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Must yield tax records, Trump told

by Compiled by Democrat-Gazette Staff From Wire Reports | February 23, 2021 at 7:13 a.m.
FILE - In this Wednesday, July 17, 2019 file photo, President Donald Trump gestures to the crowd as he arrives to speak at a campaign rally at Williams Arena in Greenville, N.C. (AP Photo/Carolyn Kaster, File)

WASHINGTON -- The Supreme Court on Monday rejected a last-ditch attempt by former President Donald Trump to shield his financial records, issuing a brief, unsigned order requiring Trump's accountants to turn over his tax and other records to prosecutors in New York.

The court's order was a decisive defeat for Trump, who had gone to extraordinary lengths to keep his tax returns and related documents secret. There were no dissents noted.

The case concerned a subpoena to Trump's accountants, Mazars USA, by the office of the Manhattan district attorney, Cyrus Vance Jr., a Democrat. The firm has said it will comply with the final ruling of the courts, meaning that the grand jury should receive the documents in short order.

Vance issued a three-word statement in response to the court's order: "The work continues."

Trump criticized the court's action. "The Supreme Court never should have let this 'fishing expedition' happen, but they did," Trump said in a statement. "This is something which has never happened to a president before; it is all Democrat-inspired in a totally Democrat location, New York City and state, completely controlled and dominated by a heavily reported enemy of mine, Gov. Andrew Cuomo."

Under grand jury secrecy rules, it would ordinarily be unclear when, if ever, the public would see the information. But The New York Times has obtained more than two decades of tax return data of Trump and his companies, and it recently published a series of articles about them.

Trump, according the reports by The Times, has sustained significant losses, owes enormous debts that he is personally obligated to repay, has avoided paying federal income taxes in 11 of the 18 years and paid just $750 in both 2016 and 2017.

The scope of Vance's inquiry is not known. It arose partly from an investigation by his office into payments to two women -- adult film actress Stormy Daniels and model Karen McDougal -- to keep them quiet during the 2016 presidential campaign about alleged extramarital affairs with Trump. Trump has denied the affairs. Court filings by prosecutors suggested that they are also investigating potential tax and insurance fraud crimes.

The subpoena sought tax records and financial statements since 2011, engagement agreements with the accountants who prepared them, the underlying raw financial data and information about how the data were analyzed.

As a candidate in 2016, Trump promised to disclose his tax returns, but he never did. Instead, he fought to shield the returns. In 2019, the 2nd U.S. Circuit Court of Appeals, in New York, ruled that state prosecutors may require third parties to turn over a sitting president's financial records for use in a grand jury investigation.

Trump appealed to the Supreme Court. In July, the justices in a 7-2 ruling rejected Trump's argument that the president is immune from investigation while he holds office or that a prosecutor must show a greater need than normal to obtain the tax records.

"No citizen, not even the president, is categorically above the common duty to produce evidence when called upon in a criminal proceeding," Chief Justice John Roberts wrote for the majority in that decision.

Justices Neil Gorsuch and Brett Kavanaugh, whom Trump nominated to the high court, joined that decision. It was issued before Trump's third nominee, Justice Amy Coney Barrett, replaced the late Justice Ruth Bader Ginsburg on the court.

Though Justices Clarence Thomas and Samuel Alito dissented from other aspects of the decision, all nine justices agreed with that proposition.

As part of its July decision, the high court returned the Vance case and a similar case involving records sought by Congress to lower courts. And the court prevented the records from being turned over while the cases proceeded.

"A president may avail himself of the same protections available to every other citizen," Roberts wrote. "These include the right to challenge the subpoena on any grounds permitted by state law, which usually include bad faith and undue burden or breadth."

Trump did just that, but his arguments were rejected by a trial judge and a unanimous three-judge panel of the federal appeals court in New York.

"Any documents produced under the Mazars subpoena would be protected from public disclosure by grand jury secrecy rules," the panel said in an unsigned opinion, "which greatly reduces the plausibility of the allegation that the district attorney is acting out of a desire to embarrass the president."

"There is nothing to suggest," the panel added of the information sought, "that these are anything but run-of-the-mill documents typically relevant to a grand jury investigation into possible financial or corporate misconduct."

Trump's lawyers then filed an "emergency application" asking the Supreme Court to intercede. It urged the court to block the appeals court's ruling while it decided whether to hear another appeal from Trump.

"Even if the disclosure of his papers is limited to prosecutors and grand jurors, the status quo can never be restored once confidentiality is destroyed," the brief said. "But the harm will be more than irreparable if the records are publicly disclosed. It will be case-mooting -- the strongest possible basis for a stay."

In response, Vance's lawyers -- including Carey Dunne, who argued the case the first time around; Walter Dellinger, a former acting U.S. solicitor general in the Clinton administration; and Michael Dreeben, a former longtime deputy solicitor general and a member of the team that assisted Robert Mueller in investigating Russian interference in the 2016 election -- pointed to the Times articles.

"The New York Times has obtained his tax-return data and described that data in depth in a series of articles," Vance's brief said. "With the details of his tax returns now public, applicant's asserted confidentiality interests have become highly attenuated if they survive at all. And even assuming any remain, they cannot justify extraordinary relief from this court that would deprive the grand jury alone of facts available to anyone who reads the press.

"This litigation has already substantially hampered the grand jury's investigation," the brief said. "No legal basis exists for the extraordinary relief that applicant requests -- or remotely justifies the further delay it entails."

Information for this article was contributed by Adam Liptak of The New York Times; and by Jessica Gresko and Jill Colvin of The Associated Press


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