Trump v. Cummings May Not Be a Slam Dunk for Congress

 

See update below:

On Monday Donald J. Trump (in his personal capacity) and several of his businesses sued Elijah Cummings (chair of the House Committee on Oversight and Reform), the committee’s chief counsel, and Mazars, an accounting firm that had provided services to Trump and his companies. The suit aims to prevent Mazars from complying with a committee subpoena seeking financial statements and similar records related to Trump and his business activities.

Many immediately dismissed this as a nuisance suit designed solely to delay the committee’s investigation. To be honest, this was my first reaction as well. Upon closer inspection, while I still think Trump will lose, the case is somewhat stronger than expected.

While there may well be issues I have not considered, I see the case unfolding in three stages. First, there is the question whether the suit is barred by the Speech or Debate Clause. The answer is yes as to the congressional defendants, but no as to the third party accounting firm. Although the court cannot grant relief against the congressional defendants, it can enjoin Mazars from complying with the congressional subpoena without offending the Speech or Debate Clause. See Eastland v. United States Servicemen’s Fund, 421 U.S. 491, 501 n. 14 (1975) (suggesting a court may inquire into the validity of a subpoena directed to a third party even though a subpoena recipient cannot bring a challenge directly against Congress itself); id. at 516 (“The Speech or Debate Clause cannot be used to avoid meaningful review of constitutional objections to a subpoena simply because the subpoena is served on a third party.”) (Marshall, J., concurring); United States v. AT&T, 567 F.2d 121 (D.C. Cir. 1977) (relying on Justice Marshall’s concurrence in Eastland for the proposition that “the fortuity that documents sought by a congressional subpoena are not in the hands of a party claiming injury from the subpoena should not immunize that subpoena from challenge by that party.”). Nor should it matter if the court dismisses the congressional defendants form the case; indeed, Chairman Cummings may want to remain a party so that he can defend the validity of the subpoena.

The second question is whether Trump has asserted a facially valid objection to the subpoena. In my view, a third party challenge to a congressional subpoena must assert a constitutional privilege or some other constitutionally protected right. Here Trump has asserted neither a constitutional privilege nor a statutory/common law privilege (he cites the duty of accounting firms to maintain confidentiality but stops short of claiming, at least as I read the complaint, a legally cognizable privilege).

Instead, Trump claims that the subpoena is invalid because it lacks a legitimate legislative purpose. This is an objection that can be made by the subpoena recipient, but the absence of such purpose does not violate any constitutionally protected right of a third party who may be inconvenienced by or simply opposed to the congressional investigation. Trump relies on the aforementioned footnote 14 in Eastland for the proposition that a third party can challenge the legitimate legislative purpose of a subpoena, but the Court’s reference there was in the context of a First Amendment challenge to a subpoena. I would not read it as allowing a challenge to the legislative purpose by a third party where that purpose was not relevant to an asserted constitutional privilege. Nonetheless, the Eastland footnote is ambiguous on this point and one cannot rule out the possibility a court could agree with Trump’s interpretation.

If a court is willing to scrutinize the legislative purpose here, that would bring us to the third question in the case. Is there a legitimate legislative purpose for the subpoena at issue? The immediate purpose of the subpoena, of course, is to obtain evidence to support allegations by former Trump lawyer Michael Cohen that Trump engaged in dishonest business practices (such as overstating or understating his net worth) in violation of federal law. But what legislative purpose is served by such information?

There are two arguments I can think of in support of Congress’s interest in obtaining the information in question. One would be that the evidence is potentially relevant to impeachment. This, however, is a weak argument. Even if sleazy and illegal business conduct that precedes the president’s time in office is a basis for impeachment, there is no impeachment inquiry in the House and the oversight committee would not have jurisdiction over such an inquiry anyway.

The stronger argument would be that the information is potentially relevant to matters on which legislation may be had. Because Congress’s authority to legislate is broad, and the courts are deferential to congressional judgments about what information may be needed for legislative purposes, this is normally a fairly easy standard to meet. It would probably be enough if the committee had jurisdiction over the federal laws Trump is alleged to have violated. However, it likely does not.

