Tag: Roa

President Trump’s Accountants Ordered to Turn Over His Financial Records to Congress (DC Circuit)

On 11 October 2019, the US Court of Appeals for DC Circuit ruled 2-1, in the case of Trump v. Mazars USA, LLPNo. 19-5142 (D.C. Cir. 2019), that President Trump’s accounting firm, Mazars USA, LLP, must turn over his financial records to the House of Representatives in accordance with a subpoena. The case runs in parallel to Trump v Vance Jr19‐3204 (2019) concerning a similar subpoena by a New York State prosecutor, discussed here.

In April 2019, the House Committee on Oversight and Reform subpoenaed President Trump’s financial records relating to years 2011 – 2018 from his accounting firm, Mazars USA, LLP. The subpoena was justified on the grounds that the Committee was investigating whether President Trump had committed any wrongdoing and also considering whether Congress should amend ethics in-government regulations. However, President Trump sued in a federal District Court seeking to block the subpoena arguing that it was part of a campaign of harassment conducted by the legislature against the executive and, therefore, served no legitimate legislative purpose. The District Court upheld the subpoena and President Trump appealed (p2).

The US Court of Appeals for DC Circuit first summarised the case law on the issue of enforceability of Congressional subpoenas, starting with the first case considered by the US Supreme Court, Kilbourn v. Thompson, 103 U.S. 168 (1881), where the Court invalidated a subpoena issued outside of a valid Congressional investigation (pp12-18).

Then, the US Court of Appeals for DC Circuit set the starting point – Congressional oversight powers were very broad. Nevertheless, they were also subject to important limitations. Firstly, “the power of Congress . . . to investigate” must be deemed “co-extensive with [its] power to legislate” (per Quinn v. United States, 349 U.S. 155 (1955) at 160). Consequently, “Congress may in exercising its investigative power neither usurp the other branches’ constitutionally designated functions nor violate individuals’ constitutionally protected rights.” Secondly, “Congress may investigate only those topics on which it could legislate” (per Quinn v. United States, 349 U.S. 155 (1955) at 161). Thirdly, “Congressional committees may subpoena only information ‘calculated to’ ‘materially aid’ their investigations” (per McGrain v. Daugherty, 273 U.S. 135 (1927) at 177) (p19).

At that point, the US Court of Appeals for DC Circuit emphasised that the case concerned a subpoena issued to President Trump’s accountant, not to the office of President of the United States directly, and, therefore, the case did not have involve the question of subpoenaing a sitting President. Consequently, the main question was “whether the Oversight Committee is pursuing a legislative, as opposed to a law-enforcement, objective.” (pp20-21).

In this respect, the US Court of Appeals for DC Circuit pointed out that “the fact that an investigation might expose criminal conduct does not transform a legislative inquiry into a law-enforcement endeavor” (per Sinclair v. United States, 279 U.S. 263 (1929) at 295). Furthermore, addressing President Trump’s claim that Congress was conducting a campaign of harassment against him, the Court explained that “in determining the legitimacy of a congressional act” Courts were not allowed to “look to the motives alleged to have prompted it” (per Eastland v. United States Servicemen’s Fund, 421 U.S. 491 (1975) at 508) (p22).

In order to determine whether the subpoena was issued pursuant to a legitimate legislative purpose, the US Court of Appeals for DC Circuit considered Chairman Cummings’s memorandum from 12 April 2019 where he set out the reasons behind the subpoena. The memorandum identified four questions that the subpoena would help answer:

  • “whether the President may have engaged in illegal conduct before and during his tenure in office”
  • “whether [the President] has undisclosed conflicts of interest that may impair his ability to make impartial policy decisions”
  • “whether [the President] is complying with the Emoluments Clauses of the Constitution”
  • “whether [the President] has accurately reported his finances to the Office of Government Ethics and other federal entities”

Furthermore, the subpoena was issued because “[t]he Committee’s interest in these matters informs [the Committee’s] review of multiple laws and legislative proposals under [its] jurisdiction.” In fact, at the time of the subpoena, the House of Representatives was working on a number of Bills that could benefit from the information supplied by President Trump’s accountants:

  • Bill H.R. 1 would require Presidents to include in their financial disclosures the liabilities and assets of any “corporation, company, firm, partnership, or other business enterprise in which” they or their immediate family members have “a significant financial interest
  • Bill H.R. 706 would require sitting Presidents and presidential candidates to “submit to the Federal Election Commission a copy of the individual’s income tax returns” for the preceding nine or ten years
  • Bill H.R. 745 “would amend the Ethics in Government Act to make the Director of the Office of Government Ethics removable only for cause” (pp25-27).

