Trump Sues Over New York Law That Would Give Congress Access To His Tax Returns

Donald Trump has filed a lawsuit seeking to block a New York State law that would allow Congress to obtain copies of his state tax returns.

Not surprisingly, President Trump, through his private attorneys, has filed a lawsuit against the House Ways And Means Committee and various New York State government officials seeking to bar enforcement of the law recently passed by the legislature that would allow the House Ways And Means Committee Chairman to obtain copies of the state tax return of any individual, a law that many members of the New York legislature was specifically aimed at helping to uncover the President’s tax returns:

WASHINGTON — President Trump sued New York State officials and the House Ways and Means Committee on Tuesday to try to block congressional Democrats from using a recently enacted New York law to obtain his state tax returns.

The lawsuit, filed by the president’s private lawyers in federal court in Washington, opens a new front in Mr. Trump’s fight to keep his tax returns secret. His administration has already rejected subpoenas from the Ways and Means Committee for his federal tax information, prompting the House to file a lawsuit of its own in recent weeks seeking enforcement.

Now Mr. Trump is moving to close a side door opened by Democratic lawmakers in his home state by asking a judge to declare that the Ways and Means Committee “lacks a legitimate legislative purpose” to request his state tax returns. The suit also seeks to nullify the New York law outright before Congress decides whether to use it.

“We have filed a lawsuit today in our ongoing efforts to end presidential harassment,” Jay Sekulow, a lawyer for Mr. Trump, said in a statement. “The actions taken by the House and New York officials are nothing more than political retribution.”

Breaking from decades of tradition, Mr. Trump refused to release his tax returns during the 2016 presidential campaign, claiming that he was under audit but suggesting that someday he may make them public. He has never released them, and Democrats have been trying to pry them loose for years.

Attorney General Letitia James of New York, who is named in the latest suit, said her office had “all the confidence that this law is legal” and pledged to “vigorously defend” it in court. A spokesman for Representative Richard E. Neal of Massachusetts, the chairman of the Ways and Means Committee, declined to comment.

The long-unfolding fights in Albany and Washington stem from Mr. Trump’s iron grip on his returns and Democratic suspicions that those documents might reveal financial malfeasance or tax fraud.

Lawmakers thought they had found a way around Mr. Trump’s refusal when they took control of the House and its tax-writing committee in January. Under a provision of the federal tax code, the Ways and Means Committee chairman is entitled to request information on any taxpayer from the Internal Revenue Service. The code states simply that the agency “shall” furnish the material.

(…)

Mr. Neal, a Democrat, has given no indication that he intends to actually make a request under the New York law. Some Democrats on Capitol Hill have even viewed the New York measure with reservation, worrying it will jeopardize their pursuit of Mr. Trump’s federal returns.
But Mr. Trump’s lawyers argue that Mr. Neal could change his mind at any time, and New York could comply “nearly instantaneously, mooting the president’s ability to object before his tax records are disclosed.”
“President Trump was thus forced to bring this lawsuit to safeguard his legal rights,” they wrote.

All of this is occurring in the context of what should by now be familiar events.

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, which is set forth in a legal memorandum made public in June, 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.

While this was going on, New York’s legislature was debating and eventually passed a law that generally speaking allows the Chairman of the House Ways And Means Committee to request copies of the state tax returns of any individual provided that they have also requested copies of that individual’s Federal returns. Notwithstanding its general applicability, the legislative history of the law, much of which is set forth in the Complaint filed by the President’s personal lawyers, makes clear that the intent of the law was to assist the House Ways And Means Committee in obtaining copies of the President’s tax returns. To a large degree, this legislative history forms the basis for much of the President’s lawsuit.

In their Complaint, the President’s lawyer rely on two theories to block the law and to block the Committee from utilizing it to seek copies of the returns.

First, they essentially allege that the Committee can never utilize the New York law, known as the TRUST Act, to obtain copies of the President’s tax returns because there can be no “legitimate legislative purpose” for doing so. While there is no legislation that defines what a “legitimate legislative purpose” might be, there are two Supreme Court cases suggesting 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 the Administration’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 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, which is set forth in a legal memorandum made public in June, 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 clear statutory authority that exists in this case.

