Sun Sentinel Palm Beach Edition
Judge refuses to block Trump bank subpoenas
Decision occurs days after ruling in similar finance case
NEW YORK — A federal judge in New York refused Wednesday to block congressional subpoenas seeking financial records from two banks that did business with President Donald Trump.
U.S. District Judge Edgardo Ramos said in a ruling delivered from the bench that Trump and his company were unlikely to succeed in a lawsuit arguing that the subpoenas seeking records from Deutsche Bank and Capital One were unlawful and unconstitutional.
Ramos also concluded that the subpoenas have “a legitimate legislative purpose.”
Deutsche Bank and Capital One did not immediately respond to requests for comment. The banks took no position in the dispute.
The lawyers for the House Financial Services and Intelligence committees say they need access to documents from the banks to investigate possible “foreign influence in the U.S. political process.”
Deutsche Bank has been a major lender to both the Trump Organization and Kushner Cos., which previously was run by Trump’s son-in-law, Jared Kushner, who now is a presidential adviser.
Deutsche Bank has loaned or been a co-lender of at least $2.5 billion to Trump’s business, much of it at a time when other banks declined providing money to him, according to a Wall Street Journal report.
Wednesday’s decision came two days after a federal judge in Washington ruled against Trump in a similar case, finding that the president cannot block a House subpoena for information from Mazars USA, a financial services firm that had done accounting work for him and the Trump Organization.
House Speaker Nancy Pelosi, D-Calif., welcomed Wednesday’s ruling, saying she was “very excited” by the news.
“Two in one week: Mazar Monday, Deutsche Bank today,” she said.
In a written submission prior to Wednesday’s hearing, lawyers for two congressional committees wrote that Trump’s effort to block the subpoenas was “flatly inconsistent with nearly a century of Supreme Court precedent.”
The lawyers said the House’s Committee on Financial Services and Permanent Select Committee on Intelligence sought the information as it investigates “serious and urgent questions concerning the safety of banking practices, money laundering in the financial sector, foreign influence in the U.S. political process, and the threat of foreign financial leverage, including over the president, his family and his business.”
Lawyers for Trump responded in writing that accepting the view of the committees would mean “Congress can issue a subpoena on any matter, at any time, for any reason, to any person, and there is basically nothing a federal court can do about it.”
In another development in House Democrats’ efforts to obtain Trump’s financial record, the revelation Tuesday of a confidential Internal Revenue Service legal memo that says tax returns must be given to Congress unless the president asserts executive privilege spilled into a hearing Wednesday.
Appearing before the House Financial Services Committee, Treasury Secretary Steven Mnuchin said he was not aware of the existence of the memo until reporters from The Washington Post made inquiries about it.
Mnuchin noted that it was a draft document.
He told the committee he believed he was following the law by refusing to turn over six years of President Donald Trump’s tax returns, which have been requested by Ways and Means Committee Chairman Richard Neal, D-Mass.
However, the 10-page IRS document says the law “does not allow the Secretary to exercise discretion in disclosing the information provided the statutory conditions are met” and directly rejects the reason that Mnuchin has cited for withholding the information.
Mnuchin said he expected the dispute to ultimately be decided by the courts.
Mnuchin has refused to turn over the tax returns despite a 1924 law that gives the chairs of the tax-writing committees in Congress the power to request the returns of any taxpayer.
Mnuchin told lawmakers he had not had any discussions on the issue with Trump, who has said repeatedly that he can’t turn over his taxes because he is under IRS audit. Trump has not asserted executive privilege to protect the returns.
Neal has said he expects to bring a lawsuit to force the administration to comply with his subpoena.
When a number of Democrats pressed Mnuchin on the issue of whether he was breaking the 1924 law, Mnuchin said that “weaponizing the IRS is a major concern of ours which affects taxpayers of both parties.”
Also on Wednesday, New York state lawmakers gave final passage to legislation that would allow Trump’s state tax returns to be released to congressional committees that have, so far, been barred from getting the president’s federal filings.
The Democratic-led Senate and Assembly approved the measures Wednesday, sending them to Gov. Andrew Cuomo, also a Democrat. A spokesman has said the governor supports the principle behind the legislation but will review the bill carefully before deciding whether to sign it.
The legislation doesn’t target Trump by name, but it would allow the leaders of the U.S. House Ways and Means Committee, the Senate Finance Committee or the Joint Committee on Taxation to get access to any New York state tax returns filed by elected officials and top appointed officials. The legislation would apply to personal income tax returns, as well as business taxes paid in New York.