Supreme Court hears arguments on Trump finances

Melissa Macaya, CNN

Updated 4:26 p.m. ET, May 12, 2020
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12:08 p.m. ET, May 12, 2020

Why subpoenas may pose the biggest legal threat to Trump's company

From CNN’s Kara Scannell

Trump Tower in Manhattan is the headquarters of the Trump Organization.
Trump Tower in Manhattan is the headquarters of the Trump Organization. Jürgen Schwenkenbecher/Picture-Alliance/DPA/AP

The Supreme Court is hearing arguments now on the Donald J. Trump v. Cyrus Vance case. The case concerns Trump's broad claims of immunity, in a dispute arising from a New York prosecutor's subpoena to Trump's accounting firm for his tax returns and other financial documents. 

The Manhattan District Attorney's office issued grand jury subpoenas to Trump’s accounting firm, Mazars USA, and Deutsche Bank and Capital One seeking eight years of financial documents and work papers from Trump, his family and the Trump Organization.

Some context: The DA's office is investigating whether the president and the Trump Organization violated state laws in several different ways. The DA is looking at hush money payments made to women alleging affairs with Trump and whether business records filed with the state were falsified and if any tax laws were violated, according to people familiar with the investigation.

The criminal investigation goes beyond those payments, according to prosecutors, who redacted several paragraphs in court filings describing the scope of the inquiry.

According to people familiar with the investigation, prosecutors are also exploring whether the Trump Organization, and any of its officers, mislead tax authorities and lenders about their business. Trump ran the family business until he was sworn into office. Then Trump transferred the leadership to his two sons Donald Trump Jr and Eric Trump.

11:46 a.m. ET, May 12, 2020

Conservative justices point to subpoenas as potential presidential harassment 

From CNN’s Katelyn Polantz

Four Supreme Court justices — Thomas, Roberts, Kavanaugh and Alito — focused on the potential harassment of the President with a wave of subpoenas.

"One could be manageable. But 100 could be impossible," Justice Clarence Thomas said to House General Counsel Douglas Letter, describing how both houses of Congress and grand juries may be subpoenaing the Presidents' documents all at the same time.

Justice Samuel Alito also scorched Letter with questions over whether the House subpoenas were harassing Trump.Letter answered that the subpoenas went to private third parties, and not to the President himself.

"That's the issue here whether something should be done" to "prevent harassment of the President," Alito said.

The exchanges were notable not only for how much the Republican-appointed justices emphasized a possible need to protect the President-- but also because of how far their approach was from what the court was questioning before today. 

Before the arguments, the court had asked the parties to describe why the court should even be involved in such a political situation.

Raising the question seemed to indicate that the court may have sought an off-ramp.

But the Supreme Court now appears to be grappling directly with how they regulate the subpoenas, or not.

Justice Brett Kavanaugh also mentioned potential harassment of the President, staking out a possibility that the court could use a test for Congressional subpoenas, such as making sure there was a critical need for the information.

Chief Justice Roberts also asked about Congressional subpoenas that may appear to be harassing the President. "How do you measure harassment in a case like that? At some point there's the straw that breaks the camel's back," Thomas said.

11:36 a.m. ET, May 12, 2020

Justice Kagan focuses on Supreme Court’s unprecedented role as referee between House and White House 

From CNN’s Katelyn Polantz

Justice Elena Kagan poses for the official Supreme Court group photo in 2018.
Justice Elena Kagan poses for the official Supreme Court group photo in 2018. J. Scott Applewhite/AP/File

Justice Elena Kagan focused on a key issue explored during today’s arguments: that the Supreme Court has not been put in a position before to referee between a probing House and a recalcitrant White House. 

"We’ve never had to address this issue because Congress and the President have reached accommodations," Justice Kagan said, before noting the President's attorneys were asking the court to "put a 10-ton" weight on the scale against Congress and in favor of the presidency. 

She's not the only one to raise the historical importance of the situation — other justices this morning and attorneys have been noting how unprecedented this case is. 

