Mnuchin Won’t Comply With Subpoena For Trump Tax Returns
Treasury Secretary Steve Mnuchin has informed Congress that he will not comply with a subpoena seeking the President's tax returns, meaning that we're headed for a court battle.
Secretary of the Treasury Steven Mnuchin has advised Congress that he will not comply with a subpoena issued by the House Ways And Means Committee directing him to produce copies of President Trump’s tax returns, documents which the committee is entitled to under Federal law:
WASHINGTON — Treasury Secretary Steven Mnuchin on Friday refused to comply with a congressional subpoena to hand over President Trump’s tax returns, a move that is likely to be the final step before the matter heads to the courts.
For more than a month, the Treasury Department and House Democrats have exchanged letters about the request, which was initiated in April by Representative Richard E. Neal, Democrat of Massachusetts and the chairman of the House Ways and Means Committee.
Mr. Mnuchin said that lawyers in the department concluded that the original request, made using an obscure provision of the tax code, was not legitimate. Mr. Neal changed course last week and issued a subpoena to try to gain access to six years of Mr. Trump’s personal and business tax returns.
On Friday, Mr. Mnuchin wrote a one-page letter to Mr. Neal, in which he reiterated his previous position that the request lacked “legitimate legislative purpose” and said he could not comply with the subpoena.
“For the same reasons, we are unable to provide the requested information in response to the committee’s subpoena,” Mr. Mnuchin said.
Mr. Mnuchin was widely expected to ignore the subpoena, as Mr. Trump has vowed to fight all subpoenas from House Democrats. The Treasury secretary has warned that allowing House Democrats to retrieve the president’s tax returns would open the door to lawmakers from both parties politicizing the Internal Revenue Service in the future.
At a Senate hearing this week, Mr. Mnuchin said that House Democrats were trying to “weaponize” the I.R.S. He said that he had not yet decided how he would respond to the subpoena, but that “you can guess which way we are leaning.” He said that the judiciary, as the third branch of government, would most likely need to settle the dispute between Congress and the executive branch, signaling the potential for a protracted court fight.
House Democrats have been weighing how to respond to the Trump administration’s defiance of congressional subpoenas. On Friday, Mr. Neal made clear his preference for avoiding retaliatory threats, to the disappointment of several of his more liberal colleagues.
Mr. Neal told reporters that he saw little value in trying to hold Mr. Mnuchin or Charles P. Rettig, the I.R.S. commissioner, in contempt of Congress. Instead, he said, he would go straight to the courts to try to enforce his subpoena, potentially as soon as next week. The case could take months or years to resolve.
“I don’t see what good it would do at this particular time,” Mr. Neal told CNN, when asked about the possibility of contempt proceedings. “I think if both sides have made up their minds, better to move it over to the next branch of government, the judiciary.”
That did not sit well among Democrats on the Ways and Means Committee, who have consistently pushed a more aggressive approach toward getting Mr. Trump’s returns. Representative Bill Pascrell Jr., Democrat of New Jersey, argued on Friday that the committee should still consider fines and other possible forms of punishment for defying the subpoena.
“What this does, going to court, is absent the Congress from their own responsibilities,” Mr. Pascrell said. He added, “I think that’s a very dangerous position for us to be in.”
While I understand the frustration of Congressman Pascrell and others who would like to see Congress hold Secretary Mnuchin and Commissioner Rettig in contempt for their refusal to comply with the subpoena, I tend to think that Chairman Neal is taking the right position here. The Ways and Means Committee could easily vote to hold Mnuchin and Rettig in contempt, and the House of Representatives would most likely vote to approve the contempt citation, there’s very little that could be done after that which would not require going to court anyway. The Trump Justice Department is unlikely to enforce the contempt citation, just as the Obama Justice Department declined to enforce the contempt citation against Attorney General Eric Holder over documents related to the Fast & Furious investigation. At that point, the House went to court but the suit was rendered moot when Holder resigned as Attorney General. The same thing is likely to happen in this case, so rather than wasting the time of going through with a pointless contempt citation, it seems to me that the better root is for the Committee and the House to go forward with a lawsuit against Mnuchin and the Administration based on its failure to comply with the law that entitles the committee to request copies of any individuals tax return.
That legal basis exists under 26 U.S.C. Sec 6103(f), which states that the Ways and Means Committee is entitled to request a copy of anyone’s tax return:
Upon written request from the chairman of the Committee on Ways and Means of the House of Representatives, the chairman of the Committee on Finance of the Senate, or the chairman of the Joint Committee on Taxation, the Secretary shall furnish such committee with any return or return information specified in such request, except that any return or return information which can be associated with, or otherwise identify, directly or indirectly, a particular taxpayer shall be furnished to such committee only when sitting in closed executive session unless such taxpayer otherwise consents in writing to such disclosure.
On it’s face, the statute seems clear on the authority of the committee to request a copy of a taxpayer’s return appears from the statute and this authority appears to be virtually unlimited. The terms of the statute make it clear that this is not true in that, at the very least, it provides that the committee will only be allowed to receive requested tax returns in executive session and that the could not be disclosed to the public without the consent of the taxpayer.
Additionally, thanks to two Supreme Court cases, though, there are some restrictions on the committee’s authority that appear to be the basis on which Mnuchin is relying in his refusal to comply with both the committee’s initial request and the subpoena. Those two 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 to the current issue, but both stand for the proposition that any Congressional investigation into the private affairs of an individual must serve a “legitimate legislative purpose.” In his letter to Chairman Neal, Secretary Mnuchin essentially argues that the Committee has failed to provide a legitimate legislative purpose for requesting the Presidents tax returns. Mnuchin states that this determination was made pursuant to guidance from the Justice Department, although the legal argument that the Justice Department raises isn’t entirely clear since its recommendation to Mnuchin has not been made public as of yet. In any case, it is this issue, whether there is a “legitimate legislative purpose” behind the committee’s request, that will be subject of litigation when the matter does get before a court, and that would still have been the case had the committee decided to take the step of holding Mnuchin and Rettig in contempt.
Other than the two Supreme Court cases I cited above, there’s very little legal precedent out there that speaks to the issue of when a Congressional investigation is legitimate and when it does not serve a “legitimate legislative purpose.” Surely, we cannot simply take the word of Congress as gospel in a situation like this, particularly because we are talking about the highly personal information that, could be subject to being abused for political purposes. That’s why Congress simply can’t say “we demand to see the returns of Taxpayer John Doe” without providing at least some legitimate reason for why they need them. At the same time, though, I would argue that the deference on this issue should be on the side of Congress and that if it comes down to being a close issue the courts should uphold the right of Congress to use its oversight and investigatory powers as permitted by law. Additionally, in the case of Donald Trump, there appears to be any number of legitimate lines of Congressional inquiry under which a request for his tax returns would be justified. Because this appears to be a case of first impression, though, it’s unclear which way the lower courts and, if necessary at some point, the Supreme Court will come down.
Here’s Secretary Mnuchin’s letter to Chairman Neal:
Secretary Mnuchin Letter to… by on Scribd