- Thanks to CuriosityStream for keeping Legal Eagle in the air, which now comes with Nebula for free. Link in the description. The Supreme Court's decisions on President Trump's tax returns are in. Now, remember there is
no legal requirement that presidential candidates
or presidents for that matter release their tax returns
from any particular year. But despite the lack of legal requirement for the last 30 years, almost all presidential and
vice presidential candidates have released years of
their personal tax returns. And during that time, every person nominated for the president as a Democrat or Republican has released their tax information, except for President Donald Trump. The self-proclaimed billionaire whose companies filed
for bankruptcy six times has been extremely guarded about releasing any information about
his financial status. Well, he said he would release them. - I will release my tax returns
against my lawyer's wishes. I will absolutely give my return. - But then decided not to. - Well, I'm not releasing tax returns, 'cause, as you know, they're under audit. - The financial information
supposedly revealed that President Trump was deeply in debt for much of the 1980s and 1990s, and that he borrowed lots of
money from overseas entities, and that in multiple years he
claimed more financial losses than all but two other U.S. taxpayers. Some people reacted to this
news with the phrase "So what?" - You know, the only one that
cares about my tax returns are the reporters, okay? They're the only ones. - While others believe
that the revelations were just the tip of the iceberg. But in 2018, the New York Times said that they obtained years of financial data about President Trump and
his various organizations from anonymous sources, which we now know include the
president's niece, Mary Trump, who is writing her own
biography of the president. But the state of New York subpoenaed President
Trump's financial records in connection with potentially the campaign finance
violations that Michael Cohen, the president's lawyer, has
already gone to jail over. Meanwhile, in Congress, three oversight committees of
the House of Representatives has subpoenaed President
Trump's accounting firm and multiple banks looking for information about the president's financial history. President Trump challenged
all of these subpoenas, and the cases wound up
in the Supreme Court. Although the cases obviously include
President Trump directly, the stakes go far beyond that in the upcoming presidential election. These decisions will determine just how much power the
president, any president, not just the sitting president, has to control the legal process against the presidency in the future. And these cases are a mixed bag. Everyone wins and everyone loses. (news reel music) Hey, Legal Eagles, it's
time to think like a lawyer because it looks like some of
the president's information is going to be disclosed
to district attorneys and potentially the public. The Supreme Court has just
decided two major cases regarding the accessibility of a sitting president's tax information and financial records. And what did they decide? And what does this mean
for President Trump and his upcoming bid for reelection? Well, let's dive in and
get down to brass tacks. This is a tale of two cases. The very long 2020 Supreme Court term has finally come to a close with the Court finally resolving the two cases involving Donald Trump's tax and financial information. So how did we get here? Well, the president claims to
be a self-made billionaire. - My father gave me a
very small loan in 1975, and I built it into a company that's worth many, many
billions of dollars. - So why is it so taxing
for President Trump to show his taxes? Well, we don't know what, if anything, the president is trying to
hide in breaking with precedent and refusing to disclose his tax returns, but that picture might
have been made clearer when the New York Times published a Pulitzer Prize-winning article entitled "Trump Engaged in Suspect Tax Schemes "as He Reaped Riches From His Father." The article was a deep dive into the finances of Donald Trump and his father, Fred Trump Sr., as well as the rest of
his immediate family. The article made two major findings. First, President Trump got a whole lot more
than a $1 million loan from his father, Fred Trump, as the president had always claimed. Secondly, President Trump
along with his siblings engaged in a variety of tax schemes that many tax experts said were illegal. It's a fascinating read that definitely deserves
to be readdressed, especially since we've sort of moved on from this particular scandal. But some of the highlights include that not only did
President Trump dissemble when he claimed that he only
received a $1 million loan from his father to start his own business, which he allegedly paid
back with interest, The New York times discovered that actually President
Trump's father loaned him north of $60 million at the time or
$140 million in today's money. And that he received at least
$413 million in today's money from his father's estate, much of which might have
been received by dubious and potentially illegal tax schemes he engaged in along with his siblings. And these schemes included potentially creating sham corporations to disguise gifts from
President Trump's parents to himself and his his siblings to just undervaluing
several real estate holdings in their parents' estate
to avoid paying more taxes on those particular holdings. And some in the Trump family
have already faced consequences from The New York Times article. For example, President Trump's
sister, Maryanne Trump Barry, once a federal judge, was forced to retire after the article disclosed
that she and her siblings were co-owners of a shell company that allegedly siphoned cash
from their father's business by just making up purchases. In addition, the inflated receipts were allegedly used to
justify rent increases for thousands of tenants. Barry quit in order to stop a
judicial ethics investigation into her conduct, though, she did get to keep her $200,000 pension. On the other hand, the
president has managed to escape scrutiny of his own taxes, largely by stonewalling the
House and district attorneys who are asking for that
financial information. And, as a result, at this time the public can't be certain that the
president is either guilty or innocent of these allegations, which takes us to the
two Supreme Court cases that were just decided. The first is captioned
as Trump versus Vance. Vance in this case being the famous, some would say infamous, New York district Attorney Cy Vance. Now I know it seems like ancient history, but you might recall that the president's old
lawyer, Michael Cohen, went to prison for tax evasion and violating campaign finance law. His crimes were paying an adult
