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Trump sues in bid to block congressional subpoena of financial records

President Trump filed a lawsuit on April 22 seeking to stop the House Oversight Committee from obtaining records from his accounting firm. (Video: Reuters)

President Trump sued his own accounting firm and the Democratic chairman of the House Oversight Committee at the same time Monday — trying an unusual tactic to stop the firm from giving the committee details about Trump’s past financial dealings.

The lawsuit, filed in federal court in the District of Columbia, seeks a court order to quash a subpoena issued last week by the committee to Mazars USA. Trump’s lawyers also are asking a federal judge to temporarily block the subpoena until the court has had a chance to review their request.

The move amounts to Trump — the leader of the executive branch of government — asking the judicial branch to stop the legislative branch from investigating his past.

Former House counsels from both sides of the aisle called the challenge a long shot and an apparent delay tactic.

Two House committees issued subpoenas to financial institutions, including Deutsche Bank, for information on President Trump’s finances. (Video: Reuters)

The suit came as House Democrats issued another subpoena likely to touch a nerve for the president. The chairman of the House Judiciary Committee on Monday ordered former White House counsel Donald McGahn to testify before the panel next month and hand over documents and records pertaining to federal investigations of Trump, his finances, his campaign and allegations he sought to obstruct justice.

He is the first former White House employee to receive a subpoena for congressional testimony in the wake of special counsel Robert S. Mueller III’s redacted report being released to the public.

Over the years, Congress has had broad leeway to use its subpoena power to probe possible corruption in other branches of government. For instance, during the 1990s the GOP-led House spent years investigating President Bill Clinton’s involvement in the “Whitewater” scandal, which began long before he was elected.

Trump’s lawsuit seeks to upend decades of legal precedent that have upheld Congress’s right to investigate, arguing that his past personal dealings are irrelevant to the legislative branch’s fundamental job: writing bills.

“There is no possible legislation at the end of this tunnel,” Trump’s attorneys wrote in their brief, talking about the Oversight Committee’s inquiry into whether Trump misled his lenders by inflating his net worth. “The Oversight Committee is instead assuming the powers of the Department of Justice, investigating (dubious and partisan) allegations of illegal conduct by private individuals.”

The subpoena Trump is seeking to stop — sent by Oversight Committee Chairman Elijah E. Cummings (D-Md.) — relates in part to “Statements of Financial Condition” that Mazars produced for Trump before he took office. 

These statements are unaudited summations of Trump’s assets, debts and net worth, which Mazars compiled annually for Trump. The statements omitted some debts, overvalued some assets and misstated some key facts in ways that made Trump seem wealthier than he was

Read Trump’s complaint against the House Oversight Committee

In testimony this year, Trump’s former lawyer Michael Cohen said that Trump used these statements to solicit loans from banks, including for a failed effort to buy the Buffalo Bills. Cohen said Trump also had used the statements to persuade insurers to lower his premiums.  

At the time of that testimony, Cohen already had pleaded guilty to lying to Congress in earlier testimony, when he was still working for Trump. He is now facing a three-year jail term.

The Oversight Committee on March 20 asked the company for copies of “statements of financial condition” and audits prepared for Trump and several of his companies, including the one that owns the Trump International Hotel in downtown Washington. The panel also requested supporting documents used to produce the reports and communications between the firm and Trump.

In a statement, Cummings called Trump’s suit “baseless.”

“There is simply no valid legal basis to interfere with this duly authorized subpoena from Congress,” Cummings said. “This complaint reads more like political talking points than a reasoned legal brief.”

A spokeswoman for Mazars confirmed that the company had received the lawsuit Monday. “As a firm we will respect this process and will comply with all legal obligations,” spokeswoman Jennifer Farrington said. She said corporate policy barred her from commenting further.

Trump’s lawsuit argues that Mazars should follow the code of professional conduct issued by the American Institute of Certified Public Accountants. It quotes one section that counsels CPAs against “disclos[ing] any confidential client information without the specific consent of the client.”

