Trump Wins Brief Delay in Tax Subpoena Case: N.Y. Hearing Update
Trump Lawyers Head to Court Claiming President Can’t Be Investigated
(Bloomberg) -- A deadline for Donald Trump’s accountants to turn over the president’s tax returns to New York state prosecutors was extended by a day.
Manhattan District Attorney Cyrus Vance Jr. wants the documents as part of a probe into 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. A federal judge in New York on Wednesday extended the deadline for Trump’s accountants to comply with a subpoena.
While Vance’s investigation is on a separate track, Trump’s refusal to release his tax records has been a flashpoint with Democrats, who moved to open a formal impeachment inquiry into Trump on Tuesday over a call he had with Ukraine’s president. During the New York court hearing Wednesday, the White House released the transcript of the conversation between the presidents.
Judge Extends Mazars Deadline by One Day, Gives U.S. a Week (11:55 a.m.)
U.S. District Judge Victor Marrero ended the hearing by extending the deadline that Trump’s accountants, Mazars USA LLP, must comply with the subpoena to give both sides an opportunity to discuss whether they can agree on allowing some documents to be turned over to Vance. The new deadline is 1 p.m. Thursday.
The judge gave the U.S. Justice Department until Monday to tell him if it plans to try to join the case and until the following Wednesday to file papers stating its position in the case.
New York Is Probing ‘Wide Variety of Parties’ (11 a.m.)
Assistant District Attorney Solomon B. Shinerock told the judge that the DA’s office is examining a “wide variety of parties and a wide variety of businesses,” and that the grand jury seeks documents relating to both Trump and “third-party” entities and individuals.
“We’re in the very early stage of wanting to review materials,” Shinerock said. “There’s a whole range of other financial records that we’re seeking here for reasons we can’t get into here.”
He said that Trump’s lawyers want to drag out the process to the point where the president is no longer in office or the statute of limitations has expired.
“They have no authority for the breathtaking grant of immunity that they seek,” he added.
Accepting the notion that the president can’t be investigated would open up federal courts to “anyone with a state or federal grand jury subpoena to challenge that subpoena based on some association of affiliation with the president,” Shinerock said.
He also said that no one would suffer any “immediate harm” if the tax records were supplied to the confidential grand jury.
If Trump’s challenge to the subpoena is legitimate, it should be heard in state court as it implicates important state interests, he said.
“Their claims of harassment and bad faith are speculative and unfounded,” Shinerock said. “The subpoena at issue relates to issues that are routinely subpoenaed.”
Trump Lawyer Says ‘All 50 States Can Do This’ (10:25 a.m.)
Arguments began with the president’s lawyer, William Consovoy, warning that a ruling against Trump will weaken the presidency.
“If the court rules that the district attorney can do this, then all 50 states can do this,” Consovoy said.
But Marrero appeared skeptical, wondering “how frequently has it been that all 50 states have conspired to undermine the presidency?”
Earlier, the judge asked what would happen if Trump’s businesses had failed to file taxes or falsified its taxes prior to the president’s election. How would the DA know of the crime if it wasn’t allowed to investigate? And if the prosecutors couldn’t investigate, “does the business get off scot-free riding on the president’s tails?”
Consovoy opened his argument by saying that Vance’s subpoena is virtually a “carbon copy” of one sent to Mazars by the House Oversight Committee earlier this year.
“The idea that this office’s investigation perfectly replicates an oversight committee investigation -- plus happens to want one additional thing, the tax returns -- can’t be a coincidence,” Consovoy said.
The lawyer also said that while Trump can’t be subject to a criminal probe while in office, he isn’t permanently protected from prosecution.
“The courts can have recourse to pursue the president like any other citizen but not while he’s in office,” he said. “He cannot be subject to criminal process while in office.”
DA Opposes Federal Prosecutors’ Request for Delay (9:45 a.m.)
Marrero began the hearing by asking lawyers for Vance’s office whether they agreed to the Justice Department’s request to delay the proceeding. The DA opposed the request. Marrero didn’t rule -- and then promptly moved forward to hearing arguments on the merits.
“While we recognize that the U.S. Attorney may wish to be heard here we question whether they should be allowed to arrive at the 11ht hour and request a delay,” Assistant District Attorney Solomon Shinerock told Marrero. It “does not change our position that compliance should begin under the auspices of grand jury secrecy.”
Trump’s Arguments:
Trump’s central argument is based on a Justice Department policy, reflected in a 2000 memo by the department’s Office of Legal Counsel, that says the president can’t be charged criminally while in office, on the grounds that it makes it difficult or impossible to carry out his constitutional duties. His team is trying to extend the proposition to shield his companies and prevent a third party, Mazars, from providing evidence.
To get a preliminary injunction to block the Mazars subpoena, Trump has to show that he faces “irreparable harm” if he doesn’t win.
“There will be no way to unring the bell” once Mazars turns over the documents, Trump’s lawyers argued. Prosecutors will already have seen the president’s confidential material with no way to remedy the situation.
Vance’s Arguments:
Vance said the president is making an unprecedented claim for “blanket immunity” that would extend to his businesses, employees, third parties like Mazars, and his conduct before he entered the White House.
“The question is not whether a state prosecutor can indict a sitting president,” Vance argued in court papers. “There is no threatened or pending state charge against a sitting president. Instead, the sole question is whether a third-party business entity should be required to produce records relating to business transactions that took place among a variety of individuals and entities -- including the president -- before the president took office.”
Key Developments:
- Trump’s lawyers argue that neither the president nor his company can be investigated for a crime while he holds office, and that the subpoena should be blocked.
- Vance argues that the president is making an unprecedented claim for “blanket immunity” that would extend to his businesses, employees, third parties like his accountant, Mazars USA, and his conduct before he entered the White House.
- Late Tuesday, the U.S. Justice Department entered the fight, suggesting it may join the president’s effort to block the subpoena and asking the judge to delay its enforcement for a week as it decides whether to intervene in the case.
- Trump’s former personal lawyer, Michael Cohen, has admitted to orchestrating hush payments to the women and released an audio recording in which he discusses a payment to McDougal with Trump. Cohen pleaded guilty last year to campaign-finance violations and is in prison.
- The Trump Organization turned over thousands of pages of business records to the prosecutor, but has resisted turning over tax details.
The case is Trump v. Vance, 19-cv-8694, U.S. District Court, Southern District of New York (Manhattan).
To contact the reporters on this story: Bob Van Voris in federal court in Manhattan at rvanvoris@bloomberg.net;Chris Dolmetsch in Federal Court in Manhattan at cdolmetsch@bloomberg.net
To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, Steve Stroth
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