Legal

Supreme Court splits on Trump tax cases, potentially shielding returns until after election

However, the justices divided on how much deference the courts should show to the president and they ordered further proceedings in lower courts.

The American flag flies in front of the U.S. Supreme Court

The Supreme Court has delivered a split decision on subpoenas for President Donald Trump’s tax returns and personal financial records, unanimously rejecting his broadest claims of “absolute” immunity in a New York state criminal investigation, but ruling that lower courts did not do enough to scrutinize congressional subpoenas for similar records.

The pair of highly anticipated decisions likely mean more delays and court proceedings on both subpoenas, increasing the odds that Trump makes it to the Nov. 3 election without releasing his tax and financial details to the prosecutors and congressional committees demanding them.

More significantly, the rulings could permanently curb Congress’ formidable subpoena power against the executive branch, which lawmakers have wielded as a cudgel for information for decades. All the justices said Congress has deployed an overbroad interpretation of its own power.

Ruling on several House subpoenas issued to Trump’s accountants and banks, a seven-justice majority said courts did not do enough to examine Democratic lawmakers’ claims that they needed the records as part of inquiries aimed at strengthening laws combating a wide range of ills, including money laundering, official conflicts of interest and foreign influence in U.S. elections.

Chief Justice John Roberts, who authored the majority opinions Thursday in both of the politically sensitive subpoena disputes, said lower-court judges needed to take “a balanced approach” to the congressional subpoenas, closely examining Congress’ need for the information, ensuring that the subpoenas are tailored to those purposes and considering whether there might be alternate sources of information.

“Without limits on its subpoena powers, Congress could ‘exert an imperious controul’ over the Executive Branch and aggrandize itself at the President’s expense, just as the Framers feared,” Roberts wrote for a majority, citing the Federalist Papers. “Congressional subpoenas for information from the President ... implicate special concerns regarding the separation of powers. The courts below did not take adequate account of those concerns.”

Two of the court’s Republican appointees were even more skeptical of the congressional effort. Justice Samuel Alito said the court’s majority did not impose enough of a burden on lawmakers to demonstrate need for the records, while Justice Clarence Thomas said Congress lacks the power to subpoena private records from anyone outside the context of an impeachment battle.

In the case involving a probe Manhattan District Attorney Cyrus Vance Jr. is conducting into Trump’s businesses, all the justices rebuffed claims by Trump’s attorneys that he is immune from criminal subpoenas while in office.

In the majority opinion, Roberts rebuffed the president by joining the court’s four Democratic appointees to also reject the Justice Department’s narrower argument that prosecutors should be required to show a “heightened need” to get the records.

Roberts said the fact that the records sought are not official, but pertain to the president’s personal and business affairs, meant that requiring a special demonstration of need by prosecutors would be unwise.

“In the absence of a need to protect the Executive, the public interest in fair and effective law enforcement cuts in favor of comprehensive access to evidence. Requiring a state grand jury to meet a heightened standard of need would hobble the grand jury’s ability to acquire ‘all information that might possibly bear on its investigation,’” Roberts wrote.

However, even as the high court turned down Trump’s arguments, the justices seemed to ensure weeks or months of ongoing litigation, because Trump will now be able to make other legal arguments that the records are legally privileged.

If lower courts deliver any adverse rulings between now and November, Trump’s lawyers could make another bid to have the Supreme Court freeze the process, effectively postponing action until after the election.

Despite the inconclusive nature of the rulings, Trump reacted angrily to the decisions, apparently treating the prospect of ongoing litigation as a humiliation and a defeat.

“The Supreme Court sends case back to Lower Court, arguments to continue. This is all a political prosecution. I won the Mueller Witch Hunt, and others, and now I have to keep fighting in a politically corrupt New York. Not fair to this Presidency or Administration!” Trump wrote on Twitter within minutes of the decisions. “Courts in the past have given ‘broad deference.’ BUT NOT ME!”

The final decisions of the Supreme Court’s term came after Trump bitterly complained of losses last month in cases involving LGBTQ rights in the workplace and the administration’s effort to end protections for so-called Dreamers. Those setbacks led Trump to invoke unusually violent imagery, lashing out at the court and trying to turn the defeats into a campaign issue.

“These horrible & politically charged decisions coming out of the Supreme Court are shotgun blasts into the face of people that are proud to call themselves Republicans or Conservatives,” Trump wrote on Twitter. “We need more Justices or we will lose our 2nd. Amendment & everything else. Vote Trump 2020!”

Vance, in a statement released shortly after the court released its decisions, celebrated the justices’ ruling as a win and pledged to quickly ramp up his office’s work investigating the president.

“This is a tremendous victory for our nation’s system of justice and its founding principle that no one — not even a president — is above the law,” the Manhattan district attorney said. “Our investigation, which was delayed for almost a year by this lawsuit, will resume, guided as always by the grand jury’s solemn obligation to follow the law and the facts, wherever they may lead.”

But at least one House Democrat, Texas Rep. Lloyd Doggett, lamented the decisions, predicting they will empower Trump to stall on the issue of his financial records through November’s election.

“While defeated on his claim that he is above the law, Trump is now beyond the law until after the November election. He may not be able to outrun the law, but he is outrunning the clock—whining all the way,” Doggett said in a statement.

