Donald Trump

The D.C. Circuit Upholds Subpoena for Trump Financial Records

By Jacob Levin
Friday, July 15, 2022, 10:01 AM

On July 8, the U.S. Court of Appeals for the D.C. Circuit held in Trump v. Mazars that the U.S. House Committee on Oversight and Reform is entitled to a narrowed subset of former President Trump’s financial records that the committee initially requested in a 2019 subpoena. This decision marked the second time the D.C. Circuit weighed in on the controversy between the Oversight Committee and Trump, issuing its opinion after the Supreme Court vacated a prior order granting the committee’s subpoena and remanding the case back to the D.C. Circuit so that the lower court could give greater consideration to the separation of powers principles at stake. (A summary of the Supreme Court’s July 2020 decision in Trump v. Mazars is available here.) 

Reconsidering the issue in light of the Supreme Court’s decision, the D.C. Circuit’s latest decision “uph[eld] the Committee’s authority to subpoena certain of President Trump’s financial records” but determined that it “must be narrowed in a number of respects.” To ensure compliance with the Supreme Court’s four-factor Mazars test, the D.C. Circuit ruled that the committee was entitled only to (a) documents from 2017 to 2018 related to financial transactions between Trump or a Trump entity and any foreign or domestic government entities; (b) documents from November 2016 to November 2018 related to Trump Old Post Office LLC or the Old Post Office lease; and (c) documents and communications from 2014 to 2018 related to inaccurate information about President Trump’s or a Trump entity’s reported assets, liabilities, or income.

Background

In April 2019, the Oversight Committee subpoenaed Trump’s personal accounting firm, Mazars USA, LLP, requesting an array of financial records related to Trump and his businesses from 2011 to 2018. Trump’s attorneys sought to block the subpoena in federal court by claiming that the Oversight Committee’s request lacked a legitimate legislative purpose and violated separation of powers principles. In October 2019, the D.C. Circuit affirmed a district court decision that declined to issue an injunction invalidating the subpoena.

The Supreme Court granted Trump’s request for review and consolidated the Mazars litigation with a decision from the U.S. Court of Appeals for the Second Circuit that had upheld similar subpoenas issued by the House Financial Services and Intelligence committees for Trump-related financial documents held by Deutsche Bank and Capital One. In a 7-2 decision, the Supreme Court vacated the circuit court judgments and remanded the cases so that the lower courts could account for the special separation of powers issues that arise when subpoenas seek information from the president. The Supreme Court explained that Congress need not show a “demonstrated, specific need” or that the requested information is “‘demonstrably critical’ to its legislative purpose,” but it is not enough that the financial information “could ‘potentially relate’ to a conceivable subject of legislation.” The opinion provides a nonexhaustive list of four factors courts should consider when evaluating whether Congress may subpoena personal information from a president: first, whether “other sources could reasonably provide Congress the information it needs in light of its particular legislative objective”; second, whether the subpoena is “no broader than reasonably necessary to support Congress’s legislative objective”; third, whether “Congress adequately identifie[d] its aims and explain[ed] why the President’s information will advance its consideration of the possible legislation”; and fourth, a consideration of the “burdens imposed on the President by a subpoena.”

After receiving the case on remand, the D.C. Circuit requested supplemental briefing from the parties responding to the Supreme Court’s new Mazars test. As an attachment to its brief, the Oversight Committee filed a 58-page memorandum that, for the first time, explained how the information requested in the subpoena would support three investigative tracks. The financial disclosures track sought information about Trump’s disclosures to the Office of Government Ethics so that Congress might consider enacting legislation to ensure that presidential disclosure laws sufficiently assess potential conflicts of interest. The federal lease track requested information about Trump’s lease agreement with the General Services Administration (GSA) for the Trump Old Post Hotel to inform potential legislation ensuring federal contracts with the president are fair, transparent, and free from self-dealing. The emoluments track sought information received by Trump from foreign and domestic government entities through his business holdings, which might inform legislation that ensures compliance with the Constitution’s Emoluments Clauses. Upon receiving the requested supplemental materials, the D.C. Circuit remanded the case to the district court for further proceedings consistent with the Supreme Court’s opinion. 

