/House likely to win at D.C. Circuit on subpoena for Trump financial records

House likely to win at D.C. Circuit on subpoena for Trump financial records

Donald Trump

A legal battle is underway in New York over House subpoenas to two banks that have extended loans to Donald Trump, Deutsche Bank and Capital One. | Alex Brandon

White House

07/12/2019 08:52 AM EDT

Updated 07/12/2019 02:55 PM EDT


A federal appeals court panel appears likely to hand the House of Representatives a win in its drive to subpoena a vast trove of financial records from an accounting firm used by President Donald Trump.

During an oral argument session that stretched to more than two hours Friday, two of the D.C. Circuit judges assigned to the case sounded sympathetic to Democratic lawmakers’ claims that they are entitled to the financial records to pursue an array of potential legislation addressing presidential conflicts of interest, financial disclosure and the regulation of payments from foreign governments.

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While the two Democratic appointees, Judges David Tatel and Patricia Millett, seemed deeply skeptical of the Trump legal team’s arguments against the subpoena, a Trump appointee who just joined the court in March, Judge Neomi Rao, sounded troubled by two aspects of the document demand.

Rao repeatedly suggested that a congressional committee seeking to subpoena records belonging to a president should be required to get specific authorization from the full House. She also indicated the House subpoena may not be adequately tailored.

Trump attorney William Consovoy said the House Oversight and Government Reform Committee’s claims about needing the records to shape legislation are a pretext and said the subpoena is a thinly veiled effort to target Trump.

“It’s law enforcement, that’s the real object,” he said, calling the House’s effort “hyper-focused on one individual.”

“When the speaker of the House says I want to see the president in prison, I don’t think we have to work that hard to see what’s happening,” Consovoy added.

The Trump lawyer also noted that just two weeks ago in the census citizenship question case the Supreme Court said judges don’t need to be “naïve” about what motivates government action. (Trump and Attorney General Bill Barr both publicly denounced that Supreme Court’s decision on Thursday.)

But Tatel and Millett noted that the House has already passed legislation to strengthen ethics laws and is considering many other bills on the topic.

“We would have to say that’s all a ruse,” Millett observed.

Consovoy said the court should “stack up” the evidence of targeting of the president against that of legitimate legislative motive. “I think my pile is higher,” he said.

Millett seemed to shake her head in disbelief at the sweeping nature of Consovoy’s arguments that Congress has virtually no power to investigate or legislate in ways that impact the president.

“It is a special office,” Consovoy said.

Asked to cite a statute that would be a constitutional regulation on presidential conduct, Consovoy mentioned the Presidential Records Act, the post-Watergate law that deemed presidents’ official records to be property of the U.S. and subject to release some time after a president leaves office.

Asked to cite any other potential law about the president that might be constitutional, Consovoy was at a loss.

Tatel repeatedly suggested Trump’s lawyers were looking for an advance ruling on the constitutionality of “legislation…that doesn’t even exist.”

House General Counsel Douglas Letter told the judges that the subpoena easily passes the test courts have applied in the past. “What we have here is obviously a legitimate legislative purpose,” he said.

Rao asked Letter if he could cite any other investigation involving subpoenas for a president’s records without the approval of the full House. “The House has given the Oversight Committee the power of the House [with regard to] oversight matters,” Letter said.

When Rao pressed further on the point, Letter said the House doesn’t conduct its business as it did years ago. “The House has changed,” he said.

“You can’t provide a single example where a committee has exercised compulsory process against the president” without a such approval, she said.

However, Letter was insistent that numerous court decisions say judges may not pry into the House’s internal structures and delegations of power. “Only the House gets to decide that,” he said. “That’s not a subject for the courts….That is outside your lane completely.”

Letter also blamed Trump for the novelty of the current situation, noting that in recent decades nearly every president put his assets into a blind trust or divested them. “The president has done something that has not been done before. He put himself in that position and we can’t forget that,” he said.

The House lawyer said the chamber was not relying on its impeachment power in issuing the Mazars subpoena. However, he stressed that Congress’ power to regulate emoluments was a valid basis for the subpoena.

