(Financial Post) – The U.S. Supreme Court on Thursday made it clear that a sitting president cannot evade criminal investigations, ruling that a prosecutor in New York City can obtain President Donald Trump’s financial records including tax returns.
The 7-2 ruling authored by Chief Justice John Roberts means that the subpoena issued to Trump’s long-term accounting firm, Mazars LLP, for various financial records to be turned over to a grand jury as part of a criminal investigation can be enforced.
The court is due to issue a second ruling imminently in related litigation involving subpoenas for Trump’s financial records by Democratic-led House of Representatives committees.
Unlike other recent presidents, Trump has refused to release his tax returns and other documents that could provide details on his wealth and the activities of his family real-estate company, the Trump Organization. The content of these records has remained a persistent mystery even as he seeks re-election on Nov. 3. Thursday’s rulings represent another milestone in Trump’s tumultuous presidency.
House committees issued subpoenas seeking Trump’s financial records from his longtime accounting firm Mazars LLP and two banks, Deutsche Bank and Capital One.
As part of a criminal investigation by the office of Manhattan District Attorney Cyrus Vance, a Democrat, subpoenas were issued to Mazars for financial records including nearly a decade of Trump’s tax returns to be turned over to a grand jury in New York City.
The investigation launched by Vance’s office in 2018 into Trump and the Trump Organization was spurred by disclosures of hush payments to two women who said they had past sexual relationships with him, pornographic film actress Stormy Daniels and former Playboy model Karen McDougal. Trump and his aides have denied the relationships.
In the litigation over the House subpoenas, Trump argued that Congress lacked a valid purpose for seeking his records and that disclosure of the material would compromise his and his family’s privacy and distract him from his duties.
In the New York case, Trump’s lawyers argued that under the Constitution he is immune from any criminal proceeding while serving as president. They also cited Justice Department guidance that a sitting president cannot be indicted or prosecuted.
In a lower court hearing, Trump’s lawyers went so far as to argue that law enforcement officials would not have the power to investigate Trump even if he shot someone on New York’s Fifth Avenue.
The House Oversight Committee in April 2019 issued a subpoena to Mazars seeking eight years of accounting and other financial information in response to the congressional testimony of Michael Cohen, Trump’s former lawyer. Cohen said Trump had inflated and deflated certain assets on financial statements between 2011 and 2013 in part to reduce his real estate taxes.
The House Financial Services Committee has been examining possible money laundering in U.S. property deals involving Trump. In a separate investigation, the House Intelligence Committee is investigating whether Trump’s dealings left him vulnerable to the influence of foreign individuals or governments.