Justice Department Legal Arguments For Withholding Trump Tax Returns Lack Merit
The Justice Department has released a memo attempting to justify the Administration's refusal to comply with a subpoena for the President;'s tax returns. Their argument is weak to say the least.
Last month, Treasury Secretary Steve Mnuchin rejected both a written request and a subpoena from House Ways And Means Committee Chairman Richard Neal, who is seeking copies of President Trump’s tax returns as part of an ongoing Congressional investigation. This refusal came notwithstanding the fact that Federal law seems to clearly establish that the Committee is entitled to a copy of the tax returns of any individual. Mnuchin contended in his responses that he based his decision not to comply with the request on a legal opinion from the Department of Justice opinion that had not yet been made public. In the interim, it was reported that the Internal Revenue Service had prepared its own draft memorandum in which it argued that the Treasury Department had no alternative but to comply with the request given the clear language of the relevant statute. Despite that, Mnuchin has continued to refuse to comply with the subpoena, leading to some demands that he be held in contempt of Congress as a result.
Late last week, the Justice Department finally released that memorandum, and the argument supporting Mnuchin’s decision doesn’t really add up:
WASHINGTON — The Justice Department on Friday backed a decision by Treasury Secretary Steven Mnuchin to defy a request from Congress for President Trump’s tax returns on the basis that it lacked “legitimate legislative purpose.”
The department issued a 33-page memo, dated Thursday, that came as House Democrats were preparing a lawsuit as the next step in their effort to gain access to Mr. Trump’s returns. Mr. Mnuchin defied requests made in April and May by the House Ways and Means Committee and refused to comply with a subpoena, setting up a legal battle between the two branches of government.
House Democrats are trying to obtain six years of Mr. Trump’s personal and business tax returns using an obscure provision of the tax code that allows congressional tax-writing committees to get the returns of any taxpayer.
The memo, written by Steven A. Engel, the head of the Office of Legal Counsel, argued that House Democrats, led by Representative Richard E. Neal of Massachusetts, made the request for political purposes with the intention of releasing Mr. Trump’s tax returns. It cast doubt about the formal rationale that the committee used for the request, which Democrats said was for the purpose of examining how the Internal Revenue Service audits presidential tax returns.
“The true aim was to make the president’s tax returns public,” Mr. Engel wrote.
He detailed public comments by Mr. Neal and Speaker Nancy Pelosi about their desire to release Mr. Trump’s tax information. He also argued that seeking the returns would not appear to fit the committee’s stated goal of scrutinizing the presidential audit process.
Claiming that Congress was exceeding its constitutional authority with the request, the Justice Department concluded that Mr. Mnuchin was following the law by refusing to turn over the returns.
“Congress may not use its subpoena power to enforce an unconstitutional demand for information,” Mr. Engel wrote.
Mr. Neal’s office did not immediately comment on the memo.
Mr. Engel’s argument that Congress lacked a legitimate legislative purpose in seeking Mr. Trump’s tax returns dovetailed closely with tracked arguments made by Mr. Trump’s legal team in lawsuits over congressional subpoenas to financial firms like Mazars USA for his financial records.
Two Federal District Court judges last month rejected that argument, refusing to block congressional subpoenas to such firms. One wrote that it was because Congress had put forth a valid argument for why it wanted them for legislative purposes and that it was “not for the court to question whether the committee’s actions are truly motivated by political considerations.” Mr. Trump is appealing the rulings.
House Democrats have been grappling with how to respond to the Trump administration’s strategy of rebuffing their oversight efforts. Mr. Neal has signaled that he is preparing to file a lawsuit soon.
The Justice Department on Friday released its legal rationale for refusing to provide President Trump’s tax returns to Congress, arguing that House Democrats want to make the documents public, which “is not a legitimate legislative purpose.”
Treasury Secretary Steven Mnuchin refused to hand the documents over early last month, writing in a letter to House Ways and Means Committee Chairman Richard E. Neal (D-Mass.) that the committee’s demand was “unprecedented” and could “have lasting consequences for all taxpayers.” After getting legal advice from the Justice Department, Mnuchin said he had determined the request should be refused.
Rep. Don Beyer (D-Va.), who serves on the committee, disputed the notion that lawmakers were using a “pretextual” basis — or dubious justification — for demanding the materials.
“Here’s what is actually ‘pretextual’ — the President telling a Cabinet Secretary to ignore the law to protect him, the Secretary usurping legal responsibilities of the IRS Commissioner to do it, and the OLC coming up with these flimsy, bogus excuses that won’t stand up in court,” he wrote on Twitter.
Legal analysts have said Mnuchin’s decision was a highly unusual move, given the language of the law covering the matter, and some House Democrats have said they expect to take legal action to get a court to intervene. A confidential Internal Revenue Service legal memo obtained by The Washington Post says tax returns must be given to Congress — unless the president were to assert executive privilege, which he has not done in this instance.
