D.C. Circuit Judges David Tatel, right, and Sri Srinivasan, left, confer. (Photo: Diego M. Radzinschi)

A federal appeals court weighing President Donald Trump's push to block a U.S. House committee subpoena for financial records from his accounting firm appeared divided Friday over arguments that lawmakers had acted outside the scope of their authority.

Judges Patricia Millett, David Tatel and Neomi Rao of the U.S. Court of Appeals for the D.C. Circuit heard arguments for more than two hours in the court's ceremonial courtroom, where marble statues of Hammurabi, Moses, Solon and Justinian are built into the wall behind the judges' bench.

Millett and Tatel, both appointed by Democratic presidents, expressed skepticism at times over Trump's claim that House lawmakers were out of bounds and lacked certain oversight authority, whereas Rao, who joined the bench in May, raised questions that suggest she might have concerns about the lawfulness of the subpoena.

Tatel pushed back against Trump lawyer William Consovoy's argument that House procedural rules did not permit the subpoena seeking documents from the accounting firm Mazars USA. “Mr. Consovoy, the only question before us is this subpoena,” Tatel said at one point.

“This is just financial disclosure, which presidents for years have been doing,” Tatel told Consovoy. “This subpoena seeks documents regarding the president's financial disclosures.”

During another exchange, Millett, a former Akin Gump Strauss Hauer & Feld partner, questioned how the court would be able to test whether House committee members were “genuine” in their assertion that they need the Trump records as part of an effort to craft legislation. Consovoy, of the Washington boutique Consovoy McCarthy, has challenged the committee's statement that it has a legislative purpose in pursuing Trump's financial records.

In May, U.S. District Judge Amit Mehta in Washington issued a ruling that backed the House subpoena. “To be sure, there are limits on Congress's investigative authority,” Mehta said in his ruling, “[b]ut those limits do not substantially constrain Congress. So long as Congress investigates on a subject matter on which 'legislation could be had,' Congress acts as contemplated by Article I of the Constitution.”

Douglas Letter, the House general counsel, on Friday urged the D.C. Circuit to uphold Mehta's decision, which he called “extremely strong.” Letter said any legislation Congress might pass after receiving the Trump accounting records from Mazars would not inherently intrude on the separation of powers between lawmakers and the office of the president.

The House subpoena, Letter argued, “would have very little impact, if at all, on how the president carries out his functions.”

Rao pressed Letter, without success, to provide historical examples where the House had passed a resolution or full vote permitting a committee to pursue a subpoena targeting a president.

“Would you say this is unprecedented, then?” Rao asked during one exchange, suggesting that the subpoena raises constitutional concerns. Letter said the House largely operates now by committees and noted that the subpoena targets Mazars, not the president. “He put himself in this position—and we can't forget that,” Letter argued, noting Trump's refusal to divest interests in various business entities before he was sworn in as president.

Neomi Rao testifies before the Senate Judiciary Committee. Credit: Diego M. Radzinschi / NLJ

Mazars, represented by lawyers from the law firm Blank Rome, has not taken a public position on the House subpoena.

Friday's arguments came as Trump and his business entities face mounting pressure from House Democrats, who are pursuing other subpoenas and court cases that could expose financial records the president has long fought to shield from scrutiny. The D.C. Circuit's ruling will almost assuredly reach the U.S. Supreme Court, perhaps even before the start of the new term in October.

The appeals court is expected soon to decide whether congressional Democrats can proceed with a suit that claims Trump violated the Constitution's restrictions against presidents accepting gifts and money from foreign and domestic sources. Another appeals court ruled this week in Trump's favor in a related suit. The Richmond-based Fourth Circuit said the complaint, filed by the attorneys general for Maryland the District of Columbia, should be dismissed.

Separately, a new case in Washington's federal trial court seeks several years' worth of Trump's tax returns. Justice Department lawyers have defied statutory language that requires the IRS to furnish private tax returns on request by the House Ways and Means Committee. The House's suit, seeking to enforce a subpoena, is pending before U.S. District Judge Trevor McFadden.

Next month, the U.S. Court of Appeals for the Second Circuit will hear a subpoena challenge confronting other Trump business records. In that litigation, House committees are seeking financial records from Capital One and Deutsche Bank, which has long had a business relationship with the New York real estate tycoon and whose lending practices are more broadly facing scrutiny.

Deutsche Bank and Capital One, like Mazars, have not taken a public position on the subpoena. Lawyers from Akin Gump represent Deutsche Bank, and Murphy & McGonigle represents Capital One.

 

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