Appeals court rules Trump must turn over 8 years of tax returns

A federal appeals panel said Monday that President Donald Trump’s accounting firm must turn over eight years of his personal and corporate tax returns to Manhattan prosecutors, a setback for the president’s attempt to keep his financial records private.

The three-judge appeals panel did not take a position on the president’s biggest argument: that he is immune from all criminal investigations. A lower court had called that argument “repugnant to the nation’s governmental structure and constitutional values.”

Instead, the appeals court said the president’s accounting firm, not Trump himself, was subpoenaed for the documents, so it did not matter whether presidents have immunity.

“We emphasize again the narrowness of the issue before us,” the decision read. “This appeal does not require us to consider whether the president is immune from indictment and prosecution while in office, nor to consider whether the president may lawfully be ordered to produce documents for use in a state criminal proceeding.”

But the tax returns are not likely to be handed over soon. Trump has fought vigorously to shield his financial records, and the case appears headed to the US Supreme Court.

The legal fight began in late August after the office of the Manhattan district attorney, Cyrus R Vance Jr, a Democrat, subpoenaed Trump’s accounting firm, Mazars USA, for his tax returns and those of his family business dating to 2011.

Prosecutors in the office are investigating the role of the president and his business in hush-money payments made to two women just before the 2016 presidential election.

The office sought the records in connection with an investigation into whether any New York state laws were broken when Trump and his company, the Trump Organization, reimbursed his former lawyer and fixer, Michael Cohen, for payments he made to adult film actress Stormy Daniels, who claimed she had an affair with Trump.

Cohen was also involved in money paid to Karen McDougal, a Playboy model who also said she had a relationship with Trump. The president has denied the relationships.

Trump’s lawyers sued to block the subpoena, writing that the criminal investigation of the president was unconstitutional. They asserted that presidents have such unique power and responsibility that they cannot be subject to the burden of investigations, especially from local prosecutors who may use the criminal process for political gain.

They pointed to impeachment as the correct way to address any potential wrongdoing by a president. Trump’s lawyers also have called the district attorney’s action an “effort to harass the president by obtaining and exposing his confidential financial information, not a legitimate attempt to enforce New York law.”

The immunity argument has never been tested in court. Federal prosecutors are barred from charging a sitting president with a crime because the Justice Department has decided that presidents have temporary immunity while they are in office.

But that policy has not precluded investigations of the president. Trump and other sitting presidents have been the subjects of federal criminal investigations, and local prosecutors like Vance have not been bound by the policy.

On Oct 7, Judge Victor Marrero of US District Court in Manhattan issued a 75-page opinion, rejecting Trump’s position.

Trump appealed to the 2nd US Circuit Court of Appeals.

“We view the entire subpoena as an inappropriate fishing expedition not made in good faith,” William S Consovoy, one of Trump’s lawyers, told the appeals panel at oral arguments.

At the arguments, the president’s immunity claim seemed to crystallize when a bold statement Trump once made — that he could stand on Fifth Avenue and shoot somebody, without being hurt politically — was cited by one of the judges, Denny Chin.

Chin asked Consovoy about the potential effect of the president’s immunity claim in such a hypothetical situation. “Local authorities couldn’t investigate?” the judge asked, adding: “Nothing could be done? That’s your position?”

“That is correct. That is correct,” Consovoy said.

The Justice Department, led by William Barr, had also weighed in, writing that Vance’s subpoena should be blocked for now but not adopting Trump’s absolutist view that a sitting president could never be subject to criminal investigation.

In an appellate brief, the department wrote that Vance’s office should not be able to obtain the president’s personal records unless and until it could show that they were central to the investigation, not available elsewhere and were needed immediately, rather than after Trump leaves office.

“A subpoena directed at a president’s records should be permitted only as a last resort,” the department wrote.

Although the United States is not a party to the lawsuit, it has the right to give its views.

The appeals court typically considers cases via three-judge panels. In addition to Chin, the panel that heard the president’s appeal included Judge Robert A Katzmann, the court’s chief judge; and Judge Christopher F Droney.

Katzmann was appointed to the appeals court by President Bill Clinton. Chin and Droney were placed on the court by President Barack Obama.

Katzmann made it clear as the oral arguments concluded that he expected the case would end up at the Supreme Court. “We have the feeling that you may be seeing each other again in Washington,” Katzmann said as the arguments ended.

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