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NYT Op-Ed: "Affirmative Action Is Wrong"; Special Counsel Jack Smith's Past Cases; Centrists' War Over Potential Third-Party Candidates; The Biggest Grift In U.S. History. Aired 9-10a ET

Aired June 17, 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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[09:00:26]

MICHAEL SMERCONISH, CNN ANCHOR: Affirmative action on life support. I'm Michael Smerconish in Philadelphia.

Monday, America celebrates the third ever federal holiday of Juneteenth, commemorating the emancipation of enslaved African Americans. And as we do, the consensus among legal scholars is that the Supreme Court will soon be ending affirmative action, at least in the context of college admissions. Now, does that mean that it achieved its purpose or that we're abandoning the underlying premise? A pair of cases have been argued we will soon know the results.

One involves Harvard, the other the University of North Carolina, the conventional wisdom is that race conscious admissions will end. Currently, race is permitted to be a factor in the admissions calculus, meaning one factor among many to be considered as schools seek to create a diverse student body for everybody's benefit. Quotas, on the other hand, are unconstitutional. That's the bottom line, after the Supreme Court has taken up several major cases involving affirmative action over the years, and one of those cases was in 2003, it was Grutter v. Bollinger. It involved the University of Michigan Law School.

Justice Sandra Day O'Connor famously wrote, then, "We expect that 25 years from now, the use of racial preferences will no longer be necessary." Well, it's been 20 years, is it still needed and legally defensible?

Opponents of race conscious admissions argue that at schools like Harvard, Asian Americans are being discriminated against where despite excelling academically, they often are scored lower on subjective personality traits. All sides seem to agree that without race as a factor in admissions, the percentage of black and Hispanic students admitted will drop, white and Asian American admissions will rise.

That's what happened in California after proposition 209 was passed in 1996, which prohibited state governmental institutions from considering race or sex or ethnicity in the areas of public employment, public contracting and public education. At the University of California schools, the percentage of underrepresented groups declined, and it remains to be seen just how expansive the reasoning of an opinion banning affirmative action in college admissions might be, it could well very extend into the workforce.

Schools will likely respond with race neutral alternatives, such as admissions guarantees based on class rank or focus on socio economic diversity. The current debate has largely been driven by one man and affirmative action opponent named Edward Blum. He has a group called Students for Fair Admissions. In the 2013 case of Shelby County v. Holder, he was behind the successful challenge to the Voting Rights Act of 1965. There, the Court struck down as unconstitutional the formula about laws needing preclearance based on state's histories of discrimination in voting. The Supreme Court said that it was based on data over 40 years old, making it no longer responsive to the current needs.

Voting rights and affirmative action, well, they sprung from the same era. Two months before he signed the Voting Rights Act on June 4, 1965, President Lyndon Johnson delivered the commencement address at Howard University. It was an important speech, one remembered as establishing the intellectual framework for affirmative action. President Johnson acknowledged the treatment of blacks from slavery to Jim Crow, and he said this.

(BEGIN VIDEO CLIP)

LYNDON JOHNSON, 36TH PRESIDENT OF THE UNITED STATES: But freedom is not enough. You do not wipe away the scars of centuries by saying now, you are free to go where you want to do as you desire and choose the leaders you please. You do not take a person who for years has been hobbled by chains and liberating bringing up to the starting line of a race and then say, you are free to compete with all the others and still justly believe that you have them completely fair. Thus, it is not enough just to open the gates of opportunity. All our citizens must have the ability to walk through those gates.

(END VIDEO CLIP)

SMERCONISH: President Johnson said that equal opportunity is essential, but that it's not enough, that men and women of all races are born with the same range of abilities but ability is not just a product of birth. Fifty-eight years later we're still having the same debate.

[09:05:05]

South Carolina Senator Tim Scott announced his presidential campaign by reflecting on his own American story.

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SEN. TIM SCOTT (R-SC), PRESIDENTIAL CANDIDATE: We live in the land of opportunity. We live in the land where it is absolutely possible for a kid raised in poverty in a single parent household, in a small apartment to one day serve in the people's house. And maybe even the White House.

