role in the Netflix series. He's the author of the book "The Taking of MH370."

I invested the three hours in the Netflix show. I'm not sorry that I did. I learned a heck of a lot. But at the end, Jeff, we still don't know.

JEFF WISE, AVIATION JOURNALIST/AUTHOR, "THE TAKING OF MH370": We still don't know, Michael. And I think that's the point. You know, in the months that followed, the investigators performed this intricate mathematical calculation that told them where the plane went. And they devoted a year's long search to scanning the seabed really challenging amazing feat the water there is as deep as three miles. And they cover an area the size of Great Britain and yet the plane was not there.

And so, this is really, I think, what the documentary series is trying to tackle with. How do we reconcile those facts? How can they have performed this really rigorous mathematical analysis and yet failed to find the plane? What could have happened? SMERCONISH: I'm going to put up a map of that part of the world and ask Jeff Wise the question, is there even consensus on what body of water it went down in?

WISE: Well, I think there's kind of the main theory and then there's kind of everything else.

[09:40:02]

And the main kind of consensus view is that the -- that the plane turned south almost certainly because the captain had plotted out this very elaborate murder-suicide scheme. And that the plane flew south and went into this area. And that's why the Australian government, you know, spent hundreds of millions of dollars searching this area, a big -- you know, a big commitment.

But then, you know, there's other theories, including my theory, which I attempt to piece together an alternative explanation that also fits with the actual scientific evidence in hand. In which I sort of say that there's a -- this kind of farfetched seeming series of coincidences, which could result in the plane going north to Kazakhstan.

SMERCONISH: People will remember you referenced the pilot. People will remember the revelation that he had a flight simulator in his home. That took on a nefarious connotation. What's the bottom line about the pilot?

WISE: You know, it's one of these things where it kind of depends on who you ask. There's a lot of people out there who think this guy was like going through a -- he had a troubled marriage and he was a letch and he was like -- has all kinds of psychological problems. The people who really know him best -- I think the people who had the most access to his family and friends say that he was like a very emotionally balanced guy. He's really liked. His marriage was strong. He was looking forward to retirement.

He put up all these videos on YouTube of him like helping, you know, making videos showing how to repair your leaky windows. Just looking at pictures of him, he seems like a chill guy. And I think he was very popular. He was regarded as an excellent pilot.

I did a story the following year about a young German pilot who flew his plane into the Alps. And if you compare these two cases the German kid was like deeply troubled. He had been pulled from flying duty for psychological problems. He had searches on his computer of like searching for how to commit suicide. He actually had searched MH370 almost like this incident inspired him. But you can see that like there's a very different kind of psychology there. But we'll never know. In mean, the human brain is so unfathomable at some level.

SMERCONISH: Jeff, quick answer, is there still an active investigation? And if not, why not?

WISE: It's a cold case basically. I mean, it's -- the files still exist. The people who looked into it are still around, but they have sort of put it on the back burner and they are waiting, you know, to see if anything happens.

I hope this will shake the tree because there are still questions that need to be asked. There are some really, you know, hard realities that need to be faced. How come the plane wasn't there?

People think, oh, it's a big ocean. It's, you know, they didn't find it because it's just the ocean is too big. That's not really correct. They had data with a known margin of error attached to it. If the plane had flown south, they really should have found it.

SMERCONISH: If it were a movie, we would be disbelieving and we'd say, too fantastical. It could never happen. We're not going to make this film.

Jeff Wise, thank you so much. I really appreciate it, the three-part docuseries and the role that you played in it.

WISE: Thank you, Michael.

SMERCONISH: Still to come, the GOP race heating up. On Friday, Ron DeSantis introduced himself in Iowa. Donald Trump will head to that state on Monday. Nikki Haley was there as well. If one of them loses the nomination, can they then run as a third-party candidate? The expert answer that you're going to hear in a moment might surprise you.

And please go answer the poll question at Smerconish.com. Is the failure of Silicon Valley Bank an isolated event or will there be a broader financial contagion?

(COMMERCIAL BREAK)

[09:48:06]

SMERCONISH: Can Donald Trump run as an independent or a third-party candidate if he first fails to win his party's nomination? It's a question circulating throughout the Republican Party and political media. If Trump were deciding to run as an independent, it would sure make for an interesting race, but you can't just run, lose and then come back because of one obstacle, sore-loser laws.

A new study published by the Harvard Journal of Law and Public Policy says, "Such a candidate would be denied ballot access in 28 states totaling 290 electoral votes if sore-loser laws are applied as written." This report is titled "If You Ain't First, You're Last." One of the co-authors, Jason Torchinsky, joins me now. He's a practicing attorney at Holtzman Vogel and an adjunct professor at the College of William and Mary. Thanks so much for being here.

So, share with me the conclusion beyond that which I have just described. You went. You took a look at all 50 state laws and what did you find?

JASON TORCHINSKY, LAWYER: Yes. So, in 28 states the sore-loser laws would prohibit somebody who lost the party primary from running as an independent or a third-party candidate. And for somebody like Donald Trump, what that means is if he were able to get ballot access in every state that he basically won in either '16 or '20, less the ones that would bar him under the sore-loser laws, he would only be able to win 81 electoral votes. So, that sort of puts a roadblock in any third-party plans he might have.

