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Court deals a huge blow to Trump’s attempts to hide the mysterious sources of his income

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David Cay Johnston
David Cay Johnston

The public is one giant step closer to learning about the mysterious sources of Donald Trump’s income.

A federal appeals court ruling on Monday that Donald Trump’s accountants must turn over his tax returns and business records to Manhattan prosecutors is likely to stand despite a promised appeal to the U.S. Supreme Court. But it may be months before the public sees even references to what is in those eight years of records.

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Beyond that, Trump could have a serious problem that few know about once a Manhattan grand jury gets the documents, as we shall see.

What may turn out to be a big problem for Trump is that he has a long and well-documented history of hiding records, lying on government documents and using two sets of records with different agencies.

The 2nd U.S. Court of Appeals, in a narrow, but the important decision on Monday held that any immunity or privilege Trump has as president has no relevance in the state criminal court proceedings. It also noted that the subpoena was not to Trump, but to his accountants.

Jay Sekulow, Trump’s lawyer in the criminal case, announced that the decision would be appealed to the U.S. Supreme Court. Sekulow said, “the constitutional issues are significant.”

Sekulow didn’t cite any specifics and I, along with others who watchdog Trump and know the law, don’t see such issues. The easiest and most likely course for the Supreme Court is to decline to hear an appeal.

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Accountants Will Comply

Mazars USA, the accounting firm holding the records, has said it will comply with the Manhattan subpoena if it is found to be valid.

Trump has asserted that as president he is immune from investigation by Congress or anyone else. Despite his withholding and destroying records from Congress, Trump claimed last May that “I am the most transparent president” ever.

The appeals court held that  after “reviewing historical and legal precedent, we conclude only that presidential immunity does not bar the enforcement of a state grand jury subpoena directing a third party to produce non‐privileged material, even when the subject matter under investigation pertains to the President.”

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The three-judge panel anticipated a claim that defending himself in a criminal case, should a grand jury hand up an indictment, was not relevant to the subpoena for documents.

“Even assuming, without deciding, that a formal criminal charge against the President carries a stigma too great for the Constitution to tolerate, we cannot conclude that mere investigation is so debilitating,” the judges ruled.

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No Basis for Blocking Subpoena

Among many court decisions and policies indicating Trump has no basis for trying to block the Mazars subpoena is a 1988 Justice Department memo. It noted that “it has been the rule since the Presidency of Thomas Jefferson that a judicial subpoena in a criminal case may be issued to the President, and any challenge to the subpoena must be based on the nature of the information sought rather than any immunity from the process belonging to the President.”

Trump has many reasons to want to keep his tax returns and business records from Manhattan prosecutors. The most important may turn out to be whether what Mazars has in its files and what Trump sent to the government match.

The grand jury impaneled by Cyrus Vance Jr., the Manhattan district attorney, can access Trump’s state tax records. New York tax returns are almost identical to the federal returns that New Yorkers file.

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What may turn out to be a big problem for Trump is that he has a long and well-documented history of hiding records, lying on government documents and using two sets of records with different agencies. In addition to what I documented in The Making of Donald Trump, other reporters including the late Wayne Barrett, Tim O’Brien and Harry Hurt III have dug out examples.

Most damning was a 1990s trial over Trump’s 1984 income taxes, one of two such tax fraud trials he lost.

The key witness in one of those civil fraud cases was Jack Mitnick, who prepared the tax returns for Trump and his father Fred for decades. He gave damning testimony against his client.

Shown the tax return introduced into evidence, the judge asked Mitnick to authenticate the document. Mitnick testified that his signature was on the return as the preparer, but said “we did not prepare” that tax return, referring to his firm.

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Significantly, the tax return that Trump had filed was not an original but a photocopy.  In tax world testimony like that is known as a “badge of fraud.”

Trump’s claim that as president he is immune from investigation even if he were to shoot someone, as his lawyers argued in court, has no basis in law.

No Absolute Executive Privilege

In 1974 the Supreme Court held unanimously that President Richard Nixon did not have an absolute, unqualified executive privilege allowing him to withhold documents from Congress.

Chief Justice Warren Burger, a conservative Republican, wrote the 1974 opinion:

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“We conclude that when the ground for asserting privilege as to subpoenaed materials sought for use in a criminal trial is based only on the generalized interest in confidentiality, it cannot prevail over the fundamental demands of due process of law in the fair administration of criminal justice. The generalized assertion of privilege must yield to the demonstrated, specific need for evidence in a pending criminal trial.”

The Supreme Court also held that President Bill Clinton had to comply with subpoenas in civil litigation while serving as president. In addition, a 2000 Justice Department memo, at footnote 36, states that while a sitting President may not be indicted at the federal level, nothing bars a criminal investigation by prosecutors or any investigations by Congress.

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