Rule of Law

President Trump has one last chance to keep tax returns, financial records secret: the Supreme Court

President Donald Trump’s years-long battle to keep his tax and financial records secret now rests with the Supreme Court.

Efforts by Congress and prosecutors in New York to obtain several years of tax returns and other documents pertaining to Trump’s personal and business affairs will be decided in the next few months by a court the president has both beseeched and berated.

The beseeching will resume Thursday when Trump’s personal lawyers ask the justices to hear his appeal of lower court rulings that eight years of financial documents must be provided to a House committee investigating illegal conduct and conflicts of interest.

That request will mirror another in which Trump’s lawyers urged the high court to review lower court decisions favoring Manhattan District Attorney Cyrus Vance’s effort to get tax and financial data as part of a grand jury investigation into payments to two women who claim they had affairs with Trump before his election. Trump has denied the women’s allegations.

Still more subpoenas have been issued by other House committees, all controlled by Democrats, seeking tax returns and financial records relating to Trump’s private real estate business, as well as those of his family members and other entities.

While the president is on a losing streak in federal and state courts, his lawyers hope for a more friendly reception at a Supreme Court partially remade in Trump’s image. Two of the nine justices, Neil Gorsuch and Brett Kavanaugh, are his nominees.

“This is going to be a real test for both Justice Gorsuch and Justice Kavanaugh – whether they are willing to follow the rule of law and Supreme Court precedent even if it means ruling against the president who put them on the bench,” says Brianne Gorod, chief counsel for the liberal Constitutional Accountability Center.

The court traditionally has shown great deference to Congress’ role in overseeing the executive branch. The New York prosecutor’s case, meanwhile, may be helped by the court’s 1997 decision allowing a private lawsuit against President Bill Clinton to proceed, as well as its 1974 ruling that President Richard Nixon had to turn over damaging White House tapes.

On the other hand, the court’s conservative justices may want to intercede on the president’s behalf if they see the various probes as a form of harassment – even if they don’t buy his lawyers’ assertion that he is immune from criminal investigation while in office.

“Historically, the court has shown special solicitude to the president,” says University of Texas School of Law professor Stephen Vladeck.

Separation of powers

The subpoenas issued by Congress and opposed by Trump’s lawyers present the Supreme Court with a classic separation-of-powers dilemma.

The House Committee on Oversight and Reform wants financial records from Mazars USA, Trump’s longtime accounting firm, to compare them with testimony from his former personal lawyer, Michael Cohen, as well as with government disclosures. Cohen told Congress that Trump routinely overstated or understated his holdings, depending on his needs.

In a separate legal proceeding originally filed in New York federal court, the House Committee on Financial Services is investigating loans provided to Trump and his business by Deutsche Bank and Capital One to finance real estate properties. Deutsche Bank loaned $130 million when no other bank would extend credit to Trump.

“We do not doubt that some members of the committees, even as they pursued investigations for valid legislative purposes, hoped that the results of their inquiries would embarrass the president,” the U.S. Court of Appeals for the 2nd Circuit ruled Tuesday. “But as long as the valid legislative purposes that the committees have identified are being pursued and are not artificial pretexts for ill‐motivated maneuvers, the committees have not exceeded their constitutional authority.”

Trump’s lawyers have attacked the subpoenas on several grounds in an effort to make Congress’ probes look more like a fishing expedition than a legislative endeavor.

“It is the first time Congress has issued a subpoena, under its legislative powers, to investigate the president for illegal conduct,” his lawyers told the justices in winning a temporary hold on the lower court’s ruling. “And for the first time, a court has upheld a congressional subpoena to the president for his personal papers.”

The House of Representatives’ general counsel, Douglas Letter, countered that the records are needed to help determine “whether senior government officials, including the president, are acting in the country’s best interest and not in their own financial interest.”

Both sides in the oversight panel’s case are due to submit briefs to the Supreme Court in the coming days that will help the justices decide whether to hear the case or let the appeals court’s ruling stand – in which case the records must be turned over.

Shades of Nixon, Clinton

A similar timetable is unfolding in the New York criminal case, where Vance has both a stronger and a weaker position than the congressional committees.

On one hand, the prosecutor is pursuing a criminal case, not federal legislation. He also has Supreme Court precedent on his side: the court ruled unanimously against Clinton when he sought to avoid giving a deposition and testifying in a civil case filed by Paula Jones for sexual harassment.

But on the other hand, the case is being investigated by a state grand jury, not a federal one. That raises federalism concerns: should a president be beholden to state and local investigations?

In its Clinton v. Jones decision, the unanimous high court said it was not addressing “whether a claim comparable to petitioner’s assertion of immunity might succeed in a state tribunal.”

Trump’s lawyers have claimed absolute immunity from criminal investigations, going so far as to say the president could shoot someone on Fifth Avenue in Manhattan and escape prosecution while he remained in office.

“For the first time in our nation’s history, a state or local prosecutor has launched a criminal investigation of the president of the United States and subjected him to coercive criminal process,” they wrote.

Vance countered that “criminal conduct may go unpunished” if his office’s subpoena for financial records is delayed or denied. And since the subpoena is aimed at Trump’s accounting firm, not the president himself, he said compliance “will in no way implicate the balance of federal and state power.”

David Strauss, a University of Chicago law professor who was part of Clinton’s legal team in the Paula Jones civil case, says Trump should have a tougher time claiming immunity in a criminal case that seeks documents only from a third party.

“It’s not like he’s got to answer questions, be put under oath, or spend his time doing anything,” Strauss says.

At this point, Trump has one way to win but two ways to lose in these cases. He must convince the court to rule his way in both cases. But the court could refuse to hear his appeals, or it could consider them but uphold at least one lower court decision.

There are “very good reasons to think that this information will make its way to those who are seeking it,” Gorod says.