Former president Donald Trump has offered to give House Democrats a peek at financial statements related to his complex business empire from before his 2016 presidential bid and eight years of contracts with his accounting firm, but refused to divulge more sensitive source data or internal communications, his lawyers told a federal judge Thursday.
The disclosure of the offer, made in late June in unsuccessful court-ordered mediation, came as Trump urged a federal judge in Washington to end a stalemate and toss out a 2019 House subpoena for eight years of his financial records, calling the congressional demand unconstitutional and unenforceable.
“The Committee on Oversight and Reform doesn’t need a decade’s worth of the former president’s sensitive financial information to legislate new financial regulations for all future presidents,” attorney Cameron T. Norris argued., saying lawmakers have plenty of power to gather data from other sources to overhaul disclosure rules.
Trump is no longer president, but the threat to the separation-of-powers if the court rules otherwise remains, Norris said.
Enforcing the subpoena could unconstitutionally weaken every future president in dealings with Congress, raising the prospect that once he or she leaves office, lawmakers could compel and post for the world to see their most sensitive data, Norris said.
The fight over the subpoena for Trump’s records from 2011 to 2018 from accounting firm Mazars USA reached the Supreme Court last year, which ruled that congressional subpoenas seeking a president’s information must be “no broader than reasonably necessary” and returned the question to lower courts to work out the standard.
The battle is just one front in clashes over Trump’s tax information. After a separate Supreme Court ruling in March, Mazars turned over related documents to Manhattan District Attorney Cyrus R. Vance Jr. (D), whose prosecutors on Thursday charged the Trump Organization with a 15-year “scheme to defraud” the government and its chief financial officer with grand larceny and tax fraud.
House Democrats say they also need the information to amend financial disclosure and conflict-of-interest laws, saying Trump’s presidency posed historic threats of corruption. They cited the complex structure of his business, his failure to remove himself from management, refusal to release tax returns unlike his predecessors, and allegations by investigators that he gave inaccurate tax and other financial information.
The House sought the records after former Trump attorney Michael Cohen testified to Congress that Trump inflated and deflated certain assets on financial statements between 2011 and 2013 in part to reduce his real estate taxes.
Douglas Letter, general counsel for House Speaker Nancy Pelosi (D-Calif.), said Trump lawyers’ in mediation “never offered to produce a single document.” Instead they proposed that a handful of committee aides and lawmakers view a small sample of records in private; take notes instead of copy or photograph them; and keep the information confidential to the committee, Letter said. He called the limitations on reviewing complex and voluminous financial data “ridiculous.”
Trump lawyers accused the House of rushing to declare an impasse and asking U.S. District Judge Amit P. Mehta to rule summarily in its favor. But Letter said that Trump had run out the clock on one, two-year term of Congress, and could do so again “if we keep having … talks that go absolutely nowhere.”
Letter urged Mehta to respect the legislative branch’s powers, not only the president’s, and enforce the subpoena without looking into whether it was using it as a political weapon under the guise of legislation.
Mehta did not appear convinced, warning Letter that the Supreme Court has ruled Congress may not use presidents as “a case study” for general legislation.
“It seems to me Congress can turn to experts or to other people who have engaged in financial fraud,” “Why couldn’t you learn what you feel you have to learn by using somebody else’s financial documents,” Mehta said.
Letter responded that Trump created a singular “ethical crisis” that tested constitutional limits, and no fewer than eight related bills are pending this Congress.
“We need to study that … We need to know exactly how far we should go or not go with respect to disclosure requirements,” Letter said. “And that depends on our ability to find out how does someone like former president Trump, was he hiding things? How did he go about it? What was the extent of it, and can we fix it?”
After Mehta noted the Supreme Court emphasized that the legislative and executive branches should resolve disputes through negotiation or “accommodations” rather than through the courts, Letter said former presidents have turned over financial information. Letter said Richard Nixon released tax records about his children, Jimmy Carter about his business and Bill Clinton legal billing records of his wife, Hillary.
Mehta still sounded skeptical.
“Nothing is going to stop a future Congress from saying a future president has done something unprecedented, and seek an exiting president’s personal documents,” said the judge.
Mehta asked if the House could narrow the subpoena — such as limiting it to records related to Trump’s ongoing voluntary lease with the federal government to operate his Trump International Hotel in Washington D.C., barring disclosure of compelled records, or requiring further mediation.
Regardless, he said “I am still not clear on what my authority is” if talks break down. “Is there anything I can do about that?” He added: ““I can’t cajole or jawbone” the sides.
