Financial Accounting

Trump Loses Effort in Appeals Court to Block Vance Subpoena (3)

Oct. 7, 2020, 5:33 PM

A federal appeals panel rejected President Donald Trump’s latest effort to block the Manhattan district attorney from getting his tax filings and other financial records.

The New York-based court, by a 3-0 vote, rejected Trump’s argument that a subpoena issued by Cyrus Vance Jr. is too broad and that it seeks to harass the president.

Trump has so far failed in all his courtroom efforts, including in the U.S. Supreme Court, to halt a criminal subpoena for the material from his accountants at Mazars USA. Trump’s remaining hope for keeping control of the records rests, once again, in the high court, to which his lawyers have already said they will appeal.

Vance has agreed to hold off enforcing the subpoena for at least 12 days, to allow the president time to seek additional delay from the Supreme Court while it decides whether to hear the appeal. The Supreme Court previously rejected Trump’s claim that he had immunity as president from state grand jury investigations.

Vance’s office declined to comment on the ruling. William Consovoy, a lawyer for Trump, didn’t immediately respond to an email seeking comment.

Its unclear when Vance’s office would get the records if he prevails, or if it would be before the Nov. 3 election. The material would be covered by laws protecting grand jury secrecy, limiting the ability of Vance’s office to make it public.

The appeals court ruled against Trump’s claim that the subpoena is overbroad, rejecting his argument that the district attorney’s investigation is focused on hush-money payments made by Michael Cohen, the president’s former lawyer, in 2016. Cohen admitted that, before the 2016 election, he made payments to adult film star Stormy Daniels and to former Playboy model Karen McDougal, who claim they’d had sex with Trump.

‘Implausible Speculation’

The court said the “bare assertion” that the scope of the grand jury probe is limited to payments made by Cohen for Trump is “nothing more than implausible speculation.”

The court also rejected Trump’s claim that the subpoena was issued “out of malice or an intent to harass.”

Vance has avoided disclosing the scope of the grand jury investigation that is being overseen by his office. But in court papers opposing Trump’s argument that the subpoena is meant only to target the Cohen payments, prosecutors suggested they may be looking into a range of potential crimes including tax fraud, insurance fraud and falsifying business records.

In a separate probe, New York state is investigating whether the Trump Organization falsely reported the value of assets to secure loans and get tax benefits.

The appeals court ruling comes after the New York Times last month published an analysis of at least two decades of Trump’s closely-guarded tax records, reporting that he paid just $750 in federal income tax in 2016 and in 2017. The Times said Trump reported huge business losses, effectively wiping out all income taxes in 10 of the previous 15 years as well.

The case is Trump v. Vance, 20-02766, Second U.S. Circuit Court of Appeals (Manhattan).

(Updates with details about scope of investigations.)

To contact the reporters on this story:
Bob Van Voris in federal court in Manhattan at rvanvoris@bloomberg.net;
Chris Dolmetsch in Federal Court in Manhattan at cdolmetsch@bloomberg.net

To contact the editors responsible for this story:
David Glovin at dglovin@bloomberg.net

Steve Stroth, Anthony Lin

© 2020 Bloomberg L.P. All rights reserved. Used with permission.

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