Trump Asks Supreme Court to Block N.Y. Subpoena for His Tax Returns (2)

Nov. 14, 2019, 10:14 PMUpdated: Nov. 14, 2019, 11:44 PM

Donald Trump asked the U.S. Supreme Court to prevent his tax returns from being turned over to a New York prosecutor, filing a high-stakes appeal that aims to give the president broad immunity from criminal investigations while in office.

The appeal, filed by Trump’s personal lawyers, marks the first time the Supreme Court has been drawn into an investigation of the president’s personal conduct and business dealings. Trump told the justices he is fighting a “politically motivated” subpoena that seeks “highly intrusive” records and could interfere with his work as president.

Trump’s lawyers also plan to seek high court review of a separate ruling that would give Congress access to his financial records. Together, the two cases will test the Supreme Court’s willingness to intervene on Trump’s behalf in what would be a historic legal and political showdown at a time when the president is also facing possible impeachment by the House of Representatives.

The appeal filed Thursday challenges a lower court ruling that said the accounting firm Mazars USA had to comply with a Manhattan grand jury subpoena for the president’s tax returns and those of his business dating back to 2011.

“Politically motivated subpoenas like this one are a perfect illustration of why a sitting president should be categorically immune from state criminal process,” Trump said in the appeal, filed by attorney Jay Sekulow.

Trump asked the Supreme Court to put the New York case on a fast track so it could be heard in the nine-month term that will end in late June. That request fulfills an agreement with New York County District Attorney Cyrus Vance, who has promised not to enforce the subpoena until the Supreme Court acts.

Hush Payments

Vance’s office is investigating whether the Trump Organization falsified business records to disguise hush payments to two women who claimed they had sex with him.

Danny Frost, a Vance spokesman, declined to comment on the appeal. He said the office will respond in a court filing next week.

In rejecting Trump’s bid to invalidate the subpoena to Mazars, a three-judge panel of the 2nd U.S. Circuit Court of Appeals in New York unanimously said a president can’t block compliance with a subpoena “simply because he is president.”

Chief Circuit Judge Robert Katzmann said Trump hadn’t shown that the subpoena would interfere with his ability to do his job as president.

“We are not faced, in this case, with the president’s arrest or imprisonment, or with an order compelling him to attend court at a particular time or place, or, indeed, with an order that compels the president himself to do anything,” Katzmann wrote. “The subpoena at issue is directed not to the president but to his accountants; compliance does not require the president to do anything at all.”

Mazars isn’t contesting the subpoena. The accounting firm has said it will “comply with all legal obligations.”

Trump has refused to release his tax returns to the public, something every president since Jimmy Carter had done.

Nixon and Clinton

The Justice Department backed Trump at the appeals court, though with a less sweeping argument. The government said Vance needed to make a “heightened and particularized showing of need” to get the tax information.

Katzmann’s opinion relied heavily on landmark Supreme Court rulings involving Presidents Richard Nixon and Bill Clinton.

The 1974 Nixon ruling said the president had to turn over Oval Office tape recordings for use in the criminal trial of six top aides stemming from the Watergate break-in.

“Neither the doctrine of separation of powers, nor the need for confidentiality of high‐level communications, without more, can sustain an absolute, unqualified presidential privilege of immunity from judicial process under all circumstances,” the unanimous Supreme Court said.

The 1997 Clinton ruling said he didn’t have a broad constitutional right to postpone a sexual harassment trial in federal court until he left office. The Supreme Court said it is “settled that the president is subject to judicial process in appropriate circumstances.”

Clinton later testified under oath in the case, falsely saying he hadn’t had a sexual affair with White House intern Monica Lewinsky. The testimony helped lead to Clinton’s impeachment; he was acquitted by the Senate.

Trump says the New York case is different because it’s a state court proceeding, rather than a federal one. The Clinton ruling said in a footnote that “any direct control by a state court over the president” could raise constitutional problems.

Targeting Trump

The appeal also contends that, unlike in the Nixon and Clinton cases, Trump is being directly targeted in a criminal probe.

“Allowing the sitting president to be targeted for criminal investigation -- and to be subpoenaed on that basis -- would, like an indictment itself, distract him from the numerous and important duties of his office, intrude on and impair executive branch operations, and stigmatize the presidency,” Trump argued.

In rejecting that argument, the 2nd Circuit noted that Nixon had been named as an unindicted co-conspirator.

“Surely that designation carries far greater stigma than the mere revelation that matters involving the president are under investigation,” Katzmann wrote.

The congressional case comes from a different court, the U.S. Court of Appeals for the D.C. Circuit. In a 2-1 decision, that court said the House Oversight and Reform Committee could subpoena eight years of Trump’s financial records from Mazars.

The Democratic-controlled House panel says it’s seeking those documents for the legislative purpose of potentially revising federal ethics-in-government laws. Trump’s lawyers say the subpoena veers impermissibly into law enforcement, something outside of Congress’s power.

A dissenting judge said in the Oct. 11 ruling that Congress can’t investigate whether the president broke the law unless it is invoking its impeachment power, something the committee hadn’t done. The House later voted to formally open an impeachment proceeding, though that inquiry is focused on Trump’s dealings with Ukraine, not his tax returns.

An 11-judge panel of the D.C. Circuit said this week it would let the ruling stand. Three judges said they would have reconsidered the decision.

Sekulow said the president will ask the Supreme Court on Friday to block the congressional subpoena until the justices decide whether to take up the appeal.

The case is Trump v. Vance, 2d Cir., No. 19-03204, 11/14/19.

—With assistance from Bob Van Voris.

© 2019 Bloomberg L.P. All rights reserved. Used with permission.

(With updates throughout)

To contact the reporter on this story: Greg Stohr in Washington at gstohr@bloomberg.net

To contact the editors responsible for this story: Joe Sobczyk at jsobczyk@bloomberg.net

To read more articles log in.

Learn more about a Bloomberg Tax subscription.