The US Court of Appeals for DC Circuit then held that the issues which were the subject matter of the legislation Congress was working on, were in fact subject to Congressional regulation. The Court, for instance, pointed to the the United States Code which contained a whole range of rules regulating Presidents’ finances and records. It also rejected President Trump’s claim that such regulation would unconstitutionally add further requirements for candidates seeking the office of the President of the United States, contrary to the judgments of the US Supreme Court in Powell v. McCormack, 395 U.S. 486 (1969), and U.S. Term Limits, Inc. v. Thornton, 514 U.S. 779 (1995). Consequently, the Court found a valid legislative purpose related to matters which fell under the Congressional purview (pp36-45).

At the same time, the US Court of Appeals for DC Circuit rejected President Trump’s claim that the supposed legislative purpose was merely pretextual and the Committee was in fact engaged in a law-enforcement investigation. The Court held that Congress could investigate whether any criminal activity had taken place to inform itself what type of legislation it should pass to address such an activity (pp27-31).

Finally, the US Court of Appeals for DC Circuit found that the information sought by the subpoena in question was material to its legislative purpose. Even with information concerning financial records going back to 2011 (i.e. long before Mr Trump became the President of the United States), the Court held that the Committee had a legitimate interest in those records because, in theory, it could use them when deciding whether the Ethics in Government Act should require financial disclosure going back more than one year, as it was currently required (pp50-54).

Accordingly, the subpoena was upheld by the majority of the bench. However, Judge Roa dissented arguing that “when Congress seeks information about the President’s wrongdoing, it does not matter whether the investigation also has a legislative purpose. Investigations of impeachable offenses simply are not, and never have been, within Congress’s legislative power“. She argued that the subpoena could not be upheld because the Committee was investigating a sitting President (alongside exercising a legislative function), which could only be done through the impeachment process (pp1-3). Judge Roa pointed to the early practice as the best source of information as to what was permitted under the Constitution. “Founding Era practice confirms the Constitution’s original meaning—investigations of unlawful actions by an impeachable official cannot proceed through the legislative power” (p20). She agreed that “the cases cited by the majority demonstrate that during an investigation of private activity, the incidental revelation of criminal activity is tolerated when Congress has a legitimate legislative purpose,” however, the subpoena cited the investigation into a potential wrongdoing by President Trump as one of the main reasons behind it (p46). Consequently, she would have invalidated the subpoena as issued outside a valid legislative purpose.

The case of Trump v. Mazars USA, LLPNo. 19-5142 (D.C. Cir. 2019) was decided on partisan lines with Judges Tatel (appointed by President Clinton) and Millett (appointed by President Obama) voting against President Trump and Judge Roa (appointed by President Trump himself) voting in his favour. However, even beyond that, it is clearly visible from the majority and dissenting opinions that while the former put emphasis on the accountability of the executive branch as the overarching objective, the latter focused on the separation of powers as understood through the lenses of originalism.

The case of Trump v. Mazars USA, LLPNo. 19-5142 (D.C. Cir. 2019), like the case of Trump v Vance Jr19‐3204 (2019) decided by the US Court of Appeals for 2nd Circuit (discussed here), is part of a long dispute over President Trump’s financial records. With President Trump consistently refusing to release his tax returns, his political opponents have been attempting to obtain them by various legal routes, including subpoenas from the House of Representatives and a New York State Grand Jury. Both subpoenas have now been upheld by the US Courts of Appeals. However, the judgment in Trump v. Mazars USA, LLPNo. 19-5142 (D.C. Cir. 2019) will be appealed by requesting another hearing before an en benc panel of the US Court of Appeals for DC Circuit. Both cases could also be eventually appealed to the US Supreme Court.