State, Federal Investigators’ Bid for Trump’s Financial Records Heard by Supreme Court

May 12, 2020 Updated: May 13, 2020

The Supreme Court heard President Donald Trump’s long-awaited appeal of lower-court rulings ordering him to hand over private business papers and tax returns to investigators.

For more than three hours on May 12, six lawyers debated about Trump’s efforts to defend himself against historically unprecedented subpoenas from federal lawmakers and a local prosecutor in New York City against the head of the executive branch. The president sued several banks and an accounting firm he has patronized to prevent access to the documentation.

Trump claims those records are temporarily privileged while he is in office, he has done nothing wrong, and inquiries are politically motivated fishing expeditions that his political enemies are gambling will uncover past wrongdoing.

“The subpoenas at issue here are unprecedented in every sense,” Trump lawyer Patrick Strawbridge told the court during the first of two rounds of oral arguments.

“Before these cases, no court had ever upheld the use of Congress’s subpoena power to demand the personal records of a sitting president, and no committee of Congress had even tried to compel production of such a broad swath of the president’s personal papers, let alone for the stated purpose of considering potential legislation.”

The day’s sitting was divided into two distinct sets of oral arguments conducted telephonically and simultaneously broadcast to the public.

The first, which consisted of the consolidated cases of Trump v. Mazars and Trump v. Deutsche Bank AG, concerned the Democrat-controlled House Committee on Oversight and Reform, which issued a subpoena to Trump’s accountant and several of his business entities. The committee wants private financial records that belong to Trump.

The U.S. Court of Appeals for the District of Columbia Circuit ruled the subpoena had a legitimate legislative purpose and was within the statutory authority of the committee. Trump’s position is that the committee has no such authority.

The second consisted of Trump v. Vance, which stems from a criminal investigation conducted by Manhattan District Attorney Cyrus Vance Jr.

Vance’s office has been looking into the role Trump and his business, The Trump Organization, may have played in alleged hush-money payments made to Stormy Daniels, a pornographic movie actress who claimed during the 2016 election cycle that she had an affair with Trump. Trump denies the affair. Federal prosecutors dropped their investigation into the matter, but Vance claims Trump may have broken state laws.

Former Trump attorney Michael D. Cohen reportedly paid money to Daniels to prevent her from speaking publicly about the alleged relationship and was reimbursed by Trump and his company. Cohen was sentenced in 2018 to three years in prison for violating federal campaign finance laws.

As part of an investigation, Vance served a grand-jury subpoena on the accounting firm, Mazars USA, demanding a wide swath of business documents, including financial papers and eight years of Trump’s personal and corporate tax returns. According to documents filed with the Supreme Court, the New York subpoena is a nearly verbatim copy of subpoenas issued by committees of Congress for the same papers.

The 2nd Circuit Court of Appeals rejected the president’s claim of immunity and ordered him to comply with the subpoena. Trump’s position is that the subpoena violates Article 2 and the supremacy clause of the U.S. Constitution.

Vance’s office previously countered that Trump is asserting a novel presidential “tax return privilege” on the theory “that disclosing information in a tax return will necessarily reveal information that will somehow impede the functioning of a president.”

Jay Sekulow, Trump’s attorney in the New York case, echoed Strawbridge.

“No county district attorney in our nation’s history has issued criminal process against a sitting president of the United States, and for good reason. The Constitution does not allow it.”

If the 2nd Circuit’s ruling isn’t reversed, “the decision weaponizes 2,300 local DAs,” allowing them “to harass, distract, and interfere with the sitting president,” Sekulow said.

Justice Clarence Thomas asked Principal Deputy Solicitor General Jeffrey Wall, who appeared in support of Trump, a hypothetical about investigators’ possible ulterior motives.

“What if it was clear from those statements that you reviewed that their intention was actually to remove the president from office rather than … that it is for … pre-textual legislative reasons?”

Wall said the U.S. House of Representatives, which is supposed to investigate as part of the lawmaking process, has made little effort to justify its actions in the case.

If you look “at what they actually say about their intended legislative proposals and then why they need the document, it’s paper-thin. They don’t give you any specifics on what they’re thinking about doing or any specifics on why they need the documents.”

“The House has never really tried to substantiate why it needs these documents in service of its legislative powers,” Wall added.

Justice Elena Kagan told Wall that his legal brief failed to “make a case as to why these particular subpoenas place a particular burden on the president such that he will be prevented from carrying out his constitutional responsibilities.”

Wall denied that and said that the House was limited in what it could do.

The lower courts said the House “probably … could not draw the blood of the president or read his teenage diary. The power that they are seeking and the burden they will impose in the aggregate on the president will, I think, reshape and transform the balance of the separation of powers. So, yes, we are saying that these subpoenas, and certainly these subpoenas taken in the aggregate, once the House has this weapon, will harm and undermine the presidency of the United States, not just this president, the institution of the presidency going forward.”

Justice Samuel Alito suggested to Douglas Letter, general counsel to the House, that he saw no practical limits to the congressional subpoena power.

“That’s correct because this court itself has said Congress’s power … to legislate is extremely broad, especially when you take into account appropriations,” Letter replied.

“So the end result is that there is no protection whatsoever,” Alito said.

Chief Justice John Roberts also told Letter: “Your test is not really much of a test. It’s not really a limit.”

Justice Ruth Bader Ginsburg seemed more sympathetic to the House’s position, suggesting it may need to revamp some laws.

She pointed out that under the Ethics in Government Act, “Congress may decide that it needs to beef up that legislation … It may also decide that for financial disclosure purposes, there should be disclosure of tax returns.”