The committee does have broad jurisdiction over matters relating to federal government personnel and agency management and operations generally. Presumably the committee will be able to identify some link between the matters it is investigating and that jurisdiction, but let’s say that it doesn’t jump off the page. And, as Trump’s lawyers can be expected to stress repeatedly, the Supreme Court  has said “[t]here is no congressional power to expose for the sake of exposure.” Watkins v. United States, 354 U.S. 178, 200 (1957).

In short, I think the committee probably wins this case at stage two. If it gets to stage three, the committee still probably has the edge, but it is not a slam dunk.

The good news is that even if the committee were to lose, it should not be on a ground that would compromise Congress’s ability to get information it truly needs. Moreover, by bringing this matter to court, Trump may have undercut arguments that his administration will want to make in the future against judicial involvement in enforcement of congressional subpoenas. This case therefore may inadvertently assist Congress’s forthcoming efforts to bring civil enforcement actions to secure compliance with its subpoenas and demands for information.

Update: Margaret Taylor (@MargLTaylor) points out that Chairman Cummings described the ostensible purpose of the Mazars subpoena in an April 12, 2019 memorandum to committee members. The memo states the committee “has full authority to investigate whether the President may have engaged in illegal conduct before and during his tenure in office, to determine whether he has undisclosed conflicts of interest that may impair his ability to make impartial policy decisions, to assess whether he is complying with the Emoluments Clauses of the Constitution, and to review whether he has accurately reported his finances to the Office of Government Ethics and other federal entities.”

The first claim, that the committee is looking into potential illegal conduct by the president, has the advantage of reflecting the actual purpose of the subpoena. On the other hand, it is not true (in my judgment) that the House or the committee has the authority to look into illegality by President Trump for its own sake, particularly with regard to his activities prior to taking office.

The other claims may strike the court as more pretextual, but they are probably close enough for government work. The House undoubtedly has the authority to investigate financial conflicts of interest and potential emoluments violations by the president. It is also plausible, if less than completely clear, that such an inquiry would fall within the committee’s general good government jurisdiction. Whether the committee is actually pursuing such an inquiry, and whether the subpoena to Mazars can reasonably be seen as a first step in pursuing that inquiry, may be more debatable, however.

To me the strongest claim of a legitimate legislative purpose is the last one. If Trump was falsifying his financial statements as a private businessman, it stands to reason that he might also have done so as public official. This seems like a legitimate reason to follow up on Michael Cohen’s allegations of falsified statements. It might not be the committee’s actual reason, but the courts are not suppose to probe the actual motives of members in evaluating legitimate legislative purpose.

Me Too’s Privileged Few

If you are interested in the law and custom of Parliament (lex et consuetude parliamenti), you should follow Jack Simson Caird on twitter (@jasimsoncaird). Had you done so, you too would have learned of a recent controversy involving parliamentary privilege and legislative self-discipline that caught my attention.

The story begins on October 24, 2018, when the Daily Telegraph, a British newspaper, charged that a “leading businessman” had engaged in “alleged sexual harassment and racial abuse of staff.” This reporting followed an eight month investigation by the Telegraph of the allegations in question. However, the newspaper was unable to reveal the identity of the businessman and other details of its findings because of an injunction issued by a three-judge appellate court at the request of the businessman and his companies. This ruling was widely criticized (at least according to the Telegraph) by MPs and others as a violation of press freedom and an inappropriate attempt to gag harassment victims.

The British court’s opinion explains that five employees had made allegations of “discreditable conduct” against the businessman in question, but all of these claims had been settled by agreements in which the employees had received “substantial payments” and the parties had entered into nondisclosure agreements. The court found that the claimants had made a showing sufficient to establish the likelihood “a substantial part of the [Telegraph’s] information was obtained through breach of duty of confidentiality to the Claimants, either in breach of the NDAs, or by those with knowledge of the NDAs, and that the Telegraph acquired the information with knowledge both of the NDAs and the breach of confidence.” Accordingly, the court issued a temporary injunction prohibiting the newspaper from publishing the businessman’s identity or other details about the alleged misconduct until a full trial on the merits.