(END VIDEO CLIP)

SMERCONISH: My colleague David Axelrod asked his former boss, former President Barack Obama to react to Senator Scott's comments.

(BEGIN VIDEO CLIP)

BARACK OBAMA, 44TH PRESIDENT OF THE UNITED STATES: If a Republican who may even be sincere in saying I want us all to live together doesn't have a plan for how do we address crippling generational poverty that is a consequence of hundreds of years of racism in the society and we need to do something about that. If that candidate is not willing to acknowledge that, yes, again and again, we've seen discrimination in everything from job -- you know, getting a job to buying a house to how the criminal justice system operates. If they're not doing that, then I think people are rightly skeptical.

(END VIDEO CLIP)

SMERCONISH: There are many statistics about African Americans that confirm President Obama's feelings that things are not equal. Looking at education first, in 2021 24.7 percent of blacks had a bachelor's degree or higher as compared with 38.3 percent of whites. As for quality of life figures, median income for the average black household was $48,297. For white households, nearly $78,000, 19.5 percent of blacks living at poverty level compared with 10 percent of whites. The life expectancies at birth for blacks, 70.8 years, 76.4 for whites.

And homicide, the leading cause of death among black males 15 to 34, 20 times higher than their white counterparts. By those measures, we've still not wiped away the scars of centuries. As President Johnson would have said, the gates of freedom have been open, but some among us, namely many African Americans still not walking through those gates at the same pace as others. Not all of the disparity attributable to the unforgivable crime against humanity represented by slavery, but surely remnants remain. And there's the challenge to simultaneously salute the opportunity afforded to Tim Scott and Barack Obama, while not losing sight of others who look like them, but are still behind.

As I noted, this discussion happening just as we celebrate the recently instated federal holiday of Juneteenth, the whole country taking a pause to honor the significance of the emancipation of enslaved African Americans. That's all well and good, but as President Obama put it, how do we still address crippling generational poverty that is the result of years of racism in our society? Which brings me to this, I want to know what you think, go to smerconish.com this hour and answer this week's poll question, is affirmative action necessary?

Joining me now, Renu Mukherjee, a policy analyst at the Manhattan Institute. She's getting her PhD at Boston College where her dissertation is on affirmative action. She wrote this piece in "The New York Times," "Affirmative action is wrong. There's a better way to make campuses diverse."

Renu, thank you for being here. You heard the tape and you're familiar with the speech, President Johnson said in 1965. It's not enough to open the gates of freedom. Was he right then?

RENU MUKHERJEE, POLICY ANALYST, MANHATTAN INSTITUTE: He was right then, Michael, affirmative action served a unique purpose. in the mid to late 1960s in the night and the 1970s, which was to provide assistance to disadvantaged African Americans as a result of the horrible legacies of slavery and Jim Crow. But that purpose is not necessarily being fulfilled today, when you look at majority of black students at Harvard, for example, they're largely the children of immigrants, and they are also typically middle and upper middle class. And so, the purpose of affirmative action isn't really being solved any more by an explicit preference based on race.

SMERCONISH: You'd like to see race conscious admissions done away with. I think you're about to get your wish when the Supreme Court issues its opinion or opinions. So, what will that next incoming class at Harvard look like in comparison to what has been the status quo?

[09:10:04]

MUKHERJEE: So it depends on if the Supreme Court still says that schools can pursue their interest in diversity. If they can, then I anticipate a lot of colleges and universities in America are going to turn to the race neutral alternative of an admissions tip based on low income status. And in that case, you'd actually see white enrollment at Harvard decline combined African American and Hispanic enrollment increase, Asian American enrollment increase, and also socio economic diversity at Harvard and other elite schools skyrocket.

