Donald Trump defies Congress and federal law for his tax returns and financial records

Last week House Oversight Committee Chairman Elijah Cummings (D-Md.) issued a “friendly” subpoena to Mazars USA, Donald Trump’s accounting firm, directing the firm to turn over the president’s financial records. Mazars had previously stated it would comply with the subpoena.

Almost immediately, Trump’s shyster lawyers – hired to keep Trump’s finances secret – sent a letter to Mazars USA, insisting that the firm ignore a lawful federal subpoena.

On Monday, Donald Trump and the Trump Organization filed a lawsuit against Chairman Cummings to block the subpoena to Mazars USA for Trump’s financial records. Trump Organization sues House Oversight chairman over subpoena for financial records:

The lawyers filed the lawsuit Monday in the U.S. District Court for the District of Columbia, saying the subpoena for records from Trump’s accounting firm, Mazars USA, “lacks any legitimate legislative purpose, is an abuse of power, and is just another example of overreach by the president’s political opponents.”

Read the Complaint (.pdf).

Cummings said in a statement Monday afternoon that Trump “has a long history of trying to use baseless lawsuits to attack his adversaries, but there is simply no valid legal basis to interfere with this duly authorized subpoena from Congress.”

“This complaint reads more like political talking points than a reasoned legal brief, and it contains a litany of inaccurate information,” he continued. “The White House is engaged in unprecedented stonewalling on all fronts, and they have refused to produce a single document or witness to the Oversight Committee during this entire year.”

In late March, Cummings sent a letter to Mazars chairman and CEO Victor Wahba requesting documents related to his panel’s probe into allegations that Trump inflated or deflated financial statements for potentially improper purposes. Cummings said Cohen provided documents to his committee in support of his testimony.

“Mr. Cohen produced to the Committee financial statements from 2011, 2012, and 2013 that raise questions about the President’s representations of his financial affairs on these forms and on other disclosures, particularly relating to the President’s debts,” Cummings wrote in the letter. “Several of these documents appear to have been signed by your firm.”

Steve Benen adds:

Lawmakers are also aware of credible allegations of criminal fraud, criminal tax evasion, and money laundering, which the American president exploited to fuel his rise to power.

In other words, the idea that Cummings’ request for information “lacks any legitimate legislative purpose” seems a little silly: the Oversight Committee, which has an expansive purview, is obviously following up on evidence of suspected wrongdoing.

Indeed, it seems this new lawsuit does little except make clear that the president and his team are desperate to keep his financial records, including his tax returns, secret.

Steve Benen explains that the Trump lawsuit hopes to limit the scope of congressional oversight:

[T]he Washington Post highlighted an interesting tidbit from the lawsuit, which I’d overlooked after initially reading the filing.

In Trump’s lawsuit, his attorneys cited a Supreme Court decision called Kilbourn v. Thompson, which found “no express power” in the Constitution for Congress to investigate individuals without pending legislation.

The problem with that argument, said University of Baltimore law professor Charles Tiefer, is that Kilbourn v. Thompson is a case from 1880.

And it was overruled by a decision in 1927, Tiefer said.

“By reaching back to precedent to the 1880s, they’re seeking … to overturn the entire modern case law that the courts have put together to respect Congress’s investigative power,” Tiefer added, referring to Trump’s lawyers. “It’s a very long shot…. These suits look like an act of desperation by the Trump lawyers.”

It’s obviously embarrassing if the president’s new legal team didn’t realize it was citing a Supreme Court case that was overturned nearly a century ago, but let’s not brush past too quickly the absurdity of the underlying argument.

Trump’s lawyers effectively made the case, in an official court filing, that Congress can only conduct oversight in pursuit of legislative ends. If that were true, any effort on the part of lawmakers to scrutinize any controversy outside of legislative pursuits would be legally impermissible.

So to recap, the president expects the courts to (a) stop lawmakers from scrutinizing his past, and (b) drastically limit the scope of congressional oversight.

That’s obviously a tough posture to defend, but just as importantly, it raises anew questions about what it is Trump and his team are so desperate to hide.

UPDATE: Chairman Cummings had agreed to delay the Oversight Committee’s subpoena deadline until after a court hearing on May 14th, when a court holds a hearing into President Trump’s suit against Cummings and the Trump’s accounting firm Mazars USA.

In related news, Donald Trump will not comply with the Tuesday deadline set by House Democrats to release his tax returns to Congress, setting up what was expected to be an extended legal clash between two branches of government. Trump Will Not Release Tax Returns to Congress, Spokesman Says:

Earlier this month, Richard E. Neal, the Democratic chairman of the House Ways and Means Committee, formally requested from the Internal Revenue Service six years’ worth of the president’s personal and business tax returns, but so far the Treasury Department has said it needs more time to respond.

[R]eleasing the tax returns is not exactly Mr. Trump’s choice. Mr. Neal is employing a provision of the tax code to request the returns, which he said his committee needs in order to evaluate the policy of automatic audits of presidential tax returns.

* * *

The Treasury Department, which oversees the I.R.S., missed the first deadline to provide the tax returns, and Steven Mnuchin, Treasury secretary, told Mr. Neal in a letter that he needed more time to study the lawfulness of the request. Mr. Mnuchin expressed concern that the request was being made for political purposes and was a violation of taxpayer privacy that could lead to the I.R.S. being weaponized against both parties in the future.

