Can the House committees get Trump’s financial information from third parties?
In the United States Supreme Court
|Argument||May 12, 2020|
|Decision||July 9, 2020|
D.C. Circuit Court of Appeals
|Petitioner Brief||Trump, et al.|
|Respondent Brief||House Committees|
Editor’s Note: On July 9, 2020, the Supreme Court remanded the case, directing the lower courts to conduct a different analysis. Courts must consider separation of powers concerns before ordering the production of the president’s financial information to House committees.
July 10, 2020
Term Ends Without Anticipated Fireworks Regarding Trump’s Financial Records
On July 9, 2020, the Supreme Court ruled in two cases regarding whether third parties must comply with subpoenas to hand over President Trump’s tax information. Trump v. Mazars involved subpoenas by three House committees to Trump’s accounting firm and two banks which have had extensive financial dealings with President Trump and his businesses.
The Supreme Court ruling in Mazars left court-watchers disappointed. Instead of the fireworks people anticipated, the Court ruled the case should go back to the lower courts and reconsider the case under a new four-part test analyzing separation of powers concerns.
As a result of the ruling, the case will certainly drag on and perhaps end up back in front of the Court next session.
In 2019, three House committees subpoenaed business and tax records related to President Trump and the Trump Organization. The three committees seeking Trump’s records are investigating various issues from ethics to national security and declared the records requested necessary to their investigations.
President Trump sued to stop Mazars, Deutsche Bank and Capital One Bank from complying with the subpoenas. Mazars, Deutsche Bank and Capital One indicated that they will comply with the subpoenas if the courts declare them valid.
Issue in the Case
The Court was asked to determine whether the Congress has the authority to subpoena the President’s personal records, even those in the custody of a third person. Congressional committees generally have a very broad ability to demand information so long as it has a “legitimate legislative purpose,” often interpreted to mean the information will lead to legislation. In the 1950s, Quinn v. US and Watkins v. US held that Congress may not exercise “law enforcement” powers. In addition, Watkins held there is no congressional power to “expose for the sake of exposure,” where the predominant result can only be an invasion of the private rights of individuals.
Here, Congress was not demanding the records of just any individual, but the President. President Trump argued that, as President, he had sweeping immunity from this type of subpoena. In the alternative, he argued that the reasons given for the subpoenas were pretextual and that Congress just wanted the information for political advantage. Congress, however, claimed that they could demand nearly any information they desired.
The Supreme Court Decision
The Court held that Congressional subpoenas for information from the President involve special separation of powers concerns that were not fully considered by the lower courts. With this decision, the Court provided the district and circuit courts a new non-exclusive four-part test to guide them in these specific situations. As a result of the ruling, the case will head back to the lower courts, which will each consider the subpoenas under the new test.
A new (non-exhaustive) test
The Court’s new test has at least four parts for the lower courts to apply in this case.
First, courts should examine Congress’ legislative purpose for gathering the subpoenaed information and then “carefully assess” whether that purpose warrants involving the President and his personal papers. If Congress could reasonably obtain the information it seeks elsewhere, it would fail to satisfy this part. Further, the Court expressly stated that due to the “President’s unique constitutional position,” Congress may not use the President or his information as a “case study” for general legislation. Here the Court distinguishes Congress from the court system (such as the proceedings in Vance): while the integrity of the court system demands all of the facts, Congress is not “hampered” when it does not have all of the relevant evidence.
Second, the lower courts should insist that the Congressional subpoena be “no broader than reasonably necessary to support Congress’s legislative objective. This prong will prevent “unnecessary intrusion into the operation of the Office of the President.”
Third, the courts should consider “the nature of the evidence offered by Congress to establish that a subpoena advances a valid legislative purpose.” The Court suggests that a subpoena based on detailed and substantial evidence of a legitimate need is more likely to be enforced. “Vague” evidence or “loosely worded” purposes is more likely to fail. Congress will, therefore, have to specifically explain in detail why the President’s information is needed.
