Trump asks appeals panel to block subpoena for tax returns

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Lawyers for Donald Trump asked a federal appeals court to recognize broad legal immunity protecting the president, his companies and business associates from criminal investigation, arguing that judges should block a grand jury subpoena requiring Trump’s accountants to provide his tax returns.

The U.S. Court of Appeals in Manhattan heard arguments Wednesday on Trump’s bid to reverse a ruling by a lower-court judge who refused to block the subpoena. On Oct. 7, U.S. District Judge Victor Marrero in Manhattan called the president’s claim of absolute immunity “repugnant” to the structure of the U.S. government and to the country’s constitutional values.

Manhattan District Attorney Cyrus Vance Jr. is investigating whether the Trump Organization falsified business records to disguise hush-money payments made before the 2016 election to two women who claimed they had sex with Trump. He sued in September — as an individual and not as president — in hopes of blocking the accounting firm Mazars USA LLP from turning over eight years of tax filings and other financial documents.

The case had been fast-tracked to the Court of Appeals, but both sides expect the dispute to end up at the U.S. Supreme Court. The appellate panel didn’t rule Wednesday or say when it will.

“We view the entire subpoena as an inappropriate fishing expedition,” Trump lawyer William Consovoy told the court.

Consovoy argued that the Constitution gives the president “absolute immunity” from state judicial process, including the New York grand jury’s demand for evidence.

“That the Constitution empowers thousands of state and local prosecutors to embroil the President in criminal proceedings is unimaginable,” Trump’s lawyers said in an earlier court filing.

Judges’ questions

The appellate judges peppered Consovoy and a lawyer for the DA’s office with questions, asking about the extent of the president’s claim of immunity, whether the immunity would extend to Trump’s company, if federal prosecutors could also seek the records, and whether the case belonged in federal court.

“The president’s immunity is being breached” by the Mazars subpoena for tax returns, Consovoy said. “It’s a right held under the constitution.”

Carey Dunne, general counsel for Vance’s office, pushed back on Trump’s arguments.

“They’re making this up,” said Dunne, noting that the DA’s probe focuses on actions that occurred prior to Trump’s presidency. “There is no privilege for tax returns, whether it’s the president’s or anyone else’s in the country. Tax returns get subpoenaed all the time.”

Dunne said his office would keep the documents confidential and would not provide them even to Congress, and that an investigation is different from an actual charge. He argued that it was too soon for Trump to sue, noting that the DA’s office would likely tell Trump if he were about to be charged by the state and that he could bring his lawsuit then.

‘Remarkable proposition’

In earlier court filings, Vance argued that Trump is making a “remarkable proposition” to the court, “not only that a sitting president enjoys blanket immunity from criminal prosecution,” but that the immunity protects him from subpoenas targeting actions taken before he took office and that it extends to his companies, former associates and employees.

“This extravagant claim is unsupported by constitutional text, statute or case law,” Vance argued.

Marrero, in his initial ruling, said that because the case concerns a state grand jury subpoena, it should be decided by a state court. He also said Trump was unlikely to win on his constitutional arguments.

Earlier this month, a federal appeals court in Washington upheld a different subpoena ordering Mazars to give Trump’s financial records to Congress. In a 2-1 decision, the court rejected arguments that the House Oversight and Reform Committee had no legitimate legislative reason to seek the information.

The New York case is being heard by a panel of three judges appointed by Democratic presidents: Chief Judge Robert Katzmann, who holds a doctorate in government in addition to his law degree; Denny Chin, the judge who sentenced Ponzi schemer Bernard Madoff to 150 years in prison; and Christopher Droney, who in September was in the majority of a 2-1 panel that revived a suit against Trump targeting alleged violations of the Constitution’s Emoluments Clauses.

The case is Trump v. Vance, 19-3204, U.S. Court of Appeals for the Second Circuit (Manhattan).

Bob Van Voris
Bloomberg News
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