Business

Inside the Party Switch that Blew Up North Carolina Politics

Published

1 year ago

July 30, 2023

Inside the Party Switch that Blew Up North Carolina Politics

When Tricia Cotham, a former Democratic lawmaker, was considering another run for the North Carolina House of Representatives, she turned to a powerful party leader for advice. Then, when she jumped into the Democratic primary, she was encouraged by still other formidable allies.

She won the primary in a redrawn district near Charlotte, and then triumphed in the November general election by 18 percentage points, a victory that helped Democrats lock in enough seats to prevent, by a single vote, a Republican supermajority in the state House.

Except what was unusual — and not publicly known at the time — was that the influential people who had privately encouraged Ms. Cotham to run were Republicans, not Democrats. One was Tim Moore, the redoubtable Republican speaker of the state House. Another was John Bell, the Republican majority leader.

“I encouraged her to run because she was a really good member when she served before,” Mr. Bell recalled in an interview.

Three months after Ms. Cotham took office in January, she delivered a mortal shock to Democrats and to abortion rights supporters: She switched parties, and then cast a decisive vote on May 3 to override a veto by the state’s Democratic governor and enact a 12-week limit on most abortions — North Carolina’s most restrictive abortion policy in 50 years.

Overnight, Ms. Cotham became a heroine to Republicans and anti-abortion advocates across the country, even as Democrats vilified her as a traitor whose unexpected party flip had changed health care policy in a politically purple state of more than 10 million people.

More perplexing to many Democrats was why she did it. Ms. Cotham came from a family with strong ties to the Democratic Party, campaigned as a progressive on social issues and had even co-sponsored a bill to codify a version of Roe v. Wade into North Carolina law.

Interviews with former and current political allies depict her as someone who had grown alienated from Democratic Party officials and ideals. Republican leaders cultivated her before she ran and, seeing her growing estrangement, seized a chance to coax her across party lines.

Before the switch, Ms. Cotham chafed at what she perceived as a lack of support from other Democrats. Once she was elected, Mr. Moore said, he made it clear that she would be welcomed by Republicans.

“Never in my life did I think that one person could have that kind of impact, that will affect the lives of thousands of people for years to come,” said Ann Newman, a Democratic activist in Ms. Cotham’s district. Ms. Newman recently asked for — and received — a refund of the $250 she had donated to Ms. Cotham’s 2022 campaign.

Her change of parties has left many of Ms. Cotham’s constituents feeling angry and betrayed, and has allowed Republicans to flex the power of their new supermajority well beyond the abortion issue, overturning a string of vetoes by the state’s Democratic governor, Roy Cooper, including six on June 27 alone.

Ms. Cotham, 44, has defended her switch and said she had delivered on many promises she made to voters.

“I campaigned on Medicaid expansion,” she said in a statement to The New York Times. “I campaigned on supporting children, housing, safer communities, a strong economy and increasing health care options. I’ve done all of this and more.”

Yet there is no question that Ms. Cotham has dealt a grievous blow to Democratic policy goals in North Carolina.

Late in March, just a few days before switching parties, she skipped a pivotal gun-control vote, helping Republicans loosen gun restrictions in the state. After she became a Republican, she sponsored a bill to expand student eligibility for private-school vouchers, voted to ban gender-affirming care for minors and voted to outlaw discussions of race or gender in state job interviews.

“This switch has been absolutely devastating,” said state Representative Pricey Harrison, a Democrat from Greensboro.

Ms. Cotham received a standing ovation at North Carolina’s state Republican convention in June. She was invited to meet privately there with Gov. Ron DeSantis of Florida and former Vice President Mike Pence.

“She’s a rock star among the Republican Party activists and voter base,” said U.S. Representative Dan Bishop, a Republican who said he encouraged Ms. Cotham to join his party and who stood behind her when she announced the decision.

A Democratic upbringing

Ms. Cotham had deep Democratic roots when she first entered the state House in 2007, replacing a lawmaker who resigned amid corruption charges. At 28, she became the state’s youngest legislator.