Fourth, courts should assess whether the Congressional subpoena will unduly burden the President’s time and attention. While Vance held that litigation does not burden the President’s time, it held that Congressional subpoenas are different. Unlike courts, Congress may have an incentive to use subpoenas on the President to gain a political or institutional advantage.
The Court was clear that this is not an exhaustive list since a subpoena for a sitting President’s personal papers is so rare; “one case every two centuries,” did not offer enough experience to determine other factors.
How does the decision relate to the political question doctrine?
Shortly before oral arguments, the Court asked the parties and the Solicitor General to brief how the political question doctrine affected this case. The political question doctrine allows a court to avoid deciding a case on its merits because the lawsuit is a political conflict that should be resolved by the “political branches”: Congress and the President.
The Court’s decision spends a considerable amount of time discussing the fact that the “political branches,” Congress and the President, are constantly engaged in a game of political and institutional tug of war. Congress has requested information from the President before, and sometimes the President has complied—typically when politics demands such a response. The Court clearly would like to avoid becoming involved in political arguments between these branches.
Although the Court paid tribute to the political question doctrine, it decided nevertheless to wade into this particular dispute. The proffered four-part test is an apparent effort to thread a very small needle and is designed to exclude subpoenas that are politically motivated or to gain an institutional advantage.
While the decision appears to be a loss for Congress in the context of Trump, it actually gives Congress a clear path to get a President’s personal records so long as it has a good, provable reason. For the first time in our Constitutional law, Congress has the express permission of the Court to get the President’s personal records if need be.
Whether courts can apply this test and still “remain above the political fray” is a huge unresolved question.
Squaring the Balancing Test with the Speech and Debate Clause
President Trump argued that Congress’ motives are political, rather than legislative. Courts are generally highly deferential to Congress’ judgement and presume Congress is acting within its legitimate constitutional powers and responsibilities. In part, this is due to the Constitution’s Speech or Debate Clause, which states:
The Senators and Representatives shall receive a Compensation for their Services, to be ascertained by Law, and paid out of the Treasury of the United States. They shall in all Cases, except Treason, Felony and Breach of the Peace, be privileged from Arrest during their Attendance at the Session of their respective Houses, and in going to and returning from the same; and for any Speech or Debate in either House, they shall not be questioned in any other Place.
US. CONST. Art. I §6 clause 1 (emphasis added).
The “any other Place” is often interpreted as “in court.” The first and third prongs of the Court’s new test both ask courts reviewing Congressional subpoenas to look at the purposes for the information, and to assess whether the reasons for an evidence underlying the demand is specific and “substantial.” This will necessarily force judges to decide whether Congress’ subpoena is “legitimate” or “political.” How this is compatible with the Speech or Debate Clause is unclear. Also, it is difficult to tell where a Congressional investigation will lead or what action will come of the information. To obtain a subpoena for Presidential documents, the Congressional committee will have to state exactly what it intends to do with the information.
How will the committees fare under the new test?
The first prong in the Court’s new test is a clear signal to the lower courts that the House Financial Services Committee’s subpoena should not be enforced, given that the Committee’s stated purpose for demanding the records was as a case study of potential financial impropriety.
On the other hand, the Intelligence Committee and the Oversight Committee may have strong arguments as to why they need the demanded records. The Intelligence Committee may have specific information and testimony that President Trump has either received money from, or is in debt to, foreign interests who may seek to take advantage of his position. The Oversight Committee has documents and testimony provided by former Trump lawyer Michael Cohen that the President may have falsified financial documents required of all federal officers. In both situations, the Congressional committees should be able to make compelling arguments that the information sought will lead to either specific legislation or other Congressional action.
Dissent: Thomas and Alito
In dissent, Justices Thomas and Alito argued impeachment is the vehicle that Congress should have used to get President Trump’s personal financial records. They said the Constitution clearly makes the impeachment process a Congressional check on the President’s improper actions. They also found no precedent from the founding generation where Congress subpoenaed a president’s personal papers. Therefore, according to the Thomas and Alito, the committees should not be able to get the requested information from a sitting President without going through the impeachment process.
In providing the new four-part test, the Court indicates that it rejects this argument. However it does define a more demanding standard for Congress when the fact-finding regards the President.