Trump Accounting Firm Must Release Some Records to Congress

(Bloomberg) -- Former President Donald Trump’s accounting firm Mazars USA must disclose some of his closely guarded financial information in response to a subpoena from Democrats in Congress, a federal judge in Washington ruled.

But in a Wednesday order, U.S. District Judge Amit Mehta stopped short of calling for the handover of all the records the Democrats requested, saying the disclosure of some of the material would raise separation-of-powers concerns. Instead, the ruling calls on Mazars to turn over documents related to the Trump Organization’s lease on the federal building that houses the Trump International Hotel in Washington, as well as records that could shed light on whether Trump received gifts or compensation from foreign governments in violation of the Constitution’s so-called emoluments clauses.

Even now that he’s left the White House, the ruling said, Trump is entitled to some level of protection from congressional inquiries. “Separation of powers considerations do not entirely disappear merely because the entanglement is between Congress and a former President,” Mehta wrote.

But in authorizing the disclosure of some of the Mazars documents, Mehta dealt a blow to a former president who has fiercely protected his financial secrets since he ran for office in 2016. After the House Committee on Oversight and Reform demanded the records in 2019, Trump fought the case all the way to the Supreme Court, which punted it back to the lower courts in Washington.

Lawyers for Trump did not respond to a request for comment. Nor did the offices of House Speaker Nancy Pelosi and House Committee on Oversight and Reform Chair Carolyn Maloney.

‘Abject Failure’

Representative Gerald Connolly, a Virginia Democrat who chairs the House Oversight Subcommittee on Government Operations, described Mehta’s ruling as only a partial victory for Democrats.

“We’ll see some of Donald Trump’s tax returns, and that’s a good thing,“ Connolly said in a statement. “But let’s be clear: We issued this subpoena two years ago. That he was able to run out the clock and avoid accountability until he left office is not a victory for the rule of law. It is an abject failure.“

The Mazars case was one of several long-running efforts by Democrats and local law-enforcement officials to gain access to Trump’s financial records. Last month, the Justice Department’s Office of Legal Counsel ruled that the Treasury Department must turn over Trump’s tax returns to a different committee of House Democrats, although the release of those materials has been delayed as the former president fights the handover in court in Washington.

And in 2020, the Supreme Court ruled that Trump would have to disclose his tax information to Manhattan District Attorney Cyrus Vance, whose office has since charged the Trump Organization and its chief financial officer, Allen Weisselberg, with tax fraud and other crimes.

The order on Wednesday arose from a subpoena that Democrats issued in 2019 for eight years of Trump’s financial information. Trump challenged the subpoena, and the case reached the Supreme Court last year.

The justices ruled 7-2 that congressional subpoenas seeking the president’s personal information must be “no broader than reasonably necessary” and ordered lower courts to determine whether the House’s request met a set of heightened legal standards. Much of the recent litigation has focused on whether the Supreme Court’s so-called Mazars test should continue to apply now that Trump has left the White House.

‘The Mazars Factors’

In his opinion, Mehta wrote that separation-of-powers concerns “are admittedly less substantial when a former President is involved.” Still, he said, that “does not warrant jettisoning the Mazars factors altogether.”

In demanding the documents from Mazars, Democrats laid out three central legislative justifications: an effort to craft laws governing financial disclosures by public officials; oversight of the General Services Administration’s lease arrangements with the Trump Organization over the Washington hotel; and possible laws related to the Emoluments Clauses of the Constitution.

Mehta found that the Democrats had met the legal threshold for demanding documents related to the GSA lease and certain emoluments issues, while falling short in its pursuit of records to bolster financial disclosure rules. For the documents related to possible emoluments breaches, he said the Democrats were only entitled to materials from the years 2017 and 2018, when Trump was president.

“The committee has presented ‘detailed and substantial’ evidence that President Trump, at least through his business interests, likely received foreign payments during the term of his presidency,” Mehta wrote. “The committee therefore is not engaged in a baseless fishing expedition.”

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