Her mother was active in party politics, and later ran successfully for the Mecklenburg County Commission. A first cousin became a Democratic Party leader in Maine, and ran a political action committee supporting abortion rights.

As a student, Ms. Cotham volunteered for Bill Clinton’s presidential campaign and interned for John Edwards, then a United States Senator.

A lot of people in the Democratic Party “have known her since she was a child,” said Ms. Cotham’s mother, Pat Cotham.

In the North Carolina House, Tricia Cotham was re-elected to four full terms and became a progressive force, calling for higher taxes on the state’s wealthiest residents to help close budget gaps. She criticized charter schools. She fought against the so-called bathroom bill that required people to use restrooms in accordance with their birth gender.

She repeatedly railed against waiting periods for abortions, and speaking on the House floor in 2015, invoked her personal experience.

“Legislators, you do not hold shares in my body,” she said in a speech that has now become famous, “so stop trying to manipulate my mind.”

In 2016, Ms. Cotham chose to run for Congress, rather than for another term in the legislature, and was defeated.

Lacey Williams, a former advocacy director at the Charlotte-based Latin American Coalition who considered Ms. Cotham a friend for years, said Ms. Cotham “felt she did not get the gratitude or spotlight that she felt she deserved,” and added, “she was jealous that other Democrats were getting the adulation from the party.”

In response, Ms. Cotham said Ms. Williams “has a right to her feelings,” but “I do not perceive it that way — I’m a very confident and accomplished woman.”

The Lobbyist

For a time, Ms. Cotham left elective politics and went into lobbying, with a focus on education. In 2019, she and three partners founded a firm called BCHL. One of the partners was C. Philip Byers, a major donor to state Republicans who was also president of a company that built charter schools.

In office, Ms. Cotham had criticized charter schools, but now her firm supported private investments in the public school system and charter schools. (Ms. Cotham said she had been supportive of public school alternatives “for years.”)

In 2019, she also became president of an education organization called Achievement for All Children, which was chosen by state officials to turn around a foundering public school in Robeson County. For the next year and a half, Ms. Cotham commuted to the school, Southside-Ashpole Elementary, which is about 100 miles from her home outside Charlotte.

Ms. Cotham fought policy battles energetically, recalled Brenda McCallum, an office manager at the school. She also appealed to her younger constituents, once dressing as the Cat in the Hat for a reading event.

“She was an excellent advocate for our school,” said Ms. McCallum. “The kids loved her.”

In early 2020, Ms. Cotham fell sick with Covid-19, a diagnosis that hobbled her for the next two years. In a local television interview in 2022, she said she was still struggling with the virus’s lingering effects.

It was around that time that state Democratic Party officials were homing in on a redrawn state House district in Mecklenburg County, where Ms. Cotham lived, and where Democratic voters outnumber Republicans. Partly because of her public Covid battle, party leaders didn’t seriously consider nominating her, but she surprised them by filing at the deadline in March to run for the seat.

Some Democrats welcomed her return, seeing her as a reliable ally on social issues like abortion, but activist Democrats in the Charlotte area said she never responded to their offers of help. Text messages from political allies and friends, wishing her well, were met with silence.

She fumed that Lillian’s List, an abortion rights organization, had “really screwed” her by endorsing another Democrat in the primary, according to a message she sent to a campaign worker, Autumn Alston, that was reviewed by The New York Times.

Ms. Cotham seemed to have embraced a me-versus-them mentality, said Jonathan Coby, her former campaign consultant. “She would say, ‘Oh, I don’t want to talk to that group, they’re out to get me; they don’t like me,’” Mr. Coby recalled.

Ms. Cotham said that Mr. Coby, who worked with her for nearly a decade, including on her most recent campaign, was not a reliable source of information.

Meanwhile, as Ms. Cotham grew leery of activists and groups on the left, she was receiving counsel from prominent Republicans. “I reached out to her and told her good luck, I hope she wins,” said Mr. Moore, the House speaker. “She was somebody I realized we could work with.”

