Court of Appeals Rules Against Trump in Battle Over Financial Records

 /  Nov. 10, 2019, 4:24 p.m.


The tables have turned for President Donald Trump’s legal team in the fight over his financial records. On October 11, the U.S. Court of Appeals for the D.C. Circuit ruled against the president in Trump v. Mazars, stating that Congress can legally retrieve eight years of financial information from Trump’s accounting firm. As Trump prepares for the upcoming 2020 election, his legal team is left with a choice: ask for a rehearing from the D.C. Circuit or appeal to the Supreme Court. 

Trump V. Mazars

The Mazars case involves the financial information held by Mazars USA, the accounting firm holding Trump’s tax returns. In mid-April, Democrats leading the House Oversight and Government Reform Committee issued a subpoena to Mazars USA for decades of Trump’s financial records. Interest over this material originated from Michael Cohen’s claims that Trump was seeking loans by exaggerating his wealth. Amidst impeachment inquiries over Trump’s push for Ukraine to investigate presidential candidate Joe Biden, this case and the actions of Trump and his attorneys have been of particular interest to Congress and the general public. Democrats point to precedent in the case of former Louisiana Federal District Court Judge Thomas Porteous Jr. to argue that tax fraud is a constitutionally impeachable offense. In that case, the Senate convicted Porteous for his fraudulent tax actions, making a prior crime justification for impeachment. The D.C. Circuit Court’s ruling in Trump v. Mazars occurred upon the President’s appeal of a lower court decision that allowed the House Oversight Committee to request the financial statements of interest. 

The Legal Battle over the Subpoena

Judges David S. Tatel and Patricia A. Millett, both appointed by Democratic presidents, wrote extensively in the Mazars case on the importance of upholding the House Committee’s authority to issue the subpoena. Tatel notes the mountain of legislation and the expressed interest shown by the Oversight Committee in determining whether or not illegal conduct occurred. The majority of the seated judges on the court cited decades of presidential checks applied by Congress through subpoenas to support their ruling; Watergate and Teapot Dome show no evidence justifying complete presidential immunity. 

To counter, Trump’s legal team argued that a full floor vote in the House was required to let the subpoena through. The majority of judges rebutted with several points justifying congressional checks over the president. Ultimately, Tatel stated that testing the efficacy of current financial disclosure laws to ensure presidential compliance is a pivotal role of Congress as outlined in the House Rules, making the subpoena constitutionally permissible. The majority soundly agreed that the Emoluments Clause supports their rationale on the checks and balances between the branches. Emoluments in the Clause’s context refer to fees or gifts of monetary value. They largely agreed that the president may not accept domestic emoluments and must seek congressional permission before accepting foreign emoluments. 

Judge Neomi Rao, appointed by Trump to the D.C. Court of Appeals, dissented in the Mazars case. Arguing that oversight powers are not permissible in this case, Rao emphasized the importance of preventing conflation of oversight and impeachment powers to check the president. Justice Tatel highlighted the lack of constitutional evidence backing Rao’s argument and the risk of a complete reordering of the Constitution in a world where impeachment powers were Congress’ only consistent way to provide presidential oversight. Historically, the constitutionality of congressional oversight has been unanimously affirmed by judges, but University of Texas law professor Steve Vladeck argues that Rao’s dissent could create a roadmap for a conservative Supreme Court decision upon appeal of the case. 

Ammunition for Trump’s Legal Team

The Mazars case also comes after a tough week for Trump and his team; a federal judge in Manhattan and the chief judge of the federal district court in Washington both delivered rulings that reduced presidential authority. Similarly, two foreign-born associates of Rudy Giuliani, Trump’s personal attorney, were indicted on campaign finance charges for generating political influence for the Ukranian government. Manhattan District Attorney Cyrus Vance Jr. is also attempting to subpoena Trump’s financial records for an investigation into hush-money payments prior to the 2016 election. This has prompted efforts on multiple fronts by Trump’s legal team to thwart investigations. Trump’s team is motivated to find success in the Mazars case and optimize their outcomes should a Supreme Court case come to fruition.

Jay Sekulow, one of Trump’s private attorneys, gave limited commentary regarding the plans for their legal team. Thus far, his lawyers are reviewing the D.C. Court’s decision and Rao’s dissent to argue that the subpoena is illegitimate. The lawyers have negotiated an agreement with House Democrats to suspend deadlines for the subpoena while the court case is pending. This gives Trump’s lawyers time to choose between two options for the case’s future: ask for another review by the D.C. Court or turn to the Supreme Court. 

A Victory for House Democrats?

House Democrats were thrilled with the ruling and the subsequent agreement that was reached with Trump’s legal team. House Speaker Nancy Pelosi and Oversight Committee Chairman Elijah E. Cummings called the decision a “major victory” and celebrated the public support for their side of the case. 

However, the Democrats may be celebrating too soon, as this case could have tremendous consequences on the future of congressional oversight over the president’s finances. The aforementioned agreement allows Trump to keep the case alive for months by asking the full D.C. court for review. The decision also will not go into effect immediately, a delay which further benefits the Trump administration. University of Chicago law professor Daniel Hemel spoke on the impact of this delay for future precedent. Hemel claims that Trump has fourteen days to decide if he wants the case reheard by the D.C. Court. Given the low chance that the court agrees to the rehearing, the petition will likely not be granted. Though arguments between Rao and the Democratic majority are likely to proceed, Hemel and other legal scholars believe that a Supreme Court review is highly probable. 

Probability, however, does not ensure proximity. Given the current timeline, a Supreme Court case would likely occur in June 2021. By this point, Trump’s re-election would have already been decided, thus lowering the president’s incentive to prevent subpoenas for financial records from going through during the 2020 election period. Impeachment lurks in the background of each case related to Trump’s finances, highlighting the House’s persistent efforts to challenge presidential notions of exemption. The upcoming year will reveal whether persistence will succeed against Trump’s upper hand.

Shreya Ram is a Contributing Writer for the Gate. The image featured in this article is licensed under the Creative Commons Attribution-ShareAlike 2.0 Generic. The photographer was WP Paarz. The original image can be found here.

Shreya Ram


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