House Ways and Means Chair Richard Neal’s uphill fight for President Donald Trump’s tax records appears to have gotten steeper.
A Supreme Court ruling Thursday in a separate case in which Democrats were seeking financial records from the president’s bankers and accountants raises fresh questions about Neal’s own demands for six years' worth of Trump’s tax records — once the headline act in Democrats’ bid to unmask Trump’s finances.
For one thing, the court seemed reluctant to get involved in fights between the White House and Congress, which could put pressure on Neal to try to compromise with the administration, though such a scenario would seem to be a long shot given Trump's intransigence toward many congressional oversight efforts.
What’s more, while the court acknowledged Congress’ need for information as part of its oversight responsibilities, the justices emphasized that subpoenas directed at the president deserve extra scrutiny. Congress, the court said, must recognize that its investigatory powers are not unlimited.
“This is going to help the president’s defense quite a bit” in the Neal case, said Andy Grewal, a law professor at the University of Iowa. “This basically gives a road map for an opinion by a lower court to deny the case.”
Meanwhile, the clock is ticking for Democrats.
Neal and his colleagues involved in the Supreme Court decision look increasingly unlikely to get Trump’s returns before this fall’s elections. It’s doubtful Democrats would continue to pursue them beyond November if he’s defeated.
In Thursday’s opinion, the court seemed loath to get involved in a dispute in which House Democrats are seeking information from Deutsche Bank and the accounting firm Mazars about Trump’s business statements, foreign transactions and his net worth, as well as his tax returns and other records. It’s still unclear which tax filings the firms have.
The court sent the dispute back to a lower court with instructions to reconsider the issue, paying special attention to the separation of powers concerns it raised.
Separately, the judges ruled in favor of a Manhattan prosecutor seeking Trump’s tax records as part of an investigation into payments to porn star Stormy Daniels and former Playboy model Karen McDougal. Barring something unexpected, those filings, sought as part of grand jury proceedings, are unlikely to ever be released to the public.
In a statement, Neal said: “I remain confident that the Ways and Means case ultimately will prevail.”
“The committee’s case meets the considerations now articulated by the court and is further bolstered by a clear statutory right in the tax code,” he said. “The law is on our side.”
Neal’s case has lagged far behind the ones decided Thursday. The two sides haven't even gotten to arguing the merits yet, though it was filed a year ago this month. The case has been stuck on the question of whether Neal even has the right to go to court for the returns.
While judges are happy to referee disputes between the government and private parties, they’ve rarely gotten involved in fights between the other parts of government, saying Congress and the executive branch have other ways of resolving their disagreements.
Neal’s case is now on hold, awaiting a decision by an appeals court in yet another case in which Democrats are suing to force former White House lawyer Don McGahn to testify before Congress on Russia matters. Like Neal’s case, that dispute raises basic questions about whether lawmakers have "standing" in court, which basically means proving that the court should intervene at all.
Neal is seeking to enforce a subpoena for six years' worth of Trump’s personal and some of his business records, under a 1924 law allowing the heads of Congress’s tax panels to examine anyone’s confidential tax information.
Democrats, under pressure to show their suit is related to their official duties as lawmakers, say they need Trump’s returns to determine whether the IRS is doing an adequate job auditing the president under a routine practice that dates to 1977.
Trump’s lawyers call that a fig leaf, saying Democrats really just want to search his returns for things they can use to embarrass the president. They also say there are other ways Democrats can oversee IRS audits of the chief executive without examining his returns and complain Democrats are not seeking records from any other presidents.
Should Neal’s case ever get to its merits, the opinion issued Thursday is likely to be quoted at length by Trump’s lawyers.
“Congress may not rely on the president’s information if other sources could reasonably provide Congress the information it needs in light of its particular legislative objectives,” said Chief Justice John Roberts, writing for the majority.
“The president’s unique constitutional position means that Congress may not look to him as a 'case study' for general legislation.”
The courts “should insist on a subpoena no broader than reasonably necessary to support Congress’s legislative objective,” Roberts wrote. “The more detailed and substantial the evidence of Congress’s legislative purpose, the better.”
The court also emphasized how rarely it gets involved in fights between the other branches of government.
“From President Washington until now, we have never considered a dispute over a congressional subpoena for the president’s records," the opinion said.
“This dispute therefore represents a significant departure from historical practice,” Roberts wrote, noting past instances when lawmakers were able to settle their differences on their own.
He cited an “innovative compromise” during the Reagan administration when it agreed to share disputed documents with Congress pertaining to the Department of the Interior on the condition that they would only be made available for a single day and that no photocopying and “minimal notetaking” would be allowed.
That could be a sign House Democrats would be better off working something out with the administration, said Michael Stern, a former senior counsel in the House of Representatives.
“The House would probably want to consider some sort of accommodation because there’s a lot of stuff in there that would provide fodder for an ultimate decision against them,” he said.
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