Monday, May 20, 2019

Judge Rules Against President Trump in Financial Records Fight with Congress


The Case, Trump v. Committee on Oversight and Reform, involves the Role of the Accounting Firm Mazars USA.

Various House Committees seek Documents that will Reveal Trump’s Finances, and Potentially Expose Conflicts of Interest that Influence how Trump Governs. One of these Committees is the House Committee on Oversight and Reform, which Subpoenaed Mazars seeking “documents and information relating to the firm’s preparation, review, and auditing of financial statements for Trump and his business entities.”

The Purpose of this Inquiry, according to the Committee, is to Examine “several specific instances where President Trump’s reporting of assets and liabilities materially differs from what was subsequently reported in his required financial disclosure filings submitted as a candidate for office and as a federal official,” and to Determine whether New Legislation is needed “to expand the scope, penalties, and periods covered by financial disclosure laws” and Augment “criminal laws governing the reporting of financial information to financial institutions.”

Mazars, for its part, offered only Token Resistance to this Subpoena. Before the Subpoena was Issued, the Committee asked Mazars if it would Voluntarily Turn Over Trump’s Financial Documents. Mazars Responded with a very Brief Letter explaining that it could Not do so because of various Laws and Regulations that Prohibit “disclosure of confidential client information without client consent or receipt of a validly issued and enforceable subpoena.” The Committee took the Hint, and Issued such a Subpoena.

Since then, Mazars has Declared its Neutrality in the Dispute between Trump and Congress. In a Document Filed in the Trump Litigation, the Accounting Firm explained that “the dispute in this action is between Plaintiffs and the Committee,” and that “Mazars USA takes no position on the legal issues raised by Plaintiffs, and requests no time for oral argument before the Court.”

Mazars’ Neutrality is a big Deal. If the Documents Congress seeks were Solely in Trump’s Possession, then Trump could Deploy every possible Obstructive Tactic to keep Congress from obtaining those Documents, and he would Succeed until Congress obtained a Court Order Requiring him to Comply. Even after Congress Obtained such an Order, it likely would Not be able to Enforce the Order until Trump Exhausts his Appeals.

But Mazars appears to have No Interest in joining Trump’s Resistance to the Subpoena. To the contrary, its stated Neutrality suggests that it will Comply with the Subpoena unless a Court Affirmatively Orders them Not to do so. Mazars’ Neutrality, in other words, Reverses the Balance of Power between Trump and Congress. Instead of being able to Run Out the Clock, Trump now has to Obtain a Court Order Preventing Mazars from Complying.

Judge Amit Mehta, the Obama-Appointed District Judge hearing the Trump Case, handed down an Order indicating that he Plans to Dispose of this Case very Quickly. Though Trump’s Lawyers requested a Preliminary Injunction, a Temporary Form of Relief that Judges sometimes give to a Party that is likely to Prevail after a Full Trial is Completed, Judge Mehta’s Order States that “the court intends to ‘advance the trial on the merits and consolidate it with the hearing’ on the motion for preliminary injunction.” That Hearing will be held Next Tuesday.

So it is likely that we will know very soon whether Judge Mehta will Quash the House’s Subpoena, an unlikely Outcome Given the Strong Legal Arguments on the House’s Side. It remains to be seen, however, whether a highly Partisan Supreme Court will Ignore Cases like Eastland in Order to Bail Out Trump.

UPDATE

Judge Amit Mehta's Ruling says Trump Cannot block the House Subpoena of Financial Records and would Not stay the Order.










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