Ruling on cross-motions for summary judgment, the district court held that it could consider the Oversight Committee’s memorandum in applying the Supreme Court’s Mazars test even though it postdated the original issuance of the subpoena. The district court then applied the Mazars test to the three investigative tracks outlined in the memorandum to conclude that the financial disclosures track could not justify any portion of the subpoena, that the federal lease track could justify only documents relating to parties associated with the Trump Old Post Hotel, and that the emoluments track supported all requested documents but only for the period when Trump was in office. Both the committee and Trump appealed the district court’s decision to the D.C. Circuit. 

Opinion

After recounting the lengthy procedural history, the court then confirmed its jurisdiction and rejected arguments that the subpoena’s expiration at the end of the 116th Congress in January 2021 made the case moot. First, it found that House Rules permit the 117th Congress’s Oversight Committee to serve as a “successor in interest” that can enforce the original subpoena, thus preserving the controversy. Second, the court determined that even assuming the original subpoena had expired, courts can “decide an otherwise-moot matter if the dispute is capable of repetition yet evading review,” as is the case for subpoena litigation that might never conclude in a two-year session of Congress.

With its jurisdiction confirmed, the court then assessed how two major developments that occurred since the time of the Supreme Court’s remand—the end of Trump’s presidency and the Oversight Committee’s memorandum explaining the legislative purpose of the subpoena—affected the D.C. Circuit’s inquiry. First, the opinion explained that the court would consider separation of powers issues by applying the Supreme Court’s Mazars test even though Trump was no longer the sitting president, declining to eschew the Mazars test in the very litigation for which it was designed. The court suggested there might be a different standard when Congress subpoenas a former president, but the subpoena at issue in this case initially sought information from a sitting president. The opinion explained that the potential for Congress to “wield the threat of intrusive post-Presidency subpoenas to influence the actions of a sitting President” preserved separation of powers concerns and therefore the Mazars test did not cease to apply when Trump left office. Second, the court decided that it could consider the Oversight Committee’s memorandum even though it postdated the issuance of the original subpoena. The court found the memorandum especially valuable both because it was the best articulation of the “Committee’s understanding of its legislative purposes” and because it was directly responsive “to the Supreme Court’s new test for evaluating congressional subpoenas to the President.” The opinion also pointed to the committee’s reincorporation of the explanation in 2021 when it reissued the subpoena, which undercut Trump’s argument that the memorandum was a “post-hoc litigation strategy.”

Having addressed these intervening issues, the court then applied the Supreme Court’s four-factor Mazars test to the three investigative tracks described in the Oversight Committee’s memorandum. Beginning with the third Mazars factor, the court found that “Congress ha[d] put forward a sufficiently detailed explanation of the legislative need to involve the President’s papers” for all three investigative tracks. For the emoluments track, the court accepted the Oversight Committee’s explanation that audited statements from Trump’s businesses would help them understand the extent, manner, and recording of foreign and domestic government payments. This would allow Congress to determine “whether and what information presidents should report upon receipt of an emolument to preserve Congress’s constitutional role in accepting or rejecting them.” For the federal lease track, the opinion noted several claims in the memorandum that, according to the committee, require insight into the president’s documents, such as a pending bill that “would prohibit contracts between the United States … and the President.” For the financial disclosures track, the court acknowledged the numerous allegations of ethical issues and discrepancies in Trump’s federal financial disclosures and found persuasive the Oversight Committee’s argument that the former president’s records would help Congress strengthen disclosure rules for future presidents and presidential candidates. 

The court then applied the first and second Mazars factors together by addressing whether the subpoena sought presidential information that was “insufficiently available from other sources” and was “no broader than reasonably necessary.” Through this analysis, the court narrowed the subpoena in both time and scope to a subset of the requested information that the court felt would sufficiently support the committee’s stated legislative interests.

For the emoluments track, the court accepted that Trump’s unique financial position as the only recent president who “declined to divest himself of his business interests and place his assets in an independent blind trust,” combined with his complex finances, made the requested information insufficiently available from other sources. The opinion also noted that only presidents are subject to the Constitution’s Domestic Emoluments Clause, which further supported the Oversight Committee’s claim that Trump’s documents are required to inform legislative action in that arena. Despite determining that Trump’s records are necessary to the emoluments track, the D.C. Circuit found the Oversight Committee’s request too wide with respect to both time and scope. The court found that the committee could justify its request only for documents from 2017 and 2018: years when Trump was in office and therefore subject to the Emoluments Clauses. The court also limited the scope of documents requested to those that “relate to any financial relationships, transactions, or ties between President Trump or the other Trump entities and actors potentially subject to the Emoluments Clauses,” such as foreign or domestic government entities.

