Trump lawyers urge Supreme Court to shield financial records

Washington — Attorneys representing President Trump asked the Supreme Court to shield his tax and business records from investigators on Tuesday, arguing in a pair of high-profile cases that subpoenas from Congress and state authorities should be quashed given his responsibilities as head of the executive branch.

The court heard oral arguments in the cases over teleconference as justices continue to work remotely due to the coronavirus pandemic. The disputes focus on requests for documents from Mr. Trump’s accounting firm and several financial institutions as part of investigations by three Houses committees and Manhattan District Attorney Cyrus Vance into the president’s business dealings.

During the first round of questioning on Tuesday, the president’s personal attorney and a lawyer for the Justice Department, which is backing the president, asserted that the congressional subpoenas served no legislative purpose and were therefore invalid. They warned that upholding the subpoenas from the House committees would effectively give Congress the green light to investigate the private lives of their political opponents.

“I think it is very hard to imagine that that House is ever going to have the power … to subpoena the records of the president,” Patrick Strawbridge, appearing on behalf of the president, said in response to a question from Chief Justice John Roberts. “The House has limited powers to regulate the presidency itself,” he added.

Strawbridge asserted in questioning from Justice Brett Kavanaugh that the Congressional subpoenas were meant not to aid in lawmaking, but serve as a “dragnet” to uncover alleged wrongdoing of the president. Jeffrey Wall, principal deputy solicitor general, agreed, saying the subpoenas “don’t match up with what the committees say they’re doing.”

The four liberal justices were deeply skeptical of the argument put forth by the president’s attorneys. Justice Elena Kagan noted that previous disputes between the legislative and executive branches are typically resolved by both sides making accommodations, and questioned why the court should rule that the president’s personal records can be shielded from a congressional subpoena.

“What it seems to me you’re asking us to do is to put a kind of 10-ton weight on the scales between the president and Congress,” Kagan said. But Wall argued the danger came not from the court intervening, but rather from overly broad congressional subpoenas that “will harm and undermine the presidency of the United States.”

“Not just this president. The institution of the presidency going forward,” Wall said. 

Douglas Letter, the general counsel for the House, pushed back on the claim that the subpoenas were targeting the president to damage him politically. He argued there is nothing novel about the subpoenas seeking Mr. Trump’s records and said Congress is conducting its oversight responsibilities to determine whether new legislation concerning financial disclosures and government ethics is needed.

“There is no responsible claim here that all that’s going on is harassment,” Letter told the justices, saying the House committees were seeking the records to inform their legislative duties.

The conservative justices peppered Letter with questions about what, if any, limits there are on congressional subpoenas, and Letter struggled to address several hypothetical scenarios. Justice Samuel Alito said he was “baffled” by some of Letter’s responses, adding that he “can’t think of a single example of a subpoena that wouldn’t meet” the requirements the House had set for itself.

Letter attempted to allay the concerns of another of the court’s conservatives, Justice Clarence Thomas, who worried that Congress’ subpoena power may go unchecked. “Not a single thing is required of the president or the White House,” Letter said, to which Thomas uncharacteristically replied, “I think we all know it’s about the president.”

A ruling from the Supreme Court is expected by late June, in the heart of the presidential campaign, and will have implications for the separation of powers. Mr. Trump has fought vehemently to protect his tax returns despite promising to make them public during the 2016 presidential campaign. A loss at the Supreme Court could bring an end to those efforts.

The justices first heard arguments in a case that consolidated suits over congressional subpoenas issued to Mr. Trump’s accounting firm, Mazars USA, and two banks, Deutsche Bank and Capital One.

The Democrat-led House Oversight Committee issued a subpoena to Mazars in April 2019 requesting eight years of financial records related to Mr. Trump and his business entities as part of an investigation into whether the president may have engaged in illegal conduct before and during his presidency, as well as whether he has undisclosed conflicts of interest and is complying with the Constitution’s Emoluments Clauses.

But Mr. Trump sought to block Mazars from complying with the subpoena and sued his longtime accounting firm in federal district court in Washington. The district court, however, sided with congressional investigators. A divided panel of judges on the U.S. Court of Appeals for the District of Columbia Circuit upheld the subpoena as constitutional, ruling it had a “legitimate legislative purpose.”

The second, similar dispute involves three subpoenas issued by the Democrat-led House Financial Services and Intelligence Committees to Deutsche Bank and Capital One. 

The Financial Services Committee subpoenaed Capital One for account records for Mr. Trump’s business entities as part of an investigation into money laundering and foreign influence. The same panel and the Intelligence Committee also issued subpoenas to Deutsche Bank for financial records for Mr. Trump’s business entities, as well as for the president and his three children, dating back to January 2010.

The president and his family sued the banks in April 2019 to challenge enforcement of the subpoenas, claiming they exceeded Congress’s constitutional and statutory authority. The federal district court in New York, however, denied the request to block compliance. In December, a divided panel of judges on the 2nd U.S. Circuit Court of Appeals ruled the banks can turn over Mr. Trump’s financial information and found the committees had legitimate legislative purposes for issuing the subpoenas.

The third case involves a grand-jury subpoena issued by Vance, the Manhattan DA, to Mazars as part of a criminal investigation into Mr. Trump’s business dealings and hush-money payments made to two women who allegedly had affairs with the president years before the 2016 election. Vance is seeking business records and tax returns dating back to 2011.

Mr. Trump sued in federal court in September, arguing he is immune to criminal proceedings while in office, but the district court ruled against him. The 2nd Circuit ruled the president’s claims of immunity “do not bar the enforcement of a state grand jury subpoena directing a third party to produce non-privileged material, even when the subject matter under investigation pertains to the president.” The Justice Department is backing Mr. Trump in the trio of cases.

During Tuesday’s arguments, Mr. Trump’s personal attorney Jay Sekulow said the Constitution grants the president immunity from demands for records and testimony by local authorities.

“Temporary presidential immunity is constitutionally required,” Sekulow said, arguing that validating Vance’s subpoena would “weaponize 2,300 local DAs” and allow them to “harass, distract and interfere with a sitting president.” In their brief for the court, the president’s legal team wrote that “politically motivated subpoenas like this one are a perfect illustration of why a sitting president should be categorically immune from state criminal process.”

Conservative and liberal justices questioned the president’s claim of “absolute immunity” from state investigations, seemingly skeptical of a blanket ruling shielding the president in non-federal cases. “You’re asking for broader immunity than anyone else gets,” Justice Sonia Sotomayor said. 

Carey Dunne, general counsel for the Manhattan District Attorney’s Office, proposed that the president’s claim of immunity poses great danger to the power and processes of state grand juries, telling Justice Clarence Thomas that such an interpretation “completely upends the way a grand jury process is supposed to work.”

Justice Samuel Alito, who seemed most amenable to the president’s arguments, asked whether the release of the president’s records could threaten his privacy. “There are prosecutors who leak all sorts of information,” Alito added. Dunne explained that secrecy rules prevent disclosure of confidential information, and said he is “not aware of any real kind of pattern” of leaking.

The disputes are a test of the Supreme Court’s new conservative majority for critics who scrutinize its independence. Mr. Trump has named two justices to the high court, Neil Gorsuch and Kavanaugh, whose confirmation in October 2018 shifted the court rightward. Somewhat surprisingly, both justices expressed varying levels of skepticism of the president’s arguments in their questioning on Tuesday.

Late last month, the court asked lawyers for both sides to submit additional legal briefs addressing whether the cases raise a political question that should not be adjudicated by the courts.