On Friday, a Second Circuit appeals court revived a lawsuit filed by businesses that claim President Trump’s unconstitutional receipt of foreign emoluments negatively impacted their business. This is the second emoluments lawsuit that is back on track, the other brought by more than two hundred members of Congress.
Citizens for Responsibility and Ethics in Washington, one of the litigants, released a statement, which read in part: “If President Trump would like to avoid the case going further and curtail the serious harms caused by his unconstitutional conduct, now would be a good time to divest from his businesses and end his violations of the Emoluments Clauses of the Constitution.”
The Second Circuit explained, “Plaintiffs allege that they have been and will be injured because foreign and domestic government entities that patronize Washington, D.C. and New York hotels, restaurants, and event spaces patronize Trump establishments (in preference to Plaintiffs’ establishments) in the hope of enriching the President and earning a reward from him through official Presidential action favorable to their governments, and that such enrichment of the President by foreign and domestic government entities violates the Foreign and Domestic Emoluments Clauses.”
Contrary to the lower court ruling, the appeals court found, “Plaintiffs’ alleged injury meets the well‐established Article III threshold for economic competitors who allege that, because of unlawful conduct, their rivals enjoy a competitive advantage in the marketplace.” Moreover, the court found that the lower court improperly required plaintiffs to prove causation (i.e. Trump’s businesses caused their injury), something that need be proven only after discovery has ferreted out all the facts.
Even more noteworthy, the court accepted the premise that Trump is using his office to enrich himself.
The President’s establishments offer government patrons something that Plaintiffs cannot: the opportunity, by enriching the President, to obtain favorable governmental treatment from the President and the Executive branch. It alleges that the marketplace is thus skewed in favor of Trump businesses because of his unlawful receipt of payments from government patrons.
This is a nice way of saying Trump has set up a giant pay-to-play racket.
The ruling clearly puts Trump on notice that the definition of emoluments extends to his business dealings with foreign states: “The prohibition stated in the constitutional text renders the President’s receipt of ‘emoluments’ unlawful, unless Congress consents to it.” The two-judge majority reiterated that the only way for Trump constitutionally to accept emoluments is with the consent of Congress, something that has not occurred.
The importance of the ruling is two-fold. First, it sets in motion a second court case in which plaintiffs might gain access to Trump’s financial records, including tax returns. Unless he can get the Supreme Court to stay the order, he’ll have to produce documents or defy legal subpoenas. Second, the ruling underscores the need for the House of Representatives to refocus impeachment hearings on Trump’s alleged financial improprieties — taking foreign money, self-dealing, directing the Air Force flights to Scotland so crews would patronize his hotel. Trump’s finances and his insatiable greed have always been his Achilles' heel. His self-enrichment is exceedingly easy for anyone to understand and, if supported by evidence, would make it exceptionally hard even for Republicans to defend. The Judiciary Committee would be wise to put out a road map detailing potential financial improprieties, putting Trump and the country on notice that their president might be a crook.