Mr. Neal dismissed those concerns, saying that they lacked merit, and gave Treasury until Tuesday to comply. He said that failing to do so would be “interpreted as a denial of my request.”

Last week, Mr. Trump’s personal lawyer urged the Treasury Department not to release the president’s tax returns and accused Democratic lawmakers of having a “radical view of unchecked congressional power.”

House Democrats are anticipating that Mr. Mnuchin will continue to [stonewall]. Mr. Neal’s next steps could include a subpoena or a lawsuit, which could ultimately be decided by the Supreme Court.

UPDATE: Treasury secretary misses deadline for providing Trump tax returns to House panel, says he will make final decision by May 6:

Treasury Secretary Steven Mnuchin on Tuesday told a key lawmaker he would make a final decision as to whether he will furnish President Trump’s tax returns by May 6, committing for the first time to a specific deadline in what has become a major Washington power struggle.

In a 10-page letter to House Ways and Means Committee Chairman Richard E. Neal (D-Mass.), Mnuchin said the Democrats’ request for Trump’s tax returns raised constitutional and privacy issues that needed to first be resolved by the Justice Department before he could make a decision on how to proceed.

The letter repeatedly cast doubt on the motivations of Democrats in seeking the tax return information. Mnuchin served as Trump’s finance chairman during the 2016 presidential campaign and Trump has already signaled he does not want the information released, but multiple legal scholars have said they don’t see much precedent for Mnuchin to ignore the congressional inquiry.

The law is clear. Mnuchin, who does not make the decision — that is the IRS Commissioner — does not need a legal opinion form DOJ. The IRS has always complied with the law.

Lawrence H. Summers, who served as Treasury secretary under President Bill Clinton, said on Twitter on Tuesday that it would be “lawless contempt” if the Ways and Means Committee did not receive Mr. Trump’s tax returns by the deadline.

Screen Shot 2019-04-23 at 2.38.08 PM

He is correct. As I have previously posted, Treasury Secretary and IRS Commissioner are in legal jeopardy — and this includes the president:

David Cay Johnston explains, Here’s the Law That Requires Mnuchin to Turn Over Trump’s Taxes, or Lose His Office and Go to Prison:

Under Section 6103 of our tax code, Treasury officials “shall” turn over the tax returns “upon written request” of the chair of either congressional tax committee or the federal employee who runs Congress’s Joint Committee on Taxation. No request has ever been refused, a host of former congressional tax aides tell me.

There is, however, a law requiring every federal “employee” who touches the tax system to do their duty or be removed from office.

The crystal-clear language of this law applies to Trump, acting White House Chief of Staff Mick Mulvaney, Mnuchin and Rettig, federal employees all.

The law says all of them “shall” be removed from office if they fail to comply with the request from Representative Richard Neal, the Massachusetts Democrat who chairs the House Ways and Means Committee.

There are no qualifiers in Section 6103 that shield Trump from delivering, in confidence, his tax returns to Congress. No wiggle room at all.

Another provision in our tax code, Section 7214(a), provides that “Any officer or employee of the United States acting in connection with any revenue law of the United States… who with intent to defeat the application of any provision of this title fails to perform any of the duties of his office or employment… shall be dismissed from office or discharged from employment and, upon conviction thereof, shall be fined not more than $10,000, or imprisoned not more than 5 years or both.”

* * *

The good-conduct provisions of the tax law are as broad as they are severe.  Significantly, it doesn’t just affect IRS auditors and collections officers. It applies to any federal employee—which means Trump as well as Mnuchin and Rettig—who “fails to perform any of the duties” they are assigned.

It also applies to any federal employee “who conspires or colludes with any other person to defraud the United States; or who makes opportunity for any person to defraud” the government. This provision could hit Mulvaney, the acting White House chief of staff and Trump’s budget director, given his reckless statements on Fox News, which some call Trump TV.

Should congressional tax lawyers, after examining Trump’s tax returns, finds that he is a tax cheat, anyone with knowledge of the cheating would also be at risk of prosecution.

Keep in mind that Trump lost two income tax fraud civil trials over his 1984 New York state and city tax returns, as recounted in my 2016 book The Making of Donald Trump.

He is also a confessed sales tax cheat, prompting Mayor Ed Koch of New York to say that Trump should have served 15 days behind bars for his crimes.

The law covers official inaction, too. Anyone who “omits” his duty “shall” be removed and may be prosecuted as a felon.

Section 7214 covers anyone with “knowledge or information of the violation of any revenue law by any person, or of fraud committed by any person, against the United States [who] under any revenue law, fails to report, in writing, such knowledge or information to the” Treasury secretary.

The risks to his liberty and fortune help explain why Mnuchin, while not turning over tax returns by the Wednesday deadline, told Congress this week, “as I’ve said in the past when we received the request, it would be reviewed by our legal department, and it is our intent to follow the law.”

That artful language was likely written by a government lawyer to help shield Mnuchin from removal from office and prosecution, at least for now.

Mnuchin can’t stall forever. If he or Rettig tries endless inaction, forcing House Democrats to sue in federal court, the failure to act could result in the same painful results as outright refusal to comply.

The Trump administration is openly and flagrantly violating federal law in plain sight, and essentially saying “what are you going to do about it?” Serve the subpoena on the IRS, and add this lawless contempt of Congress as an Article of Impeachment. This is a clean, clear-cut case.