Mehta promised to “work very hard to get everyone an expedited decision,” saying he knew any ruling would be appealed. “We know this is not the last stop. We’ll get it out in short order.”
By Spencer Hsu Spencer S. Hsu is an investigative reporter, two-time Pulitzer finalist and national Emmy Award nominee. Hsu has covered homeland security, immigration, Virginia politics and Congress. Twitter
Trump exposed as prosecutors make first move in high-stakes chess game The charges against Allen Weisselberg might seem small fry, but the threat to people higher up the food chain is mounting
Michael Cohen sounded giddy on the latest episode of his podcast, Mea Culpa. Allen Weisselberg, a key lieutenant to Donald Trump, Cohen’s former boss, was about to be charged alongside Trump’s company with tax fraud.
“This case is being prosecuted like a mob case. And that means they are starting at the bottom of the tree, and working their way up, by getting the smaller fish to flip with pressure on people like Weisselberg to rat on their former boss of bosses!” Cohen said, gleefully mixing his metaphors.
Cohen knows this score. Trump has been under investigation by New York’s top prosecutors for three years – in large part thanks to Cohen, once his trusted lawyer. Cohen – who once said he would “take a bullet” for Trump – turned on the former president as he was sentenced to 36 months in prison for crimes including facilitating illegal payments to silence two women who allegedly had sex with Trump.
On the surface, the Weisselberg charges did seem like “smaller fish”. In an interview with Politico, Trump’s lawyer Ronald Fischetti said: “It’s like the Shakespeare play Much Ado About Nothing. This is so small that I can’t believe I’m going to have to try a case like this.”
But surfaces can be deceptive.
After three years of subpoenas, supreme court hearings and existential legal rows about the legality of charging a president of the United States with wrongdoing, New York’s fearsome prosecutorial team have charged a little-known 73-year-old accountant with defrauding taxpayers of $1.7m over 15 years. That is big money for most people, but not an amount that would worry Trump, who Forbes calculates is worth $2.4bn.
Downplaying the significance of this week’s indictment would, however, be a mistake. Alongside Weisselberg, Manhattan district attorney Cyrus Vance, and the New York state attorney general Letitia James also charged the Trump Organization with tax fraud, the start of a process that could crack the secretive Trump empire wide open.
The salvo in the long-brewing legal battle will, at the very least, wrap up Trump for years in legal woes, and at worst could destroy his family business and put not just Weisselberg but the Trump family members who run his business and Trump himself in the dock.
The indictment would “raise the unprecedented prospect of a former president having to defend the company he founded and has run for decades against accusations of criminal behavior,” Cohen cooed.
No longer insulated by claims of presidential protections, Trump faces a flotilla of legal actions. Alongside the charges brought this week against Weisselberg and the Trump Organization, Vance and James are investigating questionable payments to former Trump sex partners and whether the value of real estate in his company’s portfolio was manipulated to defraud insurance companies and banks and to generate unlawful tax breaks.
In some ways, the charges against Weisselberg give us a glimpse of the bumpy road ahead for the former president.
“This has been framed as a ‘fringe benefits’ issue,’” said University of Chicago Law School professor Daniel Hemel, an expert on taxation and federal courts. “Another way of looking at it is that the Trump Organization was paying its CFO [chief financial officer] under the table.”
Such a move – if proven – would be an extraordinary thing for a company the size of Trump’s to have done, and will likely lay the groundwork for what’s ahead.
Ironically, one parallel case Hemel pointed to was the prosecution of Leona Helmsley, the late Manhattan hotel empress and long-time sparring partner of Donald Trump.
Helmsley v Trump was a Manhattan feud for the ages. Trump was an admirer of Harry Helmsley, the billionaire property tycoon who once owned the Empire State Building. Leona Helmsley not so much. He once called her a “disgrace to humanity”. Helmsley simply said: “I hate Donald Trump.”
Leona Helsmley, who was sentenced to four years in jail for tax evasion.
In 1988 the Helmsleys were charged with evading more than $4m in income taxes. In another historical twist, the charges were brought by Rudy Giuliani, then federal prosecutor and more recently one of Trump’s staunchest allies.
The following year, Helmsley – her husband was too sick to stand trial – was sentenced to four years in jail after being found guilty on 33 counts of tax evasion including fraudulently charging a $1m marble dance floor for their private mansion to their hotel and real-estate empire.
