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Trump’s Tax Returns, or What Does Nancy Pelosi Have to Hide?
Watching the election coverage last night it had barely become clear that the Democrats were going to take the House before all the talk (on the “mainstream” channels I was surfing) turned to salivating over the ability of House committees to use the subpoena power to get Trump’s tax returns. It was almost indecent. The masks slipped pretty fast. They weren’t attached very well to begin with.
But I’m not 100 percent sure how these tax return subpoenas are going to shake out. I’m familiar with the subpoena power in private litigation. As a lawyer for several decades, I’ve issued plenty of subpoenas. But subpoenas aren’t magic. You don’t necessarily get what you want. They’re just formal requests that obligate the recipient to either a) comply, b) negotiate some acceptable alternative, or c) let a court decide whether compliance is required (a recipient can move to quash or an issuer can move to compel enforcement). In practice, subpoenas are rarely complied with as issued.
Would be curious to hear from someone with expertise on the question of the scope of Congress’s subpoena power. Obviously a congressional committee isn’t a private litigant or even a prosecutor. The scope of its power and discretion in seeking information is going to be different. But is it unlimited? I’m not sure “we’re just looking for something politically damaging” is going to be enough for a subpoena to stand up to judicial scrutiny.
And God help us if it is. Maybe a Senate committee can start launching random subpoenas to Schumer and Pelosi. I’m sure they’ve got some skeletons. Pelosi and her husband have made a fortune. Is that really all on the up and up? Or have there maybe been some fat contracts steered Mr. Pelosi’s way? Foreign financing on some business endeavor? Enquiring minds want to know. I’m not saying there’s anything there. Maybe there’s not. Probably there’s not. But if the subpoena power is an unconstrained political tool, what’s to stop the Republican Senate from checking?
In case you can’t tell, I don’t like where this is going. In truth, I don’t want Nancy Pelosi and her husband pointlessly harassed. Or any other member of Congress for that matter. Or Trump. Washington is enough of an embarrassing circus already. If the House or Senate is going to investigate the behavior of political leaders, there out to be some evidence of a crime (or maybe an ethics violation for investigations within a legislative body) as a basis and a justification for turning its sights on an individual actor. The death knell for a privately issued subpoena is the conclusion that it’s nothing more than a “fishing expedition” and the same rule should hold for Congress. I look forward to watching how the subpoenas for Trump’s tax returns play out. My guess is there will be much litigation, and it is not at all clear to me the Democrats will (or should) prevail.
Published in Politics
If I recall correctly, the Republican House issued many subpoenas which were basically ignored. I think you’re right that the Democrats’ fishing expedition will have limited success. I hope.
Here’s what I’ve never been able to figure out. What exactly do they think they’ll learn from the tax returns, anyway?
The only thing of significance I can remember *ever* learning from a politician’s tax returns is that I gave more to charity in 2000 (or maybe it was 1999) than Al Gore did.
Yes in addition to the formal objections and litigation, there’s an ability to slow walk or obstruct or just make getting compliance very difficult. That works better when a subpoena is broad and a little vague though. A request as concrete as “Donald Trump’s tax returns for the years XXXX-XXXX” is going to be harder to obstruct that way. Keep in mind, it will be issued to the IRS as well as maybe Trump. My guess is only a court is going to prevent compliance with a subpoena of this sort.
This. Wouldn’t they need to have some semi-legitimate reason for subpoenaing them? The only reason I can think of is if they actually try to impeach, and that would depend on the charges.
What would be the grounds for such a subpoena?
The short answer is, they don’t really care about having a theory. They just hope they’ll find something illegal, or at least embarrassing. And given the scope of Trump’s various business endeavors, who knows? I’m pretty sure his tax returns don’t look like yours or mine.
If pressed, I think they’ll give one of two rationales: 1) Russia!! They’re obsessed with Trump’s links to Russia and I think they’re hoping for information about who Trump’s Russian business associates might be, or even better, evidence that some business of Trump’s is Russian financed and maybe some Russian oligarch has him by the financial short hairs; or 2) Emoluments Clause. They’re hoping to find evidence that he’s getting some financial benefit from a foreign state that they can use as a basis for impeachment because he’s violating the emoluments clause.
Tax returns are pretty heavily *specifically* protected by explicit privacy law. They’d have to have some more-than-figleaf reason to override that, I’d expect.
I have no expertise, but logic based on the structure of the federal government would seem to the conclusion that Congress does not have the power to force the President to reveal personal information like his tax returns. Congress and the President are separately elected by the people of the United States, and neither has power over the other. Congress apparently has some power over executive branch officials, but presumably only over their conduct of official business over which Congress has budgetary authority.
That would be an interesting question to pose to @troysenik. Perhaps someone w/ his contact information could forward this post to him.
Exactly. “I don’t like Trump” shouldn’t be a reason to start an investigation . . . but it might be.
I think it has already been established that Pelosi’s husband has significantly enhanced his business based on Nancy’s legislative actions. Hubby is a real estate developer. I understand that he has bought land at prices depressed because of heavy-handed environmental regulation, and then after he bought the land, magically the environmental regulations get relaxed.
Does that suggest Republican lawyers are really bad at writing subpoena requests? Or that there’s a double standard regarding compliance with the law?
Never mind. I answered my own question.
By analogy to discovery rules in civil litigation, tax returns are presumed private unless there is some compelling, highly relevant reason to order their disclosure for a specific evidentiary purpose. There is no right for a party to go fishing in hopes of finding useful stuff as one might in looking through business records in commercial litigation.
