Donald Trump

Whither the Trump Financial Documents Cases?

By Quinta Jurecic, Bryce Klehm
Tuesday, March 2, 2021, 8:01 AM

Remember Donald Trump’s tax returns?

For all of Trump’s presidency, the mystery of his finances tantalized journalists: Given that he never released his tax returns during the 2016 campaign, what might he be hiding? After Democrats won control of the House of Representatives in 2018, various House committees began digging for access to Trump’s taxes and other financial documents, sending out subpoenas to financial institutions with which Trump had worked. Manhattan District Attorney Cyrus Vance also started his own investigation into the matter. Trump resisted—and the drama came to its crescendo in a pair of Supreme Court rulings in July 2020, in which the court refused to bar either Congress or Vance from access to the documents.

Yet the tax returns remained hidden through the 2020 election. Trump continued to throw up roadblocks against Vance, and the subpoenas brought by Congress languished. After Trump lost the election to Biden and reluctantly left the White House, the importance of his financial documents faded somewhat. The story seemed to have coasted to a stop.

Until now, that is. Last week, on Feb. 22, Vance’s office finally laid hands on the documents it had waited for a year and a half to receive. The 117th Congress, meanwhile, may soon reissue its requests for Trump’s information—and a key hearing is coming up this Thursday, March 4. Given this recent surge of activity, it’s worth taking a look at where the cases stand and what could be coming next.

Trump v. Vance

The grand jury subpoena at issue in Vance was sent to Mazars USA, LLP, Trump’s personal accounting firm, seeking financial records—including tax returns—for Trump and affiliated organizations, from 2011 through the present day. Trump inserted himself between the grand jury and Mazars, blocking the accounting firm from handing over the material on the grounds that, as president, he enjoyed “temporary presidential immunity” from state-level criminal process. His arguments proved unsuccessful before the Supreme Court, which ruled in July 2020 that Trump was not absolutely immune and—in a rebuttal to the Justice Department, which participated in the case as an amicus—that the subpoena should not be reviewed under a heightened standard. The Supreme Court remanded the case back to the U.S. District Court for the Southern District of New York.

Trump’s legal team continued to fight against the subpoena in district court, filing an amended complaint arguing that Vance’s subpoena was “wildly overbroad” and was issued “in bad faith”—two arguments that Chief Justice John Roberts specifically noted remained available to the president in his majority opinion in Vance. Vance responded with a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), on the grounds that Trump had failed to state a claim. On Aug. 20, the district court granted Vance’s motion, writing that Trump’s legal arguments amounted to “absolute immunity through a backdoor.” The court dismissed the case with prejudice: “Justice does not require granting leave to replead under these circumstances,” wrote Judge Victor Marrero. “Justice requires an end to this controversy.”

Trump, it seems, did not agree with Marrero. The next day, Trump’s lawyers again sought to delay the subpoena by filing a request for an administrative stay in the U.S. Court of Appeals for the Second Circuit. Judge Denny Chin of the Second Circuit denied the request but agreed to hear the case—only to affirm the district court’s dismissal in an Oct. 7 ruling. (“The procedural posture of this case … is unusual,” noted the appeals court.) Trump’s lawyers again appealed to the Supreme Court, filing an emergency application for a stay. Vance agreed to delay enforcement of the subpoena until the court ruled.

From there, the case sat on ice for more than four months, while first Election Day and then Inauguration Day came and went. The Supreme Court did not rule on the matter until Feb. 22, when it at last denied Trump’s application for a stay. And finally, just three days after the Supreme Court denied the stay, the Manhattan District Attorney’s Office reportedly obtained the former president’s financial records.

What happens next? Vance hasn’t been sitting on his hands while waiting for the Supreme Court to act. The Manhattan District Attorney’s Office has, according to the New York Times, “interviewed a number of witnesses” and “issued more than a dozen new subpoenas.” Vance also added a well-known prosecutor, Mark Pomerantz, to the team conducting the investigation. Little else remains public about the team’s work given the legal constraints required by grand jury secrecy.

The Times recently reported that Vance “is focused on possible tax and bank-related fraud, including whether the Trump Organization misled its lenders or local tax authorities about the value of his properties to obtain loans and tax benefits”—and a recent report added that investigators are increasingly looking into the company’s chief financial officer. An earlier stage of the investigation reportedly concerned payments made in 2016 to prevent two women from speaking publicly about their sexual relationships with Trump. The Associated Press, however, wrote in early February that Vance’s office seems to have dropped this aspect of the investigation. Ironically, Trump’s arguments about the subpoena’s supposed overbreadth focused on the claim that Vance’s investigation concerned only the payments to women. The courts, it seems, were right to have been skeptical.

Trump v. Mazars and Trump v. Deutsche Bank

While Vance concerned presidential immunity to criminal process, the Supreme Court framed the congressional subpoena cases—Trump v. Mazars and Trump v. Deutsche Bank—as raising questions about the separation of powers between Congress and the executive. The cases initially concerned four subpoenas issued by three House committees investigating Trump. The House Financial Services Committee sought information from Capital One and Deutsche Bank, both banks used by Trump and his businesses; the House Intelligence Committee likewise subpoenaed Deutsche Bank; and finally, the House Oversight and Reform Committee subpoenaed Mazars. As in Vance, Trump sued to block enforcement of the subpoenas.