Needless to say, the substantive law in the U.K. is quite different from that of the United States, where the First Amendment presumably would prevent a judicial order of this kind. The divergence is illustrated by the British court’s quote of the following from an earlier case:

To take an extreme example, the content of a budget speech is a matter of great public interest. But if a disloyal typist were to seek to sell a copy to a newspaper in advance of the speech in Parliament, there can be no doubt that the newspaper would be in breach of duty if it purchased and published the speech.

The notion that the advance leaking of a budget speech is an “extreme example” potentially justifying a prior restraint against publication would strike Americans as outlandish (though, to be fair, bribery of a government official to provide confidential information might well have other civil or criminal consequences in the U.S.).

What is interesting for our purposes, however, is not the substantive law on press freedom, but what happened next. On October 25, 2018, immediately following the issuance of the injunction, Lord Peter Hain revealed in the House of Lords some of the confidential information covered by the court’s order, including the identity of the businessman in question. This in turn allowed the British media, which otherwise would have been risking contempt of court, to report the information to the general public. (See this blog post by Professor Jelena Gligorijevic for further details). Hain’s action has been widely condemned as an abuse of parliamentary privilege.  Continue reading “Me Too’s Privileged Few”

(Not So) Desperately Seeking Trump’s Tax Returns

Despite the great deal of chatter (marches even) about the need for President Trump to release his tax returns, there has been relatively little discussion of Congress’s statutory authority to obtain these materials. Two exceptions are these comments by Professors Andy Grewal and George Yin. Grewal and Yin agree that Congress has the authority to request and obtain Trump’s tax returns for a legitimate legislative purpose, and they also agree that the executive branch could disregard a congressional request for these returns on certain grounds (e.g., Congress does not in fact have a legitimate legislative need for the information or, in Grewal’s words, “the request is supported only by personal animus and not a proper legislative purpose”).

Though the matter is not free from doubt, I take a somewhat different view of the law here. I argue below that the Secretary of the Treasury (to whom Congress directs requests for tax return information) and the executive branch in general do not have the legal right to refuse congressional requests for tax return information based on an assessment of the legislative need or motive that underlies such requests. I also suggest that Congress can minimize the likelihood that the executive branch will assert a right to refuse its request by adopting a careful and disciplined approach to making the request in the first place.

Continue reading “(Not So) Desperately Seeking Trump’s Tax Returns”

Can Schock Turn the Tables (and Mirrors, Chandeliers, etc.) on the Government?

So last night I am at Costco and I get a tweet from @danielschuman directing my attention to two new filings by the legal team for former Congressman Aaron Schock, who is facing federal charges arising from, among other things, the allegedly improper use of his Members Representational Allowance to decorate his congressional office in a lavish “Downton Abbey” style. Schock’s attorneys maintain that the government’s allegations are built on a “house of cards” (heh) and are demanding discovery regarding certain aspects of the prosecution case, including whether prosecutors gave erroneous legal instructions to the grand jury about the House Ethics Manual and other House guidelines for official conduct by members of Congress.

The real blockbuster in the Schock motions, though, was the revelation that the FBI had recruited a congressional staffer in Schock’s district office to act as a confidential informant and, get this, wear a wire while having conversations with Schock and other members of his staff. The CI also allegedly seized or attempted to seize various documents from Schock’s office for the government’s benefit.

