The Trump Soho hotel in New York last year. (Seth Wenig/Associated Press)
Opinion writer

Prognosticating a court’s ruling based on questions at oral argument is a dicey business. Nevertheless, what played out in district court in New York on Wednesday in the context of a lawsuit over President Trump’s receipt of emoluments should alarm the White House — and put Congress on notice.

At issue is whether Citizens for Responsibility and Ethics in Washington, a non-profit good-government group, and several hotel/restaurateurs can challenge the president receipt of monies from foreign governments through the businesses from which he refused to divest.

The good news for the challengers is that the judge wasn’t buying a key defense, namely that “emoluments” cannot cover monies earned through private business transactions. Dahlia Lithwick provides an droll account of the argument in front of Judge George B. Daniels of the Southern District of New York:

The DOJ has urged that—at least according to some dictionaries—an emolument requires a connection between the payment made and the president’s office or employment. Daniels thinks this is a tortured reading of the clause. “Why can’t we just say it’s addressing the compensation the president gets?”

[Deputy Assistant Attorney General Brett] Shumate keeps insisting that it’s only an emolument if the president exchanges the gift for services. Judge Daniels keeps telling him that if a foreign power gives Trump $1 million to sign a treaty, it doesn’t matter if the president signs that treaty. Shumate keeps insisting this is a “gift.” “Well, not from the foreign country’s perspective,” snaps Daniels. People titter. They go round and round this mulberry bush multiple times as Daniels changes the hypo: “If you say you’re going to sell me a car for $10,000,” says Daniels, “and I show up tomorrow and there’s no car, are you saying that’s a gift?”

Shumate says the gift-giver’s subjective intent doesn’t matter. Daniels says there is no difference between an official and unofficial act of the president. “Everything he does is official,” Daniels says. “It doesn’t matter if it’s in exchange for his services, whether he sleeps all day or works all day, his services arise out of the office of the president.” Shumate says none of the framers understood the Emoluments Clause to “apply to private business concerns.”

Cue the hot dogs.

Daniels: “So a foreign government says to the president, ‘Sign this favorable treaty and we will give you $1 million. You own a hot dog stand so we will buy a million dollars in hot dogs.’ ”

Shumate: “That might be a present.”

Daniels: “You are not arguing that $1 million in hot dogs is a present.”

Shumate concedes that he is not.

A good deal of the president’s push-back on calls to divest from his business is that the voters knew he was a businessman when they elected him and his earnings aren’t prohibited by the Constitution. The first is of no legal consequence, the second may be rejected by a federal court judge. I confess I thought this was the highest hurdle for plaintiffs to overcome, and thought a court would be hesitant to make new law in this area (where everything is new law given the paucity of litigation). That, however, may not be the plaintiffs’ biggest problem after all.

The sticking point for CREW and the other plaintiffs may be “standing” — whether they have a cognizable injury the court could remedy. Daniels sounded dismissive of the notion CREW might have standing simply because it diverted resources to police this issue. On the subject of the other plaintiffs’ standing he, to my surprise, seemed to give the challengers a rough time:

Daniels is perhaps most animated when he starts telling Gupta that this is a political problem, to be sorted out between the president and Congress. “Why,” he asks, “is this a legal question for the courts? It’s an issue between two branches of government. … The president has the ability to do this. I’m not sure there’s anything in the Constitution that says Congress couldn’t consent even if they thought it was a bribe. … Why should the president fight this out in a street brawl with individuals?”

Daniels didn’t seem to push back on  government’s argument that the private plaintiffs’ injuries were too specific. Plaintiffs should argue that this should be a question of proof, a factual matter that can be explored in discovery and ultimately litigated before the fact-finder (judge or jury).

If the case goes forward, the president will face a raft of discovery, which would include demands to see his tax returns. That would put Trump finally in the position of  choosing between the presidency and maintaining secrecy about his finances.

Taking a step back here, the judge is right in the sense that the emoluments clause empowers Congress to either approve or disapprove of the president’s receipt of foreign loot. The problem is that the GOP Congress has no interest in doing so. Ah, but in 2018 control of one or both of the houses of Congress may flip, giving Democrats’ subpoena power and control of oversight hearings. They could surely demand hearings, subpoena documents, take the president to court if he refuses to turn them over and ultimately make a determination he cannot accept emoluments. It’s that face-off that the president should dread.

Incidentally, in a separate lawsuit, Democratic members of Congress are asking a court to enjoin Trump’s receipt of emoluments so Congress can pass judgment on them. There, however, the issue may be that the GOP doesn’t want to pass judgment so the court’s injunction would be entirely ineffective. Ah, but once again that changes if and when control of one house flip to Democrats.

In sum, perhaps one of these lawsuits (or another) will succeed in forcing the president to disgorge financial information he desperately wants to keep under wraps. However, what Wednesday’s argument reminds us is that a change in control of Congress not only raises the possibility of impeachment but also of demands Trump refuses to accede to (e.g., to reveal his financial dealings). At that point does he take his marbles and go home to Trump Tower? Does Congress hold him in contempt? Stay tuned.