Rule of Law

Congressional Democrats’ emoluments lawsuit targeting President Trump’s private business can proceed, judge says

Democrats in Congress can move ahead with their lawsuit against President Trump alleging that his private business violates the Constitution’s ban on gifts or payments from foreign governments, a federal judge ruled Tuesday.

The decision in Washington from U.S. District Judge Emmet G. Sullivan adopted a broad definition of the anti-corruption law and could set the stage for Democratic lawmakers to begin seeking information from the Trump Organization. The Justice Department can try to delay or block the process by asking an appeals court to intervene.

In a 48-page opinion, the judge refused the request of the president’s legal team to dismiss the case and rejected Trump’s narrow definition of emoluments, finding it “unpersuasive and inconsistent.”

The lawsuit is one of two landmark cases against Trump relying on the once-obscure emoluments clauses of the Constitution.

In a case brought in Maryland by the attorneys general of D.C. and Maryland, Justice Department lawyers representing the president have succeeded in temporarily blocking subpoenas for financial records and other documents related to Trump’s D.C. hotel.

The congressional case, brought by about 200 Democrats, extends beyond the hotel and provides a potential new avenue for investigators to gain access to a broader array of Trump’s closely held finances.

Trump’s lawyers argued that the prohibition applies only to payments received for government action taken by a president in his official capacity. The clause, they argue, should not be considered a blanket bar on private business transactions with foreign governments.

Sullivan noted that the lawsuit alleges the president — without seeking permission from Congress — has received payments for hotel rooms and events from foreign governments, as well as licensing fees paid by foreign governments for his show “The Apprentice” and intellectual property rights from China.

The emoluments cases, which could eventually end up at the Supreme Court, appear to mark the first time federal judges have interpreted these clauses and applied their restrictions to a sitting president. The lawsuits were early arrivals to what is now a wide range of investigations and legal battles over the president’s business interests and what information he and his family will be required to provide about them.

 While special counsel Robert S. Mueller III has wrapped up his inquiry on Russian interference in the 2016 election, a half-dozen House committees are seeking financial information related to the Trump Organization, its accountants and lenders. The president and his family filed suit late Monday in New York against their biggest lender and one of their banks, to try to stop them from complying with subpoenas from congressional committees.

Led by Sen. Richard Blumenthal (D-Conn.) and Rep. Jerrold Nadler (D-N.Y.), the Democrats filed their suit last year asking the court to force Trump to stop accepting payments they consider violations of the Constitution’s foreign emoluments clause. They say the provision was designed to guard against undue influence by foreign governments by barring any “emolument” — meaning a gift or payment — without prior approval from Congress.

Sullivan agreed, writing that dictionaries from the era of the Founding Fathers, as well as legal historians and government practice, point to the broader definition backed by the congressional Democrats that “ensures that the clause fulfills this purpose” of excluding the possibility of corruption and foreign influence. Sullivan described the record as “overwhelming evidence” from “over two hundred years of understanding the scope of the clause to be broad.”

“The Court is persuaded that the text and structure of the Clause, together with the other uses of the term in the Constitution, support plaintiffs’ definition of ‘Emolument’ rather than that of the President,” the judge wrote.

Although the president gave up day-to-day management of his businesses — including residential, office, hotel and golf properties in the United States, Europe and South America, he still owns them and can withdraw money from them at any time. A number of foreign embassies and leaders have stayed in or held events at Trump’s D.C. hotel.

Congressional Democrats and their attorneys from the nonprofit Constitutional Accountability Center have argued the payments from foreign governments received by Trump through his extensive enterprises ought to be considered emoluments under the Constitution and thus deemed illegal.

In a tweet, Blumenthal called the opinion a “tremendous victory & vindication of a commonsense reading of the Constitution.” He added that “the next step should be discovery & full disclosure.” Nadler called the ruling “an important milestone in seeking to hold the President accountable” for what he called ongoing violations of the clause.

Justice Department attorneys have argued the case should be dismissed, saying the payments Trump receives for market-rate transactions are not emoluments.

One government attorney described the issue as “a political dispute,” arguing in court that members of Congress had additional ways of pressuring the president to change his behavior, such as holding hearings, passing legislation or withholding funding.

“We will continue to defend the president in court,” Justice Department spokeswoman Kelly Laco said in statement Tuesday in response to the ruling.

A Trump Organization spokesperson did not immediately respond to a request for comment.

Sullivan had already ruled in September that the legislators had legal standing to sue. He wrote the case ought to be allowed to continue in part because the Constitution’s foreign emoluments clause “requires the President to ask Congress before accepting a prohibited emolument.”

But Sullivan still needed to rule on questions that include whether the Founding Fathers’ definition of “emolument” was broad enough to include a foreign embassy paying the president to rent a hotel ballroom.

In his ruling, Sullivan acknowledged concerns from Trump’s lawyers, who said allowing the case to move ahead would impose “significant burdens” on a sitting president.

But clarifying the definition of the clause, the judge wrote, should ensure the president can abide by his oath of office.

The president’s argument “regarding the ‘judgment’ and ‘planning’ needed to ensure compliance with the clause is beside the point,” the judge wrote. “It may take judgment and planning to comply with the clause, but he has no discretion as to whether or not to comply with it in the first instance.”

Sullivan did not rule Tuesday on the Justice Department’s previous request to make an immediate appeal of his finding on standing. He asked the president and congressional Democrats to file additional briefings before the end of May.

Recent academic research appears to bolster the plaintiffs’ position. During the past 150 years, the Justice Department issued more than 50 opinions interpreting the foreign emoluments clause as prohibiting federal officials from accepting any benefit from foreign governments, “even if the benefit is small in size, if it is part of an arms-length transaction, if the benefit is funneled through an intermediary, or if the official’s government responsibilities don’t affect the foreign government,” according to new research from Kathleen Clark, a professor at Washington University in St. Louis.

Under Trump, that changed, with the Justice Department deciding in 2017 to side with Trump’s personal lawyers in arguing that the clause permits the president and all federal officials to accept unlimited money from foreign governments “as long as the money comes through commercial transactions with an entity owned by the federal official,” Clark wrote.

In his opinion Tuesday, Sullivan quoted extensively from the similar ruling by U.S. District Judge Peter J. Messitte in the emoluments case against Trump in Maryland. Justice Department attorneys and the president’s personal lawyers have appealed the ruling from Messitte, who had allowed the attorneys general to begin issuing subpoenas. That case is narrowly focused on transactions involving Trump’s D.C. hotel.

But a three-judge panel of the U.S. Court of Appeals for the 4th Circuit appeared skeptical during a March 19 hearing that Trump is illegally profiting from his D.C. hotel. The appeals court did not say when it would issue a ruling.