SMERCONISH: A fellow named Richard Winger looked at this issue and came to a different conclusion. He thought it was only South Dakota and Texas that would have a sore-loser law that would apply to a presidential context. Why do you think that that analysis is wrong and yours is right?

TORCHINSKY: Well, Richard didn't look at laws, statutes, regulations. He literally only looked historically and said, can I find instances where someone sought a major party nomination and eventually ran as a third-party candidate?

[09:50:00]

And while it's true that there are some, and in particular probably the best one known would be John Anderson in 1980, I think the modern environment 40 years after John Anderson did it, I think, the Republican Party would look very differently at a Trump third-party run if he were not the Republican nominee and would look to take advantage of these laws and challenge his access to the ballot in those 28 states.

SMERCONISH: Jason, what would happen if Trump or anyone else for that matter were to run for a nomination and not get it, and then try and advance a write-in campaign?

TORCHINSKY: So, write-in laws are very different. They vary across the country. Some states would accept those write-in votes. Some states would say, our sore-loser law applies. We're not going to count those.

I haven't done a separate study on the write-in laws but that would be even harder. But frankly the number of candidates who get elected using a write-in campaign particularly for major national office is slim to none.

SMERCONISH: Why do we have sore-loser laws?

TORCHINSKY: Sore-loser laws really were designed about 100 years ago or so, and they kind of protect the party nominees from somebody who lost in a political party primary and then says, you know what? I want to run in the general any way.

The idea behind it is if you lost, you lost. And you don't get kind of a second bite at the apple to run in the general without having won a party primary.

SMERCONISH: I would argue that they are outdated to the extent that they ever served a useful purpose. And my short version would be that -- where Gallup says 42 percent of the country regards themselves as independent, not as R and not as D. They are a lot of us who get shut out of the primary process. A lot of moderate candidates who can't emerge in a primary, I think, could be viable in a general election but are often precluded by sore-loser laws from coming back.

TORCHINSKY: That's probably right. But keep in mind the sore-loser laws protect the Republican and Democratic Party primary processes and frankly it's Republicans and Democrats that control the legislatures in nearly every state in the country. So, changing those laws would be very difficult.

SMERCONISH: Right, it's like term limits. You know, there's consensus in the country that we should have term limits. I think, there's consensus in Washington but we need the people who are in Washington to agree with us about term limits and they don't. You get the final word.

TORCHINSKY: Right. Well, I mean, again, I think our study shows it would be difficult to impossible for Donald Trump to run as a third- party candidate it he in fact loses the Republican primary.

SMERCONISH: Jason, thanks for all the work that went into this and your willingness to discuss it. I really appreciate it.

Hey, hang on one second. Here's a social media reaction. Maybe we'll answer together. Put it up on the screen, Catherine. I'll read it aloud.

If Trump runs third-party and he gains enough electoral votes to block the others from hitting 270, then it goes to the House and Trump could win outright. Jason, your thought?

TORCHINSKY: It's been 100 plus years -- 150 years or so since we have had an election go to the House. I would be surprised if Donald Trump could win enough states to actually make that happen as a third-party.

SMERCONISH: And can I add? And you correct me if I'm wrong. If Trump today said, I'm out of the Republican primary process. I'm today announcing I'm running third-party. That he could do, correct?

TORCHINSKY: Possibly. But keep in mind he has already filed the declaration of candidacy with the FEC that says he's seeking the Republican nomination. So, for states that have disaffiliation requirements, that have February or March primaries, you know, there's a good argument that he's already affiliated with the Republican Party for the purposes of those state laws.

SMERCONISH: I'll bet he appreciates all the free legal advice you just gave him which is he better stay in the Republican primary and win that process, or he's done. Thank you so much. I appreciate your time.

TORCHINSKY: OK. Thank you.

SMERCONISH: Still to come, more of your best and worst social media comments and the final result. Please go vote. Be a little esoteric today but we like that. Go to Smerconish.com and tell me is the failure of SVB, Silicon Valley Bank, is that an isolated event? We hope so. Or will there be broader financial contagion? Results in a moment.

(COMMERCIAL BREAK)

[09:58:49]

SMERCONISH: Hey, before the poll results, I have a Rorschach test for you. I'm going to put something on the screen. You're going to shout out loud what you see. Ready? Here we go. What do you see?

The car's owner, James (ph) Starostecki, is a vegan. He says it's about his love of tofu and his attempt to lobby people to stop using animal products. The state Bureau of Motor Vehicles they said, well, it could have a vulgar interpretation. It's not a First Amendment issue said the Secretary of State's office because the license plate is owned by the state. The state then offered him a plate that reads V3GAN, or vegan, but the motorist said, no thanks, and just got a standard plate. What were you thinking?

Here are the results of the poll question from Smerconish.com this week. It has to do with SVB. Hoping it's an isolated event but it might have been part of a broader contagion. Hit me with it. Fifty-six percent of more than 25,000 say it is an isolated event and we hope that they are correct.

Social media, what else came in during the course of the program? There was this. These people can't get Trump out of their head after almost two and a half years.

[10:00:01]

Another dog chasing its tail. I assume Pete Phillips means the prosecutors can't get him out of their head. Look, at the end of my opening commentary, I said something about which, I think, we should all be able to agree which is it's time to wrap up those investigations because we don't want them budding right up against the 2024 election. Thank you for watching.