The House sued the administration in July after Treasury Secretary Steven Mnuchin refused to comply with a subpoena for Trump’s business and tax records issued in May.
The Justice Department has sought to toss out the case for Trump’s tax records, based on White House claims of immunity from congressional oversight.
McFadden wrote that both cases raise similar, weighty legal questions about whether courts can weigh in on political fights between Congress and the White House or if the Constitution requires that judges stay out of such disputes.
In a seven-page order, McFadden noted that the full U.S. Circuit Court of Appeals for the District of Columbia Circuit voted last week to rehear a 2-to-1 panel decision overturning a trial judge’s order that McGahn must comply with a House subpoena to testify in Congress’s impeachment probe.
“The D.C. Circuit granted rehearing en banc in McGahn, so all the reasons for a stay still hold,” McFadden wrote, saying the question of whether the House or Senate can go to courts to enforce subpoenas “is unsettled for now.”
“Piecemeal litigation would be an inefficient use of resources,” said McFadden, who stayed the case indefinitely to “await further proceedings in McGahn.”
The House has argued in the tax records case that it can go to court under a basis that was not an issue in the McGahn case. Namely that it may sue to enforce a 1924 law that gives the tax-writing committee authority to seek tax returns and other records in overseeing the effectiveness of the Internal Revenue Service’s audit programs.
McFadden in January announced he would delay ruling on the Trump administration’s request to toss out the lawsuit until a ruling in McGahn’s case. McFadden lifted the stay when the federal appeals court in Washington said Feb. 28 that McGahn can defy a congressional subpoena.
It remains unclear whether appeals in the McGahn case can be resolved before the House request for Trump’s tax returns expires when this term of Congress ends after November’s election.
At oral arguments in the tax case last fall, McFadden said he was “dubious” about the department’s claim that Congress cannot go to court to enforce its legal demand for information because doing so would “supplant the centuries-old process of political negotiation” between the executive and legislative branches.
The judge acknowledged arguments that such an absolute position could stymie any congressional investigation of the executive branch. McFadden invoked Trump’s acting chief of staff, Mick Mulvaney, who has said Democrats will “never” see the president’s tax return.
Trump is the first president since the 1970s not to release his tax records. Mnuchin has said the subpoena “lacks a legitimate legislative purpose,” according to Trump’s court filing.
House lawyer Megan Barbero said the law clearly states that the treasury secretary “shall furnish” tax return information requested by the tax-writing committee. “Even in politically fraught cases,” she said, “it is the duty of the court to weigh in and say what the law is.”
House Democrats sued in July, citing investigative reports that allege Trump has engaged in aggressive, decades-long tax avoidance schemes. House Democrats said they seek to determine if he took inappropriate advantage of tax laws.
The committee sought the records citing a provision of the federal tax code prompted by the Teapot Dome bribery scandal involving the administration of president Warren G. Harding in the early 1920s.