Two Federal Judges Reject Trump’s Attempt to Block Congressional Subpoenas for Financial Records

By Krista Doherty

Over two days in May, federal judges in Washington D.C. and New York City ruled that U.S. Congressional Committees have the legal authority to subpoena private companies requesting financial records relating to Donald Trump and his business affiliates.

The House Committee on Oversight and Reform issued a subpoena on April 15 requesting financial records and other documents from Mazars USA LLP, a firm that Donald Trump has used for accounting services, from 2011 to 2018. As a result, Mr. Trump and his business affiliates filed a lawsuit in the U.S. District Court for the District of Columbia requesting “the court, among other things, to declare that the Oversight Committee’s subpoena to Mazars ‘is invalid and unenforceable’ and to issue a ‘permanent injunction quashing Chairman Cummings’ subpoena.” (Opinion, 12).

On May 20, 2019, the D.C. District Court ruled in favor of the House Oversight Committee. Judge Amit Mehta cited a multitude of court cases, including Quinn v. United States and McGrain v. Daugherty, that have confirmed Congress’s “broad investigative authority” which allows them to investigate any matters and conditions related to legislation. Additionally, in past court cases such as, Watkins v. United States and United States v. Rumely, the Supreme Court has consistently acknowledged Congress has an “informing function,” meaning they have the ability to look into and report “corruption, maladministration or inefficiency in agencies of the Government” (Opinion, 16).

Judge Mehta acknowledged that there are limits to Congress’s investigatory power. Congress may not intrude on Executive or judicial “prerogatives,” nor may they expand their powers to an area they are prohibited to legislate (Opinion, 17). According to precedent set by Watkins and McSurely v. McClellan the question for the court to answer is not what Congress’s motives are, but whether or not they have transcended their authority (Opinion, 18-19). Article I of the Constitution grants Congress the power to investigate matters where legislation “could be had” (Opinion, 3).

Judge Mehta concluded: “Applying those principles here compels the conclusion that President Trump cannot block the subpoena to Mazars. According to the Oversight Committee, it believes that the requested records will aid its consideration of strengthening ethics and disclosure laws, as well as amending the penalties for violating such laws. The Committee also says that the records will assist in monitoring the President’s compliance with the Foreign Emoluments Clauses. These are facially valid legislative purposes, and it is not for the court to question whether the Committee’s actions are truly motivated by political considerations. Accordingly, the court will enter judgement in favor of the Oversight Committee” (Opinion, 3).

Judge Mehta also denied Plaintiff’s motion for a stay pending appeal.

Two days after Judge Mehta’s ruling, the U.S. District Court for the Southern District of New York entered a similar order, affirming the validity and enforceability of subpoenas issued by two other House committees, the Committee on Financial Services and the permanent select Committee on Intelligence of the U.S. House of Representatives. The committees’ subpoenas were issued to Deutsche Bank AG and Capital One Financial Corporation requesting financial records relating to President Trump, his adult children, and his businesses.

On May 28, 2019, the judge in the Southern District order, Judge Edgardo Ramos, granted the plaintiffs a stay pending appeal.