Schock’s team is livid, and I can’t say that I blame them. Bear in mind that the House Counsel has long taken the position that the FBI should go through its office to request or schedule interviews with members, officers or employees of the House related to official conduct. (The FBI supposedly agreed to this in the early 1990s, but, if so, this agreement has often been honored in the breach). The purpose of this procedure is to ensure that interviewees have the opportunity to be represented by counsel and that they understand the rights and obligations arising from their congressional service. For the FBI to not merely conduct an ex parte interview (which it has done before), but to turn a congressional staffer into an informant who secretly records conversations with his boss and colleagues, seems like a flagrant violation of the norms of conduct that have guided executive-legislative branch relations in the post-Watergate era. It is different, for example, than Abscam (controversial itself at the time), which involved third parties who were not subject to congressional rules and who did not enjoy a legislative relationship of trust and confidence with their targets.

A more difficult question is whether this breach of norms amounts to a legal violation that can be enforced in Schock’s criminal case. Schock’s lawyers argue that the government’s actions may constitute “violations of separation of powers principles, including those embodied in Speech or Debate jurisprudence” and assert that “the CI presented a direct threat to Mr. Schock’s Speech or Debate privilege.” They also contend, somewhat more directly, that by “us[ing] the CI to intrude upon Mr. Schock’s Office, to listen to and record conversations with Mr. Schock and his staffers, and to seize documents from with Mr. Schock’s Congressional Office,” the government “violated the Constitutional privilege against executive interference granted to all Members of Congress by the Speech or Debate Clause.”

The government’s alleged actions (and I should note my comments are based solely on what Schock’s lawyers have represented) certainly implicate fundamental concerns of the Speech or Debate Clause, but for reasons I have discussed before (see here for example), I am not sure they constituted violations of the Clause itself, at least as it has been interpreted by the courts. A Speech or Debate analysis would ask whether the government was prohibited from capturing, whether through the testimony of the CI, the secret recordings or pilfered documents, discussions of a legislative nature. But I don’t think that is the primary issue here. The bigger issue is the government’s improper use of a legislator’s “alter ego” (as legislative aides are called in the Speech or Debate jurisprudence) to act as a tool of the prosecution (i.e., the executive branch) without any contemplation of how this conflicted with his duties to the congressman and the House (i.e., the legislative branch).

The irony is that Schock’s prosecution rests in part on House rules, guidelines and norms of conduct (many of which his lawyers claim are not so clear). I am not aware of any specific House rule or guideline that prohibits a staffer from secretly recording his boss or stealing office documents to hand over to the government, but I think there is a decent chance the Ethics Committee would find this to be conduct not reflecting creditably on the House. Maybe the prosecutors should have sought an advisory opinion before they started down this path.

I may have further comments on this as things progress, but these are my initial reactions.

Would Speech or Debate Protect Attorney General Sessions from Prosecution?

It is being alleged that Attorney General Sessions gave untruthful testimony in his confirmation hearing. Specifically, in response to a question from Senator Franken about communications between Trump surrogates and representatives of the Russian government in the course of the 2016 presidential campaign, Sessions responded: “Senator Franken, I’m not aware of any of those activities. I have been called a surrogate at a time or two in that campaign and I did not have communications with the Russians, and I’m unable to comment on it.” In fact, Sessions apparently did have two discussions with the Russian ambassador during 2016, although it is unclear whether they discussed anything regarding the election.

For present purposes, we will skip the (serious) issue of whether there is a plausible basis for viewing this testimony as perjury or a material false statement that could be the basis of a criminal prosecution. Assuming that such a basis exists, there is an interesting legal question that arises. Would Sessions be immune from prosecution under the Speech or Debate Clause? For the reasons set forth below, the answer is probably no.

Continue reading “Would Speech or Debate Protect Attorney General Sessions from Prosecution?”

Virginia Supreme Court Takes on Speech or Debate

The Virginia Supreme Court recently issued a decision in Edwards v. Vesilind, No. 160643 (Va. Sept. 15, 2016), a case involving the application of the Virginia constitution’s speech or debate clause to a subpoena for documents directed to Virginia state senators and the Division of Legislative Services (DLS), a legislative agency that provides legal and other research services to the Virginia General Assembly. The subpoena, which arose from a lawsuit alleging that certain state house and senate districts violated the Virginia constitution, sought written communications and other documents related to the legislature’s formation of these districts, including documents that discussed (1) compactness, population and other criteria used to form the districts; (2) the role played by partisan or incumbent-protection considerations; and (3) the process of preclearance through the Virginia attorney general.