Ruling in Mazars and Deutsche Bank (consolidated as Mazars), the Supreme Court established a new four-part test for congressional subpoenas of personal information concerning the president. First, “courts should carefully assess whether the asserted legislative purpose warrants the significant step of involving the President and his papers”; second, subpoenas should be “no broader than reasonably necessary to support Congress’s legislative objective”; third, Congress must offer evidence to “establish that a subpoena advances a valid legislative purpose”; and fourth, “courts should be careful to assess the burdens imposed on the President by a subpoena.” The court vacated and remanded the appellate rulings in Mazars and Deutsche Bank back to the appeals courts to resolve the issue of whether the subpoenas meet the new four-part test.

Over the rest of the summer, Congress worked to tailor its subpoenas to the new test—or, in the case of the Financial Services Committee’s subpoena to Capital One, dropped them entirely. That committee also narrowed its subpoena to Deutsche Bank to request “only records that do not constitute the President’s information,” as general counsel to the House, Doug Letter, put it. Intelligence Committee Chairman Adam Schiff likewise announced that the committee would scale back its Deutsche Bank subpoena to focus primarily on any financial ties between Trump and foreign entities. While the Oversight and Reform Committee chose not to revise its subpoena to Mazars, the committee’s chairwoman, Rep. Carolyn Maloney, issued a 59-page memo explaining why the existing subpoena satisfied the four-part test.

Since then, the cases have moved forward slowly. On Oct. 20, the U.S. Court of Appeals for the D.C. Circuit held oral arguments over whether Mazars should be remanded to the district court for further proceedings, with Trump’s team urging that it should. Whichever way the judges planned to rule, however, the court was overtaken by the Second Circuit’s Dec. 14 ruling remanding Deutsche Bank back to the district court. Finally, on Dec. 30, the D.C. Circuit followed suit and remanded Mazars back to the district court.

At this point, the litigation has stretched out long enough that Congress may need to reissue the subpoenas in order for them to have any effect. According to one reading of congressional authority, subpoenas issued by the House expire at the end of the session of the Congress by which they are issued—which, for the 116th Congress, was Jan. 3. The committees haven’t yet made any concrete moves to send out the subpoenas again, though the rules adopted by the 117th Congress seemingly would have allowed Congress to speed up the clock and reissue the requests without waiting for the committees to formally reorganize in the new session.

Things may move forward soon, though. In a Dec. 21 letter to the D.C. Circuit in Mazars, Letter wrote, “If this case has not been resolved by the end of this Congress, the Chairwoman will reissue the subpoena to Mazars at the start of the next Congress”—and Maloney issued a memo on Feb. 23 announcing her intent to send out the subpoena once again. And in a Jan. 11 status conference in the Deutsche Bank case, Letter told the district court judge that the Intelligence and Financial Services committees “will be issuing subpoenas very soon.”

So what’s next? In Deutsche Bank, the court is waiting for the subpoenas to be reissued. In Mazars, a status conference is scheduled for March 4 at 11 a.m., where observers might learn more about what to expect in the coming months.

Judge Jon O. Newman of the Second Circuit offered a glimpse of the potential questions facing the district courts as the cases move forward. In a concurring opinion to the court’s per curiam order that the Deutsche Bank case be remanded, Newman outlined “preliminary issues that the District Court might find it useful to consider.” Among these issues are whether any of the former president’s personal information is even contained in documents requested by the narrowed subpoenas, “how the interests of contending sides are to be protected” when documents containing the president’s personal information are identified, and the “precise scope of the narrowed subpoenas.” Newman foresees that if the parties to the case have to view particular documents, the district court will have to decide “how to maintain appropriate secrecy” when viewing the documents so that Trump is still “entitled to protection.”

What Now?

The wheels of justice turn slowly. It’s now a year and half since Congress and the Manhattan District Attorney’s Office first made these requests for information, and Congress still hasn’t obtained the information it’s looking for. Members of the public eager to peek into Trump’s finances won’t be sated by Vance’s victory at the Supreme Court: As Vance’s team emphasized during oral arguments at the Supreme Court, laws enforcing grand jury secrecy prevent investigators from going to the press with details about what they’ve found in the documents from Mazars.

One takeaway from Vance and Mazars, then, might be that Trump was simply able to wait out the scrutiny—though the fact that the details of his finances remained largely hidden to the public in the run-up to the election, apart from a New York Times investigation, didn’t help him secure a second term. At the same time, as an ex-president he no longer has whatever protection he may once have enjoyed from investigation and prosecution at the state level. And the new constraints on congressional investigations imposed by the four-part Mazars ruling no longer apply to him now that he has left office. The Mazars test, after all, concerns congressional investigations of presidential information—not of information belonging to former presidents.

Vance and Mazars were stories that spoke both to the institutional presidency—and, in the case of Mazars, the relationship between the presidency and Congress—and the more individual matter of what would become of Donald Trump. For Vance, the institutional story is over, concluded by the Supreme Court’s refusal to grant the president immunity. The Manhattan investigation has contracted into a story about whether Trump the individual might face criminal charges in New York state. 

When it comes to Mazars, though, the institutional drama continues. There’s value to Congress in demonstrating that it can get what it wants when it litigates a subpoena—proving, however long it takes and however much resistance it faces in court, that a congressional subpoena has real bite. And so, even though separation of powers questions are no longer on the table, the House has a long-term interest in finally getting hold of those long-awaited documents. For that reason, the continuing battle between Trump and the House over the former president’s financial materials is worth keeping an eye on as part of the broader story of congressional oversight post-Trump.

Topics: