Today, Explained - Supreme Tax Court

Episode Date: July 9, 2020

The Supreme Court issued its remaining decisions today for the 2020 term, including the biggie: Trump’s tax returns. Transcript at vox.com/todayexplained.  Learn more about your ad choices. Visit podcastchoices.com/adchoices

The all-new FanDuel Sportsbook and Casino is bringing you more action than ever. Want more ways to follow your faves? Check out our new player prop tracking with real-time notifications. Or how about more ways to customize your casino page with our new favorite and recently played games tabs. And to top it all off, quick and secure withdrawals. Get more everything with FanDuel Sportsbook and Casino. Gambling problem? Call 1-866-531-2600.

Visit connectsontario.ca. The Supreme Court wrapped up its 230th season today. Everyone was waiting to hear what the nine justices would say about President Trump's taxes, including us. Back in December of 2019, remember 2019? We previewed the tax cases with Andrea Bernstein from WNYC's Trump Inc. podcast. Today, we're going to replay some of that detailed background Andrea provided before going to our pal Ian Millhiser to talk about the results. Here we go. So there are two cases that stem from congressional subpoenas that Trump sued so as not to have his tax returns turned over. And those are Trump v. Mazars and Trump v. Deutsche Bank. Yes. And the third case is the Manhattan District Attorney.

And this case arises from an investigation into Trump's business that came from the Stormy Daniels case. A piece of it got sent to the Manhattan DA. The Manhattan DA began investigating, requested Trump's tax returns, and at that point, Trump sued the DA. So that's the third case, Trump revants. And I guess this story begins during the 2016 campaign

when candidate Trump breaks with tradition and refuses to release his tax returns. How rich is this tradition of sharing your financial information? Every president in modern history has released his tax return to the public. Remind us why. Because it's important for people to understand whether the president is acting in his or her own interests or in the country's interests.

The founders were so concerned about political corruption, and they felt that corruption could be as big a threat as a foreign army, that it could corrupt the democracy from within. So they put in all kinds of measures to bar political leaders from even the temptation of doing something wrong. And the release of the tax returns is in that tradition, that it's sort of, it's a check, it's a control on having somebody who might be acting for a personal interest and not for the country's interest. So what's the argument that President Trump makes in 2016 for not releasing them? He gives a bunch of reasons. He says, my business is so complicated, it's under

audit. I'll release it after it's audited. But if I were finished with the audit, I would have an open mind to it. I would say that. But I don't want to do it during the audit. And really, no lawyer, even from the other side, they say often, not always, but when you're under audit, you don't have, you don't subject it to that. You get it done and then you release it. And just to be clear here, candidate Clinton releases her tax returns and candidate Trump does not during the race. Correct. Then once he's elected president and hasn't released his tax returns, the argument is that, oh, well, the people voted for me.

And so obviously they approve of my decision not to release my tax returns. So as president, he's got a Republican House, a Republican controlled Senate. Does the taxes issue kind of just go away for two years? Well, it kind of does because there's no one to make him. We can now officially project that the Democrats will take control of the House. This is a very significant defeat for Mr. Trump, a historic accomplishment for the Democrats. Democrats getting subpoena power, the ability to investigate the president. And 2018 elections, Democrats take over in the House, and they make very clear that one of the things they want to do is oversight.

So they start doing investigations. Round about the spring, three committees start filing subpoenas for President Trump's financial records from, in one case, his accountants, and, in another case, his bankers. And they go to court, they request these subpoenas, and almost immediately, Trump brings in a team of lawyers and says, no, you cannot have these because you don't have a valid inquiry, and also you are trying to provide a law enforcement function which you're not allowed to do.

That's how two of the cases get to federal judges in New York and in the District of Columbia. And then once they're in those courts, they start working their way through, and Trump starts losing. He loses at the federal court level, he loses at the circuit level, and that's how the case gets to the Supreme Court.

Okay, well, let's go through each of these cases one by one. There are two that originate from congressional investigations. The first is Trump v. Mazars. What's the story there? And the accountants seemed inclined to cooperate until the Trump family business intervened and said that couldn't happen, that there were various problems, including what they argued was a separation of powers. And there was an argument in federal court and Trump lost that case and lost it very quickly. And almost simultaneously, the same House lawyers and the same Trump lawyers were in a courtroom in New York arguing the Deutsche Bank case. Okay. And this is the second case the Supreme Court will hear. What's the situation in the Trump v. Deutsche Bank case? In this case, the House is looking at whether there was foreign influence in elections and whether there was some money laundering through banks and through business relationships

that the Trumps might have had. So they're saying we need to see the records. And among the records it's seeking from Deutsche Bank are Trump's tax returns. Now, in the Deutsche Bank case, the judge said at the end of the oral arguments to the Trumps, you don't have a case. You are wrong. There is nothing that bars these records from being turned over. At which point, the Trumps immediately appealed. So the decision in those two cases, those two congressional cases,

they've really tracked each other. They've been very close. The rulings have been similar. First, there was a federal judge that said, no, you're wrong to the Trumps. Then the district court said, no, you're wrong. So he loses the Deutsche Bank case at the district level and at the circuit level, and he loses the Mazars case at the district level and the Second Circuit level, and he loses the Mazars case at the district level and the Second Circuit level. And each time he loses these cases, these are not namby-pamby decisions. The judges are saying the president is not king. That was an actual line in a decision. Congressional inquiries are legitimate. So these are very strongly

worded decisions. Okay, so two of these Supreme Court cases originated from the House, and they both tried to get the president's financial records in different ways, one going through the president's accountants and one going through his bank. What about the third case that originated with the Manhattan DA, Trump v. Vance? The third case is interesting because in the first two cases, Trump's lawyers argued Congress is violating its constitutionally authorized powers because it is trying to do what a prosecutor would do. The Vance case is so interesting because it's, in fact, a prosecutor.

So they cannot be making that argument. So they are making a different argument. And the argument that they are making is that a president has absolute immunity from investigation even, not even prosecution, just investigation, so long as he or she is a sitting president, which has enormous implications,

which did come out in the arguments in the Second Circuit Court of Appeals when one of the judges asked Trump's lawyer, he said, what about the Fifth Avenue example? And what he's talking about is the president's comment that he could shoot somebody on Fifth Avenue and no one would complain. What's your view on the Fifth Avenue example? Local authorities couldn't investigate. They couldn't do anything about it.

I think once a president is removed from office, any local authority, this is not a permanent immunity. Well, I'm talking about while in office. No, nothing could be done. That's your position. That is correct. And what the judge is saying is, are you saying if the president shot someone on Fifth Avenue, he would be immune from investigation? And the Trump's lawyer's answer was yes, so long as he's a sitting president. All right, as promised, a break. And then we're going to talk about whether the president can just do whatever he wants. He can't.

Support for Today Explained comes from ramp ramp is the corporate card and spend management software designed to help you save time and put money back in your pocket ramp says they give finance teams unprecedented control and insight into company spend with ramp you're able to issue cards to every employee with limits and restrictions and automate expense reporting so you can stop wasting time at the end of every month. And now you can get $250 when you join Ramp. AMP.com slash explained. R-A-M-P.com slash explained. Cards issued by Sutton Bank. Member FDIC. Terms and conditions apply. Bet MGM, authorized gaming partner of the NBA, has your back all season long.

From tip-off to the final buzzer, you're always taken care of with a sportsbook born in Vegas. That's a feeling you can only get with BetMGM. And no matter your team, your favorite player, or your style, there's something every NBA fan will love about BetMGM. Download the app today and discover why BetMGM is your basketball home for the season. Raise your game to the next level this year with BetMGM. Download the app today and discover why BetMGM is your basketball home for the season. Raise your game to the next level this year with BetMGM, a sports book worth a slam dunk. An authorized gaming partner of the NBA.

BetMGM.com for terms and conditions. Must be 19 years of age or older to wager. Ontario only. Please play responsibly. If you have any questions or concerns about your gambling or someone close to you, please contact Connex Ontario at 1-866-531-2600 to speak to an advisor free of charge. BetMGM operates pursuant to an operating agreement with iGaming Ontario.

Ian, let's not waste anyone's time. What happened at the Supreme Court today with Trump's taxes? The president lost the case involving the prosecutorial probe, the state prosecutorial probe. So the law is the same there. But he got a pretty big victory in the other case, the Mazars case. The court didn't say that he is immune from investigation, but it put some pretty strict new limits on the House's ability to investigate the president. And that means that the law moved very much in Trump's direction today. Interesting. Okay, well, let's dig into it, starting with the congressional cases, as we did in the first half of the episode. What happened with the whole Mazars case? What happened today? So up until

today, the rule was that Congress has sweeping power to conduct almost any investigation that it wants to conduct. What the Supreme Court said today is that that broad rule does not apply to the President of the United States. The President of the United States is special. And so it put all kinds of new limits on Congress's ability to investigate the president. And what that means in practice is that a lower court is going to have to hear this case all over again. I think it's likely that Congress is going to have to narrow its subpoenas. At the very least, they're going to have to look at what the new rules say and try to figure out what they can do with those new rules. And this litigation is going to go on and on and on for months and years, which means it's going to be months or years before anyone in the

House sees Trump's financial records. Would anyone in the House still try or even have the authority to see his financial records after he's president? Well, after he steps down, it potentially gets easier. But at the same time, when he's no longer the president, the need for these records is less important. I mean, one thing that they're probing here, for example, is whether or not the president of the United States has nefarious ties to Russia or to certain former Soviet businessmen. And, you know, if it's the sitting president of the United States, you really care. If it's a former president, I mean, you still care if that's the case, but there's less of an immediate threat there.

