For Trump, Stalling Deutsche Bank Subpoena May Be Victory Enough
(Bloomberg) -- President Donald Trump doesn’t have a slam-dunk legal case for keeping his banking records away from congressional investigators, legal experts say.
Still, his latest lawsuit could help him politically: It could stall the production of potentially damaging documents, perhaps even until after the 2020 reelection bid. It could also force lawmakers to narrow the broad scope of their record request.
Either could qualify as a political victory for the president. And regardless of the outcome, the mounting legal battle is also likely to have longer-range implications -- helping to define how far future lawmakers can go in using their oversight and subpoena powers to investigate a sitting president, or simply dig up dirt about political opponents.
“Ultimately, the courts will referee this slugfest," said Jacob Frenkel, a lawyer at Dickinson Wright. “The judicial branch, possibly the Supreme Court, may limit congressional subpoena power -- or embrace a right of inquiry beyond an otherwise obvious legislative purpose.”
It’s the latest wrinkle in a battle by congressional Democrats to probe Trump’s potential ties to Russia and investigate broader questions about foreign interference in U.S. politics. As part of that, lawmakers subpoenaed Deutsche Bank AG and Capital One Financial Corp. for financial records spanning a decade that are related to Trump, his family and their businesses.
On Monday, Trump, his three eldest children -- Donald Jr., Eric and Ivanka -- and several of his companies sued Deutsche Bank and Capital One in Manhattan federal court, asking a judge to block the banks from responding to the requests. The Trumps called the subpoenas an improper attempt to harass and to dig up information to use against the president for political purposes.
Now comes a certain flurry of action. The Trumps’ filing said that banks intended to provide documents to Congress around May 6. Between now and then, lawyers for Trump and Congress are likely to fill the case docket with legal filings. U.S. District Judge Edgardo Ramos in Manhattan will probably hold a hearing and consider Trump’s request for a temporary restraining order, unless congressional Democrats push back the banks’ deadline.
Trump’s attempt to prevent disclosure of non-privileged documents to Congress "is an uphill battle to say the least,” according to Harry Sandick, a former federal prosecutor who’s now in private practice.
The Trumps claim the subpoena lacks a legitimate legislative purpose and violates the Constitution. The committees that issued the subpoenas failed to take steps required by the federal Right to Financial Privacy Act before obtaining personal financial records, according to the suit. Trump Organization spokeswoman Amanda Miller didn’t respond to requests for comment.
The suit didn’t claim that any documents fall under the protection of executive privilege. "Unless there is a claim of privilege, courts are reluctant to intervene and block a legislative subpoena based on an argument that the investigation is not well-founded," Sandick said.
Trump doesn’t have any special rights as president to protect his personal bank records from a congressional subpoena, said Charles Tiefer, a professor at the University of Baltimore School of Law. “In a case involving his personal finances, there isn’t a hint, there isn’t a shadow of executive privilege,” Tiefer said. He added, however, that the courts may give him more opportunity to have his position considered because of his office.
Any ruling is likely be appealed to the Second Circuit Court of Appeals in Manhattan. For their part, Deutsche Bank and Capital One, while they are the defendants, are basically bystanders in the fight. They have said they’ll comply with valid subpoenas and follow any court order blocking or delaying production of the information.
“I think Trump’s lawyers are seeking to delay," said Tiefer, a former solicitor and deputy general counsel of the U.S. House of Representatives. "Trump’s lawyers will consider it a victory if their journey through the legal system takes them through Election Day 2020."
The lawsuit from Trump and his children parallels a move by his administration to push back on suddenly muscular congressional oversight.
With House Democrats ramping up oversight in the wake of the Mueller report into Russian interference in the 2016 election, the White House has refused Congressional demands for documents, urged officials not to testify before congressional committees and stalled requests for the president’s tax returns. In conjunction with the Trump Organization, the administration has sought court orders quashing subpoenas directed to Trump’s banks and accountants.
The Trump family’s position, as outlined in the filing, challenges almost a century of legal precedent protecting Congress’s broad authority to investigate, lawyers say. Trump’s administration has repeatedly argued that there’s no legitimate legislative purpose behind the inquires, which it calls a political tool for Democrats to harass the president.
“The president has a reasonable argument,” said Seth Taube, a former federal prosecutor now at Baker Botts. “Your subpoenas must be to aid in making legislation, and no one in Congress has suggested that these broad requests are legislation related.”
On the other hand, Taube said, the subpoenas could be used by lawmakers to investigate possible grounds for impeachment. In considering subpoena matters, courts typically give broad latitude to investigators, he said.
Taube and others added that lawmakers could haggle with the banks to further focus their requests. “My guess: This may cause the parties to negotiate narrowing the subpoenas -- an end in itself for the president’s defense team,” Taube said.
If the matter works up through the courts, trial judges may be more likely to embrace an obligation to produce and the appellate courts may side with limiting congressional power, according to Frenkel. Like much in the Trump era, the final word may be had by the U.S. Supreme Court.
As for the subpoenas themselves, lawmakers on Tuesday defended their legitimacy. House Intelligence Committee chairman Adam Schiff said congressional efforts to obtain Trump-related bank records from Deutsche Bank are "essential" to determine whether Russia or any other foreign power may have leverage over the president.
"The reason that we are concerned about financial issues is this investigation began as a counter intelligence investigation," said Schiff, speaking at a Mueller report-related event sponsored by the Washington Post.
Even if the suit succeeds in delaying document production until after the next election, the congressional subpoenas may set a longer-range precedent, said Saikrishna Prakash, a professor at the University of Virginia School of Law. They could open the door for lawmakers of either party to demand financial records of candidates and office holders on the other ticket, he said.
"If you really want to dig, you could dig through all kinds of stuff," he said. "It’s a little sobering."
The case is Trump v. Deutsche Bank, 19-cv-03826, U.S. District Court, Southern District of New York (Manhattan).
©2019 Bloomberg L.P.