SMERCONISH: Renu, to cut to the chase, how do we do both? How do we continue to atone and make right the sins of slavery as President Johnson laid out, as the statistics that I've shared, make clear and yet do something about what's happening with Asian Americans who I think are clearly on the short end of the stick, right, with superior academic performance, and yet these subjective personality traits being held against them. Can we do both?

MUKHERJEE: Yes, Michael, I think we can do both. And I'll also point out that the Supreme Court has held, you know, remedying societal discrimination isn't actually a proper legal justification currently for affirmative action, it's really to increase diversity. So the way in which you can help disadvantage black children and also help disadvantaged children of all races is to maybe measure -- provide a more accurate measure of disadvantage, which would probably be some sort of admissions to face on income status or to do something like, you know, a top 10 percent plan where you admit at a public State University the top 10 percent of students in their graduating high school class. That would provide remedies for low income disadvantaged children, not just who are black but of all races and alleviate the discrimination that Asian American children are now subjected to in the admissions process.

SMERCONISH: Right. Your reference to a class approaches is often the model in Texas. Let's answer social media together, I'll read it aloud because I probably -- you probably don't have a screen on which to see it, affirmative action, says JAG, served its purpose in the 70s and 80s, but now it is working against those it was to protect. I'm not sure, Renu, how the viewer believes it's working against African Americans, because I think they were the intended recipients. But go ahead and respond to that, from your perspective. MUKHERJEE: I think that that viewer is trying to get at my earlier point, which is that those that now received the admissions tip based on race at Harvard and other elite schools are largely the children, even if they're underrepresented minorities of African immigrants, for example, and they tend to come from middle and upper middle class status. Whereas when affirmative action was instituted in the 1960s, it was to help the most disadvantaged in our society, which is why if you take a top 10 percent plan or more explicit to base on socio economic status, that could help, again, the intended beneficiaries way back when.

SMERCONISH: I mean, I get the argument that you're making, if you're talking about the son or the daughter of an African American couple where one or the other as a physician or one is an attorney, it hardly seems fair that there'd be an advantage over a white applicant or an Asian applicant whose mother or father works in the trades by way of illustration. I just don't know that that broad brush addresses the norm of what's going on out there.

In any event, I appreciate you being here. I know how you're going to vote on today's poll question. Make sure you go and do it, OK?

MUKHERJEE: Thank you.

SMERCONISH: Go to smerconish.com, this is what it is today's poll question. We went through a whole variety of machinations and then I said to Katherine (ph), Katherine said to me, let's make it simple, is affirmative action necessary? That's the question. Go vote @smerconish.com.

Still to come, now even the centrists are polarized. The group No Labels working to nominate a third party presidential candidate while rival group Third Way says, that would just reelect Donald Trump. How's that going to play out?

And will Special Counsel Jack Smith's documents case against President Trump holds up in court? Several of the high profile cases Smith brought in the anti-corruption unit ended with a mistrial or hung jury. The Supreme Court reversed the conviction of my next guest, former Virginia Governor Bob McDonnell. He's here.

Plus, it's been called the greatest grift in American history. Fraudsters reportedly stole more than 280 billion in COVID-19 relief funding. I'll talk to the reporter who's been doing the investigation on that.

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[09:18:37]

SMERCONISH: So how might Jack Smith's case or perhaps cases against former President Trump holed up at trial? Between 2010 and 2015 Smith led the DOJ's public integrity unit of about 30 prosecutors investigating public corruption cases of politicians and others. Among Smith's more notable prosecutions, Democratic senator and vice presidential candidate John Edwards on campaign finance law violations over payoffs to the woman with whom he'd been having an affair and a bribery case against Democratic Senator Robert Menendez over unreported gifts from a friend in exchange for influence. Both those cases resulted in hung juries and miss trials. Smith's team did secure a conviction against Republican Congressman Rick Renzi of Arizona for extortion, bribery, insurance fraud, money laundering and racketeering. In 2021, President Trump pardoned Renzi.