“This is something where the Congress can regulate the president. It’s right in the Constitution,” Letter said.

Despite Millett’s evident disagreement with many of the arguments made by Consovoy, she actually seemed to share some of Rao’s concerns about the relevance of some of the subpoenaed records to the House’s numerous ongoing investigations of Trump’s business dealings.

The subpoena issued to accounting firm Mazars covers Trump-related records from 2011 to 2018. Millett appeared to be considering excluding the first few years of that period. She noted that Trump’s first personal financial disclosure filed after he declared his presidential candidacy was supposed to include income and assets held back to 2014.

Millett suggested the House’s reasons for going back to 2011 or earlier seemed weak. “I don’t know why under that theory they cannot go back to age 18—or birth, for heaven’s sake,” she said.

Letter seemed reluctant to agree to any particular temporal limit, but eventually agreed that a decades-old diary would be off limits. “We will never seek the diary of a president when he was seven years old. You can count on that,” he said.

Letter also ridiculed the Trump team’s arguments that Congress has no business investigating activity that is criminal in nature.

“The Congress did a massive investigation of 9/11,” noted Letter, who was a top Justice Department appellate litigator for decades before becoming the House’s top lawyer earlier this year. “Nobody would have said, ‘This involves hijacking and mass murder so the Congress can’t investigate. It’s ludicrous.”

One other issue the court wrestled with Friday was whether it mattered that the subpoena in dispute was served on Trump’s accountants and not him.

“This subpoena is directed at the president,” Consovoy insisted.

“It’s not,” Millett interjected. “It’s directed at a third-party who happens to have files related to the president.”

“I don’t think a subpoena to the president’s lawyer would be considered a third party. I don’t think [one] to the president’s doctor would be considered a third party,” Trump’s lawyer replied.

With much of the argument focusing on separation of powers and potential interference with the president’s ability to carry out his office, Rao said it was strange that only Trump’s personal lawyers were in court.

“Why is the Department of Justice not here to protect the office of the president?” she asked.

Consovoy said he couldn’t speak for the Justice Department’s decision not to appear in the case.

The Oversight Committee issued the subpoena in April to the New York office of the global accounting firm Mazars, seeking details on the work done for Trump and his businesses from 2011 through 2018.

In May, U.S. District Court Judge Amit Mehta rejected Trump’s challenge to the accounting firm subpoena. He said it wasn’t the court’s role to second-guess the committee’s claim that it needs the information to assess possible conflicts of interest and consider whether legislative changes are needed to address them.

“It is not the court’s role to decipher whether Congress’s true purpose in pursuing an investigation is to aid legislation or something more sinister such as exacting political retribution,” wrote Mehta.

While Democrats have struggled over whether to open impeachment proceedings against Trump, the district court judge said Congress had a right to the subpoenaed information as it mulls that possibility and complaints that Trump is violating the Constitution by receiving emoluments from foreign governments. Trump called Mehta’s decision “ridiculous” and “wrong” and noted that the judge was appointed by President Barack Obama.

The session Friday was the first time an appeals court has heard arguments on a case that is part of the broader legal war underway between House Democrats and Trump over information related to his business dealings and his conduct while in office. Interest in the arguments was so high that the court moved from its usual spot to the courthouse’s large ceremonial courtroom, which was nearly filled with close to 200 spectators.

A legal battle is underway in New York over House subpoenas to two banks that have extended loans to Trump, Deutsche Bank and Capital One. A federal judge there also denied Trump’s bid to block those subpoenas. A 2nd Circuit Court of Appeals panel is set to hear arguments in that case late next month.

Democrats recently intensified the legal combat by filing a lawsuit to obtain copies of Trump’s tax returns directly from the IRS. Just last week, the House Ways and Means Committee sued Treasury Secretary Stephen Mnuchin and IRS Commissioner Charles Rettig for refusing to comply with both a subpoena for the returns and an earlier request under federal law.

One or all of the disputes seem likely to wind up at the Supreme Court.

Despite the lack of consensus among Democrats over whether to formally proceed with an impeachment inquiry, Democratic lawmakers are largely united over enforcing their demands for records that could aid various ongoing investigations.

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