The second claim is based on the First Amendment and set forth in the final three paragraphs of the Complaint:

74. The First Amendment prohibits laws enacted for the purpose of discriminating or retaliating against an individual for his politics or speech.

75. New York legislators have admitted, on countless occasions, that the TRUST Act’s purpose is to expose the private tax information of one individual—President Trump—for political gain. Tellingly, the law is tailored to fit the precise circumstances of the President’s current dispute with the Ways and Means Committee, and its practical operation will affect only President Trump. It was passed to help House Democrats expose the President’s private tax information, adopting and furthering their unlawful purposes.

76. The TRUST Act singles out President Trump because he is a Republican and a political opponent. It was enacted to retaliate against the President because of his policy positions, his political beliefs, and his protected speech, including the positions he took during the 2016 campaign.

This strikes me as being an odd part of the Complaint, although no more so than the “legitimate legislative purpose” argument. Regardless of what the New York legislators may have said in the course of debating the law, the fact of the matter is that the law itself does not just apply to Donald Trump, but conceivably to anyone who files a tax return with the State of New York. To argue that the law somehow violates the President’s First Amendment rights is, at best, a stretch.

One thing worth noting about the Complaint is that it does not raise one argument that some critics of the law raised when it was signed into law by Governor Cuomo. Specifically, that the statute amounts to a “Bill of Attainder,” which the Constitution bans both Congress, in Article I, Section 9, Clause 3 and the states, in Article I, Section 10, Clause 1, from passing. Generally speaking, a Bill of Attainder is a bill or law that is aimed at inflicting punishment on a specific individual. For the most part, courts have interpreted these clauses narrowly and in the context of what was considered a Bill of Attainder at the time that the Constitution was drafted. Therefore, there is a strong argument that the prohibition set forth in the Consitution only applies to laws that contain some sort of criminal punishment, which isn’t the case here. No doubt this is why the President’s attorneys did not pursue this legal position in their Complaint.

In any case, we’ll see how this goes as the legal proceedings go forward.

Here’s the Complaint:

Trump v. Ways and Means Com… by Doug Mataconis on Scribd

FILED UNDER: Donald Trump, Impeachment, Law and the Courts, Politicians, Taxes, US Politics
Doug Mataconis
About Doug Mataconis
Doug holds a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May 2010. Before joining OTB, he wrote at Below The BeltwayThe Liberty Papers, and United Liberty Follow Doug on Twitter | Facebook

Comments

  1. alkali says:

    Politely, this is bonkers. Why doesn’t Rep. Neal ask NY for the tax returns, get them 10 minutes later, and then file a suggestion of mootness with the court? Why litigate this at all?

  2. Daryl and his brother Darryl says:

    Silly, silly, silly.

  3. Teve says:

    You know I just remembered that a while back, Trumper trolls here were referring to him as a “wildly successful businessman”. But I haven’t heard that in quite a while.

  4. CSK says:

    @Teve: Do they ever ask why he’s so frantic to keep his tax returns hidden?

  5. @alkali:

    It’s likely that Trump would be able to get a TRO blocking the state from complying with the law until the merits of his lawsuit can be determined. Indeed, such an order is likely among the first actions his lawyers will take now that the Complaint has been filed.

  6. Kathy says:

    I suppose by now Trump has set a record for the most lawsuits involving the White House and administration, which will be hard to beat.

    He can now declare victory and go home.

  7. Pylon says:

    Trump has made hollow threats to sue so many people and organizations in the past three years. But he goes through with this one – I wonder why?

  8. alkali says:

    @Doug Mataconis: It’s likely that Trump would be able to get a TRO blocking the state from complying with the law until the merits of his lawsuit can be determined. Indeed, such an order is likely among the first actions his lawyers will take now that the Complaint has been filed.

    1) No TRO has yet been entered and the House Dems are still free to proceed as I suggested until such time as the court actually enters a TRO (about which see below).

    2) When you are seeking a TRO you ordinarily file that motion with your complaint. Trump’s lawyers have now filed that motion, a day later, which proves that they are incompetent. The fact that the Dems have failed to take advantage of that delay establishes that they are also incompetent.

    3) The TRO standard requires a showing of a likelihood of success on the merits, so they shouldn’t get a TRO. But why are the House Dems agreeing to litigate that by sitting on their hands? Call 1-800-NY-AG and get the tax returns.