My next guest, former Virginia Governor Bob McDonnell has a distinctly personal perspective on Smith. In 2014, Smith prosecuted him on charges of bribery and a jury convicted McDonnell on 11 corruption related felony counts but the conviction was later overturned unanimously by the Supreme Court. The case concerned McDonnell and his wife accepting more than $175,000 worth of loans and gifts from a businessman seeking the state's help in researching a dietary supplement. Chief Justice John Roberts wrote the court's opinion and said that the prosecution had taken a, quote, "boundless interpretation of the federal bribery statute about what constitutes an official act."

[09:20:04]

Former governor of Virginia Bob McDonnell joins me now. Governor, thank you for being here.

So, you John Edwards --

BOB MCDONNELL, (R) FORMER GOVERNOR OF VIRGINIA: Thanks, Michael.

SMERCONISH: -- Robert Menendez, all failed prosecutions, what's the common denominator, if any, as it relates to Jack Smith?

MCDONNELL: Michael, thanks for having me on. You know, Jack Smith, Harvard educated, good careers are tough prosecutor, decisive, but those five years during the time he was head of the Public Integrity section of DOJ, you just chronicled some of the cases with Menendez and the former vice presidential candidate, John Edwards, also the lowest learner, you know, he was giving advice to perhaps go after conservative groups for IRS matters.

My case, you know, Michael, it's long in the past now. But we wrote a 38 page brief, we gave the government and advanced telling them why their theory of the case were wrong. We had amicus briefs filed by people like the former White House Counsel for five U.S. presidents from Reagan to Obama, 83 former attorneys general saying why this was wrong, and yet, you know, they persisted. And so, you know what I get out of that, and I think he's been overzealous in some of these low profile cases, he's willing to stretch the law, John Roberts called it a boundless interpretation that would catch up politicians and their ordinary acts that they do for people. And I think it's just says maybe a lack of judgment. And that's the concern that I get out of my case and the others.

SMERCONISH: Well, then why do you think he was selected?

MCDONNELL: Well, Merrick Garland made the choice. He also brought in David Harbaugh (ph), you know, one of his top people in this case. Harbaugh was actually in the courtroom, gave the closing argument in my case, and was also in the Edwards case. So, again, there's some judgment questions there. But I don't know what pool or what their criteria he had to pick from.

But you know, on paper, he's been a good public service. But in the courtroom, and in the judgments, he said these failures. You know, in my case $28 million of legal fees, and three and a half years of great difficulty for my state, my family, my staff, I just think he's willing to stretch the law. And here's the problem, Michael, you know, as a lawyer, the ethical rules are, you're supposed to, as a government attorney, a federal prosecutor, you're supposed to seek truth and justice, not merely to convict, it's a very different ethical duty. And I think maybe that's been the downfall in some of these cases he'd rather win.

SMERCONISH: And to state the obvious, two things can be true at the same time that former President Trump should not have retained the 31 documents that are at issue here. And the Jack Smith is an overzealous prosecutor, right? None of this excuses --

MCDONNELL: that's -- yes.

SMERCONISH: -- Trump's conduct, we should make that clear.

MCDONNELL: Yes. No, listen, I agree. I'm not making a judgment on the facts. If they can prove, if Mr. Smith and his team can prove that the evidence will support the allegations in this indictment, the speaking indictment, then I think Mr. Trump may have some criminal culpability. But you know, he haven't things tried in the press, Michael, I know it's never fair, there's always been, the laws not clear, and so we're going to have to see how this plays out in the courtroom because one of the sides is going to be really embarrassed when it comes to evidence.

SMERCONISH: To your case, Chief Justice Roberts wrote the opinion it was unanimous. I'm going to put on the screen and read one paragraph for the audience not familiar with what he said, "There's no doubt that this case is distasteful. It may be worse than that. But our concern is not the tawdry tales of Ferraris, Rolexes and ball gowns. It is instead with the broader legal implications of the government's boundless interpretation of the federal bribery statute. A more limited interpretation of the term official act leaves ample room for prosecuting corruption, while comporting with the text of the statute, and the precedent of the Court."