Congressional subpoena power is pretty broad because each house gets to decide what its committees are authorized to look at it would be tough to relate the personal tax returns of the President to any cognizable legislative purpose.
I think the House either loses in court if they try to enforce a subpoena or the court bails saying there is no jurisdiction. Contempt of Congress has no bite by itself. The enforcement is if a federal court rules that the subject has to comply with the subpoena and then contempt liability applies.
If there is no truly damaging info in his tax returns, Trump might counter with an offer to disclose his returns if every current member of the House and Senate agree to disclose theirs. Otherwise, buzz off.
I would have used a more vulgar term, but, yes!
I suspect Donald Trump’s tax returns are orders of magnitude more complex than anything previous presidents (or candidates) have disclosed. There’s all kinds of potential for interpretive mischief, and the Democrats know it. Bastards.
Don’t you have to have some evidence or indication a crime has been commited to get a subpoena?
This is not correct, in my experience. The relevance standard in the typical civil discovery rules is a low bar. It only has to be relevant, not “compelling” or “highly” relevant, and does not even have to be admissible, as long as it is reasonably calculated to lead to the discovery of relevant evidence.
These rules vary from state to state; my principal experience is under the federal and Arizona rules, which are very similar.
For a third-party subpoena, there is a second step of balancing the burden on the third party, with perhaps some cost-shifting.
Cato is correct that, as a practical matter, it is often feasible to negotiate a partial response, as both parties have an incentive to avoid incurring attorneys’ fees on a relatively trivial issue.
There is a separate confidentiality procedure, in which the court can enter a protective order limiting disclosure and use of the information and documents produced. Such orders are often negotiated between the parties and submitted by stipulation.
No, it’s really not that. It’s just a reality that sometimes you’re looking for “any and everything related to X event” which is pretty vague, and other times you’re looking for “that document over there” which is pretty specific. It’s just much harder to informally obstruct the latter type of request.
And the Clintons donated Bill’s old underwear to Goodwill and took a charitable deduction.
Not always a crime, but some legitimate purpose. We issue subpoenas in civil litigation all the time. No crime, but a pending dispute. Congress issues subpoenas for all sorts of investigations that don’t, or may not involve crimes. They do have some general power to just investigate what’s going on in the world, or in the government. I’m sure the Benghazi investigation issued subpoenas, and the 9-11 commission did. Because the public and Congress had legitimate concerns about finding out what the H-E-double toothpicks happened.
But when it’s an investigation turned on a specific political opponent, it just seems to me it’s more in the nature of a criminal investigation and the justification for compelling disclosure of otherwise private information needs to be some kind of evidence that you’re on more than a fishing expedition looking for politically useful dirt.
Would this apply to something protected by stringent privacy laws like, say, tax returns?
Depends on the scope of the privacy law. Tax returns can certainly be discoverable. But statutory protections do exist that limit either discovery or disclosure of various types of information, including tax returns. I’m not expert in exactly how they work though.
Yeah. I overstated the requirement. Another issue is that as you point out there is invariably a protective order which would be almost meaningless in this instance. Does the whole Committee and their staffs get to see the returns? The whole House? Might as well publish online.
Fascinating question, @catorand. We’ve already seen how ineffectual subpoenas can be–didn’t the House committee use subpoenas to get the information from the DOJ? Pretty soon it will be, “what subpoenas.” I’m no lawyer, but I suspect the Dems effort will create more hubbub and grist for the media mill than anything. And where is that darn Mueller report and the latest IG report??
It already has been. See Russia Collusion! as exhibit A.
The irony of the whole “Russia Russia Russia!” thing is that if (as it appears) the goal of the Russian “interference” [for lack of a better word] in the 2016 election was to sow discord and distrust, and undermine confidence in the American electoral system, it only worked because the Dems decided to use the Russians as a scapegoat for their embarrassing loss.
Tax returns are routinely produced in civil litigation, where relevant. Some examples: a family law case involving alimony, child support, or a property split; or a personal injury lawsuit involving a lost earnings claim. Depending on the circumstances, you might only produce a subset of the return. For example, if the issue is lost earnings, you don’t have to produce schedules relating to itemized deductions or investment income, but you do have to produce the parts relating to earnings from work.
Thanks for this info. It’s appreciated.
However, here is a major principle that everyone seems to ignore: a tax return is a product of tax accountants and tax lawyers.
After all, the way tax returns work is this: a wealthy human hires a team of tax accountants and tax attorneys each year for the purpose of having their tax returns done correctly.
Those people set up the tax returns. Once the forms are signed and sent off to the Internal Revenue Service, the tax accountants and the attorneys are on the hook for any penalties that come about through their lack of knowledge, or through their deliberate mis-representation of the law to the client. (Those people might have an incentive to mis-represent the law, as they want the client to get the most tax dodges and what not to reduce the tax bill, so that they are hired the following year.)
Unless the Presidential client has deliberately withheld information or has lied out right, none of this is Trump’s problem. Any penalties that would come about from the misdeeds of the accountants and attorneys would be their liability, not Trump’s. I believe he should say so publicly and move on.
I am hoping for scorched earth with all the leaking of secrets. Don’t just drain the swamp, but that mother down.
I remember that in 1973 I paid more than Richard Nixon had. (A paltry $ 550 or so, but to a person who was 20 years old, it was a lot.)
Of course, the most important question this could resolve is whether the Russians reported their payments to Trump with a W2 form or a 1099 form. And if a 1099 form, did Trump do adequate pre-payments in lieu of withholding?…