Ms. Cotham said that Mr. Moore and “others” were pleased that she was running. She called their well wishes “pretty common.”

Both Mr. Moore and John Bell, the Republican majority leader, said they didn’t know at that time that Ms. Cotham would change parties.

Ms. Cotham’s top campaign donors included the North Carolina Dental Society PAC — which gave almost exclusively to Republican candidates — and the North Carolina Health Care Facilities PAC, which gave mainly to Republicans.

“Those groups have honored me with their support for years,” Ms. Cotham said. “I’ve earned it.”

A rocky return

In January, Ms. Cotham was part of a small group of lawmakers who escorted Mr. Moore to the dais to be sworn in as speaker. Some Democrats said they were surprised to see Ms. Cotham play such a role.

In a recent interview, Mr. Moore praised Ms. Cotham’s ability to “work with Republicans at all times.”

Democrats, including Ms. Cotham, sponsored a House bill that month to write Roe v. Wade’s protection of abortion rights into state law. Yet she refused to meet or take phone calls from Planned Parenthood, according to Jillian Reilly, a lobbyist for the group.

Ms. Cotham told Mr. Coby and her mother that she was put off that Democrats treated her as a newcomer when she returned to the House, inviting her to freshman orientation and offering her a mentor. She declined both.

Ms. Cotham would later say she was offended by what she regarded as bullying and groupthink inside the Democratic caucus, which was no longer the “big tent” she had once known. She said the caucus focused too much on process over the hard work of governance.

Democrats said they were baffled by the accusations she later aired. Text messages between Ms. Cotham and house Democratic Party leader Robert Reives reviewed by The Times show friendly dialogue.

“It never would have crossed my mind that she was having issues,” said Mr. Reives.

Mr. Bell, the Republican majority leader, said he was aware of Ms. Cotham’s unease. He and Mr. Moore tried to engage her about joining the G.O.P., telling her “you have a home over here.”

After Ms. Cotham was criticized for missing the vote on gun regulations, Mr. Bishop, the Republican congressman, called her and said he had heard she was thinking of joining his party.

“I got the sense when we talked that she was much farther along in that decision than I had understood before calling her,” he recalled.

After the gun vote, Mr. Coby said he found Ms. Cotham to be angry. “She said, ‘I’m either going to switch parties or resign,’” he remembered. “The things she was telling me then were like, ‘The Democrats don’t like me, the Republicans have helped me out a lot and been nice to me’.”

Four days later Ms. Cotham announced her decision to defect. “The party wants to villainize anyone who has free thought,” she said of the Democrats during a news conference.

She accused Democrats of spreading “vicious rumors” about her — perhaps alluding to chatter that she and Mr. Moore were romantically linked. Mr. Moore has denied the assertion; Ms. Cotham called it “insulting.”

Ms. Cotham was soon fielding thousands of texts, emails and phone messages calling her a traitor and liar, delivering vulgarities her mother described “as a new low in society” and demanding that she resign.

Four months after Ms. Cotham’s party switch, the bitterness still runs deep.

Linda Meigs, a political activist from Charlotte, drove to Ms. Cotham’s district this month for a meeting with local lawmakers hosted by Common Cause North Carolina and other liberal advocacy groups.

Ms. Meigs said she had come prepared to confront Ms. Cotham over how she could have campaigned on “Democratic Party values such as women’s rights to reproductive freedom and L.G.B.T.Q. rights,” only to reverse her support. Ms. Cotham was invited to speak, but didn’t attend.

“When I’m talking to somebody and asking them a question, I usually like to look them in the face,” Ms. Meigs told a crowded room at a Mint Hill church. “I can’t do that tonight.”

Instead, she pointed to a front-row chair. “So,” she said to cheers, “I’m going to talk to this empty chair.”

Bryan Anderson contributed reporting from Raleigh, N.C. Kitty Bennett contributed research.

