10 July 2020

Mixed Victory

The Supreme Court issued their ruling yesterday in Donald Trump's various tax cases. In sum, it was a short-term victory for Trump but a major loss for him in the longer run.

In all cases, the Supreme Court soundly rejected Trump's claims that he had sweeping immunity from criminal and congressional investigations while in office. As former Acting Solicitor General Neal Katyal said yesterday, "If I’m Donald Trump, I am scared right now" (details here).

In what could be called the New York tax return case, the Manhattan District Attorney has been investigating whether the law was broken when Trump paid hush money to two women with whom he had affairs. The DA suspects Trump falsified business records to cover his tracks and wants his tax returns for grand jury review to see if any crimes have been committed.

Trump claimed as President he could not be subject to such investigations and that he therefore could not be subpoenaed. A 7-2 majority of Supreme Court justices said, in so many words, his claim is garbage and that he can both investigated and subpoenaed like an ordinary citizen.

The matter was referred back to the lower court for further proceedings and the grand jury will now reissue the subpoenas. Here is where it's a short-term win for Trump, simply because he can now run down the clock fighting those subpoenas like any ordinary private citizen . But the law is solidly against Trump and the grand jury could end up with the tax returns before the election where they will be under seal, meaning they will not be released to the public.

But here's the kicker: if Trump fails in his efforts to block the subpoenas on what we could call "ordinary citizen" grounds, then there is a chance, albeit probably a small one, that the District Attorney could indict Trump before the election. Talk about an October Surprise.

In Trump's other tax cases, where he's been fighting congressional subpoenas, the high court again rejected his arguments that he's immune from scrutiny. But the Supremes sent that case back to a lower court for further review of separation of powers consideration, so the matter was essentially a draw.

These congressional cases will almost certainly not be resolved before the election, so in that sense, it's a short-term victory for Trump in that he can play the delay game again. In the longer run, however, he can no longer rely on his special immunity dodge.

In all candor, this is about the best that could be expected for these cases. I think some people unreasonably believed if the court ruled against Trump, the tax returns would suddenly be available to the public within days. That was never the case.

What was decided and, again, in a big loss for Trump, is that he does not have the special immunity that he claimed. And in a delicious twist to the story, the two Supreme Court justices whom Trump nominated ruled against him in the district attorney's case.

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