The Virginia senators and DLS objected to the subpoenas based on the Virginia speech or debate clause, which provides “Members of the General Assembly . . . for any speech or debate in either house shall not be questioned in any other place.” The trial court, however, narrowly construed this privilege as applying only to “purely internal legislative communications solely among legislators, and between legislators and legislative staff.” Moreover, it defined “legislative staff” as “legislative assistants and/or aides who are employed and paid by the individual legislators, a legislative committee, or the legislature as a whole.” It found DLS and its employees to fall outside these parameters and therefore held that agency entirely unprotected by legislative privilege. It further found that the senators could not withhold communications with DLS, political consultants or other third parties.

The trial court’s ruling was certified for direct appeal to the Virginia supreme court because of the importance of the questions presented, which were ones of first impression concerning the scope of the Virginia speech or debate clause. The supreme court’s ruling as to the scope of the privilege and who may invoke it is also of wider interest because it construed the Virginia clause as co-extensive with the federal Speech or Debate Clause. As the court noted, the language in the Virginia constitution is derived from the federal Clause, and “[b]oth provisions afford similar protections because they are based on the same historical and public policy considerations.” Slip op. at 8.

Continue reading “Virginia Supreme Court Takes on Speech or Debate”

Should SCOTUS Hear Senator Menendez’s Speech or Debate Case?

A Third Circuit panel recently rejected Senator Menendez’s Speech or Debate appeal, thereby clearing the way for his corruption trial to proceed. United States v. Menendez, No. 15-3459 (3d Cir. July 29, 2016) (slip opinion). Menendez, it is reported, may seek further review from the full Third Circuit and/or file a petition for certiorari with the Supreme Court. While the court’s conclusion is no surprise, its reasoning raises some questions which could be fodder for Supreme Court review.

To briefly recap the facts, Menendez is accused of having intervened with the executive branch on behalf of one Dr. Salmen Melgen in exchange for personal gifts and campaign contributions. For example, Menendez allegedly sought to persuade/pressure executive officials to drop a Medicare fraud investigation into Melgen’s billing practices.

Continue reading “Should SCOTUS Hear Senator Menendez’s Speech or Debate Case?”

Update on SEC v. Ways & Means

Judge Gardephe has granted the House’s motion for a state pending appeal of his order enforcing the SEC’s administrative subpoenas to the House Ways & Means Committee and its former staffer. In addition to finding that the balance of hardships weighed in the House’s favor (which seems fair), the court found there to be a “serious question” going to the merits of the legal dispute between the parties.

As far as one can tell from the stay ruling, this “serious question” relates to how the court applied the Speech or Debate privilege to the information sought by the subpoenas. The only specific issue mentioned, however, is “whether the Speech or Debate Clause provides a non-disclosure privilege for ‘legislative act’ documents.” Since the court resolved that issue in the House’s favor, it seems odd it would count as a serious question justifying a stay of the court’s ruling.

In any event, it looks like the Second Circuit will get a crack at this interesting case.

House Mulls Appeal of SEC Subpoena Decision

Judge Gardephe of the federal district court for the Southern District of New York has issued his long-awaited ruling in SEC v. Committee on Ways & Means, an enforcement action by the SEC to require the House committee and its former subcommittee staff director to comply with administrative subpoenas. The court rejected the House’s broadest arguments (by which it sought to avoid compliance with the subpoenas entirely), but it issued guidelines allowing the House to withhold certain information pursuant to the Speech or Debate Clause. The House was initially given ten days to comply with the subpoenas as limited by the court’s ruling (which would have meant complying during the week of Thanksgiving).

