U.S. to Join Fight Over New York’s Subpoena of Trump Taxes

(Bloomberg) -- The top federal prosecutor in Manhattan said the U.S. will join a legal fight between Donald Trump and Manhattan District Attorney Cyrus Vance Jr. over the president’s tax and other financial records.

U.S. Attorney Geoffrey Berman in Manhattan said in a letter to the judge Monday that the government intends to participate in the litigation and will file papers Wednesday. Last week, his office asked for a temporary halt to the enforcement of a state subpoena to Mazars USA LLP, Trump’s accountants, while the government considered whether to participate, suggesting the U.S may join in support of Trump.

It’s not yet clear what the government’s legal arguments will be, but they would probably bolster the position of Trump, who is suing in his personal capacity, not as president, which means he’s represented by private lawyers, not employees of the Justice Department. Trump’s team is claiming broad, constitutional immunity from criminal investigation, including into his businesses and the people who worked for him before he became president. They’ve asked U.S. District Judge Victor Marrero to block the subpoena.

The president “cannot be subject to criminal investigation, for any conduct of any kind, while he is serving as president,” Trump’s lawyers said in a court filing.

The argument suggests that Trump’s team thinks Berman’s office acted outside the Constitution in its investigation of Trump lawyer Michael Cohen, said Harry Sandick, a former prosecutor in the office who’s now a partner in the firm Patterson Belknap Webb & Tyler LLP.

“Implicit in the idea that the president may not even be within the scope of a criminal investigation is that SDNY’s own investigation into Cohen’s campaign finance crimes was unconstitutional, as was the entire Mueller investigation,” Sandick said.

The argument “is at odds with too much constitutional history” and unlikely to succeed, he said. The U.S. may instead limit itself to arguing that state prosecutors are barred from enforcing the Mazars subpoena by constitutional provisions barring states from interfering with federal functions.

Vance wants the Mazars documents as part of grand jury probe of whether the Trump Organization falsified business records related to hush-money payments to porn actress Stephanie Clifford, known as Stormy Daniels, and former Playboy model Karen McDougal, who claim to have had sexual relationships with Trump.

Berman’s office charged Cohen with coordinating payments to Clifford and McDougal at the direction of Trump, whom federal prosecutors famously referred to in court papers as “Individual 1.” Cohen pleaded guilty last year to campaign-finance violations, tax evasion, bank fraud and lying to Congress. He’s serving a three-year sentence. Berman recused himself from the case, which was pursued by other lawyers in the office.

“We’re in the very early stage of wanting to review materials,” Solomon Shinerock, a prosecutor in Vance’s office, told Marrero in a hearing last week. “There’s a whole range of other financial records that we’re seeking here for reasons we can’t get into here.”

The case is Trump v. Vance, 19-cv-08694, U.S. District Court, Southern District of New York (Manhattan).

©2019 Bloomberg L.P.

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