Supreme Court ruling upholds demands for Trump's taxes

July 9, 2020 Updated 11:28 AM PT

WASHINGTON — The Supreme Court dealt a defeat to President Trump on Thursday by rejecting his claims of presidential immunity and upholding subpoenas from New York prosecutors seeking his tax returns and financial records.

In one of the most anticipated rulings on presidential privilege in years, the justices by a 7-2 vote ruled the nation’s chief executive is not above the law and must comply with legitimate demands from a grand jury in New York that is investigating Trump’s alleged hush money payments to two women who claimed to have had sex with him.

But because the grand jury operates in secret, it is unlikely the general public will see Trump’s financial records before the November election, if ever.

And in a second ruling, the high court, also by a 7-2 vote, temporarily blocked subpoenas from three House committees on the grounds that Democratic lawmakers failed to show how a decade’s worth of Trump’s financial records were needed to formulate new legislation. The justices sent those cases back to lower courts, giving Trump a partial victory.

The split decisions reflect the high court’s differing assessments of a grand jury and a congressional committee. Traditionally, grand juries have had broad power to demand documents and records to aid in a criminal investigation. And they operate in secret.

By contrast, on Capitol Hill, congressional investigations are increasingly caught up in partisan warfare and in scoring political points, not in drafting legislation. While all nine justices agreed in theory that a president must respond to valid congressional subpoenas, the limits imposed on such requests by Thursday’s decision will likely be welcomed by future White House occupants.

The court’s opinion by Chief Justice John G. Roberts Jr. may be most significant in its rejection of Trump’s extravagant claims of executive power. Trump’s personal attorneys went to court in New York and argued the president was “absolutely immune” from any investigation or even questioning while he was in office, even if he shot someone on Fifth Avenue, evoking Trump’s famous 2016 campaign quip about his unwavering popularity with his base.

Roberts said that view of presidential supremacy has never been part of America’s history.

“In our judicial system, the public has a right to every man’s evidence. Since the earliest days of the republic, ‘every man’ has included the president of the United States,” he said in the opening words of the ruling in Trump vs. Vance. “Beginning with Jefferson and carrying on through Clinton, presidents have uniformly testified or produced documents in criminal proceedings when called upon by federal courts.”

Roberts recalled the story of Aaron Burr’s 1807 treason trial in which President Jefferson was subpoenaed by Chief Justice John Marshal to turn over private letters Jefferson had received that implicated Burr.

“Two hundred years ago, a great jurist of our court established that no citizen, not even the president, is categorically above the common duty to produce evidence when called upon in a criminal proceeding,” Roberts wrote. “We reaffirm that principle today and hold that the president is neither absolutely immune from state criminal subpoenas seeking his private papers nor entitled to a heightened standard of need.”

Roberts agreed the president and his attorneys may still claim that “a particular subpoena would impede his constitutional duties.” But Trump’s records are held by his accountants, so it will be hard to argue that compiling or turning over those documents would prevent Trump from carrying out his duties.

Only the court’s four liberals — Justices Ruth Bader Ginsburg, Stephen G. Breyer, Sonia Sotomayor and Elena Kagan — joined the chief justice’s opinion.

Trump’s two appointees, Justice Brett M. Kavanaugh and Neil M. Gorsuch, concurred in the outcome in the New York case, but said they would have gone further in allowing the president to “raise constitutional and legal objections” to the grand jury subpoena.

Justices Clarence Thomas and Samuel A. Alito Jr. dissented in both cases. They agreed the president was not immune from investigation, but both said they would have also blocked the subpoena from the New York grand jury. It “threatens to impair the functioning of the presidency,” Alito said.

Thursday’s decision culminates a term in which the chief justice took control in all of the major cases. And he did so in a way that few would have predicted.

He joined with the court’s liberals on major rulings in favor of LGBTQ employees, to strike down a Louisiana abortion law and to block Trump’s repeal of the Obama administration policy that protects so-called Dreamers. But he also joined with the court’s conservatives in favor of several religious liberty claims.

Although the New York decision was a defeat for Trump, there is a bright side for him. Chances are high that the details of his finances will remain a secret from the public because grand juries operate confidentially and rarely leak. Had House investigators received Trump’s records, it would have been far more likely that some or all of the information would have leaked before the November election.

Also, exactly when the documents must be handed over to the grand jury is unclear.

Trump blasted the decision, insisting that courts in the past had deferred to presidents in such matters. “BUT NOT ME!” he tweeted.

In the past, the court consistently has rejected sweeping claims of presidential immunity, ruling unanimously that President Nixon had to hand over the Watergate tapes and that President Clinton had to be deposed in the Paula Jones sexual harassment lawsuit.

The election-year dispute had an obvious political significance, but it was also the rare separation of powers case in which the powers of the president, Congress and the judicial system were all at issue.

Regarding the House subpoena, Roberts wrote in Trump vs. Mazars USA that there was a need for a “balanced approach” in this clash between the president and Congress. He said a lower court judge must take a closer look at the subpoenas and “carefully assess whether the asserted legislative purpose warrants the significant step of involving the president and his papers.” He also said the amount of records should be “narrowed” in scope.

He added that the House had failed to explain why it needed Trump’s financial records in order to legislate.

“It is impossible to conclude that a subpoena is designed to advance a valid legislative purpose unless Congress adequately identifies its aims and explains why the president’s information will advance its consideration of the possible legislation,” he said.

House Speaker Nancy Pelosi (D-San Francisco) said the court’s rulings are “not good news for President Trump. The court has reaffirmed the Congress’ authority to conduct oversight on behalf of the American people.” She said the House would press its case in the lower courts.

After Democrats won control of the House in the 2018 midterm election, three separate committees — on oversight, intelligence and financial services — issued broad subpoenas to Trump’s accountants demanding records going back to 2010 on his personal and family finances. A subpoena to Deutsche Bank sought records on loans taken out by Trump and his organization.

Lawyers for the House said Congress has the power and duty to conduct oversight and investigations, including into the chief executive. They said it was especially important to look further since Trump appeared to have far-flung business dealings that were hidden from the public, and said his finances could reveal whether the president had conflicts of interest, including business deals in Russia.

Separately, a New York grand jury looking into potential crimes involving Trump’s personal and business dealings had also issued a subpoena seeking his financial records.

Unlike other presidents since the Watergate era of the 1970s, Trump has refused to disclose his tax returns and has kept secret the details of his business dealings. Investigators were particularly interested in whether Trump and his businesses were heavily indebted to foreign banks.

Trump said during the 2016 campaign that he expected to release his tax returns, but then refused to do so.

Trump’s personal lawyers filed suits in New York and in Washington seeking to block the subpoenas. They argued that demands for records were extreme and unjustified, and that the president had an “absolute immunity” from investigators who sought personal and confidential information.

They lost in lower courts. Federal judges and the U.S. appeals courts in Washington and New York ruled the president, like other citizens, had no right to defy subpoenas for records issued by Congress or a grand jury.

In December, the Supreme Court agreed to hear Trump’s appeals and put the lower court rulings on hold.