“These are things that are unequivocally not business expenses,” said Hemel. Even Trump agreed, saying shortly after Leona Helmsley’s death that it was “foolish” for her husband to have committed tax evasion “because he was such a rich man”.
Given that sentiment, why would the Trump Organization – allegedly – cook the books for such relatively small sums?
The coming cases may provide an answer. Both Weisselberg and the company deny any wrongdoing, and have said they will fight the case in court, but the cases will blow open Trump’s finances, something he has fought hard to prevent, even going as far as to go against recent presidential precedent and refusing to release his tax returns.
But while there are many similarities between the polarizing property plutocrats Trump and Helmsley, Trump’s case is in many ways unusual.
First, said Hemel, it’s highly unusual a business as large as Trump’s would engage in these kinds of alleged tax frauds. With its army of lawyers and accountants, it should have been easy enough for his advisers to find perfectly legal ways to avoid paying taxes – just as ProPublica’s revelations have shown his billionaire peers have done.
Second, when a tax-avoidance scheme is exposed as potentially open to prosecution, it is highly unusual for businesses to fight those charges. The normal course of action is to apologize and pay up.
Add on that in this case the man at the top is a former president of the United States and: “Everything about this case is unusual and everything about it is political,” said Hemel. “That doesn’t mean the district attorney is wrong to go after it.”
In the high-stakes chess game Vance and James are now playing against Trump, this is an opening move that immediately threatens one of their opponent’s key pieces.
Weisselberg has worked for the Trump family for close to 50 years. Outside the family, and arguably inside, no one knows how the Trump business really operates better than him. His two sons have worked with Trump. Jennifer Weisselberg, one of his son’s ex-wives, is a key witness for the prosecution and has handed over what her lawyer, Duncan Levin, describes as 10 banker’s boxes of evidence to the authorities.
The pressure is on for Weisselberg to flip but his indictment also puts pressure on Trump insiders lower down the tree.
Robert Mintz, a former federal organized crime prosecutor and now partner at law firm McCarter & English, said: “Complex white-collar fraud cases are very difficult to prove, and generally require more than financial records to demonstrate clear evidence of criminality. Prosecutors typically build these cases with the benefit of a cooperating witness who can walk them through the documents and add an insider’s perspective to the conspiracy.”
As Cohen pointed out this week Trump can no longer hold out the promise of a presidential pardon to his allies. Facing potential ruin and jail time, will Weisselberg stay true? And as the charges keep coming, where will others decide their loyalty lies?
“Loyalty is hard to maintain when it can put you in jail,” said Hemel.
A blockbuster report from the Brookings Institute this week concluded that former President Donald Trump is at "serious" risk of indictment for a number of alleged crimes, including tax dodging, falsifying records and a variety of business-related fraud.
The 60-page report, released Monday, came just days before criminal indictments against Trump Organization and its longtime finance chief were unsealed Thursday. Both the company and CFO Allen Weisselberg were accused of staging a 15-year-long scheme to avoid payroll taxes for top executives through the use of off-the-books corporate benefits.
Brookings describes the report's four authors as "experts with a broad array of backgrounds as scholars, practitioners, former prosecutors, and defense lawyers, who have served under state or federal administrations headed by leaders of both political parties, and who have substantial relevant experience with the particular investigating offices here." They include Georgetown Law School professor and Deputy Attorney General under George H.W. Bush, Donald Ayer; former federal prosecutor Danya Perry; experienced criminal litigator John Cuti and senior Brookings fellow Norman Eisen, who served as counsel to the U.S. House Judiciary Committee during the process of President Trump's first impeachment trial.
To reach their conclusions, the authors write that they consulted "court filings, media reports, congressional transcripts, and other sources," which were public but had never been compiled in the same place.
In particular, the report finds that Trump's potential criminal liability stems from alleged improperly recorded "business" expenses, including a $130,000 payout to Trump's former personal attorney Michael Cohen, as reimbursement for a hush-money payment to adult film star Stephanie Clifford, a.k.a "Stormy Daniels." The tax-free corporate benefits given to top Trump Organization officials also figure heavily into the analysis of the former commander-in-chief's criminal liability, the authors conclude.
The report identifies five areas where Trump is most at risk of prosecution:
1. Falsifying business records 2. Tax Fraud 3. Insurance Fraud 4. "Scheme to defraud" 5. Enterprise Fraud
Trump Report Final Uploaded byBrett Bachman Description:A Brookings Institute report, which found former President Donald Trump is at "serious" risk of indictment for a number of alleged crimes.Full description
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