Obviously, Merrick Garland, the Attorney General, knew when appointing Jack Smith that the Supreme Court had kind of spanked him as it relates to your case, but he's selected him nonetheless. Why do you think?

MCDONNELL: Well, you know, Michael, that's a question for Merrick Garland. I hate to pass on that other than the fact that he's got, again, tremendous experience being in public and tragedy, making decisive -- taking decisive action and high profile cases and tough enough to stand up against the president united states in the courtroom in a historic indictment. That would be my best guess. But he had to know he would subject himself to immense scrutiny based on really bipartisan mistakes going after about Democrat, and in my case, a Republican person and getting unanimously revoked. He got the law unanimously wrong in my case. So, I question Mr. Garland's judgment in this pick, no (inaudible) is going to get this kind of --

[09:25:03]

SMERCONISH: Well, it's had a lot of run operations on the prosecution of public -- so called public corruption all across the country. I'm going to put on the screen and I'll read allow the social media reaction that just came in. Go ahead, Katherine, let's see what it says, POTUS 47, aka POTUS 47, aka Donald Trump, not 45, will not need to pardon himself. Let that sink in.

Governor, quick question for you, what's the prospect that whomever is POTUS 47, Trump, Biden, Kamala Harris, Ron DeSantis pardons Donald Trump, do you think this ends with a Jerry Ford like move?

MCDONNELL: Well, of course that presumes he'd be convicted. Michael, the bunker's concern is we have weaponized the criminal justice system, I think both parties have done it. You know, the rule of law is much more important than any person or one president that might be elected. That's my broader concern is when you do things, as in my case, getting the law wrong for whatever your motivations might be, you undermine the basic tenet of American civilization, which is the rule of law, no one is above the law, but everybody is treated fairly under the law.

So, I think that there might be -- if he's convicted, there very well may be because of the reaction to that conviction, there will very well may be an act by a future president to do as you said that for did and to create peace in our nation is to have a pardon. But that's a long way down the road. We have to see what happens. What's the real evidence not in the press but in the courtroom.

SMERCONISH: Right. Well, pretty compelling that speaking indictment laid out a hell of a case, but we'll see the way in which the former president defends himself. Thank you, Governor. Appreciate you being here.

MCDONNELL: OK. Thanks, Michael.

SMERCONISH: Make sure you're voting @smerconish.com, is affirmative action necessary? Juneteenth is on Monday. Like where are we? Supreme Court is about to say, we think that affirmative action race conscious admissions are unlawful.

So, where are we? Is it necessary still?

Up ahead, there's a battle over whether it's bad for the country to have a third party presidential candidate in 2024. You might remember, I recently interviewed Ryan Clancy here, the chief strategist of No Labels, that's the group that is trying to get on the ballot in enough states to actually win. Well, today, equal time to the cofounder of Third Way, which recently held a strategy meeting in Washington with Democratic advisors and former senators on how to stop No Labels. Plus, as much as 280 billion of earmark COVID-19 relief funds and maybe more basically embezzled by everyday Americans. The biggest theft in U.S. history. How did that happen?

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[09:31:53]

SMERCONISH: Now it's the centrists who are at war. "The Washington Post" reports that last week there was a high-powered meeting at a D.C. think tank aimed at shutting down a potential third-party presidential candidacy for 2024. In attendance prominent Democratic strategists including advisers to President Biden like Ron Klain, former U.S. senators Doug Jones, Heidi Heitkamp, Claire McCaskill, and Republicans from the anti-Trump Lincoln Project like Bill Kristol.

As the "Post" put it, "Their mission to figure out how to best subvert a potential third-party presidential bid by the group No Labels, an effort they all agreed risked undermining Biden's reelection campaign and reelecting former President Donald Trump to the White House."

The event was hosted by another third-party group, the Third Way, whose co-founder will join me in just a moment, which has been leading the charge to stop No Labels, this despite the fact that America has been showing little enthusiasm for a 2024 rematch between presidents Biden and Trump. Or the polls consistently show more Americans identifying as I rather than R or D.

