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A Court Ruled, Again, That Trump's Accounting Firm Must Turn Over Financial Documents To House Democrats

The DC Circuit rejected President Donald Trump's argument that the House Oversight Committee didn't have authority to issue a subpoena to his accounting firm.

Last updated on October 11, 2019, at 12:00 p.m. ET

Posted on October 11, 2019, at 10:24 a.m. ET

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WASHINGTON — A federal appeals court ruled Friday that President Donald Trump's accounting firm must comply with a congressional subpoena for the president's financial records, handing Trump the latest setback in his effort to stop House Democrats from gathering information about him in their impeachment inquiry.

The US Court of Appeals for the DC Circuit rejected Trump's argument that the House Oversight Committee lacked authority to issue a subpoena to the president's longtime accounting firm, Mazars USA LLP.

"Contrary to the President's arguments, the Committee possess authority under both the House Rules and the Constitution to issue the subpoena, and Mazars must comply," Judge David Tatel wrote in the 2–1 opinion.

Trump could ask the full DC Circuit to reconsider the three-judge panel's decision, or skip that step and ask the US Supreme Court to take up the case now.

The DC Circuit is where the bulk of legal challenges related to Congress's power to investigate the executive branch and the White House's ability to rebuff those efforts have historically played out. The appeals court's ruling on Friday will set precedent for lower court judges fielding congressional subpoena challenges going forward — assuming the full court or the Supreme Court don't reverse — although the case dealt specifically with a subpoena issued outside of impeachment proceedings, so it wasn't immediately clear how much it could affect future impeachment-related fights.

It's the second loss for Trump in his bid to block the House Oversight Committee's subpoena to Mazars — a district court judge in Washington, DC, had ruled in May that the committee presented "facially valid legislative purposes" in issuing the demand for the president's financial records.

The Mazars subpoena predates House Speaker Nancy Pelosi's announcement that Democrats were undertaking an investigation into whether the president committed impeachable offenses. Earlier in the case, Trump's lawyer had argued that the fact that Democrats sent the subpoena to Mazars outside of any impeachment proceeding hurt Democrats in arguing that their demand for Trump's records was valid.

But in her Sept. 24 impeachment investigation announcement, Pelosi made clear that the inquiry would cover investigations already underway before certain committees, including the House Oversight Committee. That means any records that the committee receives now could go toward a future impeachment proceeding, giving the decision greater significance.

House Oversight Committee Chair Elijah Cummings said in a statement that Friday's ruling "is a fundamental and resounding victory for Congressional oversight, our Constitutional system of checks and balances, and the rule of law."

"After months of delay, it is time for the President to stop blocking Mazars from complying with the Committee’s lawful subpoena. We must fulfill our stated legislative and oversight objectives and permit the American people to obtain answers about some of the deeply troubling questions regarding the President’s adherence to Constitutional and statutory requirements to avoid conflicts of interest," Cummings said.

Rep. Jim Jordan, the top Republican on the House Oversight Committee, and other Republicans on the committee have opposed the Mazars subpoena. Jordan wrote a letter to Cummings in April saying he "strenuously" objected to what he characterized as an abuse of the subpoena process to try to get Trump's personal financial records. He did not immediately have a comment on Friday in response to the DC Circuit's decision.

A lawyer for Trump did not immediately return a request for comment.

In the 66-page majority opinion, Tatel made clear that the court was not addressing whether Congress could directly subpoena a sitting president in a non-impeachment investigation, since the subpoena at issue went to a third party, Mazars. Trump also hadn't argued that the records were subject to executive privilege, which is another issue that could come up in impeachment-related subpoena fights going forward, especially if the subpoenas relate to documents and testimony about White House activities, as opposed to Trump's private financial affairs.

Instead, the court decided that the House Oversight Committee was pursuing a proper legislative purpose in issuing the subpoena, as opposed to a law enforcement function, which is what Trump argued would fall outside of its authority. Tatel pointed to reasons that Cummings publicly gave for seeking records from Mazars, including exploring whether Trump had undisclosed conflicts of interest, whether the president was complying with a constitutional prohibition against accepting things of value (referred to as "emoluments") from domestic and foreign governments, and whether he'd accurately reported his finances.

Most importantly, Tatel wrote, Cummings had said that learning this information about Trump would inform the committee about whether existing financial disclosure and ethics laws and rules were working. The fact that Cummings had expressed an interest in whether Trump violated any laws didn't turn the congressional probe into a law enforcement investigation, the judge wrote — Congress could be interested in that information in considering whether to draft new laws to fix the situation. Tatel noted that there was pending legislation related to these issues.

"Whether current financial disclosure laws are successfully eliciting the right information from the sitting President, occupant of the highest elected office in the land, is undoubtedly 'a matter of concern to the United States,'" Tatel wrote.

Trump was represented by private attorneys in the case, but the Justice Department separately argued in favor of blocking the subpoena. The court rejected the government's position that Congress had to specifically articulate in advance what legislation it would pursue in issuing this sort of subpoena. Congress made decisions about what laws to craft based on information it received, Tatel wrote, and swapping the order "would turn the legislative process on its head."

Justice Department spokesperson Sarah Sutton declined to comment.

The court also rejected Trump's argument that the subpoena was invalid because there was no new law imposing burdens on the president that Congress could pass that would survive a constitutional challenge. Tatel wrote that the court didn't need to consider every possible law that Congress might take up, but that, for instance, there wouldn't be any "inherent constitutional flaws" in changing or expanding financial disclosure laws that already apply to the president.

DC Circuit Judge Patricia Millett joined Tatel in finding the Mazars subpoena was valid. Judge Neomi Rao dissented, writing that her colleagues were breaking "new ground" and that the decision "would turn Congress into a roving
inquisition over a co-equal branch of government." She said that if Congress were investigating illegal conduct by an official subject to impeachment — in this case, the president — then that wasn't covered by a committee's power to legislate. A subpoena such as the one issued to Mazars had to be issued through an impeachment proceeding, she wrote.

"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," Rao wrote in her 68-page dissent.

Tatel responded to Rao's dissent, writing that she was trying to move "the goalposts" and advocate for a new test that "would enfeeble the legislative branch." He wrote that under Rao's theory, as soon as a Congress member suspected a government official who could be removed through impeachment was committing criminal activity, Congress either had to end the legislative investigation and open an impeachment inquiry, or drop the investigation altogether.

"The dissent identifies nothing in the text, structure, or original meaning of Article I or Article II of the Constitution to support such a sweeping rule of legislative paralysis," Tatel wrote.

Rao was Trump's second appointee to the DC Circuit and is the newest judge on that bench. Liberal advocacy groups opposed to her nomination earlier this year expressed concerns that Rao's writings as an academic showed she would be too deferential to executive power, and said her dissent on Friday demonstrated those fears were founded. Nan Aron, president of Alliance for Justice, wrote a series of tweets denouncing Rao's position.

"This is stunning: in her dissent, Trump court pick Neomi Rao argues that allegations of illegal conduct against the President cannot be investigated by Congress except through impeachment," Aron tweeted. She continued in another tweet: "Neomi Rao is doing exactly what the Trump administration put her on the bench to do."

Neomi Rao is doing exactly what the Trump administration put her on the bench to do. #courtsmatter #StopTrumpsTakeover https://t.co/q9GnF5qZvA

@NanAron via Twitter / Via Twitter: @NanAron

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