Business

Elon Musk, Mark Zuckerberg and Jeff Bezos to Attend Trump’s Inauguration

Published

5 hours ago

January 15, 2025

Press Room

Elon Musk, Mark Zuckerberg and Jeff Bezos to Attend Trump’s Inauguration

Bezos, Zuckerberg and Coke at the inauguration

Corporate America had already raced to donate big sums to Donald Trump’s record-breaking inaugural fund. Now some of its leaders appear eager to jockey for prominent positions at the inauguration next week.

It’s a new reminder that for some of the nation’s biggest businesses, forging close ties to a president-elect who is promising hard-hitting policies like tariffs is a priority this time around.

Jeff Bezos and Mark Zuckerberg are expected to be on the inauguration dais, according to NBC News, alongside Elon Musk and several cabinet picks.

The presence of Musk isn’t a surprise, given the Tesla chief’s significant support of and huge influence over Trump. But the other tech moguls have only more recently been seen as supporters of the administration. (Indeed, Bezos frequently sparred with Trump during his first presidential term.)

It’s the latest effort by Bezos and Zuckerberg to burnish their Trump credentials. At the DealBook Summit in December, Bezos — whose Amazon has faced scrutiny under the Biden administration and whose Blue Origin is hoping to win government rocket contracts — said that he was “very hopeful” about Trump’s efforts to reduce regulation.

And Zuckerberg recently announced significant changes to Meta’s content moderation policy, including relaxing restrictions on speech seen as protecting groups including L.G.B.T.Q. people that won praise from Trump and other conservatives. On the inauguration front, Zuckerberg is also co-hosting a reception alongside the longtime Trump backers Miriam Adelson, Tilman Fertitta and Todd Ricketts.

Both tech moguls have visited Mar-a-Lago since the election, with Zuckerberg having done so more than once.

Coca-Cola took a different tack. The drinks giant’s C.E.O., James Quincey, gave Trump what an aide called the “first ever Presidential Commemorative Inaugural Diet Coke bottle.”

More broadly, business leaders want a piece of the inauguration action. The Times previously reported that the Trump inaugural fund had surpassed $170 million, a record, and that even major donors have been wait-listed for events.

Others are throwing unofficial events around Washington, including an “Inaugural Crypto Ball” that will feature Snoop Dogg, with tickets starting at $5,000, The Wall Street Journal reports.

It’s a reminder that C.E.O.s are reading the room, and preparing their companies for a president who has proposed creating an “External Revenue Service” to oversee what he has promised will be wide-ranging tariffs.

David Urban, a longtime Trump adviser who’s hosting a pre-inauguration event, told The Journal, “This is the world order, and if we’re going to succeed, we need to get with the world order.”

In other Trump news: The president-elect is expected to appear via videoconference at the World Economic Forum in Davos, Switzerland, which starts on Inauguration Day, according to Semafor.

HERE’S WHAT’S HAPPENING

Investors brace for the latest inflation data. The Consumer Price Index report, due out at 8:30 a.m. Eastern, is expected to show that inflation ticked up last month, most likely because of climbing food and fuel costs. Global bond markets have been rattled as slow progress on slowing inflation has prompted the Fed to slash its forecast for interest rate cuts.

More Trump cabinet picks will appear before the Senate on Wednesday. Senator Marco Rubio of Florida, the choice for secretary of state, is expected to field questions about his views on the Middle East, Ukraine and China, but is expected to be confirmed. Russell Vought, the pick to run the Office of Management and Budget, will most likely be asked about his advocacy for drastically shrinking the federal government, a key Trump objective. And Sean Duffy, the Fox Business host chosen to lead the Transportation Department, will probably face questions on how he would oversee matters including aviation safety and autonomous vehicles, the latter of which is a priority for Elon Musk.

Meta plans to lay off another 5 percent of its employees. Mark Zuckerberg, the tech giant’s C.E.O., told staff members to prepare for “extensive performance-based cuts” as the company braces for “an intense year.” The social media giant faces intense competition in the race to commercialize artificial intelligence.