Former Reagan speech writer Peggy Noonan wrote in the "Wall Street Journal" that if the race is indeed a Trump-Biden rematch a third- party slate will certainly enter the race and quote -- "if a few crucial things break its way they have to get on almost every state ballot and put forward a solid ticket, not a brilliant one but solid, two accomplished people, one from each party, presumably political veterans, whom people could see, hear, and think they could do the job -- they'd have an even or better than even chance of surprising history by winning."

No Labels has made things complicated by saying that it would end its campaign if the GOP nominee is DeSantis or anyone else not named Trump because their research shows that they then wouldn't be able to attract enough dissatisfied Republicans to make the candidate viable, nor would No Labels run if a candidate poll show Biden is way, way out ahead of Trump next spring. But how could anybody definitively know that given the volatility and unreliability of our polling?

Joining me now to discuss is Matt Bennett. He's the co-founder of Third Way. He served as deputy assistant to President Clinton for intergovernmental affairs. Matt, thank you for being here. You've seen all the polling data. I'll put one on the screen.

Sixty-six percent say that it would be a disaster for Joe Biden to be reelected. Fifty-six percent say the same thing about Donald Trump. So, what's wrong with giving choice to the majority who don't want either of them? MATT BENNETT, CO-FOUNDER, THIRD WAY: Well, the problem is that what No Labels is offering is collusion and not choice. What they're going to do if they run a third-party candidate is offer a spoiler, you know, somebody who can attract some protest votes, people who are really truly by the time we get to November of next year unable to pull the lever for either candidate. And there's enough of those people to make a difference in the race. We saw that in 2016 where in very critical states six to eight percent of the population voted for people like Jill Stein and Gary Johnson. What they're not going to provide is a real path to victory.

[09:35:00]

They've been claiming and what Peggy Noonan is claiming -- that's just ridiculous. There's almost no one who is a serious political observer who thinks that is remotely possible. They are very unlikely to win a single state. No candidate has done that since 1968 as a third-party and they certainly aren't going to win 270 electoral votes. So, they might -

SMERCONISH: But how could you -- how could you know that -- respectfully how could you know that if you don't even know the identity of the third-party ticket that we're talking about?

BENNETT: Well, first of all, there's history, right? One of the most popular presidents in American history four years after leaving office ran as a third-party candidate, Teddy Roosevelt, and he didn't come close to winning. He was a spoiler for his Republican Party but he didn't win.

If you add up all the electorate votes, the third-party candidates have won in the period since Roosevelt, that's still doesn't get you to 270 votes. There's just no way. I mean, look, there have been credible third-party candidates on the ballot in recent history, Ross Perot in 1992 and 1996, but he didn't win a single state and no one has except for guys running as overt racists in the '50s and '60s.

So, this just isn't going to happen. What happens in electoral politics is even though there are a lot of independents and a lot of grumpy people out there who would like a third choice, in the end they go back to their parties and that's why have these very close presidential races.

SMERCONISH: Matt, I hear from -- I hear from many, and on your Web site I know that you have David Brooks' recent take on this posted at the thirdway.org Web site. And I reread his piece but I've heard this sentiment from others, is this idea of people who say, you know, conceptually I like the idea and Americans ought to have more choice but not this cycle.

To which I respond and say, wait a minute, this is the perfect cycle where a majority of Americans say please don't saddle me with either of these guys. Like, maybe this is the breakthrough year.

BENNETT: It isn't. I mean, if you look back at the numbers on incumbent presidents in recent history, the ones who got reelected, Bill Clinton, Barack Obama, George W. Bush, they were all polling in the low 40s at this point in this cycle and people were dissatisfied because American voters tend to be kind of grumpy. But what happens as we get close to the election is that members of their party, Democrats and Republicans, go back to their base. Yes, there are a lot of independents out there, but only about seven percent of the electorate are true swing voters, which is to say they would and do vote for either party.