But a Trump-appointed judge, Trevor McFadden of the DC District Court, hearing yet another Trump tax document subpoena case last year, pointed out what might be the most extraordinary part of the standoff:

"Congress has been sending subpoenas your way for hundreds of years," McFadden asked a government lawyer in a case over the House's ability to get Trump's tax returns from the IRS. "Are you familiar with a case where the Executive Branch has said, 'No'?"

 Later, McFadden returned to the chicken-and-egg question--was Congress at fault for its subpoena, or was it the executive branch's refusal creating the problem?

"Congress has been subpoenaing for a long time, and the Executive has been complying for a long time. And isn't maybe the difference that -- is this the first time the Executive Branch isn't complying?" 

He noted historically Congress and presidents have always negotiated to avoid court historically, a point the justices have brought up several times this morning.

11:14 a.m. ET, May 12, 2020

Justice Thomas echoes dissent by Trump-appointed judge

From CNN’s Marshall Cohen  

Justice Clarence Thomas poses for the official Supreme Court group photo in 2018.
Justice Clarence Thomas poses for the official Supreme Court group photo in 2018. Mandel Ngan/AFP/Getty Images/File

Justice Clarence Thomas has seemingly picked up on arguments from his former clerk-turned-judge Neomi Rao, who wrote a dissenting opinion against the financial subpoenas last year when the DC Circuit Court of Appeals upheld one of the subpoenas in a divided ruling.

“In the DC Circuit opinion, it says that this sort of information or subpoena should be requested under the impeachment power,” Thomas said asked during his first round of questions. “What's the line between a subpoena, a legislative subpoena and an impeachment-related subpoena?”

Later on, Thomas raised the possibility that House Democrats have used “pretextual” reasons to issue the subpoenas. They say the subpoenas to Trump’s accountant are needed to review his tax records, conduct oversight, and craft legislation about presidential conflicts of interest.

Thomas didn’t mention Rao by name, but this echoes her dissent from October. Rao disagreed with the majority on the appeals panel, and said Democrats were trying to “turn Congress into a roving inquisition” of the Executive Branch by using legislative subpoenas to investigate Trump.

Rao is one of Trump’s most controversial judicial appointees and was forced to apologize for her past writings sexual assault, where she said women should change their behavior to avoid getting date-raped. She was confirmed by the Senate on a party-line vote in March 2019.

Arguing on behalf of the Justice Department, Deputy Solicitor General Jeffrey Wall responded by saying that the House rationale was “paper-thin” and that the subpoena was designed to find “wrongdoing” by Trump, which is more about removing him from office than writing new laws.

Democratic-appointed justices later rebutted Thomas’ line of questioning by noting that congressional committees often conduct fact-finding inquiries as part of the law-writing process.

11:06 a.m. ET, May 12, 2020

Justice Kagan: Trump wants a "10-ton weight" between President and House

From CNN’s Dan Berman

Justice Elana Kagan testifies during a House Appropriations subcommittee hearing in 2019.
Justice Elana Kagan testifies during a House Appropriations subcommittee hearing in 2019. Chip Somodevilla/Getty Images/File

Justice Elena Kagan noted that in previous conflicts like this one between a President and Congress over documents, there has been some kind of agreement and they were able to work things out.That’s not happening here, she told Trump attorney Patrick Strawbridge:

“You're asking us to do is to put a kind of 10 ton weight on the scales between the President and Congress and essentially to make it impossible to perform oversight and to carry out its functions where the president is concerned.”

The president's stance: Trump has argued that Congress is on a fishing expedition and their efforts have no legislative purpose. The House says it’s conducting oversight and fact-finding in advance of possible future legislation.

11:09 a.m. ET, May 12, 2020

Justice Ginsburg asks: Why should Trump be shielded?

From CNN's Joan Biskupic

Justice Ruth Bader Ginsburg participates in a discussion at the Georgetown University Law Center on February 10.
Justice Ruth Bader Ginsburg participates in a discussion at the Georgetown University Law Center on February 10. Sarah Silbiger/Getty Images/File

Justice Ruth Bader Ginsburg and the other liberals noted that President Bill Clinton and other presidents before him have turned over materials sought by Congress. 

