William S. Consovoy. Photo: Diego M. Radzinschi/ALM

The U.S. Supreme Court, handing President Donald Trump an early victory in his quest to keep his financial records secret, on Monday blocked enforcement of a U.S. House committee subpoena that two lower courts had said was lawfully issued to the president's accounting firm Mazars USA.

The ruling marked the first time the high court squarely addressed Trump's financial records, and the order provides an early indication of how the justices could view the major separation-of-powers issue at the center of the dispute and others that are are certain to reach the court soon.

The unsigned order, issued Monday evening, put the House Oversight Committee's subpoena on hold until Trump's lawyers file a petition challenging the merits of a federal appellate court ruling that upheld the subpoena against Mazars. The court set a noon Dec. 5 deadline for the filing of a petition.

"Should the petition for a writ of certiorari be denied, this stay shall terminate automatically," the court said in its order. "In the event the petition for a writ of certiorari is granted, the stay shall terminate upon the issuance of the judgment of this court."

Five justices are needed to grant an emergency application asking the court to put on hold a lower court ruling. Granting such a request doesn't automatically mean the court will agree to take up the merits of the dispute, which, instead, only takes the votes of four justices.

Douglas Letter, general counsel to the U.S. House of Representatives. Photo: Jason Doiy/ALM

In granting the stay, the Supreme Court in effect rejected arguments by House general counsel Douglas Letter that there was no basis for additional delay in enforcing the subpoena, which had been upheld by the U.S. Court of Appeals for the D.C. Circuit. Letter is assisted by lawyers from the Washington firm Robbins, Russell, Englert, Orseck, Untereiner & Sauber.

Letter, in his response to Trump's push for an emergency hold, had argued that two levels of the federal judiciary had upheld that subpoena as valid and enforceable under Supreme Court precedents. "Each concluded that the committee issued the subpoena in furtherance of a valid legislative purpose and that the subpoena seeks documents relevant to a subject about which Congress could enact legislation," Letter wrote.

But Trump's lawyer, Consovoy McCarthy partner William Consovoy, told the justices in a court filing that the committee's investigation of Trump for wrongdoing was not a legitimate legislative purpose but instead was "an attempt to exercise a law-enforcement power beyond Congress's legislative purview."

Consovoy warned, "Given the temptation to dig up dirt on political rivals, intrusive subpoenas into personal lives of presidents will become our new normal in times of divided government—no matter which party is in power."

The subpoena stemmed from testimony by Trump former attorney Michael Cohen during the House committee's hearing in February. Cohen alleged that Trump had inflated and deflated  his assets on personal financial statements to obtain a bank loan and to reduce his New York real estate taxes and insurance premiums.

In the D.C. Circuit, two Trump-appointed judges—Neomi Rao and Gregory Katsas—had urged their colleagues to review a panel decision, issued in October, that said Trump's accounting firm must respond to the House subpoena for eight years of information.

The panel, with Rao dissenting, said the House had a legitimate legislative purpose in seeking the tax records because "it seeks information important to determining the fitness of legislation to address potential problems within the executive branch and the electoral system; it does not seek to determine the president's fitness for office."

Trump's emergency application to block the House subpoena arrived at the high court less than 24 hours after Trump's personal lawyer, Jay Alan Sekulow, along with Consovoy, filed a petition for review challenging a Second Circuit decision upholding a subpoena from Manhattan district attorney Cyrus Vance Jr. for the president's financial records in connection with a state grand jury investigation. That subpoena was also issued to Mazars.

The grand jury is examining allegations that the president paid hush money to two women through his former lawyer Cohen prior to the 2016 election. The appellate court rejected Trump's argument that he enjoyed absolute immunity.

The Trump administration's Justice Department filed an amicus brief arguing that the Second Circuit was wrong to treat a subpoena for a president's personal records no differently than any other subpoena.

"The decision below resolves grave and important questions regarding Article II and the Supremacy Clause" wrote U.S. Solicitor General Noel Francisco in urging the justices to grant review. "It upholds a state criminal subpoena that has no historical precedent. And it poses a serious threat to the autonomy of the Office of the President of the United States."

 

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