The next paragraph of that code, however, says that CPAs can release client information “to comply with a validly issued and enforceable subpoena.” 

Trump’s private attorney, Jay Sekulow, issued a brief statement saying, “We will not allow Congressional Presidential harassment to go unanswered.” 

In the suit, Trump’s attorneys wrote that the true purpose of this investigation was not governance but political advantage: “Its goal is to expose Plaintiffs’ private financial information for the sake of exposure, with the hope that it will turn up something that Democrats can use as a political tool against the President now and in the 2020 election.”

The Trump Organization, Trump’s private business, also is listed as a plaintiff in the lawsuit. Trump still owns the business, although he says he has given up day-to-day control to his sons Eric Trump and Donald Trump Jr.

In a phone interview, Trump Organization attorney Alan Garten called the subpoena “unprecedented overreach by Congress.”

Trump moves to resist House inquiries, setting up fight over congressional subpoena powers

On Monday, some legal experts were skeptical that the president’s tactic would succeed. They said courts generally have granted Congress fairly wide powers to investigate, even in cases where the investigation wasn’t connected to a pending bill. 

“You can never say never because courts change and there are new judges, but this is way over the top,” said Kerry W. Kircher, who served as House counsel for the Republican majority from 2011 to 2016, referring to the suit. “I’m as confident as I can be that there’s no chance of success here on the merits.”

Kircher said that the courts would be “altering the whole arrangement of checks and balances” should they rule in favor of Trump.

In Trump’s lawsuit, his attorneys cited a Supreme Court decision called Kilbourn v. Thompson, which found “no express power” in the Constitution for Congress to investigate individuals without pending legislation.

The problem with that argument, said University of Baltimore law professor Charles Tiefer, is that Kilbourn v. Thompson is a case from 1880.

And it was overruled by a decision in 1927, Tiefer said. 

“It has not been followed for the last 90 years,” Tiefer said of the 1880 decision. Instead, the 1927 ruling found Congress has much wider powers to investigate — and courts since then have let that interpretation stand and even reinforced it.

Tiefer, a Democrat and former acting House counsel, said the main goal of Trump’s team may be not to block the subpoena forever but simply to delay it so any damaging information comes out after the 2020 election. But he said the case could actually move through the courts quickly — perhaps in just a few months.

“By reaching back to precedent to the 1880s, they’re seeking . . . to overturn the entire modern case law that the courts have put together to respect Congress’s investigative power,” he said of Trump’s lawyers. “It’s a very long shot. . . . These suits look like an act of desperation by the Trump lawyers.”

Monday’s lawsuit comes amid a broader effort by Trump’s attorneys and the White House to resist congressional requests for information.

This month, the Treasury Department missed a deadline to hand over Trump’s tax returns to the House Ways and Means Committee.

White House officials also have been digging in their heels on other requests related to Trump’s actions as president.

The administration has signaled it does not plan to turn over information being sought about how particular individuals received their security clearances, Trump’s meetings with foreign leaders and other topics that they plan to argue are subject to executive privilege, according to several aides familiar with internal discussions.

On Monday, House Speaker Nancy Pelosi (Calif.) sent a letter to fellow Democrats that said the House was determined “to conduct oversight over the other branches of government, unified in our search for the truth.”

While some in her party have called for the chamber to initiate impeachment proceedings, Pelosi thus far has resisted that request, instead throwing her support behind aggressive committee investigations into Trump’s actions both before and after he took office.

Cummings’s subpoena to Mazars put a spotlight on an accounting firm that Trump has used since the early 1980s. In addition to compiling these “statements of financial condition” for Trump personally, Mazars and its predecessor firms also handled the tax filings for his charity, the Donald J. Trump Foundation. 

Devlin Barrett, Karoun Demirjian and Tom Hamburger contributed to this report.