Will court’s allow Congress to investigate Trump taxes?

Article I of the Constitution grants Congress all legislative power. Its power to investigate is fundamental to the implementation of existing laws and to evaluating which new laws are required. Thus, the power to investigate is critical to the discharge of Congress' legislative function.

The U.S. Supreme Court has long held that Congress must be able to gather relevant documents, testimony, and other evidence from the executive branch in order to discharge its legislative duties. McGrain v. Daugherty, 273 U.S. 135 (1927). This does not mean, however, that its investigatory power is unlimited. Exercise must be related to a valid legislative purpose, and therefore Congress cannot investigate matters on which it cannot legislate.

Among its other responsibilities, the House Oversight and Reform Committee has jurisdiction over the Ethics in Government Act that requires "all federal officials, including the President, to publicly disclose financial liabilities that could impact their decision-making." The oversight committee subpoenaed President Donald Trump's personal and business records from Mazars, an accounting firm that has provided Trump and various associated business with accounting services.

The committee maintains that the requested records are necessary to "aid its consideration of strengthening ethics and disclosure laws, as well as amending the penalties for violating such laws." More specifically, the committee identified by memorandum the following areas for investigation: (1) Whether the president may have engaged in illegal conduct before and during his tenure in office; (2) whether he has undisclosed conflicts of interest that may impair his ability to make impartial policy decisions; (3) whether he is complying with the emoluments clauses of the Constitution; and (4), whether he has accurately reported his finances to the Office of Government Ethics and other federal entities.

President Trump has refused to cooperate with the House of Representative's request to provide it with any information or documents relevant to his finances. Not surprisingly, Trump sued to block the enforcement of the subpoena to Mazars. He asked the court to declare the subpoena invalid and unenforceable. Trump's general theory is that no legislative purpose exists for the subpoenaed information and that the true motive is to collect personal information for political purposes.

Judge Amit Mehta upheld the validity of Committee's subpoena and rejected Trump's arguments. Trump v. Committee on Oversight, 19-cv-1136 (D.D.C., May 21, 2019). The next day, Trump filed a notice of appeal to the 4th U.S. Circuit Court of Appeals, case number 19-5142.

The district court reasoned that the Constitution gives Congress the power to remove a president through impeachment for criminal conduct. It is "simply not fathomable," he noted, that Congress lacks to power to investigate him for unlawful conduct without formally opening an impeachment inquiry.

Courts must presume that Congress is acting to further its constitutional responsibility to legislate and that they must defer to Congress' determination as to what is needed. So long as Congress acts pursuant to its constitutional authority, the courts lack the authority to intervene based on an examination of Congress' motives. One obvious concern is that dishonest or vindictive motives are easily attributed to investigative conduct.

Once a court finds an investigation is one upon which legislation is possible, it must not entangle itself in judgments about the investigation's scope or the evidence sought. Although testing motives is off limits, courts may consider what Congress has said about the purpose of any investigation to determine whether it has exceeded its legislative authority.

The investigatory rationales stated in the committee's memorandum fall within in the ambit of its legislative authority. The district court found that it is reasonable to think that the Mazars records might assist Congress in determining whether the ethics statutes and regulations need updating to strengthen accountability, promote transparency, and protect against conflicts of interest.

On a separate investigatory front, Judge Mehta's general analysis supports the House Ways and Means Committee's request to the secretary of the Treasury for "any return or return information." On April 13, the committee asked for this information in "furtherance of legislative proposals and oversight related to Federal tax laws, including, but not limited to, the extent to which the IRS audits and enforces the Federal tax laws against the President." On May 17, Secretary Steven Mnuchin refused the committee's request. He stated: "In reliance on the advice of the Department of Justice, we have determined that the Committee's request lacks a legitimate legislative purpose." The secretary's argument appears to be a replay of the claims rejected by Judge Mehta.

But the Trump v. Committee on Oversight case is not the end of the story. The following day the Southern District of New York upheld the House Committee on Financial Services subpoena to Deutsche Bank and Capital One to access Trump's financial records. Donald J. Trump v. Deutsche Bank, 19-cv-3826, S.D.N.Y. (May 24, 2019). It denied Trump's request for a preliminary injunction against the enforcement of the subpoena for those records. On May 25, the parties jointly agreed to an expedited appeal to the 2nd U.S. Circuit Court of Appeals, case number 19-1540. Appellants opening brief will be filed on June 18.

If these cases are upheld on appeal, which seems likely, the House will have breached Trump's "redline" refusal to turn over his personal and business records going back to 2011. It also will be the first time the courts have allowed Congress to investigate a president's finances, including his complex business interests. What Congress ultimately does with the information remains to be seen.