Lawyers for Deutsche Bank and Capital One repeatedly refused on Friday to tell an appellate court in New York whether the banks are in possession of President Donald Trump’s tax returns, citing “contractual obligations” not to disclose the information and drawing the ire of a panel of judges. Oral Argument Summary: Trump v. House Financial Services and Intelligence Committees (Lawfare blog).
The three-judge panel was so frustrated by the lawyers’ refusal to answer that one of the judges suggested the appellate court might seek an order for the information.
“Should we go to court and seek an order? I’m serious. We need to know,” US Circuit Judge Peter W. Hall told a lawyer for Deutsche Bank, Raphael Prober.
After several minutes of argument on the subject, the panel directed the lawyers to file letters under seal within 48 hours saying whether the banks have Trump’s tax returns. But while the banks’ lawyers indicated they would respond in writing, it wasn’t clear that they agreed to provide that information.
Come Monday, the appellate court can use its inherent power of contempt to hold these lawyers in contempt, and let them think about their failure to comply with a valid court order from a jail cell, if it decides. No more obstruction of justice.
In May, US District Judge Edgardo Ramos refused to block the subpoenas from the House Intelligence and Financial Services committees, ruling that the panels seeking Trump’s financial information have legitimate legislative purposes.
The subpoenas are broad, Ramos said, but they are “clearly pertinent” to Congress’ work and “do not constitute impermissible law enforcement activities.”
A lawyer for the House reiterated Friday that the subpoenas are at least in part intended to aid an inquiry into possible money-laundering activities that could result in banking policy revisions and to investigate the President’s financial dealings with foreign powers, such as Russia.
“Why is it that Deutsche Bank would lend him money when no other bank would touch him?” Douglas Letter, general counsel for the House, said Friday.
“Then what is the legislative purpose?” said a member of the panel, Judge Debra Ann Livingston. “It’s law enforcement.”
Letter disputed that, saying the committee intends to use the subpoenaed material to determine whether there should be additional banking regulation that might curb the type of loans Trump received.
“Russian oligarchs and others, their money is pouring into the United States and being used in real estate transactions and others,” he said.
An attorney for Trump, Patrick Strawbridge, countered that the subpoenas, which seek records from Trump’s family members, including the children of his adult children, were overly broad.
Strawbridge suggested they sought material beyond the scope of a lawful congressional inquiry and would result in banks turning over accounting of “every Diet Coke that a teenager bought using a credit card from Capital One.”
He cautioned against a scenario in which the court might “rubber-stamp the broadest possible subpoena ever served on a sitting president.”
The judges didn’t rule Friday, saying they would deliver their decision at a later date.
The New York Times provides additional details, Court Hints at a Range of Paths in Fight Over Trump Financial Records:
Lawyers on both sides acknowledged that some kind of compromise could be possible, but they appeared unlikely to give much ground.
Douglas Letter, a lawyer representing the congressional committees, said lawmakers would be willing to negotiate on narrowing the scope of the subpoenas to exclude records that could reveal sensitive information about people outside of the scope of their inquiries, such as low-level employees of Mr. Trump’s businesses. But, Mr. Letter said, it was necessary to review a broad swath of Mr. Trump’s documents.
“We are doing an extremely broad investigation,” Mr. Letter said, explaining the committees’ reasons for wanting to see Mr. Trump’s family members’ records as well. “Obviously if you’re laundering Russian money, moving it to the United States, you need to see how it’s handled domestically.”
Mr. Strawbridge told the judges several times throughout the hearing that he would be willing to negotiate a narrower records release, but when Judge Newman asked him which parts of the subpoenas the Trump family would be willing to allow, Mr. Strawbridge said he had not been authorized to negotiate at that moment.
Judge Newman and the two other judges, Peter W. Hall and Debra Ann Livingston, are hearing the appeal, which is just one of the battles Mr. Trump is engaged in to keep his financial records private. He is also fighting a subpoena from another House committee to the accounting firm Mazars USA and has sued in an attempt to block the House from requesting his state tax returns from New York.
Judge Newman, who adjourned the hearing, did not indicate when the panel would issue a ruling.
First, the court is going to respond to the bank lawyers’ letter on Monday. If it is non-responsive, expect to see sanctions and/or contempt of court.
Deutsche Bank has been a major lender to both the Trump Organization and Kushner Companies, which previously was run by Trump’s son-in-law, Jared Kushner.
On Thursday, the German bank also agreed to a $16 million settlement with the Securities and Exchange Commission over corruption allegations, including that it hired relatives of foreign governments officials in Russia and elsewhere in order to win business. See earlier, Deutsche Bank Faces Criminal Investigation for Potential Money-Laundering Lapses.
It’s hardly the first time that Deutsche Bank has been fined millions of dollars for money laundering of Russian oligarch money. Deutsche Bank fined for $10 billion Russian money-laundering scheme (2017); Deutsche Bank faces action over $20bn Russian money-laundering scheme (2018); Deutsche Bank | Violation Tracker.
Subpoenas have also been sent to 10 other banks unrelated to Trump and his family. Those banks are reportedly complying with congressional subpoenas, as I’ve previously posted. Follow the money: banks are complying with congressional subpoenas for Trump’s financial records.