Personally, I think the decision was about as favorable to the House as reasonably could be expected (with one exception, which I will get to in a minute). It should have been no surprise that the court rejected the House’s sovereign immunity argument (see here and here). Judge Gardephe surveyed prior case law on inter-branch subpoenas and flagged House Rule VIII, which expressly mandates compliance with administrative subpoenas. See op. at 12-18. He concluded: “Given that no court has ever held that sovereign immunity applies to an inter-branch subpoena, and given that House rules appear to acknowledge that no blanket sovereign immunity applies to an administrative subpoena issued by a Federal agency to the House, a House member, or House staff, this Court concludes that sovereign immunity has no application here.” Id. at 18. Moreover, even if sovereign immunity applied, the court found that Congress waived it for these purposes by passing the STOCK Act. Id. at 21.

On Speech or Debate, the court agreed with the House on two key issues. First, it agreed that the Clause provides a non-disclosure privilege for documents reflecting legislative acts, disagreeing with the Third and Ninth Circuit position that Speech or Debate is merely a non-use privilege with regard to documentary evidence. Op. at 63. The court noted: “Whether an Executive Branch subpoena seeks testimony from a Member concerning a ‘legislative act’ or documents that fall ‘within the sphere of legitimate legislative activity’ is, in this Court’s view, immaterial under the Speech or Debate Clause. . . . The issuance of such subpoenas, and a judicial practice of enforcing them, also presents a significant risk of intimidation, and upsets the checks and balances the Framers envisioned, and put in place.” Id. at 58.

Second, the court agreed that the Speech or Debate Clause protects both formal and informal legislative information gathering. Op. at 58. Although the court did not define precisely the outer boundaries of informal information gathering, it seemed to take a broad view of this activity, explicitly noting that it would “extend to a legislator’s gathering of information from federal agencies and from lobbyists.” Id. at 49. Thus, for example, communications from the Greenberg law firm to Brian Sutter, the committee staffer, could be protected if they were part of the committee’s “informal information gathering concerning a matter that might be the subject of legislation.” Id. at 64.

These victories may not benefit the House much in the short term because the court’s opinion allows the SEC to obtain the information it primarily seeks, i.e., whether Sutter tipped off a Greenburg lobbyist as to a pending decision on Medicare reimbursement rates. (This result is not surprising either.) But over the longer term the court’s language and reasoning provide a useful precedent for House lawyers seeking to protect the institution from intrusive subpoenas.

There is, however, one exception. The court ordered the House to provide a privilege log for any documents that it withheld on the basis of the Speech or Debate privilege. House and Senate lawyers have always resisted providing such logs, arguing that requiring them itself intrudes on the privilege. As far as I know, neither the House nor Senate has provided such a log in the past. Requiring them as a routine matter, at least, would place a burden on Congress’s exercise of the privilege that its counsel would rather avoid.

In any event, the House has requested an extension of time to comply with the court’s order, stating that it needs to consider whether or not to appeal. Citing both the sovereign immunity and privilege log issues in particular, the House explains that the court’s ruling presents “multiple issues of tremendous institutional importance to the U.S. House of Representatives, and our structure of government in general.”

In response to the House’s request, Judge Gardephe has extended the deadline to December 7. Stay tuned.

Government Not Impressed by Menendez’s “Policy” Approach to Speech or Debate

The government has filed its brief in opposition to Senator Menendez’s Speech or Debate arguments. A fuller analysis will have to wait, but the arguments look to be pretty much as I expected.

From the brief’s conclusion:

Defendant Menendez’s broad, unprincipled interpretation of the Speech or Debate Clause is a blueprint for immunizing criminal activity on Capitol Hill. Under defendant Menendez’s interpretation, all a Member of Congress—or staffer—would have to do in order to shield his illegal activity from criminal prosecution is insert the word “policy” into a corrupt conversation, mention an unrelated bill in an unlawful email, write something legislative on a calendar entry for an illicit gathering, threaten to hold a hearing at the conclusion of a meeting, or ask for a briefing at the end of an effort to influence the Executive Branch.