A quick update on developments in Manhattan District attorney Cyrus Vance’s investigation, in which the DA has subpoenaed years of President Trump’s financial records (including tax information) from his accountant, Mazars.
The DA’s office has just agreed to forbear from any effort to enforce the subpoena until after the Second Circuit federal appeals court has a chance to review the president’s motion to stay the latest ruling he just lost. At the end of last week, Judge Victor Marrero of the Southern District of New York (SDNY) issued a lengthy opinion denying Trump’s motion to quash the subpoena.
Before I go on with that, let’s back up to how we got here, because I believe the DA’s grand jury investigation has been widely misinterpreted.
The common assumption has been that Vance is focused on the hush money payments to the two women who claim to have had trysts with Donald Trump about a decade before he ran for office. Of these, the Stephanie Clifford (a.k.a Stormy Daniels) transaction would presumably be of more interest to the DA because it more directly involves the Trump Organization. On that deal, Michael Cohen (the now-convicted former lawyer and self-described “fixer” for Trump) laid out the payment and was reimbursed by the Trump Organization, and there are questions about whether the business properly accounted for the payments under New York law.
To be clear, I am not saying a crime was committed — I have no idea. I am just saying the DA’s interest in and jurisdiction over that transaction is easy to grasp. By contrast, the Karen McDougal transaction involved the purchase of her story by American Media Inc. (owner of National Enquirer), with no reimbursement by the president or his business conglomerate.
Clearly, though, the DA is interested in much more than hush-money payments. As Rich and I have discussed a couple of times on the podcast, in 2018, the New York Times published a blockbuster 13,000-word report, alleging that the organization founded by the president’s father, Fred Trump, has a long history of suspect tax, banking, and insurance arrangements. These are said to include exaggerations (in both directions) about Donald Trump’s assets for tax and other purposes. The Times report reads like a memo to guide investigators and prosecutors in probing the now-president and his private business activities. (I’d state the caveat that much of what is recounted, even if true and provable, is apt to be outside the applicable statutes of limitations.)
Plainly, Vance picked up this ball and has been running with it. As the Times reported three weeks ago, the DA hinted in the proceedings before Judge Marrero that he is looking into possible bank and insurance fraud. Further, Vance’s office indicated that public news reports involving “possibly extensive and protracted criminal conduct at the Trump Organization” were a salient part of the grand jury inquiry.
It has been a years-long slog, though, because the president went to federal court to try to derail it, on the untenable theory that presidents have immunity from investigative demands for information.
Recall that, after losing rounds in the SDNY and the Second Circuit, Trump appealed to the Supreme Court, which ruled 7–2 against him in July in Trump v. Vance. At the time, I explained that the case might ironically be seen as a win for the president, at least politically. That’s because, while rejecting the sweeping immunity claim, the justices hypothesized that district attorneys (who are elected officials, many in the party in opposition to the president) could theoretically abuse their authority by harassing the president for political gain. The Court thus invited the president to go back to federal court to challenge Vance’s subpoena on grounds other than the rejected immunity claim.
As the Court related, presidents from Jefferson to Clinton have had to comply with criminal and civil subpoenas. Consequently, it seems highly probable that the president will lose in the end. Nevertheless, the reasoning in Chief Justice Roberts’s majority opinion implied that Trump would be able to tie the subpoena up in litigation past Election Day. (I should point out, moreover, that grand jury investigations are secret. Even if the federal courts rapidly ruled against the president, his accountant’s surrender of financial records to the DA and a state grand jury would not result in their becoming public any time soon, if ever — at least assuming that no one violates the law by leaking.)
That brings us back to the present state of play. Trump again challenged Vance’s subpoena in federal court. Judge Marrero wasted little time, denying the challenge in a 103-page opinion issued last Thursday. The SDNY court found that the president’s legal team had just filled new bottles with the same old wine — purporting to raise new abuse-of-power claims, but propping them up with the same facts and arguments Marrero had found unpersuasive when they were raised in the president’s immunity claim. Trump’s private counsel quickly sought a stay, but Marrero obviously thinks the president’s claims are frivolous: He denied the stay and directed that the clerk of the court deem the case closed.
The Trump team indicated that it would appeal to the Second Circuit and ask it to stay Marrero’s ruling in the meantime. To make a long story short, the Second Circuit agreed to entertain the president’s motion to stay enforcement of the subpoena until the appeal is completed, and that motion will be argued next week (on September 1). But the Circuit refused to grant Trump’s request for an administrative stay, which would have barred Vance from attempting to enforce the subpoena in the interim.
On Saturday, however, the DA’s office advised the president’s private counsel that it would delay enforcement of the subpoena until after the Second Circuit issues a decision on Trump’s request for a stay pending appeal — specifically, until the close of business the second calendar day after the court rules. This assurance, the DA states, is intended to give the Second Circuit ample opportunity to consider all the president’s arguments and decide them.
Clearly, the DA is very confident that the Circuit will rule in his favor. Vance wants to build a record that every conceivable Trump challenge is being decided now, so that any future delaying tactics will be given the back of the hand. If, as I expect, the Second Circuit effectively endorses Marrero’s ruling by refusing to grant an injunction against the subpoena’s enforcement, I doubt the Supreme Court would agree to hear the case again.
Bottom line: The DA’s investigation is more extensive — perhaps much more — than many have assumed, and there is a chance that litigation over the subpoena for the president’s private financial records, including tax returns, could be wrapped up in September. That, however, does not mean that there would be public disclosure of the Trump financial records prior to Election Day, let alone that District Attorney Vance would be in a position to bring charges by then — or that he will ever be in such a position.