Appeals Court Dismissive of Trump’s Argument to Block Subpoena of His Tax Returns

A federal appeals court expressed skepticism Wednesday that President Donald Trump can block a subpoena from New York state prosecutors for his tax returns, in a case that all sides agree is likely headed toward the Supreme Court for an election-year showdown.

Judges from a three-member panel of the 2nd US Circuit Court of Appeals in downtown Manhattan challenged Trump’s private attorney on key elements of his argument, primarily that the President enjoys absolute immunity from all criminal investigations while he is in office.

Asked by Judge Denny Chin about the limits of presidential immunity, and “the Fifth Avenue example,” Trump attorney William Consovoy even argued that local authorities in New York City could not investigate the sitting president if he shot someone in the street while Trump was in office.

While in office, Katzmann asked, “nothing could be done, that’s your position?”

Consovoy replied: “That is correct, that is correct.”

The back-and-forth was an allusion to Trump’s comment during the 2016 campaign that he “could stand in the middle of Fifth Avenue and shoot somebody and I wouldn’t lose voters.”

It was first invoked by Carey Dunne, who argued on behalf of the Manhattan District Attorney.

“You could invent scenarios where you could imagine it would be necessary or at least perhaps a good idea for a sitting president to be subject to a criminal charge, even by a state while, in office,” Dunne said. “If he for example did pull out a hand gun and shoot someone on Fifth Avenue, well, what would be the impact of that? Would local police be disabled from restraining such a person? Or from processing such a person? Would we have to wait for an impeachment proceeding to be initiated?”

The case before the appeals court revolves around a subpoena to Trump’s accounting firm. After New York District Attorney Cyrus Vance subpoenaed the President’s tax returns this summer, Trump’s lawyers went to federal court to stop him. A judge dismissed that lawsuit earlier this month, but Trump’s lawyers swiftly filed an appeal and want the lawsuit revived.

The appeals judges pressed Trump’s side for an explanation of why compliance with a subpoena in a state probe would cause a massive distraction preventing the president from doing his job.

“The premise is that this is a distraction. It distracts the President from carrying out his duties,” federal Judge Denny Chin said. “Where is the distraction if the subpoena is served on accountants? The President doesn’t have to do anything to comply with the subpoenas?

The case is expected to make its way to the Supreme Court. Both sides struck a deal Monday to fast-track any Supreme Court petitions after the appeals panel weighs in, potentially teeing up a dramatic showdown in Washington before the 2020 election.

The legal wrangling is the latest clash in the multi-dimensional fight for Trump’s tax returns, which has been led by Democrats on the federal and state level. Vance is a Democrat.

The case can be traced back to the hush-money payments to adult film actress Stormy Daniels and another woman who alleged extramarital affairs with Trump, which he denies. State prosecutors want to know if the Trump Organization, based in New York, filed false business records to cover up the payments.

In August, Vance’s office subpoenaed eight years of Trump’s tax returns from his accounting firm, Mazars USA, for an ongoing grand jury investigation. (Even if Vance obtains the highly coveted financial records, they’ll likely remain secret unless they’re used as evidence at a trial.)

Trump’s team had asked the lower-court judge to block Vance from enforcing the subpoena, and to stop Mazars from sending over the tax records, until Trump leaves office. His lawyers argued that a criminal investigation of the sitting president is “unconstitutional.” In a surprising move, the Justice Department got involved and also requested a temporary freeze on the subpoenas.

The lower-court judge invoked the Founding Fathers and excoriated Trump’s claims of immunity as “repugnant” and an “overreach of executive power.” US District Judge Victor Marrero, in a 75-page decision, dismissed the suit, through the appeals court stepped in to temporarily block the subpoenas after Trump filed an appeal.

Vance’s investigation comes after the Justice Department probe into the payments, which landed ex-Trump attorney Michael Cohen in prison for violating federal campaign finance laws. He is currently at a federal prison in New York and is slated to be released in December 2021.

Trump has gone to extraordinary lengths to keep his finances private, even though he promised to follow decades of precedent and publicly release his tax returns before the 2016 election.

His critics have alleged that his tax returns could expose massive debts to foreign interests or that is he not as wealthy as he claims to be. A Forbes estimate from September said Trump is worth $3.1 billion, though Cohen has testified that Trump inflated his earnings in the past.

The appeals judges for Wednesday’s hearing were Chin, Robert Katzmann and Christopher Droney. All three were appointed to the federal bench by Democratic presidents.

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