A new bill would give TikTok a reprieve from a ban in the United States. Senator Ed Markey, Democrat of Massachusetts, said he planned to introduce the Extend the TikTok Deadline Act, which would give the video platform 270 additional days to be divested from its Chinese parent, ByteDance before being blacklisted. It’s the latest effort to buy TikTok time, as the app faces a Jan. 19 deadline set by a law; President-elect Donald Trump has opposed the potential ban as well.

A question of succession

JPMorgan Chase and BlackRock, the giant money manager, just reported earnings. (In short: Both handily beat analyst expectations.)

But the Wall Street giants are likely to face questioning on a particular issue on Wednesday: Which top lieutenants are in line to replace their larger-than-life C.E.O.s, Jamie Dimon and Larry Fink.

Who’s out:

Daniel Pinto, who had long been Dimon’s right-hand man, said he would officially drop his responsibilities as JPMorgan’s C.O.O. in June and retire at the end of 2026. Jenn Piepszak, the co-C.E.O. of the company’s core commercial and investment bank, has become C.O.O.
And Mark Wiedman, the head of BlackRock’s global client business and a top contender to succeed Fink, is planning to leave, according to news reports.

What Wall Street is gossiping about JPMorgan: Even in taking the C.O.O. role, JPMorgan said that Piepszak wasn’t interested in succeeding Dimon “at this time.” DealBook hears that while she genuinely appears not to want to pursue the top job, the phrasing covers her in case she changes her mind.

For now, that means the most likely candidates for the top spot are Marianne Lake, the company’s head of consumer and community banking; Troy Rohrbaugh, the other co-head of the commercial and investment bank; and Doug Petno, a co-head of global banking.

The buzz around BlackRock: Wiedman reportedly didn’t want to keep waiting to succeed Fink and is expected to seek a C.E.O. position elsewhere. (So sudden was his departure that he’s forfeiting about $8 million worth of stock options and, according to The Wall Street Journal, he doesn’t have another job lined up yet.)

Fink said on CNBC on Wednesday that Wiedman’s departure had been in the works for some time, with the executive having expressed a desire to leave about six months ago.

Other candidates to take over for Fink include Martin Small, BlackRock’s C.F.O.; Rob Goldstein, the firm’s C.O.O.; and Rachel Lord, the head of international.

But Dimon and Fink aren’t going anywhere just yet. Dimon, 68, said only last year that he might not be in the role in five years. And Fink, 72, said in July that he was working on succession planning: “When I do believe the next generation is ready, I’m out.”

The S.E.C. gets in a final shot at Musk

Another battle between Elon Musk and the S.E.C. erupted on Tuesday, with the agency suing the tech mogul over his 2022 purchase of Twitter.

It’s unclear what happens to the lawsuit once President-elect Donald Trump, who counts Musk as a close ally, takes office. But the agency’s reputation as an independent watchdog may be at stake.

A recap: The S.E.C. accused Musk of violating securities laws in his $44 billion acquisition of the social media company.

The agency said that Musk had failed to disclose his Twitter ownership stake for a pivotal 11-day stretch before revealing his intentions to purchase the company. That breach allowed him to buy up at least $150 million worth of Twitter shares at a lower price — to the detriment of existing shareholders, the agency argues.

The S.E.C. isn’t just seeking to fine Musk. It wants him to pay back the windfall. “That’s unusual,” Ann Lipton, a professor at Tulane Law School, told DealBook.

Alex Spiro, Musk’s lawyer, called the latest action a “sham” and accused the agency of waging a “multiyear campaign of harassment” against him.

The showdown sets up a tough question for the S.E.C. Will Paul Atkins, the president-elect’s widely respected pick to lead the agency, drop the case? Such a move could call the bedrock principle of S.E.C. independence into question.

Jay Clayton, who led the agency during Trump’s first term, earned the respect of the business community for running it in a largely drama-free manner. It was under Clayton that the S.E.C. sued Musk over his statements about taking Tesla private.

