How the GOP dossier chase may help House Democrats get Trump's tax records
Posted May 12, 2019 6:24 p.m. EDT
CNN — In the end, Congress will almost certainly get President Donald Trump's financial records -- and Republican efforts to investigate the Christopher Steele dossier could be one reason why.
Trump has asked the courts to stop the records from getting to the Democratic-held House of Representatives. Yet one past court case that could hurt his arguments was, ironically, the case that hurt the Democrats in the last two years.
That was the Republican-led House pursuit of political research firm Fusion GPS' financial records. Rep. Devin Nunes, a Trump ally and then-chairman of the House Oversight Committee, targeted the firm for its commissioning of the Russia dossier.
In that case, Nunes, a California Republican, subpoenaed the bank used by Fusion GPS, and Fusion GPS sued the bank to stop it from turning over the records to Congress, which would reveal who paid for the dossier.
"The difficulty that Trump faces is the same one that we faced," said Bill Taylor, Fusion GPS' attorney in the case. Fusion ultimately lost the court fight to keep the records away from Congress, following a federal district judge's ruling.
Though Fusion's situation is only one case, the legal history doesn't look good for the Trump team's approach. A better understanding of how federal judges might respond to Trump will come as soon as Tuesday, at a scheduled court hearing in the accounting firm subpoena challenge.
Trump's legal team has brought its court cases against subpoenas with a similar tactic to what Fusion unsuccessfully tried -- suing the banks and the accounting firm directly to thwart Congress. Their legal arguments, so far, even cite some of the same laws and precedents.
The financial companies haven't taken positions in court in the Trump financial records cases, and the House of Representatives' general counsel has stepped in, like in the Fusion case, to argue for the subpoenas.
In the Fusion case, a judge in DC federal court said Congress' Russia investigation was a legitimate legislative endeavor -- meaning it overrode even laws that offer some personal financial privacy protection.
After the judge ruled, the bank gave the documents to the House committee for its investigation. The Fusion GPS clients -- which included the Democratic Party looking for opposition research on Trump --were revealed.
Trump's attempts to stop Congress from getting his financial records have multiplied in recent weeks.
That's because four committees in the Democratic-controlled House of Representatives have converged to pursue his financial records. The committees are seeking Trump's information from an accounting firm, as well as banks that have loaned to him and the IRS, which has his tax returns. If any of the subpoenaed groups were to hand over Trump's records, those documents, in theory, could include enough detail to reveal the President and his company's earnings, losses, debts and wealth from before he took office.
Trump quickly challenged the subpoenas of the accounting firm Mazars USA and the banks Deutsche Bank and Capital One in court, seeking to delay, potentially limit or ultimately kill the requests.
At the same time, demands from a House committee to obtain Trump's tax returns directly from the IRS were rejected by Treasury Secretary Steve Mnuchin this week, and a fourth House committee responded with subpoenas to Mnuchin and to the IRS on Friday. If the Treasury Department refuses to give the House the tax returns, that standoff, too, may be headed for court.
Several tax attorneys and lawyers from both political parties who specialize in congressional court fights this week cast serious doubt over how successful Trump may be.
"There's a very good chance that the public eventually does see information coming out of this litigation," said Kevin Sweeney, a former federal tax prosecutor, who added that the accounting firms might have more financial information on Trump than the IRS does.
"Arguably you could get a lot more information from the accounting firm than you could from the tax returns," Sweeney said. "They'd keep the documentation they used to prepare that return, and the work papers with the analysis that they prepared that return from."
While the IRS tax return fight still may be headed for court, the cases over the bank and accounting firms' subpoenas are moving swiftly already, with hearings lined up starting Tuesday.
The length of time the cases last may be just as significant for Trump as an ultimate win or loss -- with a delay past November 2020 a possibility if the cases and appeals drag out.
The federal judges will have to weigh whether the House of Representatives' subpoenas could have valid legislative purposes.
Courts, generally, haven't limited Congress' power or curtail its activities, finding that legislation could arise out of many topics of investigations. The Supreme Court once even noted that Congress may take its investigations down "blind alleys" that don't result in legislation.
"There's a heavy presumption in favor of the validity of a congressional subpoena," Taylor said. "Courts typically don't quash them or even force Congress to narrow them," Taylor said.
Yet Trump's legal team has asked the court to carefully consider the limits of Congress' power. The President's attorneys criticize what they believe are "limitless, suspicion-free, judicially-unquestionable investigations to find 'potential conflicts of interest,'" according to one recent legal brief. They warn of "massive ramifications for our republic."
They are also arguing for privacy expectations that they say any person should have with their financial records.
But Trump isn't just any company, organization or citizen -- he's the President. Judges may want to weigh the high political stakes and his team's claims that he's being unfairly targeted as President.
Marc Mukasey, a lawyer for Trump in the Deutsche Bank and Capital One case, declined to comment on his team's legal strategy, and instead pointed to the arguments his team has made on paper in court.
Congress, for its part, has argued that they seek the Trump financial records as a way to learn about possible foreign money in the US and influence in politics. Congress also says the documents could help them develop policy on banking and may reveal whether the President has conflicts of interest from his business past.
"Congress's power to conduct oversight and investigations is firmly rooted in the constitutional separation of powers," lawyers for the House wrote in a court filing Friday. "Rather than respect the Committees' legitimate investigations into these serious issues of national importance, Mr. Trump and his companies have continually engaged in stonewalling intended to obstruct and undermine these inquiries."
The fast track
So just how quickly could these court cases get decided?
Federal District Judge Amit Mehta, assigned to oversee that crucial subpoena fight with Trump's accounting firm, has already kicked the court activity into a higher gear.
Mehta had been scheduled to weigh an initial legal question in the case before digging into its substantive questions, but now plans to weight the full case all at once on Tuesday.
"The sole question before the court -- Is the House Oversight Committee's issuance of a subpoena to Mazars USA LLP for financial records of President Donald J. Trump and various associated entities a valid exercise of legislative power? -- is fully briefed, and the court can discern no benefit from an additional round of legal arguments," Mehta wrote in a court order on Thursday.
Sitting in Washington, Mehta has handled legal arguments involving Congress before. In 2018, he denied a request from 17 Democratic members of the House Oversight Committee, then in the minority, to get details from the agency that agreed to lease the Old Post Office building in Washington, DC, to the Trump family to open a hotel. The Democrats didn't have the ability to pursue those records, Mehta found, because they didn't have the full House's backing.
Yet he noted in his opinion how in other situations, the House of Representatives can subpoena -- and that gives the House "greater political force" against challengers.
Even the former FBI Director James Comey was stymied in an attempt to stop a congressional request for information, after sending his attorneys to argue before yet another federal judge in Washington in November last year. Comey had called a Republican-led House committee's request for a private hearing with him "extraordinary and frivolous," and took issue with it not being public because he believed Republicans would leak and spin what he said.
The judge cast doubt on Comey's challenge at the hearing, noting that the court had never limited Congress in the way Comey wanted. Comey's attorney appeared to concede, responding, "Here's your opportunity, Judge."
Comey settled before Judge Trevor McFadden, a Trump judicial appointee overseeing that case, could make a judgment.
Congress got its interview.