May 9, 2020 - Politics & Policy

Trump's tax returns fight reaches the Supreme Court

Photo Illustration: Eniola Odetunde/Axios. Photo: Adam Bettcher/Getty Images

President Trump’s lawyers are asking the Supreme Court to adopt a sweeping view of presidential immunity that would make it much harder to investigate any future president.

Why it matters: Trump’s steadfast refusal to release his tax returns — a fight that will culminate in Supreme Court arguments on Tuesday — has mushroomed into a showdown with implications well beyond his administration.

  • If he loses, the public will eventually see the financial records Trump has fought so hard to keep secret. If he wins, the presidency may well be shielded from most accusations of criminal wrongdoing.

Driving the news: The court will hear oral arguments Tuesday in Trump’s effort to block two sets of subpoenas for his financial records — one batch filed by a trio of House committees, the other by Manhattan District Attorney Cy Vance.

  • Those subpoenas demanded a host of financial records from Capital One, Deutsche Bank and the accounting firm Mazars, mostly pertaining to business they did with Trump before he was president.
  • Trump’s personal lawyers will argue that neither Congress nor a state prosecutor had the authority to issue the subpoenas.
  • The financial firms themselves are not fighting the records demands, and have said they will comply with the subpoenas if the court tells them to.

The big picture: Trump is advocating for “a rather sweeping form of presidential immunity,” said Harry Sandick, a former federal prosecutor in the powerful Southern District of New York.

  • Congressional investigations must have a “legislative purpose.” They can’t be an exercise in law enforcement.
  • That bar has historically been pretty low. A congressional investigation is valid, the Supreme Court has ruled, as long as it’s an investigation into “a subject on which legislation could be had.”
  • House Democrats say that’s the case here. The records they’re seeking about Russians’ real estate purchases in the U.S., for example, could inform new money-laundering laws. Investigating Trump’s payments to Stormy Daniels, the House argues, could easily lead to tighter disclosure laws for future presidents.

The other side: All of the relevant committees, Trump’s lawyers said in a brief, “have acknowledged that the purpose of the investigations is to determine whether the President engaged in wrongdoing” — which, they argue, is impermissible.

The intrigue: Trump’s lawyers take it a step further. They're arguing not only that Congress didn’t have a legislative purpose here, but that if it did have a legislative purpose like stronger disclosure requirements, that would be unconstitutional.

  • Such laws "exercise dominion and control over the Office of the President," Trump says.

Where it stands: Lower courts in this litigation have all ruled against Trump. And the Supreme Court’s key precedents on presidential investigations — cases from the Teapot Dome scandal to Watergate and Paula Jones' lawsuit against Bill Clinton — seem to work against Trump.

  • The court rejected President Nixon's claims of absolute presidential immunity, and said Clinton could be deposed — a much bigger burden than anything being asked of Trump.

Between the lines: These records aren’t covered by executive privilege, because for the most part they pertain to Trump’s personal and corporate finances — not his duties as president.

  • But the court may be wary about letting state prosecutors, like Vance, investigate sitting presidents, some experts say. That could expose any president to a slew of bad-faith criminal inquiries from any “county lawyer” in America, the administration argues.

Yes, but: If state prosecutors can’t investigate a sitting president, and if the court agrees to foreclose at least some congressional investigations, that only leaves federal prosecutors — whom the president can, in most cases, fire.

  • They're also prohibited by the Justice Department from charging a sitting president with a crime.

The Trump administration is "always trying to push oversight onto a different body or jurisdiction or situation, and then when that situation arises they still reject oversight,” said Elizabeth Wydra, the president of the Constitutional Accountability Center, a liberal legal group that has filed a brief opposing Trump in this case.

  • Sandick noted that “there’s a little bit of a shell game the administration was playing,” specific to Trump’s financial records. “They’re kind of playing keep-away and just trying to keep it away until the election.”
  • That part, at least, may have worked.

What’s next: The Supreme Court is expected to rule by June, but even if Trump loses, more run-of-the-mill disputes over document production could easily keep the relevant records out of public view until after the election.

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