And so the need to see the records becomes less serious. What was the vote, out of curiosity? So the vote here was really lopsided, which was surprising. It was, in the Mazars' case, it was 7-2. And the really surprising thing is that all four of the liberal justices joined the majority opinion. Wow. So not a partisan vote, so to speak. the way that they did. It's possible that they decided it was better to throw in with Chief Justice Roberts, who wrote the majority opinion, than risk him having – deciding with the most conservative justices and writing an opinion that was even more favorable to Trump. I mean, one other thing that I'll note is that the lawyer for the House who argued this case did not do a

good job at the oral argument. It was one of the worst oral argument performances, frankly, that I've seen before the Supreme Court. And, you know, on the margins, that can matter. Maybe some of the liberal justices were turned off by the fact that he didn't seem to have good answers to some of their questions. Now, in the other big decision, the Vance decision out of New York, there was also a 7-2 ruling, but kind of like 7-2 the other way. Is that fair? I think that's mostly true. There's been a long line of decisions saying that the president's not above the law. For example, in Clinton v. Jones, the Supreme Court said that the president can be sued by private citizens.

And the fact that he's president doesn't mean that he has full lawsuit immunity. The court has said that federal courts may – or federal prosecutors potentially can conduct criminal investigations into the president. This case asks whether state prosecutors may conduct criminal investigations into the president. And the answer to that is also yes. The president is still not above the law, still not immune to legal process. Does this mean that someone is going to at some point get to see his tax returns? The answer to that question is we don't know. So what's going on here is that Cyrus Vance, the Manhattan district attorney, subpoenaed Trump's accounting firm. They want a bunch of financial documents relating to Trump and also to Trump's companies.

You know, they're probing whether not just Donald Trump personally, but the Trump organization, maybe other executives in the Trump organization have committed crimes. And so they want to see these financial documents so they can determine whether or not crimes have been committed. The implication of today's decision is just that that investigation is not going to be shut down in its entirety. Trump can't just say, I'm the president, na-na-na-na, I win. If, you know, the district attorney is able to overcome whatever new objections Trump may raise, then the district attorney will see these documents. They will be part of a grand jury

investigation. Often those investigations are confidential, so the public may never see them. But this case at least holds open the possibility that someday we will know what's in those documents. How did President Trump take these decisions? I mean, he took it in very Trumpian form. You know, he sent out a tweet thread saying that, you know, some other presidents were super corrupt and, you know, suggesting that he was treated unfairly. This is about prosecutorial misconduct. We catch the other side spying on my campaign,

the biggest political crime and scandal in U.S. history, and nothing happens. I doubt that he really understood what the court had done because it's not like, you know, this was a terrible day for him. But, you know, Donald Trump's going to Donald Trump, and so he complained about it. Chances are the president didn't read the opinions. I think that's right. He sent out a tweet thread reacting to them so quickly.

I mean, I hadn't read the opinions yet, and it's my job to do that. I think a lot of people heading into this particular session of the Supreme Court with such major cases on the line regarding abortion rights, Native American rights, President Trump's taxes, immigration, were really afraid that more recent Trump appointees would just rule completely in line with President Trump himself, who has obviously shown quite a disdain for the courts, for the legal apparatus of this country. Did people like Gorsuch and Kavanaugh surprise? So I think there are two factors in play here. One is Chief Justice Roberts. I think that

Chief Justice Roberts recognizes that there has to be some daylight between the law and the preferences of the Republican president. And most of the decisions that he handed down that pleased liberals were very narrow. I mean I think his abortion decision is a one-off, good for this right only, the very next abortion law that comes to him. He's going to uphold the attempt to restrict abortion. But I think that Roberts probably wanted to show that the court was engaged in something other than pure politics. I think that Gorsuch is the other factor. You know, Gorsuch has said that it's important to read statutes very literally.

If you look at, for example, the LGBT rights case, Bostock, you had a law and if you just read the law, it was very clear that the language of that law pointed in a pro-LGBT direction. And to his credit, Gorsuch was able to say, look, like this is what it says. And I said, you have to follow what it says. So I'm going to do what it says. So I don't know if I was flabbergasted showed that even though this is an extraordinarily conservative court, it does want to be engaged in something other than pure Republican policymaking. Ian, thank you. What do Supreme Court reporters do when the Supreme Court is out of session?

The answer is I'm taking next week off, assuming that there's no retirements. Congratulations. Thank you. Ian Millhiser covers the Supreme Court of the United States for Vox. I'm Sean Ramos for Amidst Today Explained.