For the most part, those independents either vote almost all the time for the Ds or the Rs. That's going to happen again this time. However, there's going to be enough of those people if a third-party candidate is on the ballot to swing the election, and the data all show that it would swing the election to Trump, that's a risk that we just believe America can't take.

SMERCONISH: I'm limited on time but quick final answer if you don't mind. If the polling were showing a third-party candidate was pulling equally from Biden and Trump, would you feel differently?

BENNETT: No, because I wouldn't believe that. Polling has been pretty inaccurate in these close presidential races and we're convinced --

(CROSSTALK)

SMERCONISH: OK. Well, wait a minute. Why can't -- why can't I say the same thing about the polling that you've been referencing, well, I can't believe that because that must be inaccurate?

BENNETT: I'm not referencing polling. I'm referencing history and what happened in actual elections in 2016 and 2020. Look, in these very close races, horse race polling just can't get it that accurate. But what we do know is that it is overwhelmingly likely that more people are reluctant Biden voters than reluctant Trump voters. And if you give those people an option, they may take it and that is an enormous concern for us.

SMERCONISH: I appreciate you being here very much. My simple rebuttal is that the only thing we know for sure is that we have no idea. There's never been a cycle like this. And the twists and turns that are about to come our way, nobody can predict. I really appreciate it though. Thank you.

BENNETT: Thank you.

SMERCONISH: Social media reaction. Catherine, what do we have on this subject? A lot of interest, I know.

If it's Biden and Trump, yes, and polling has confirmed this. The situation has never been more ripe for No Labels. The question is, who is that candidate?

Look, he says -- he says he's not interested. He's going to be upset with me for even floating his name. But are you telling me that if an Admiral William McRaven decided that he were willing to be drafted by his country to serve that you could today, mid-June of 2023 say, well, that could never work, because I can't accept that opinion. I just can't accept that opinion. I believe the polls that say a majority of Americans don't want either of the two who are right now leading their tickets.

I want to remind you to answer this week's -- don't take it out on me, admiral. It was a question I was asked. I was speaking honestly.

[09:40:01]

Go to Smerconish.com and answer this, very simple and yet so complicated. Is affirmative action necessary?

Still to come, it's the greatest theft in American history, how thousands of everyday Americans were able to steal billions of government money under the guise of COVID-19 relief? The co-author of this great A.P. Investigation, Associated Press Investigation joins me next.

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SMERCONISH: It's the biggest grift in U.S. history. Billions stolen from the U.S. government not just by lifelong criminals but by everyday Americans. I'm talking about the federal COVID-19 relief aid intended to cushion the most devastating pandemic in a century. According to the "Associated Press," fraudsters may have stolen more than $280 billion in COVID-19 relief funding.

Most of the theft was obvious and simply done, at least in retrospect. In Georgia a U.S. soldier awaits sentencing after admitting to stealing millions of dollars from the federal program after she illegally submitted more than 150 payment protection program loan applications.

[09:45:11]

A pastor in Florida went on the run after receiving more than $8 million from the government's COVID relief program for small businesses and non-profits. His family filed paperwork falsely claiming that their ministry had over 400 employees and a monthly payroll of $2 million.

And in California, a couple convicted after stealing more than $18 million in COVID relief loans to purchase three homes, diamonds, gold coins, luxury watches, expensive furniture and other valuables. Alone they read like one-offs, a successful heist by an opportunistic criminal but these are not isolated cases.

To date the U.S. government has already charged more than 2,000 defendants with pandemic-related fraud and are still investigating thousands more. The United States justice department's acting director for COVID-19 fraud enforcement calls it, an unprecedented amount of fraud.

How could such enormous amounts of fundings be divvied out unnoticed? Investigators are attributing this to the government's eagerness to provide quick relief. Money was dished out to Americans struggling to make ends meet among record unemployment numbers but it lacked oversight and not nearly enough restrictions on who can apply. In short, the con was all too easy.

