Secrecy of Trump's taxes, financial records on the line in Supreme Court arguments

House committees and a N.Y. prosecutor want to get their hands on the president's documents in twin blockbuster cases on Tuesday.
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President Donald Trump departs after speaking during the daily briefing on April 17, 2020.Jim Watson / AFP via Getty Images file

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By Pete Williams

WASHINGTON — President Donald Trump's lawyers will urge the Supreme Court on Tuesday to let him block access to his tax returns and other financial documents sought by three congressional committees and a New York prosecutor.

In one of the most closely watched disputes of the court's term, the cases will test the justices' independence and could yield major rulings on the power of Congress to demand documents from a sitting president — or the authority of a president to refuse.

The court will hear the two separate cases by telephone conference call with each justice taking a turn to ask questions, a process that began May 4 and for the most part has worked smoothly, despite a toilet flushing faux pas. It has, however, tamed the normal back and forth of oral argument, and the questioning has been less aggressive. Live audio of the argument will be available on C-SPAN.

Whichever way the court rules, the decisions — there will be one for each case — will be a blockbuster. The rulings will probably be released by late next month.

Trump's lawyers say the document demands are politically motivated fishing expeditions. But House Democrats say the president cannot block the subpoenas because they have nothing to do with his official duties, are directed at his banks and accountants — not him — and don't require him to do anything in response.

In the first case, the Democratic majorities of three House committees are seeking several years' worth of financial records from Mazars, the Trump organization's accounting firm, and two banks that loaned money to Trump businesses — Capital One and Deutsche Bank.

The Oversight Committee acted last year after former Trump lawyer Michael Cohen testified that "Mr. Trump inflated his total assets when it served his purposes and deflated his assets to reduce his real estate taxes." The Financial Services and Intelligence committees said they were looking into money laundering and lending practices.

House Democrats have said they believe Trump's tax returns might provide insights into a question special counsel Robert Mueller never answered: Did Trump borrow money from Russian entities or otherwise do business with them before he became president? He has denied any such relationship. Democrats say that if any existed, that would give Russian President Vladimir Putin leverage over Trump.

The president's personal lawyers argue that Congress has the power to issue subpoenas only for the purpose of writing laws. The demands for Trump's documents, they say, are instead an effort to conduct investigations, not to legislate. Simply claiming that the information might lead to changing existing laws cannot transform a law enforcement effort into a law-making one, they say.

"These subpoenas are no more valid than would be demands for the president's medical records so Congress may consider health care reform," they write in their Supreme Court brief.

Besides, they say, it's been clear since Trump was elected that Congress was determined to dig into his family's financial history. "Exposing private details about individuals is not a power Congress holds," the lawyers write. "Yet that has been the goal here from the start."

In response, House Democrats say Congress has the power to issue subpoenas when it needs to know how current federal laws are working.

"It is scarcely surprising that investigators need to conduct a thorough investigation when seeking to determine whether money laundering, election and national security, disclosure and conflict of interest laws are sufficient," they argue.

While Trump says Congress has never before subpoenaed the private records of a sitting president, lawyers for the House say Congress has been seeking information about the public and private conduct of presidents for nearly 200 years.

In the second case on Tuesday, the president's lawyers will argue that a local prosecutor in New York had no power to seek a grand jury subpoena for Trump's tax records from his accountants. Manhattan District Attorney Cyrus Vance is investigating hush money payments made to two women who claimed they had affairs with Trump — allegations the president has consistently denied.

Trump's team says that because a president cannot be indicted while in office, he is immune from any part of the criminal justice process, including grand jury subpoenas. One of his lawyers told an appeals court that a sitting president could not be investigated even for shooting someone on Fifth Avenue in Manhattan.

It's even worse, they say, to imagine that every local prosecutor in the country could target the president for investigation. "The risk that politics will lead state and local prosecutors to relentlessly harass the president is simply too great to tolerate," Trump's lawyers argue.

While the demand for his taxes is directed at his accountants, not him, the president's lawyers say "there is no dispute that the subpoena itself targets the president — it names him personally and seeks his private records." He'll have to consult with his lawyers and consider possible court fights, which will distract him from his official duties, the president's lawyers say.

The House lawyers say the president's immunity from the burdens of legal process applies only to his official acts, not his personal ones. Grand juries cannot be blocked from investigating a president's private conduct, they say, because that could hinder the prosecution of a president after leaving office.

The Supreme Court has never ruled on the issues raised in either case before it. But in two unanimous decisions, the court said President Richard Nixon had to respond to a subpoena for White House tapes in a criminal case and President Bill Clinton was not immune from a civil lawsuit while in office, despite the potential distraction the litigation might cause.

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In 2000, the Justice Department's Office of Legal Counsel researched the issue and concluded, as previous opinions did, that a sitting president cannot be indicted. But it said, "A grand jury could continue to gather evidence throughout the period of immunity, even passing this task down to subsequently empaneled grand juries if necessary."

Mueller's team took a similar view during the special counsel investigation. Mueller's final report said while a sitting president can't be prosecuted, "a criminal investigation during the president's term is permissible."

The accounting firm and both banks have taken no position in either of the cases, saying the dispute is between the president — who is represented by his personal lawyers, not the Justice Department — and Congress and the New York district attorney.