The pair of subpoena rulings Thursday leave up in the air whether voters will get to see the tax returns he has resisted disclosing since launching his presidential campaign in 2015, despite promising at one point to make them public.

At the heart of both cases are questions about whether third-party companies, like Trump’s accounting firm Mazars USA, can be compelled to produce the president’s personal documents while he’s in office.

By releasing decisions in July, the Supreme Court has parted with its usual practice over the past few decades of issuing its final — and most controversial — opinions of the term on one of the last days of June, a departure that coincides with broader delays resulting from the coronavirus pandemic.

Covid-19 outbreaks in the United States led the court to suspend in-person arguments, hold its first-ever telephone arguments and push some cases into the fall. The Trump subpoena cases were originally set to be heard on March 31, but the actual, virtual arguments were conducted on May 12.

The justices left only one other case to their final opinion day: a dispute over whether a large swath of eastern Oklahoma is actually an Indian reservation.

While the Manhattan district attorney’s investigation could be considered more urgent legally, since it involves a criminal investigation, the House inquiries may pack more of a political punch. That’s because while records turned over under a grand jury subpoena are required to be kept secret at least until charges are filed, lawmakers are under no such obligation and could release the Trump financial files in the lead-up to the election.

At issue in the House case are subpoenas that House committees issued last year to Mazars USA, as well as major Trump lenders Deutsche Bank and Capital One. All the queries, according to lawmakers, are intended to inform efforts to update ethics, disclosure and money laundering laws, as well as those pertaining to foreign influence in elections and government.

But Trump’s legal team argued that the demands were tantamount to political harassment, and that the House’s claims of a “legislative purpose” were a pretense to simply investigate the president.

When arguments were eventually held on the disputes almost two months ago, Thomas and Alito sounded highly sympathetic to the president’s arguments and hostile to the House’s.

The court’s other three Republican appointees — Roberts and Justices Neil Gorsuch and Brett Kavanaugh — were more equivocal and did not sound like certain votes for Trump’s stance. Most of the court’s liberal justices seemed to favor some authority for the House to get the information it is seeking.

Trump’s legal challenge questions lawmakers’ long-held principle that Congress has broad authority to seek documents it needs to support its constitutional lawmaking power, as well as the duty to oversee the executive branch’s implementation of the laws it has passed. But the justices repeatedly questioned House counsel Douglas Letter about the limits to Congress’ investigative power and the outer edge of what might be considered a “legitimate legislative purpose” for its investigations.

At its core, the president’s legal fight with Congress is over how close a link the courts will require between House committees’ investigative efforts aimed at allegations of presidential misconduct and lawmakers’ specific plans to pass legislation.

Before Thursday’s ruling, lower courts agreed that a broad interest in government oversight and the possibility of changes to mundane legislation like financial disclosure laws are enough to justify congressional subpoenas — and that history has shown this was the precise intent of the framers of the Constitution.

Trump’s lawyers, though, contended that investigating whether a president broke the law in his financial dealings is beyond Congress’ legislative powers and that, outside of an impeachment inquiry, no congressional action to pursue such allegations is legitimate.

That would appear to leave Congress with only a few options for reining in a president who is defying the law: withholding approval of legislation, funding or presidential nominees. Criminal law enforcement is also a possibility, but that is unlikely at the federal level because of a Justice Department opinion barring indictment of a sitting president.

One central point of discussion by the lawyers and the justices during oral arguments was the 1997 Supreme Court decision that rejected similar immunity claims from President Bill Clinton’s lawyers and allowed a sexual-harassment civil suit against him by an Arkansas state employee, Paula Jones, to proceed.

Clinton’s statements in his subsequent deposition in that suit prolonged the Whitewater independent counsel investigation and led to his impeachment by the House.

Several justices said Trump’s lawyers were ignoring or downplaying Clinton v. Jones, which greenlighted civil litigation that many would consider less weighty than a congressional subpoena or a criminal investigation.

“The aura of this case is really: Sauce for the goose serves the gander, as well,” Justice Ruth Bader Ginsburg, who was appointed by Clinton, said during the arguments.

The other case considered by the justices stemmed from a drive by Vance, the Manhattan district attorney, to use state-level grand jury subpoenas to get eight years of Trump’s tax returns and other financial records.

Trump’s personal lawyers said permitting such prospecting would lead to a flurry of similar requests, potentially unleashing 2,300 local prosecutors to target the president.

Last September, Trump sued Vance to try to block grand jury subpoenas as part of an investigation into alleged fraud by the Trump Organization and other matters.

Trump’s attorneys made a sweeping argument that presidents are immune from all concrete steps in the criminal justice process — ranging from subpoena to arrest and prosecution — while in office.

Despite more than a year of litigation, precisely what Trump-related tax and financial records the accounting firm and the banks have and would turn over in response to the subpoenas remains somewhat murky. Mazars is believed to have the president’s tax returns dating back more than a decade. The House Oversight and Government Reform Committee’s subpoena to that firm demands a wide array of financial records spanning eight years, but doesn’t explicitly seek tax returns.

Last August, in response to an order from a federal appeals court in New York, Capital One said it had no tax returns from Trump or his family.Deutsche Bank said it does not have the president’s returns but has some for two people linked to Trump, believed to be family members.