Why would President Trump be shielded in a way that his predecessors were not, they asked? Their questions invoked controversies and familiar names from the Watergate era, Whitewater and Paula Jones.

Ginsburg also rebuffed deputy Solicitor General Jeff Wall as he argued that Congress was seeking financial papers as an investigatory matter, not a valid legislative one, as the committees have asserted. Congress must investigate, she said, before it legislates. 

That might be true, Wall responded, but when the President is involved, a higher standard for subpoena exists because of the possibility a president would be harassed and distracted from his work.

10:42 a.m. ET, May 12, 2020

Liberal justices push back on Trump lawyer's defense to block subpoenas

From CNN’s Ariane De Vogue

Liberal justices pounced on a lawyer for President Trump, suggesting that the Supreme Court has long upheld Congress’ power to investigate. 

Justice Ruth Bader Ginsburg noted past investigations concerning Watergate, Whitewater and Paula Jones. “How do you distinguish all of those cases,” she asked a lawyer for Trump. Ginsburg noted that before Congress can legislate it must investigate.

Justice Sonia Sotomayor saw a separation of powers problem if the Courts were to trim Congress’ authority.

Justice Elena Kagan noted pointedly that “this isn’t the first conflict between Congress and the President,” she said.

Some context: Chief Justice John Roberts was looking to see if the House had any power to subpoena personal records.

“It sounds like at the end of the day this is just another case where the courts are balancing the competing interests on either side, is that the wrong way to look at it,” Roberts said. 

But conservative Justice Clarence Thomas seemed to suggest that the subpoenas strayed from legitimate legislative purposes, and instead represented an attempt at law enforcement that would be inappropriate.

10:36 a.m. ET, May 12, 2020

Chief Justice Roberts kicks off arguments by trying to cool things down

From CNN's Joan Biskupic

Chief Justice John Roberts is seen before the start of President Donald Trump's State of the Union speech on February 4.
Chief Justice John Roberts is seen before the start of President Donald Trump's State of the Union speech on February 4. Leah Millis/Pool/Getty Images/File

For his first question, Chief Justice John Roberts showed an immediate interest in trying to bridge interests between the two sides and to turn what truly is a momentous case into an ordinary one.

Roberts wanted Trump attorney Patrick Strawbridge to pull back from an “absolute” hard-line position. Roberts questioned whether, at the end of the day, this would be a simple balancing of competing interests.

What the case is about: President Trump's private lawyers are asking the Supreme Court to block House subpoenas to the President's accounting firm and banks for years of financial records. The House argues it seeks the records from Mazars USA, Deutsche Bank and Capital One for the legitimate purpose of investigating whether Congress should amend federal conflict-of-interest and financial disclosure laws, as well as laws regulating banks. 

Lawyers for the House stress that the subpoenas are directed at third parties, not the President, and that the documents are unrelated to his official duties.

10:01 a.m. ET, May 12, 2020

"Oyez! Oyez! Oyez!" The Supreme Court is now live

From CNN’s Ariane de Vogue

US Supreme Court Marshal Pamela Talkin listens during a House Appropriations subcommittee hearing in 2019.
US Supreme Court Marshal Pamela Talkin listens during a House Appropriations subcommittee hearing in 2019. Al Drago/Bloomberg/Getty Images/File

The Marshal of the Court, Pamela Talkin, banged the gavel and introduced the justices with the traditional cry of: "Oyez! Oyez! Oyez!" Over the phone, the "cry" was slightly modified. 

Talkin said in part: "All persons having business before the Honorable, the Supreme Court of the United States, are admonished to draw near and give their attention, for the court is now sitting. God save the United States and this Honorable Court."

Chief Justice John Roberts will now announce the case and Trump attorney Patrick Strawbridge has a two minute introduction. 

What this moment means: It's a part of the proceedings that often serves to mark the court's respect for history and tradition just before it shapes new precedent.