Supreme Court blocks President Trump's financial records from release — for now

The move is a setback to House Democrats seeking access to Trump's tax records as they press ahead with impeachment

Published November 26, 2019 10:50AM (EST)

US President Donald Trump  (Photo illustration by Salon/Getty Images)
US President Donald Trump (Photo illustration by Salon/Getty Images)

The Supreme Court on Monday temporarily blocked the enforcement of a subpoena for President Donald Trump's long-sought tax returns, allowing itself more time to decide whether to take up a case that would test the separation of powers outlined in the Constitution.

The court's brief order did not offer any reasons for the freeze, and there were no noted dissents. It instructed Trump's legal team to file a petition by Dec. 5 stating why the nation’s highest court should hear the case.

A review by the Supreme Court would finally settle an issue which has dogged the president since before he came into the Oval Office: the release of his tax returns.

The court's decision on whether to take up the case will be made in the coming weeks. If the justices accept to hear the case, a decision would likely come out in the heat of the 2020 presidential election next spring. The court could also decline to take up the case, leaving in place lower court decisions which went against the president.

Monday's stay concerned a subpoena that the House Oversight and Reform Committee issued in April to the president's longtime accounting firm Mazars USA, which says it will comply with the court to release Trump's tax records.

Trump's lawyers have argued that the subpoena to Mazars is improper because the committee lacked a legitimate legislative purpose for seeking the president's financial records. Last month, a divided three-judge panel of the U.S. Court of Appeals for the District of Columbia rejected that argument.

"A congressional committee, as committees have done repeatedly over the past two centuries, issued an investigative subpoena, and the target of that subpoena, questioning the committee's legislative purpose, has asked a court to invalidate it," D.C. Circuit Court Judge David S. Tatel, an appointee of President Bill Clinton, wrote in the majority opinion at the time. "The fact that the subpoena in this case seeks information that concerns the president of the United States adds a twist, but not a surprising one."

"We detect no inherent constitutional flaw in laws requiring presidents to publicly disclose certain financial information," he added in the opinion. "And that is enough."

Chief Justice John Roberts last week entered a temporary "administrative stay" in the case. The new stay order was issued by the full court.

The case is one of two at the Supreme Court in which Trump sued to stop Mazars from complying with subpoenas for his financial records. Federal appeals courts ruled against the president in both cases.

The latter arises out of an investigation headed by Manhattan District Attorney Cyrus Vance Jr., a Democrat, who subpoenaed roughly the same materials from Mazars as part of a probe into hush-money payments made to adult-film actress Stormy Daniels and former Playboy model Karen McDougal. Both women alleged affairs with Trump, who has denied the claims and any wrongdoing.

That case is further along at the Supreme Court, as the president has already filed a petition seeking a review. Meanwhile, prosecutors have field a brief urging the court to deny one.

A unanimous three-judge panel of the U.S. Court of Appeals for the Second Circuit in Manhattan ruled against Trump earlier this month. Rejecting a claim of “presidential immunity,” the court ruled that state prosecutors can require third parties to turn over a sitting president's financial records for use in a grand jury investigation.

Judge Robert Katzmann, writing for the majority, pointed to a 1974 case, United States v. Nixon, in which the Supreme Court upheld a subpoena issued to President Richard Nixon to produce tape recordings key to the Watergate investigation.

"The president has not persuasively explained why, if executive privilege did not preclude enforcement of the subpoena issued in Nixon, the Mazars subpoena must be enjoined despite seeking no privileged information and bearing no relation to the president's performance of his official functions," Katzmann wrote, adding in a footnote: "The past six presidents, dating back to President Carter, all voluntarily released their tax returns to the public. While we do not place dispositive weight on this fact, it reinforces our conclusion that the disclosure of personal financial information, standing alone, is unlikely to impair the president in performing the duties of his office."

William Consovoy, one of the president's personal lawyers, previously claimed that a sitting president is immune from criminal prosecution and investigation in office. At an appeals court hearing, Consovoy, responding to a judge's question, said that, as long as Trump is in the White House, he could not be investigated — even if he were to shoot someone in the middle on the streets of New York.  (As a candidate in 2016, Trump infamously claimed that his supporters were so loyal that he could stand there "and shoot somebody" and not "lose any voters.")

The Justice Department filed a brief in support of Trump, though it stopped short of endorsing his claim of absolute immunity from all criminal investigations. Instead, government lawyers said that there are instances when a local prosecutor could legally seek a president's documents; however, this was not one of them.

Presidential materials "should not be treated as just another source of information," the department said. "A subpoena directed at a president's records should be permitted only as a last resort."

Vance has rejected Trump's sweeping immunity claims, arguing that the president seeks “to invent and enforce a new presidential 'tax return privilege,' on the theory that disclosing information in a tax return will necessarily reveal information that will somehow impede the functioning of a president."

He added, "No such privilege exists in the law."

U.S. District Judge Victor Marrero in New York called Trump's immunity claim "repugnant to the nation's governmental structure and constitutional values."

Justices on the Supreme Court are not required to hear a cases or to schedule it at a party's request, but an appeal from a sitting president would likely attract their attention.

If the Supreme Court agrees to review the cases, they will be argued before a panel dominated by conservatives that includes two Trump nominees: Justices Neil Gorsuch and Brett Kavanaugh. In addition, in interviews before the 2016 election, Justice Ruth Bader Ginsburg criticized the president's decision not to release his tax information, as other presidential nominees had done.

"How has he gotten away with not turning over his tax returns?" Ginsburg said in an interview with CNN. "The press seems to be very gentle with him on that." (After her remarks drew criticism, Ginsburg said she should not have commented on the candidate.)

Democrats on Capitol Hill have been on a quest to obtain Trump's tax returns ever since he bucked decades of tradition when he first refused to release them during the 2016 election cycle.

Though not required by law, every major party presidential nominee since the 1970s has chosen to publicly release his or her tax returns except for Gerald Ford, who only released a summary. Financial disclosures can help paint a fuller picture of a candidate's business positions and interests by providing information about financial dealings, such as investments, donations, business relationships, assets and possible conflicts of interests.

Since clinching the presidency, Trump has argued that he cannot disclose his returns because he is being audited by the IRS — even though audits do not prevent taxpayers from releasing their tax documents.

By Shira Tarlo

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