Democrats sense new momentum in Trump tax return fight

Democrats sense new momentum in Trump tax return fight
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Democrats are seizing on a recent court ruling in favor of a House subpoena for President TrumpDonald John TrumpTrump says 'Failing New York Times' should be held 'fully accountable' over Russia report Trump says 'Failing New York Times' should be held 'fully accountable' over Russia report Trump tweets ICE will begin removing 'millions' of undocumented migrants MORE’s financial records, saying the judge’s order could bode well in a separate bid for Trump’s tax returns.

Judge Amit Mehta, an Obama appointee, rejected nearly all of the president's legal arguments in his order Monday upholding a subpoena issued by the House Oversight and Reform Committee to Trump's accounting firm, Mazars.

Trump's lawyers are leaning on those same arguments as they try to block similar document requests from Congress, suggesting the president is likely to face an uphill battle fending off congressional subpoenas such as the one seeking the president’s tax returns.

House Democrats and others seeking Trump’s tax returns see Mehta’s ruling as a positive sign for their prospects in court.

“It’s certainly encouraging,” said Rep. Dan KildeeDaniel (Dan) Timothy KildeeDems eye repeal of Justice rule barring presidential indictments Dems eye repeal of Justice rule barring presidential indictments Democratic lawmaker says Trump isn't 'leaving us any choice' on impeachment MORE (D-Mich.), a member of the House Ways and Means Committee. “The fact that the courts are willing to uphold what is a legitimate request ... it’s a message that the White House ought to pay attention to.”

Rep. Bill PascrellWilliam (Bill) James PascrellFirst major 'Medicare for All' hearing sharpens attacks on both sides First major 'Medicare for All' hearing sharpens attacks on both sides Democrats needle GOP on standing up to Trump MORE (D-N.J.), another Ways and Means Committee member who has been active on the tax return issue, said the ruling makes the president’s lawyers’ reasoning for rebuking congressional committees “look silly.”

A court battle over Trump’s tax returns is on the horizon now that Treasury Secretary Steven MnuchinSteven Terner MnuchinDemocrats ask OSC to review whether Kushner violated Hatch Act Democrats ask OSC to review whether Kushner violated Hatch Act Trump: My 'financial statement' will probably come out 'at some point' MORE has rejected a subpoena from Ways and Means Committee Chairman Richard NealRichard Edmund NealTrump: My 'financial statement' will probably come out 'at some point' Trump: My 'financial statement' will probably come out 'at some point' Schiff blasts DOJ over memo on withholding Trump tax returns MORE (D-Mass.) for six years of Trump’s tax filings, from 2013 to 2018.

And Mehta’s recent ruling may offer some clues as to how that fight will play out.

In Monday’s ruling, he cited decades of established precedent that favors Congress’s ability to investigate and says courts do not have to determine if there is a political motivation behind congressional actions.

He also sided with the Oversight and Reform panel’s argument that the requested financial records will help the committee as it considers strengthening ethics and disclosure laws and monitors Trump’s compliance with the Constitution’s Emoluments Clause.

“These are facially valid legislative purposes, and it is not for the court to question whether the Committee’s actions are truly motivated by political considerations,” Mehta wrote.

Trump’s lawyers have argued in the Mazars case that Congress needs a specific legislative purpose to get the documents. His attorneys are expected to make those same arguments in a federal courthouse in New York on Wednesday as they seek to block subpoenas issued by the House Financial Services and Intelligence committees for Trump’s financial records from Deutsche Bank and Capital One.

The Democratic-controlled panels have not pointed to specific bills in their subpoenas but instead have painted a broader picture about the kinds of measures they could pass as a result of receiving the requested documents.

The question of legislative purpose is also at the center of the fight over Trump’s tax returns and would likely be a key part of any battle in the courts over that issue.

Neal has said the Ways and Means Committee wants to see Trump’s tax returns because it is conducting oversight and considering legislative proposals related to how the IRS audits presidents. Mnuchin has argued that Neal does not have a legitimate legislative purpose.

