Court of Appeals says Congress can subpoena Trump financial records

Legal issues arising from the Trump presidency and taking up more space in the federal court dockets, from the district courts all the way to the Supreme Court. This time around, the Second Circuit rules that a congressional committee has the legal authority to subpoena the private financial records of Donald Trump and his family, who are also his business associates.

The case is Trump v. Deutsche Bank AG, issued on December 3. This case has been on the fast-track all year. The Southern District of New York issued a ruling in this case in May 2019, and the Second Circuit (Hall, Newman and Livingston in dissent) issued a 100+ page decision only a few months after hearing oral argument on August 23.

This is not one of the more glamorous issues that have arisen from the Trump presidency. Other cases involve sex payments to porn stars, impeachment, et. al. This case started when Congress decided to explore how loopholes allow corruption, terrorism and money laundering to infiltrate the American financial system. The Financial Services Committee said “The movement of illicit funds throughout the global financial system raises numerous questions regarding the actors who are involved in these money laundering schemes and where the money is going.” And the Chair of the Intelligence Committee said it is investigating

“[t]he scope and scale of the Russian government’s operations to influence the U.S. political process”; “[t]he extent of any links and/or coordination between the Russian government, or related foreign actors, and individuals associated with Donald Trump’s campaign, transition, administration, or business interests, in furtherance of the Russian government’s interests”; “[w]hether any foreign actor has sought to compromise or holds leverage, financial or otherwise, over Donald Trump, his family, his business, or his associates”; and “[w]hether President Trump, his family, or his associates are or were at any time at heightened risk of, or vulnerable to, foreign exploitation, inducement, manipulation, pressure, or coercion.”

What is the constitutional scope of a Congressional investigation? How far can Congress go in the course of overseeing the financial system and other institutions? There is no dispute that Congress has authority to conduct investigations. But that scope is not always clear, because few people bring lawsuits over these investigations. Judge Newman notes that while the Supreme Court says Congress can obtain information pursuant to its legislative authority under the Constitution, that power is not unlimited. In 1955, the Court said in Quinn v. United States that "The power to investigate 'must not be confused with any of the powers of law enforcement.' “Nor does it extend to an area in which Congress is forbidden to legislate.' 'Still further limitations on the power to investigate are found in the specific individual guarantees of the Bill of Rights . . . .' And, most pertinent to the pending appeal, the power to investigate “cannot be used to inquire into private affairs unrelated to a valid legislative purpose.'” Trump's lawyers invoke the italicized portion.

Over a lengthy dissent from Judge Livingston, the majority says that Congress can obtain the financial records of Trump and his family/business associates. Here is the holding:

The Committees’ interests concern national security and the integrity of elections, and, more specifically, enforcement of anti‐money‐laundering/counter‐financing of terrorism laws, terrorist financing, the movement of illicit funds through the global financial system including the real estate market, the scope of the Russian government’s operations to influence the U.S. political process, and whether the Lead Plaintiff was vulnerable to foreign exploitation.

The Court also holds that the legislative interest in investigating these areas outweighs any privacy interests invoked by Trump. Not only is Congress investigating matters "of the highest order," as lawmakers are looking into "national security and the integrity of elections. By contrast, the privacy interests concern private financial documents related to businesses, possibly enhanced by the risk that disclosure might distract the President in the performance of his official duties."