A federal appeals court Friday challenged President Trump’s attempt to block Congress from demanding eight years of records from his accounting firm, warning of the implications if lawmakers could not investigate potential misconduct in a president’s private business dealings while in office.
The implications of such a finding would be “stunning,” added U.S. Appellate Judge David S. Tatel.
The comments came during more than two hours of questioning in Washington over the president’s appeal of a lower court’s refusal to block a House Oversight Committee subpoena to Mazars USA for financial statements and audits it prepared for Trump and several of his companies.
The three-judge panel of the U.S. Court of Appeals for the D.C. Circuit appeared divided at times during the case, one of the first of several separation-of-powers battles that are advancing through the appellate courts and expected to reach the U.S. Supreme Court.
Tatel and Millett voiced strong skepticism of Trump’s arguments that the request for documents was flawed because it came from a committee without specific authorization from the full House to investigate the president and was an unconstitutional attempt to harass a president that served no legitimate legislative purpose.
Douglas N. Letter, the House’s general counsel, accused the president of stonewalling inquiries about possible conflicts of interest, noting the House subpoena was issued after congressional testimony by Trump’s former personal lawyer Michael Cohen that Trump intentionally inflated and deflated the value of his assets to bankers and insurers for personal gain.
The president’s private lawyer, William S. Consovoy, argued Congress is not legitimately exercising its legislative and investigative powers but is instead trying to usurp the executive branch’s law enforcement role.
“When the speaker says, ‘I want to see the president in prison,’ we don’t have to look hard” for lawmakers’ true motive, Consovoy argued, calling it “naive” to deny what is “staring the court in its face.”
Consovoy argued that any new laws Congress might contemplate would unconstitutionally impede the president’s ability to carry out his unique role as chief executive, or they would impose added requirements to becoming president.
He said the House has also did not make a “clear statement” authorizing the Oversight Committee — chaired by Rep. Elijah E. Cummings (D-Md.) — to investigate the president.
That claim appeared to win some support from Judge Neomi Rao, a Trump nominee and the newest member of the court. Millett was nominated by President Barack Obama and Tatel by President Bill Clinton.
Rao asked Letter, “Is there any historic example in which Congress has investigated a president, without a full vote of the House or Senate or a resolution? . . . Would you say this is unprecedented?”
Letter responded that the subpoena was issued not to the president but to his accounting firm.
But Letter also said the questions being investigated by Congress are historic because of Trump’s actions, including his decisions not to divest or wall off his financial interests from his office. What if, hypothetically, Letter asked, the government of Saudi Arabia decided to rent the entirety of Trump International Hotel in Washington — a party in the litigation and an entity in which Trump has retained an interest — and agreed to pay any price.
Congress and the American public “would want to know what money is coming in,” Letter said. “We need to know, is he under the influence of a foreign government, a foreign state or government? Why do things [his assets and debts] show up and disappear” in recent years? Letter said.
Tatel noted the House has already passed or proposed legislation addressing presidential conflicts of interest and ethics in government, subjects that Consovoy conceded the subpoena might address, although Consovoy argued they were not the legislation’s genuine purpose.
“Under your naive theory, the court would have to say that’s all a ruse” Millet pushed back, adding, “How would you show that’s not [Congress’s] genuine” interest?
Tatel went further, asking, “How could financial disclosure prevent the president from fulfilling his constitutional duties?”
“They [members of Congress] are not subjecting the president to arbitrary and capricious review,” he said. “This is just financial disclosure, which presidents for years have been doing.”
In a sign of the high stakes involved in the case, the appeals court agreed to expedite its review. Lawyers for House Democrats agreed with the president’s private legal team to suspend deadlines set by the subpoena while the case is pending. The timeline allows the case to move swiftly by court standards and could set up a potential ruling from the Supreme Court in the midst of the presidential campaign.
Mazars has said it will “respect the legal process and fully comply with its legal obligations.”
The panel gave both sides twice as long to make their arguments, extending the hearing well beyond the scheduled hour.
In a separate case in New York, the president and his family are trying to stop one of their largest lenders from complying with a congressional subpoena. The president has appealed a ruling in that case and contends Deutsche Bank and Capital One should be barred from turning over years of financial records.