Some tax experts noted that a lawsuit over Trump’s tax returns would be different from the Mazars case because the Oversight and Reform Committee is able to look at a wider range of issues in investigations than the Ways and Means Committee can.

But they also said a judge’s ruling that comes down so strongly on the side of House Democrats could be helpful in the tax return fight.

“This opinion is so grounded in the relevant precedent that I can’t imagine a different outcome in the tax return case,” said Seth Hanlon, a senior fellow at the left-leaning Center for American Progress.

When Neal requested Trump’s tax returns, he cited a provision of the federal tax code that stemmed from legislation passed in 1924 in the wake of the Teapot Dome scandal. Mehta, in his ruling, cited the 1924 law as an example of when congressional investigations have led to legislation.

“It’s worth noting that he situated the Revenue Act of 1924 within the tradition of legitimate congressional investigations that led to legislative reforms,” Hanlon said.

Steve Rosenthal, a senior fellow at the Urban-Brookings Tax Policy Center, said it helps Democrats “to win a big one early and to win it hands down.”

Other courts may be influenced by Mehta’s ruling, and the administration may be “more reserved on aggressively rejecting requests for information,” he added.

The fight for the president’s tax returns is likely to center on different legal questions. While the Oversight and Reform Committee’s subpoenas for the financial records were sent to private financial institutions, Neal is asking Trump officials to hand over documents relating to the head of the administration.

That will likely raise new arguments over whether the federal agencies can provide Congress with the tax returns. And Trump could assert privacy concerns to try to prevent the documents from being turned over to lawmakers.

The fight over the documents comes as several House committees seek testimony and documents from current and former Trump administration officials, a battle that could also end up in court.

Former White House counsel Don McGahn defied a congressional subpoena for his testimony by failing to appear at a hearing Tuesday, following instructions by the White House, a move that sparked calls from some Democrats to start impeachment proceedings against Trump. 

And the House Judiciary Committee voted along party lines earlier this month to hold Attorney General William BarrWilliam Pelham BarrForeign interference is a threat to the 2020 elections — presidential interference is, too Foreign interference is a threat to the 2020 elections — presidential interference is, too America's crisis of compassion is a Constitutional crisis, too MORE in contempt for not turning over the entire unredacted Mueller report and all of its underlying evidence. 

Jonathan Turley, a George Washington University law professor and an opinion contributor to The Hill, said the legal threshold “is fairly low for Congress” when it comes to proving that a subpoena is related to potential legislation.

“So, you know, that dog won't hunt for the White House,” he said.

But he said Democrats in Congress shouldn’t feel too comfortable relying on that standard alone to guarantee a legal victory.

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Turley, who represented the GOP-held House in lawsuits against the Obama administration, said lawmakers should be clearer in tying their request for his tax returns to potential legislation to make their legal case airtight and prevent any potential slip-ups.

“What I'm surprised about is how poorly the committee has positioned itself. There's almost a lack of effort in articulating a more concrete legislative purpose,” Turley said.

Victoria Nourse, a law professor at Georgetown University and onetime counsel to former Vice President Joe BidenJoe BidenTrump hits polling on Fox News: 'Something weird going on at Fox' Trump hits polling on Fox News: 'Something weird going on at Fox' 2020 Democrats look to cut into Biden's lead with black voters MORE, said it’s likely that the cases will eventually end up before the Supreme Court. Trump’s attorneys have already appealed Mehta’s decision to the D.C. Circuit Court of Appeals.

She cast doubt on the possibility that Chief Justice John Roberts, who has sought to guard the high court from political attacks, would allow the Supreme Court to overturn such a strongly rooted precedent backing Congress’s investigative powers by siding with the president.

“I think it would seem very partisan on behalf of the court because two justices voting on it had been appointed by Trump himself. And I know that the chief would like to avoid the appearance of impropriety,” Nourse said.