The memo on Trump’s taxes is written in part with an eye toward the expected court fights, and at one point its author, Assistant Attorney General Steven A. Engel, suggested judges should be reticent to intervene in such disputes.
“Separated from the democratic process, the federal courts are not well equipped to second-guess the action of the political branches by close scrutiny of their motivations,” Engel wrote in the 33-page memo. “These same limitations do not apply to the Executive Branch, which operates as a politically accountable check on the Legislative Branch.”
The Ways and Means Committee is seeking tax returns and other Trump business information from 2013 through 2018, relying on a law that says the Treasury Department “shall furnish” tax-return information upon “written request” from that panel’s chairman. The committee issued subpoenas for the records last month.
The Justice Department’s opinion argues that the committee’s request is simply partisan politics that carried over from Trump’s refusal during the 2016 presidential campaign to publicly release his tax returns. For decades, major presidential candidates have made their tax returns public.
The memo cited statements made by leading Democrats during the campaign and after Trump became president to argue that the Democrats are trying to violate important boundaries between the executive and legislative branches for short-term political gain.
“The Chairman’s request that Treasury turn over the President’s tax returns, for the apparent purpose of making them public, amounted to an unprecedented use of the Committee’s authority and raised a serious risk of abuse,” Engel wrote in the memo, which is dated Thursday.
“Congress could not constitutionally confer upon itself the right to compel a disclosure by the Executive Branch of confidential information that does not serve a legitimate legislative purpose.”
Engel said that while the executive branch “should accord due deference and respect to congressional requests,” it does not need to treat them “as unquestionable.”
The president, Engel wrote, “stands at the head of a co-equal branch of government, and he is separately accountable to the people for the faithful performance of his responsibilities. Treasury thus had the responsibility to confirm for itself that the Chairman’s request serves a legitimate legislative end.”
Off the bat, Engel’s argument that the Committee’s request is illegitimate due to the fact that it is intended to make the returns public ignores both the statute and the representations of Chairman Neal and the other members of the Committee. Under the terms of the relevant statute, while the committee is entitled to any tax return it requests those returns only have to be provided under the proviso that they cannot be made public unless the individual taxpayer consents to them being made public. Additionally, I am not aware of any statements by Chairman Neal or any of the Democratic members of the committee wherein they state that they intended to make the President’s returns public if and when they receive them. Given that, this part of Engel’s argument quite simply has no merit whatsoever.
Engel goes on to argue that the Committee is not entitled to copies of the President’s returns due to the fact that it lacks a “legitimate legislative purpose.” While the statute itself does not contain any requirement that the Committee set forth any such purpose, two Supreme Court cases suggest that this limitation on Congressional subpoena power does exist. These cases are McGrain v. Daugherty, a 1927 case arising out of one of Congress’ investigations into the Teapot Dome scandal, and Watkins v. United States, a 1957 case dealing with a union officials conviction for contempt of Congress. The facts of these cases are not important, but both stand for the proposition that any Congressional investigation into the private affairs of an individual must serve a “legitimate legislative purpose.” In late May, though, Federal District Court Judges in Washington, D.C. and New York City both issued opinions dealing with unrelated Congressional document requests that appear to undercut Engel’s legal position significantly. While neither case deals with tax return issues, they do deal with the equally sensitive issue of Congressional requests for documents from third-parties dealing with the President’s finances. In both cases, the Judges gave Congress broad deference in determining what a “legitimate legislative purpose” was and essentially stated that as long as Congress can state a plausible reason for requesting the information then it has met the requirements under the law.
With these rulings in mind, and also keeping in mind that the relevant statute clearly gives the Ways & Means Committee broad authority to demand a copy of a tax return, it seems clear that the Administration’s legal argument is incredibly weak. Even taking into account the argument that the committee must have a “legitimate legislative purpose” for its request, it is clear from the court cases noted above that Congress itself is the sole judge of what a legitimate purpose is and that it is not up to the Administration to refuse to comply with a validly issued subpoena, especially in a case such as this when the subpoena is backed up by the statutory authority that exists in this case. Were the matter brought before a Judge, as it should be, it seems clear that there would be a ruling in favor of the committee.
At this point, the next move in this standoff is up to Chairman Neal and the Committee. Since Mnuchin is obviously not going to respond to the Committee’s request under any circumstances, that means that they need to move forward with finding him in contempt and using the court’s to enforce their demand. Based on the law, it seems clear that the better argument would be on their side. As I’ve noted before, though, that process is going to be slow to proceed. Even if the Committee wins at the District Court level, the Administration will obviously seek to appeal the matter to the Court of Appeals and, from there, to the Supreme Court if necessary. If it goes that far, then the request may still be pending well after the 2020 election and well after Trump either being forced to leave office due to losing the election or will be somewhere in the beginning of a second term in office. If Trump is defeated, of course, the request effectively becomes moot. If he wins re-election, then it’s unclear what state all these investigations of the President will be in at that point.
Here’s the Justice Department memorandum:
Justice Department Memo on … by on Scribd