Supreme Court hears momentous cases involving access to Trump tax, business records

Supreme Court hears momentous cases involving access to Trump tax, business records

The U.S. Supreme Court on Tuesday considers three blockbuster cases concerning efforts by the Democratic-led House of Representatives and a grand jury working with a prosecutor in New York City to obtain copies of President Donald Trump’s financial records.

Unlike recent presidents, Trump has refused to disclose his tax returns and other materials that would shed light on the scope of his wealth and his family-run real estate business. The cases test the limits of presidential power in relation to Congress and state prosecutors.

As they have so far this month, the justices are hearing arguments by telephone due to the coronavirus outbreak. Six of the nine Supreme Court justices are over the age of 65.

Rulings are due by the end of June.

In all three cases, lower courts in Washington and New York ruled against Trump.

Here is a look at what is at stake in the cases:

The 3 cases

Two of the three cases concern attempts by Democratic-led House of Representatives committees to enforce subpoenas seeking Trump’s financial records from three businesses: Trump’s longtime accounting firm Mazars LLP and two banks, Deutsche Bank and Capital One.

The Supreme Court has consolidated these two cases and will hear them together in a scheduled one-hour argument.

The other case concerns another subpoena issued to Mazars for similar information, including tax returns, but this one was issued as part of a grand jury investigation into Trump being carried out in New York City. The justices will hear a second one-hour oral argument in this case.

What the House wants from banks, accounting firm

The oversight committee in April 2019 issued a subpoena to Mazars seeking eight years of accounting and other financial information in response to the testimony before Congress of Michael Cohen, Trump’s former lawyer.

Cohen said that Trump had inflated and deflated certain assets on financial statements between 2011 and 2013 in part to reduce his real estate taxes. The committee said it wanted to find out whether illegal actions had taken place.

In this Dec. 12, 2018, file photo, Michael Cohen, President Donald Trump’s former lawyer, leaves federal court after his sentencing in New York. Cohen was ultimately sentenced to prison and claimed Trump directed payments be made to Stormy Daniels and Karen McDougal. (Craig Ruttle/The Associated Press)

Cohen was sentenced to prison after pleading guilty to charges including violating campaign finance law, bank fraud, tax evasion and lying to Congress.

The House’s financial services committee has been examining possible money laundering in U.S. property deals involving Trump. In a separate investigation, the House’s intelligence committee is investigating whether Trump’s dealings left him subject to the influence of foreign individuals or governments.

The two committees issued 12-page subpoenas in April 2019 requiring Deutsche Bank to hand over the banking records of Trump, his children and his businesses. Lawmakers requested documents that identify “any financial relationship, transaction or ties” between Trump, his family members and “any foreign individual, entity or government,” according to the subpoena.

Investigators hope the records will reveal whether there are any financial links between Trump and Russia’s government, sources familiar with the probe said. That would include whether any loans to Trump by Deutsche Bank were back-stopped by Russian entities – a financial arrangement that can be considered a form of insurance, the sources said.

Senior sources within Deutsche Bank have denied any Russian connections to loans it made to Trump.

Deutsche Bank was the only major lender to conduct business with Trump in recent years – doing so despite the fact that he defaulted on loans worth hundreds of millions of dollars the German bank made to him between 2004 and 2008.

At the time of his January 2017 inauguration, Trump owed Deutsche Bank around $350 million US, according to sources. Many of the loans were granted through Deutsche Bank’s New York-based private banking division, which also lent to Trump’s son-in-law and adviser Jared Kushner.

The Financial services committee in the House also issued a subpoena to Capital One, which also had maintained a long-term relationship with Trump and has come under scrutiny for some of its business practices.

Huge stakes for Congressional oversight

If Trump loses, the material would need to be handed over to Democratic lawmakers, most likely before the Nov. 3 election in which Trump is seeking a second four-year term. The ruling would make clear that a president, at least when it comes to information held by third parties, cannot block House subpoenas.

Trump’s lawyers have advanced several arguments, including that Congress had no authority to issue the subpoenas, a broad assertion of presidential power. No sitting president has ever had his personal records subpoenaed, they said.

Adam Schiff is the chair of the House’s intelligence committee, one of three that have been stymied in obtaiming financial records from Donald Trump, leading to Tuesday’s Supreme Court hearing in Washington. (Joshua Roberts/Reuters)

They also said that even if Congress could issue the subpoenas, it lacked a valid legislative reason for doing so and had not stated with sufficient detail why it needed the documents.

If the court were to embrace Trump’s broadest arguments, it would severely weaken the ability of Congress to conduct oversight of a president.

The New York case

The office of Manhattan District Attorney Cyrus Vance, a Democrat, in September 2019 sought nearly a decade of tax returns. It is part of a criminal investigation that began in 2018 into Trump and the Trump Organization, which is the president’s family real estate business.

The request for documents was spurred by disclosures of hush payments made to two women who said they had past sexual relationships with him. Those women are pornographic film performer Stormy Daniels and former Playboy model Karen McDougal. Trump and his aides have denied the relationships.

Adult film star Stormy Daniels speaks outside federal court in New York in 2018. Trump has denied having an extramarital affair with Daniels and knowledge of payments she received. (Mary Altaffer/The Associated Press)

Trump’s lawyers argue that his records cannot be handed over because of his authority as president under the Constitution, contending he is immune from any criminal proceeding when in office.

They have downplayed prior Supreme Court rulings regarding limits on the reach of presidential authority and point instead to Justice Department guidance that asserts that a sitting president cannot be indicted or prosecuted.

In a lower court hearing, Trump’s lawyers went so far as to argue that law enforcement officials would not have the power to investigate Trump even if he shot someone on New York’s Fifth Avenue.

Vance has countered that his investigation is at an early stage and that there is a risk that documents would be lost if prosecutors cannot access them now.

Other landmark presidential cases

In two earlier cases over presidential power, the justices acted unanimously 8-0 in requiring President Richard Nixon to turn over White House tapes to the Watergate special prosecutor, ultimately leading to his resignation. In 1997, justices ruled unanimously in allowing a sexual harassment lawsuit against President Bill Clinton to go forward, leading to his impeachment in the House. He was subsequently acquitted in a Senate trial.

William Rehnquist, who was the lone justice on both courts, sat out the tapes case because he had worked closely as a Justice Department official with some of the Watergate conspirators whose upcoming trial spurred the subpoena for the Oval Office recordings.

U.S. President Donald Trump talks with U.S. Supreme Court Justices Neil Gorsuch, left, and Brett Kavanaugh at the State of the Union Address on Feb. 5, 2019. Gorsuch and Kavanaugh were appointed by Trump. (Jonathan Ernst/Reuters)

Three justices who heard the Clinton case are still on the bench: the Clinton-appointed Ruth Bader Ginsburg and Stephen Breyer, as well as Clarence Thomas, appointed by George H.W. Bush.

There are two Trump-appointed justices hearing the case Tuesday: Neil Gorsuch and Brett Kavanaugh.

Published at Tue, 12 May 2020 08:00:00 +0000