For the federal lease track, the court found that the committee’s specific interest in presidentially held leases created a sufficient need for presidential documents. The opinion explained that Trump’s status as the only president who was a federal leaseholder while in office created a particular need for his documents to inform legislative responses to the unique conflicts of interest that arise in that scenario. Reasoning from this analysis, the court found it necessary to curtail the subpoena to the time during which that conflict existed—from November 2016 to November 2018, or when Trump was in a position to exert influence on GSA as either president-elect or president. Additionally, the court limited the scope of documents to those from Trump Old Post Office LLC, the company that held Trump’s only GSA lease, and other documents related to the Old Post Office lease. 

Though calling it a “particularly close question,” the court also found that the financial disclosures track justified some access to Trump’s documents. The court said that while many government officials are subject to disclosure requirements and that others have been accused of unethical behavior, the committee had sufficient need of Trump’s personal records because it was seeking to address “the specific gaps that President Trump allegedly exploited.” The court limited the committee to records from 2014 to 2018, years for which Trump had already submitted disclosure documents. The court also limited the scope of documents requested to those that “reference, indicate, or discuss any undisclosed, false, or otherwise inaccurate information about President Trump’s or a Trump entity’s reported assets, liabilities, or income.” In so deciding, the court said it was placing trust in Mazars to determine the information that met those criteria. The court also limited the Oversight Committee to communications between Trump and his accountants that “relate[] to potential concerns about misrepresentations or omissions.” 

The court then turned to the fourth Mazars factor and held that the subpoena, having been significantly narrowed, did not impose an unwarranted burden on Trump. The opinion explained that because Trump was now out of office, complying with the subpoena “will no longer distract the head of the Executive Branch.” The court noted that even if Trump had still been in office, he would not play a role in preparing the documents himself and just participating in “litigation, without more, generally do[es] not cross constitutional lines.”

The court then briefly explained that it could narrow the Oversight Committee’s overbroad subpoena into compliance with the Mazars factors, as opposed to simply invalidating it and sending it back to Congress as Trump had requested. Acknowledging that the Supreme Court did not directly address this question in its opinion, the court inferred this power from the Mazars companion case, Trump v. Vance, which acknowledged courts’ authority to modify subpoenas of presidents issued by state grand juries. (A summary of the Supreme Court’s decision in Trump v. Vance is available here.)

The court then considered and rejected other arguments advanced by Trump that he argued should make the subpoena unenforceable. First, Trump claimed the Oversight Committee’s purpose was not truly legislative but, instead, an impermissible attempt to disclose wrongdoing for political purposes. The court rejected Trump’s argument, explaining that Congress may investigate wrongdoing in order to “better appreciate the nature of any gaps in existing laws” and that the committee’s memorandum adequately explained the legislative goals of the subpoena. Second, Trump argued that the subpoena was “not pertinent to any constitutional legislation.” The court concluded that it was too early to say what legislation Congress might ultimately enact based on the information it receives and the court had no reason to conclude that there was an “inherent constitutional flaw in requiring presidents to disclose certain financial information.” Third, Trump contended that the subpoena should be “per se invalid” because the committee had not made any guarantees to keep the information confidential. The court found that there was no requirement that the committee provide assurances of confidentiality but “anticipate[d] that the Committee will handle any records ultimately obtained with due regard for their potentially sensitive nature.” Fourth, Trump argued that the committee should have subpoenaed him directly as opposed to Mazars as a third party. The court inferred from the Supreme Court’s silence on the issue in its opinion that there was no prohibition on third-party subpoenas for presidential documents.

Concurrence

Judge Judith Rogers, who joined in the majority opinion, added a brief concurrence highlighting “the sensitive nature of the questions of first impression” presented in this case. She explained that either party could petition for a rehearing or rehearing en banc if they felt the D.C. Circuit “overlooked or misconstrued” the committee’s legislative goals or “overstated” the relevance of requested documents. The parties are likely to pursue these options. Oversight Committee Chairwoman Carolyn Maloney has already issued a statement saying the committee is “considering the next steps in this litigation.”

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