Trump taxes: US appeals court upholds release of financial records to House

A federal appeals court panel ruled Friday that House lawmakers can see years of former President Donald Trump’s financial accounting, but narrowed the range of documents Trump must turn over in a long legal battle. date on his adherence to presidential ethics and disclosure laws.

The fight is not over – both sides can still appeal the three-judge panel’s decision to the United States Court of Appeals for the DC Circuit or to the Supreme Court. But the decision marked a partial victory for each side over a subpoena issued in 2019 by the House Oversight Committee to Trump’s accounting firm, Mazars USA.

“We maintain the power of the Committee to subpoena certain of President Trump’s financial records in furtherance of the Committee’s enumerated legislative purposes,” Chief Justice Sri Srinivasan wrote. “But we cannot maintain the magnitude of the Committee’s subpoena.”

The panel was re-examining a case that the United States Supreme Court sent back to lower courts for retrial in July 2020.

In a complex and nuanced 67-page opinion, Srinivasan interpreted how to apply the Supreme Court’s directive to “insist on a subpoena no broader than reasonably necessary to support the legislative purpose of Congress.” The case deals with a largely unprecedented fight over how far Congress can go in investigating the country’s chief executive’s alleged corruption and what protections former presidents retain from lawmakers’ inquiries after having left office under the separation of powers of the Constitution.

Trump, who lost re-election in 2020 and is likely preparing another White House bid in 2024, was the first major party candidate in decades to refuse to release his tax returns, publicly criticizing Internal Revenue. Service for having it audited. Trump refused to divest himself of his business holdings, and during his tenure he oversaw the government leasing agency for his flagship Washington hotel, even as his businesses received millions from the federal government and foreign powers.

In response, congressional Democrats launched several efforts to investigate his finances, which Trump blocked. The House Oversight Committee demanded a slew of information from Mazars about Trump and his business entities over an eight-year period spanning 2011 to 2018, saying his presidency exposed weaknesses in oversight that could not be only be resolved with this information. The committee said it was seeking the documents to corroborate the testimony of former Trump attorney Michael Cohen that Trump artificially inflated and deflated the reported value of his assets for personal gain.

Trump sued in May 2019 to block the publication, arguing that he had absolute immunity from legislative inquiries and that House Democrats only wanted to expose his data for political purposes.

In another case still pending appeal, Trump also opposed a request by the House Ways and Means Committee to see six years of his federal tax records. After Trump left, President Biden’s Treasury Department agreed to the records being released, and a federal judge appointed by Trump agreed last December. Trump continued to fight liberation as a private citizen.

The judges in Friday’s ruling — Srinivasan and U.S. Court of Appeals Judge Judith W. Rogers — debated during closing arguments late last year whether to compel a former president to share his financial information after leaving office could have a “chilling effect” on all future commanders-in-chief. , as argued by Trump’s lawyer, Cameron Norris.

At the same time, Ketanji Brown Jackson – the third justice who heard the arguments but has since been elevated to the Supreme Court and did not participate in the opinion – expressed concerns about creating lasting protections for the presidents after their return to private life. , undermining the authority of Congress.

In the end, Srinivasan navigated a middle ground, analyzing the committee’s request for three types of information — documents relating to Trump’s business and personal financial records with Mazars; records regarding the federal lease of the Trump International Hotel recently sold by Trump in the Old Post Office building in downtown Washington; and documents related to legislation regarding the Constitution’s “foreign emoluments” clause, which prohibits presidents from accepting gifts from foreign nations.

The court said lawmakers could obtain records, source documents and engagement letters from Mazars from 2014 to 2018, but only those that “reference, indicate or discuss undisclosed, false or otherwise inaccurate information” about Trump’s reported assets, liabilities, or income, and any related communications indicating that the information was incomplete, inaccurate, or “otherwise unsatisfactory.”

The court also upheld the subpoena for documents related to his federal hotel lease from Trump’s election in November 2016 to 2018, but only from the company that held the lease, Trump Old Post Office LLC. . Finally, the appeals court agreed that the House could obtain all documents from 2017 and 2018 related to financial ties or dealings between Trump or a Trump entity and “any foreign state or foreign state agency, the United States , any federal agency, state or state agency or government official.

The committee “amassed detailed evidence of alleged misrepresentations and omissions” in disclosure forms required by Trump, the court said, and provided “detailed and substantial” explanations of how his financial disclosures, contracts with the government and accepting foreign gifts as president could inform changes to federal law aimed at protecting taxpayers and addressing conflicts of interest among political office holders.

“If the level of evidence presented by the Committee here is insufficient to obtain a narrow subset of information about the former president, we doubt that a Congress could obtain the papers of a president,” the judges wrote. , adding that “requiring disclosures aimed at preventing presidents from engaging in personal dealings and other conflicts of interest is surely a legitimate legislative objective.

“Former President Donald Trump has shown an unprecedented disregard for federal ethics and financial transparency,” said House Oversight Committee Chairwoman Rep. Carolyn B. Maloney (DN.Y. ) in a written statement. She said that while it was “disappointing that the Court narrowed the subpoena in some respects”, she was pleased that it “confirmed key elements of the Committee’s subpoena, asserted our authority to obtain documents from Mazars and dismissed former President Trump’s spurious arguments that Congress cannot investigate his financial misconduct.

Trump’s attorneys at the law firm Consovoy McCarthy did not immediately respond to a request for comment on Friday.

Friday’s ruling overruled a similar August 2021 ruling by the trial judge in the case. U.S. District Judge Amit P. Mehta limited the documents lawmakers could obtain to a broader set of Trump’s personal financial records from 2017 and 2018, when he was president, and records related to his hotel lease. in Washington and the legislation regarding the emoluments clause.

The courts acted after Chief Justice John G. Roberts Jr. in July 2020 upheld Congress’ broad power to issue subpoenas for a president’s personal financial records, but ruled in a notice of 7 to 2 that congressional subpoenas seeking information about a president must be “no broader than reasonably necessary” and sent the matter to lower courts to craft the standard.

The case was not resolved before Congress expired in January 2020, but the newly elected House, still under Democratic control, renewed its request in February 2021.

Rachel Weiner contributed to this report.

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