Trump tax return strategy could backfire, recent court decisions indicate
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The Trump administration is fighting back against the House Democratic push to obtain the president's past tax returns, but two court decisions in recent days indicate it's possible the administration's strategy could backfire.
Recent rulings from two federal courts went against President Trump in his efforts to block subpoenas from financial institutions. If the White House's arguments for withholding Trump's tax returns also fail to convince a judge, an ensuing appeal might only serve to delay the exposure until closer to the 2020 election -- when the president would prefer to talk about other issues.
WELLS FARGO, TD BANK TURN OVER TRUMP FINANCIAL RECORDS TO HOUSE DEMS
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Michael Stern, a former senior counsel in the House of Representatives' Office of General Counsel, told Politico, "I don't think anyone would say that it's impossible for there to be a final order for him to produce the tax returns by the middle of next year." That would be in the heat of Trump's re-election campaign.
First, Judge Amit Mehta of the D.C. District Court ruled that accounting firm Mazars USA must comply with a House Oversight Committee subpoena for Trump's financial documents. Then Judge Edgardo Ramos of the Southern District of New York ruled similarly regarding the House Financial Services and Intelligence Committees' suboenas issued to Deutsche Bank and Capital One.
Whether a president's tax returns enjoy greater protection remains to be seen. University of Iowa Law Professor Andy Grewal says in his recent paper "The President's Tax Returns" that court precedent may be on Trump's side, at least for the time being.
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Grewal notes that while congressional committees do have broad authority to request a person's tax returns, that power is not unlimited. Such requests must be made with a legitimate legislative purpose. He cites the Supreme Court's 1957 decision in Watkins v. United States, which pointed to the need for Congress to act in relation to "a legitimate task," and 1880's Kilbourn v. Thompson, which said that Congress' investigation of the Navy Secretary was improper, but "the whole aspect of the case would have been changed" had it been in the context of an impeachment inquiry.
Based on those cases, Grewal argues, Congress may not have the authority to presently demand Trump's tax returns, as they have not opened an impeachment investigation.
House Speaker Nancy Pelosi, D-Calif., stated earlier this month that using an impeachment probe as an excuse to get documents could work, even if the investigation does not lead to impeachment. Grewal's paper appears to support the validitiy of this idea, but so far House Democrats have resisted making that move.
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Mehta's ruling, however, appears to claim that opening an official investigation is not even necessary, at least in the context of Trump's financial documents that were subpoenaed from Mazars USA.
"It is simply not fathomable that a Constitution grants Congress the power to remove a President for reasons including criminal behavior would deny Congress the power to investigate him for unlawful conduct---past or present---even without formally opening an impeachment inquiry," Mehta wrote.
On top of that, Mehta ruled that Congress does not even need to be motivated by a legitimate legislative purpose, as long as their investigation is based "on a subject matter on which 'legislation could be had.'"
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Treasury Secretary Steve Mnuchin said he would comply with a court order to release Trump's tax returns, but that does not mean the administration would not at least try to appeal a district court's decision. During that time, similar appeals in the Mazars USA and Deutsche Bank cases could advance through the judicial system as well. Since those matters are taking place in different circuits, if those appeals meet different outcomes, it could be grounds for the Supreme Court to consider taking up the issue of the limits of congressional oversight of the executive branch.
The timing of all this is what could ultimately pose a problem, depending on how long these legal battles last.
Trump's own past statements have supported the idea that releasing tax returns sooner rather than later would be a good idea. When Mitt Romney ran for president in 2012, he held out until finally making them public in September. Trump commented on this in 2016.
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JUDGE WHO UPHELD TRUMP SUBPOENA DONATED TO DEMS ON COMMITTEE SEEKING THE RECORDS
"He waited until September to give them, just before the election," Trump told ABC. "They made him look so bad, it was so unfair, I actually think he didn't lose because of the 47 percent, I think he lost because of a couple of really minor items in tax return where he did nothing wrong."
If the issue of Trump's tax returns is decided the way lower courts ruled on his financial documents, the president and his legal team may have to weigh the benefits of trying to push a court case past November 2020, or potentially prevailing beforehand, versus letting the information out early, so that Trump's campaign has more time to address it.
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"He's gambling," Stern said.