Court Battles

Supreme Court to hear blockbuster case on Trump financial records

The Supreme Court will face its most politically potent case of the term on Tuesday when the justices hear arguments in a landmark dispute over access to President Trump’s financial records and tax returns. 

Trump contends that the broad powers he enjoys as the country’s chief executive invalidate subpoenas issued by House Democrats and a New York grand jury, and even bar access to a third-party paper trail of his financial dealings from before he entered office.

The pair of overlapping cases will thrust the court into the political spotlight and could see the justices fundamentally alter the balance of power between Congress and the White House, as well as determine whether Trump can be implicated in a New York state criminal probe just months ahead of the 2020 vote.

“This is a blockbuster case not only in terms of potential political impact but also constitutional law,” said Robert Tsai, a law professor at American University. “For the High Court to embrace the notion of immunity, as President Trump has demanded, would reshape our system of checks and balances for decades, if not generations, to come.” 

A consequential ruling before Election Day would likely send political shock waves through the country and could make control over future Supreme Court vacancies a more salient issue at the ballot box. 

The justices on Tuesday will weigh competing claims about the scope of presidential immunity, Congress’s investigative and oversight authority and the power of state prosecutors to gather evidence linked to a sitting president. 

One argument concerns a slate of congressional subpoenas issued to Trump’s accountants and banks. The Democratic-led House committees behind the subpoenas say the documents are needed to assess the adequacy of current ethics and disclosure laws.

But Trump’s lawyers have pushed back on those claims in court filings, arguing that the lawmakers lack a legitimate legislative reason for pursuing Trump’s personal and corporate records.

The House Oversight and Reform Committee says it subpoenaed Trump’s accounting firm, Mazars USA, to see if updates were needed to the rules governing ethics, conflicts of interest and presidential financial disclosure.

Another set of subpoenas comes from the House Financial Services Committee, which requested records from Deutsche Bank and Capital One. That committee seeks to follow up on press reports that several Deutsche Bank staffers with financial crimes expertise raised concerns that Trump and his son-in-law, Jared Kushner, were linked to illicit financial activity.

“The potential use of the U.S. financial system for illicit purposes is a very serious concern,” Rep. Maxine Waters (D-Calif.), who chairs the Financial Services Committee, said in an April 2019 statement. 

The House Intelligence Committee also subpoenaed Deutsche Bank. Its focus is on Kremlin efforts to interfere in U.S. elections and whether Russian or other foreign nationals have financial leverage over Trump. 

A separate criminal case from New York, Trump v. Vance, concerns access to eight years of Trump’s personal and corporate tax returns. In that case, Cyrus Vance Jr., the Democratic district attorney for Manhattan, obtained a grand jury subpoena against Mazars.

The fate of Trump’s tax returns and financial records have been closely watched since his presidential campaign. He is the first president in decades to refuse to make any of his tax returns public, claiming that he is under audit. The IRS has said that does not prevent Trump from voluntarily disclosing those returns.

A ruling in Vance’s favor, however, could lead to Trump’s returns being made public.

Among other investigative threads, Vance’s office is looking into payments made to silence two women who allege they had affairs with Trump, including porn star Stormy Daniels. Trump’s former lawyer and fixer Michael Cohen is currently serving a prison term in part for his role in the payoff scheme, which violated campaign finance laws and which Cohen said he conducted at the direction of Trump to influence the 2016 presidential election.

Trump’s private attorneys filed multiple lawsuits to prevent the third-party financial institutions from disclosing his financial records. They argue that enforcing the subpoenas would encroach on the executive branch’s exclusive power to enforce the nation’s laws, in violation of the Constitution’s separation of powers. 

“The events that led to the subpoenas’ issuance, the public statements surrounding these investigations, the nature of these demands themselves, and other evidence confirm that the committees’ purpose is to find out if the president broke the law,” Trump’s lawyers wrote in a court filing.

In the New York criminal case, Trump argues that presidents enjoy “absolute immunity” from any criminal process — which extends to third-party custodians of financial records. Trump’s lawyers also warn that a ruling in favor of the Manhattan district attorney would open the floodgates and invite similar litigation targeting the U.S. president.

“The president cannot effectively discharge those duties if any and every prosecutor in this country may target him with criminal process,” Trump’s lawyers said.

In both cases, Trump has lost every round of the battle in the lower courts.

In the Supreme Court case, the president is backed by the Department of Justice, though its lawyers did not go as far as Trump in its assertion of presidential immunity. 

Legal experts say that prior Supreme Court decisions concerning a president’s privileges and immunities fall well short of the kind of blanket protection Trump is seeking. 

The Supreme Court has traditionally left it to trial judges to determine on a case-by-case basis whether to block or allow lawsuits aimed at occupants of the Oval Office, said Tsai, of American University.

“But this president has consistently pushed the envelope to ward off legal and political accountability, and White House lawyers have enabled that strategy,” he said. 

In a 1974 ruling against President Nixon’s right to shield secret Watergate tapes, a unanimous court held that while presidents can conceal some confidential information under executive privilege, they cannot withhold key evidence from a criminal investigation.

In another unanimous ruling in 1997, the court decided in Clinton v. Jones that presidents are not immune from civil lawsuits for conduct that occurred before entering the White House, allowing a sexual harassment case to proceed against Clinton while in office.

Tags Donald Trump Jared Kushner Maxine Waters Michael Cohen Supreme Court

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