Musk, who is set to become Trump’s cost-cutting czar and is expected to have office space in the White House complex, has called for the “comprehensive overhaul” of agencies like the S.E.C. The billionaire said he would also like to see “punitive action against those individuals who have abused their regulatory power for personal and political gain.”

In related news: The Consumer Financial Protection Bureau sued Capital One, accusing it of cheating its depositors out of $2 billion in interest payments.

THE SPEED READ

Deals

DAZN, the streaming network backed by the billionaire businessman Len Blavatnik, is closing in on funding from Saudi Arabia’s sovereign wealth fund as the kingdom continues to expand its sports footprint. (NYT)
The Justice Department sued KKR, accusing the investment giant of withholding information during government reviews for several of its deals. KKR filed a countersuit. (Bloomberg)
OpenAI added Adebayo Ogunlesi, the billionaire co-founder of the infrastructure investment firm Global Infrastructure Partners, to its board. (FT)

Politics and policy

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We’d like your feedback! Please email thoughts and suggestions to dealbook@nytimes.com.

Business

For uninsured fire victims, the Small Business Administration offers a rare lifeline

Published

5 hours ago

January 15, 2025

Press Room

For uninsured fire victims, the Small Business Administration offers a rare lifeline

As wildfires continue to burn around Southern California, thousands of business owners, homeowners and renters are confronting the daunting challenge of rebuilding from the ashes. For some number of them, the road ahead will be all the more difficult because they didn’t have any or enough insurance to cover their losses. For them, the U.S. Small Business Administration is a possible lifeline.

The SBA, which offers emergency loans to businesses, homeowners, renters and nonprofits, is among the few relief options for those who don’t have insurance or are underinsured. Uninsured Angelenos can also apply for disaster assistance through the Federal Emergency Management Agency, or FEMA.

The current wildfires are ravaging a state that was already in the midst of a home insurance crisis. Thousands of homeowners have lost their insurance in recent years as providers pull out of fire-prone areas and jack up their prices in the face of rising risk.

“For those who are not going to get that insurance payout, this is available,” Small Business Administration head Isabella Casillas Guzman said in an interview during a recent trip to the fire areas. “The loans are intended to fill gaps, and that is very broad.”

About one-third of businesses don’t have insurance and three-quarters are underinsured, Guzman said.

“There will be residual effects around the whole community,” she said. “Insurance will not cover this disaster.”

Businesses, nonprofits and small agricultural cooperatives can apply for an economic injury loan or a physical damage loan through SBA. Homeowners are eligible for physical damage loans. Economic injury loans are intended to help businesses meet ordinary financial demands, while physical damage loans provide funds for repairs and restoration. People can apply online and loans must be repaid within 30 years.

Renters can receive up to $100,000 in assistance, homeowners up to $500,000 and businesses up to $2 million, according to Guzman. Homeowners and renters who cannot get access to credit elsewhere can qualify for loans with a interest rate of 2.5%. The SBA determines an applicant has no credit available elsewhere if they do not have other funds to pay for disaster recovery and cannot borrow from nongovernment sources.

Interest rates for homeowners and renters who do have access to credit elsewhere are just over 5%. Loans for businesses could come with interest rates of 4% or 8% depending on whether the business has other credit options.

An applicant must show they are able to repay their loan and have a credit history acceptable to the SBA in order to be approved. The loans became available following President Biden’s declaration of a major disaster in California.

“We’ve already received hundreds of applications from individuals and businesses interested in exploring additional support,” Guzman said. “We know the economic disruption may not be contained to the footprint of any evacuation zones or power outages.”

People who don’t have insurance or whose insurance doesn’t cover the entirety of their losses are eligible for loans, Guzman said. While many will use the funds to start from scratch after losing their property to the fires, businesses that are still standing can also apply for support to cover lost revenue.

Guzman was not able to estimate the total value of loans they expect to offer in California but said the organization is on solid financial footing after temporarily running out of funds in October.

“Funding has been replenished by Congress, and we expect to be able to coordinate closely with Congress,” Guzman said. “We’re fully funded and in a good position to provide support.”