Joining me now to discuss is Richard Lardner. He's an investigative reporter for the "Associated Press" where he co-wrote "The Great Grift: How billions in COVID-19 relief aid was stolen or wasted." Richard, round numbers, how much money was pumped out and what percentage is believed to have been stolen or wasted?

RICHARD LARDNER, INVESTIGATIVE REPORTER, ASSOCIATED PRESS: Well, Congress appropriated about $5.2 trillion and presidents approved those bills. About the accounting that we have from the pandemic response accountability committee says 4.2 trillion of that has been spent. Some of this money has a longer tail on it to spend. Those numbers will be updated but it's over $5 trillion in total that's been appropriated for COVID relief.

SMERCONISH: Is it a reflection of economies of scale? And by that, I mean that you write -- there was an $837 billion IRS program that had 99 percent success in its delivery. That sounds pretty darn impressive. But that one percent fail was $8 billion.

LARDNER: Yes. I do think, you know, as we went through these numbers, you can sort of become a little numb because some of these programs are so large, you know, hundreds of billions of dollars. Still to us and I think to most people $8 billion is a lot of money. Nothing is ever going to be perfect in a massive emergency aid program like this one. But still, we shouldn't lose sight of large sums of money and sort of what they mean.

SMERCONISH: How aggressive are the government efforts now to recoup those funds and to continue prosecuting cases?

LARDNER: I think they're very aggressive. There are three strike forces that were created to go specifically after COVID fraud. The Biden administration wants to triple that number. This is keeping federal prosecutors, investigators and inspectors general very busy and will for some time.

The statute of limitations on crimes related to the two large SBA programs, paycheck protection and the COVID emergency -- economic injury disaster loan program have been extended from five to 10 years. There's also a push to do that same statute of limitations extension for crimes related to unemployment and systems fraud.

SMERCONISH: You know, I had this conversation on radio, and one of my callers said to me, not that anyone defends the waste, fraud and abuse, but that the fire hose needed to be opened to keep the economy afloat, and that this was one of the likely ramifications that was going to take place. Quick thought from you?

LARDNER: Well, I think that's right. I mean, this was a moment where businesses were shutting down, people were out of work, economies were in free fall and Washington responded aggressively.

And they wanted the money out fast, so the standard safeguards that normally protect federal money from going to the wrong people were lowered. But I think it's important that -- it takes people on the other side. There were people who took advantage of that during a public health crisis. You know, they saw an opportunity for an easy payday and they grabbed it.

SMERCONISH: Yes. Horrible. By the way, congrats to you and your colleagues. I'm so glad you're on this case because it needs more attention.

[09:50:03]

So, thank you.

LARDNER: Thank you.

SMERCONISH: Quick social media reaction, Catherine. What do we have on the greatest grift of all time?

A bungled pandemic response and an appalling misuse of money.

I don't know that it was a bungled pandemic response because of what we just shared with you. I mean, it's appalling, absolutely. But maybe there was not an alternative. If you are going to open the hose at that velocity, because you think you need to sustain the economy, I'm not depending it, I think it's disgusting. Like, who among us is going to capitalize on a public health crisis to line their pocket?

Still to come, more of your best and worst social media comments, and have you voted yet? Please go now to Smerconish.com, register for the daily newsletter while you're there, you'll love it, it's free, and answer this question, is affirmative action necessary?

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[09:55:18]

SMERCONISH: So, there's the result of this week's poll question at Smerconish.com, 28,002, not too shabby, 60/40, a nice clean divide. Is affirmative action necessary? Sixty percent, I'll say going with -- going with the LBJ answer, yes, it is. LBJ famously having said it is not enough to just open the dates, pardon me, the gates of opportunity. That was the 1965 speech that he delivered at Howard University, 40 minutes long, worthy of your time and attention. I have it posted on my Facebook page.

And to those who were in the 40 percent, I have to say, well, do you believe that the premise was faulty initially? Or do you think we've already achieved the goals? The data that I presented earlier show we haven't achieved the goals.

Happy Father's Day. I'll see you next week.

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