Toward the end of Friday’s hearing, the three-judge panel of the U.S. Court of Appeals for the 2nd Circuit considering the appeal asked the banks’ attorneys whether the documents subject to the subpoenas could potentially include the president’s tax returns.
“I am not asking you for the content" of the returns, Judge Jon O. Newman said.
“We’re not in a position to answer that question,” said Raphael Prober, the attorney for Deutsche Bank, the president’s largest creditor.
“It is a fairly important question in this case,” Newman said.
Prober and Capital One’s attorney, James Murphy, both said “contractual obligations" prevented the banks from answering the judges’ questions.
As the judges appeared to grow frustrated by the attorneys’ resistance, Judge Peter Hall added: “Should we go to court and seek an order? I’m serious. We need to know.”
The banks, which have not publicly taken a position on Trump’s efforts to block the subpoenas, agreed to provide the appeals court a letter within 48 hours addressing the matter, but it was unclear what the letters would specify or whether they would be made public.
The case is part of an escalating fight between Trump and congressional Democrats over the president’s financial records. Trump has broken with decades of precedent by refusing to release his tax returns and has launched a multi-court effort to keep the details of his finances secret.
The House Financial Services and Intelligence committees are pushing the boundaries of their powers to target and embarrass the president, Trump’s attorney Patrick Strawbridge told the court. The subpoenas would sweep up every debit card transaction and check written by Trump, his children and even his grandchildren, he said.
The case involves the “broadest possible subpoena ever served that targets a sitting president,” Strawbridge said. “The real objective appears to be law enforcement” not legislative.
The court should order the committees to negotiate with Trump to narrow the scope of their subpoenas to relevant matters, he said. Otherwise, “every Diet Coke that a teenager bought using a credit card from Capital One” could be part of the documents produced, Strawbridge said. “They did not have to form their subpoena so broadly."
Douglas Letter, general counsel for the House, said Trump hasn’t shown a serious willingness to negotiate the terms of the subpoenas. “I do not believe this is sincere,” Letter said.
Letter also defended the committees’ subpoenas as part of sweeping investigations into Russian money laundering that could lead to legislation. Subpoenas have also been sent to 10 other banks unrelated to Trump and his family, he said. Despite the subpoenas’ broad scope, Letter said complying would “have almost no effect on Mr. Trump’s time."
Reps. Maxine Waters (D-Calif.), chair of the Financial Services Committee, and Adam B. Schiff (D-Calif.), chairman of the Intelligence Committee, have said they want to examine the relationship between Trump and Deutsche Bank as part of a larger examination of Russian money laundering and potential foreign influence on Trump.
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, now a presidential adviser.
Trump’s company has taken out about $364 million in loans from Deutsche Bank since 2012, according to public filings. The loans included two worth $125 million to buy and renovate the Doral golf resort in Florida, a $170 million loan to renovate Washington’s Old Post Office into a Trump hotel, and a $69 million loan to refinance an existing Trump hotel in Chicago.
Trump’s financial disclosures and loan records indicate that all four of the loans remain outstanding, though they do not show the balances outstanding.
“Why is it that Deutsche Bank would lend him money when no other bank would touch him?” Letter said.
The fight over Trump’s financial documents comes at a time when Deutsche Bank is struggling financially and has announced a massive restructuring, including potentially cutting 18,000 jobs, gutting its stock and bond trading business and reducing other investment bank operations.
On Thursday, the German giant 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.
Deutsche Bank said in a statement about the SEC settlement: “Deutsche Bank provided substantial cooperation to the SEC in its inquiry and has implemented numerous remedial measures to improve the bank’s hiring practices.”
David A. Fahrenthold contributed to this report.