Business

Cookies, Cocktails and Mushrooms on the Menu as Justices Hear Bank Fraud Case

Published

14 hours ago

January 15, 2025

Press Room

Cookies, Cocktails and Mushrooms on the Menu as Justices Hear Bank Fraud Case

In a lively Supreme Court argument on Tuesday that included references to cookies, cocktails and toxic mushrooms, the justices tried to find the line between misleading statements and outright lies in the case of a Chicago politician convicted of making false statements to bank regulators.

The case concerned Patrick Daley Thompson, a former Chicago alderman who is the grandson of one former mayor, Richard J. Daley, and the nephew of another, Richard M. Daley. He conceded that he had misled the regulators but said his statements fell short of the outright falsehoods he said were required to make them criminal.

The justices peppered the lawyers with colorful questions that tried to tease out the difference between false and misleading statements.

Chief Justice John G. Roberts Jr. asked whether a motorist pulled over on suspicion of driving while impaired said something false by stating that he had had one cocktail while omitting that he had also drunk four glasses of wine.

Caroline A. Flynn, a lawyer for the federal government, said that a jury could find the statement to be false because “the officer was asking for a complete account of how much the person had had to drink.”

Justice Ketanji Brown Jackson asked about a child who admitted to eating three cookies when she had consumed 10.

Ms. Flynn said context mattered.

“If the mom had said, ‘Did you eat all the cookies,’ or ‘how many cookies did you eat,’ and the child says, ‘I ate three cookies’ when she ate 10, that’s a false statement,” Ms. Flynn said. “But, if the mom says, ‘Did you eat any cookies,’ and the child says three, that’s not an understatement in response to a specific numerical inquiry.”

Justice Sonia Sotomayor asked whether it was false to label toxic mushrooms as “a hundred percent natural.” Ms. Flynn did not give a direct response.

The case before the court, Thompson v. United States, No. 23-1095, started when Mr. Thompson took out three loans from Washington Federal Bank for Savings between 2011 and 2014. He used the first, for $110,000, to finance a law firm. He used the next loan, for $20,000, to pay a tax bill. He used the third, for $89,000, to repay a debt to another bank.

He made a single payment on the loans, for $390 in 2012. The bank, which did not press him for further payments, went under in 2017.

When the Federal Deposit Insurance Corporation and a loan servicer it had hired sought repayment of the loans plus interest, amounting to about $270,000, Mr. Thompson told them he had borrowed $110,000, which was true in a narrow sense but incomplete.

After negotiations, Mr. Thompson in 2018 paid back the principal but not the interest. More than two years later, federal prosecutors charged him with violating a law making it a crime to give “any false statement or report” to influence the F.D.I.C.

He was convicted and ordered to repay the interest, amounting to about $50,000. He served four months in prison.

Chris C. Gair, a lawyer for Mr. Thompson, said his client’s statements were accurate in context, an assertion that met with skepticism. Justice Elena Kagan noted that the jury had found the statements were false and that a ruling in Mr. Thompson’s favor would require a court to rule that no reasonable juror could have come to that conclusion.

Justices Neil M. Gorsuch and Brett M. Kavanaugh said that issue was not before the court, which had agreed to decide the legal question of whether the federal law, as a general matter, covered misleading statements. Lower courts, they said, could decide whether Mr. Thompson had been properly convicted.

Justice Samuel A. Alito Jr. asked for an example of a misleading statement that was not false. Mr. Gair, who was presenting his first Supreme Court argument, responded by talking about himself.

“If I go back and change my website and say ‘40 years of litigation experience’ and then in bold caps say ‘Supreme Court advocate,’” he said, “that would be, after today, a true statement. It would be misleading to anybody who was thinking about whether to hire me.”

Justice Alito said such a statement was, at most, mildly misleading. But Justice Kagan was impressed.

“Well, it is, though, the humblest answer I’ve ever heard from the Supreme Court podium,” she said, to laughter. “So good show on that one.”