film star, Stormy Daniels, and former Playboy model, Karen McDougal, to stay quiet about their
alleged sexual encounters with President Trump. Now there's no way to know for sure, but it's possible that President Trump was the unindicted
co-conspirator individual one who engaged in a conspiracy
with Michael Cohen. Of course, the name has been redacted, so it's impossible to know for certain that President Trump was in
fact individual number one. But not withstanding, the
district attorney for New York, Cyrus Vance, subpoenaed Trump's
accounting firm Mazars USA for eight years of business
and personal tax records in connection with President Trump and the Trump organization's
potential role in the hush money payments
made to McDougal and Daniels before the 2016 election. This is a criminal investigation into President Trump's possible role in these violations of
law, since Cohen claimed to be acting on President Trump's behalf. - I am ashamed that I chose to take part in concealing Mr. Trump's illicit acts rather than listening
to my own conscience. - The president filed for
emergency injunctive relief, claiming that as president
the constitution provides him with absolute immunity from any criminal
process or investigation, including unofficial presidential conduct and the associated subpoenas
of third party records. This means that President
Trump thinks he has a right to stop Mazars and the
banks Vance also subpoenaed from complying with the subpoenas. And as a result of the injunction, those financial records
were never turned over to the state of New York. So let's talk about President
Trump's arguments here. President Trump argued
that now is not the time to bring any potential
criminal charges against him. In the president's view,
there are only two options for dealing with criminal allegations against a current president. One, Congress can impeach the president, which we've crossed that bridge, or a state can launch a
criminal investigation after he or she ends
their term as president. The president contended that
defending a criminal inquiry would interfere with his ability to discharge his duties as president, and he asserted that criminal charges are actually prohibited
by the Supremacy Clause of Article II of the Constitution since state and local officials are simply using their authority to "defeat the legitimate operations "of the federal government." The president argued that it's
not necessarily this one case that would distract him
from presidential duties. Rather it is "the cumulative effect "of permitting every
state and local prosecutor "to take the same steps the
district attorney did here." And while the president
was making it sound like there are thousands of local prosecutors waiting to prosecute the president, really he was arguing
sort of the same thing that Bill Clinton once did
in Clinton versus Jones that any action taken against
him would also ipso facto be politically motivated and
would swamp the presidency in responding to all of
these different inquiries. Some of which might be legitimate, but the vast majority of
which might not be legitimate and might be filed by
Democratic district attorneys to stymie a Republican president or Republican district attorneys to stymie a Democratic president. In response, District
Attorney Vance simply said that there's no such thing as unlimited presidential immunity from criminal prosecution. Vance argued persuasively that the president's Article II immunity only extends to official acts
in his capacity as president. And prior precedent
involving sitting presidents like Clinton versus Jones
and Nixon versus Fitzgerald bolstered Vance's arguments. When Paula Jones sued Bill
Clinton for sexual harassment that happened before he was president, the Court ruled that he was not entitled to absolute immunity from civil litigation arising out of events which transpired prior
to his taking office. And that lawsuit was not dismissed, and Clinton had to comply
with the legal process. Eventually he sat for a deposition, which he famously perjured himself. And on the other hand, the Supreme Court has ruled in
the past that President Nixon did have absolute immunity from damages predicated on his official
acts as president. Things that happened while he was the president
of the United States. But even in that case, the
Supreme Court emphasized that a president is not
immune from criminal charges stemming from his official or unofficial acts while in office. And here Vance argued the same limitation on
presidential immunity also extends to the Supremacy Clause, which supposedly prevented states from interfering in the
president's official acts. Vance argued that state
criminal investigations and subsequent subpoenas are both unrelated to the
president's official acts and would not interfere with President Trump's official duties as president of the United States. And Vance also pointed out that allowing a president
to have total immunity from criminal or civil litigation during the time the president is in office could lead to total immunity after one's presidential term has ended, as well as immunity from third parties. Because if that immunity existed, it might impede the criminal investigation because you might lose the evidence or the statute of limitations might run because too much time has passed. So let's talk about how
the Supreme Court ruled in this particular case. Here, Vance won and Trump
lost, at least on paper. The Supreme court ruled
seven justices to two that in our judicial system "the public has a right
to every man's evidence." In practice, this means that the president does not have absolute immunity from state criminal subpoenas. And state prosecutors do not
need to meet a higher standard to seek evidence from a sitting president. Although President Trump argued that criminal cases would
distract him from his job, Justice Roberts disagreed stating, "two centuries of experience confirm "that a properly tailored
criminal subpoena "will not normally hamper the performance "of the President's
constitutional duties." And one of the things that
led to people thinking that this was a complete
slam dunk of a case is that these subpoenas weren't directed at the president himself, but rather third parties,
accountants and banks. So it's not like the president
was going to have to spend all of his time responding
to the subpoenas anyway. These records are held by third parties, and President Trump cannot
tell those third parties that they can't respond. And although President Trump argued that criminal investigations would harm the public perception of him, the majority opinion
also dismissed this claim by noting that the issuance of a subpoena would not have much of an effect on the president's reputation. Because when you get a subpoena, you have to provide the information. There's no necessary stigma
related to that in particular. Moreover, grand jury proceedings, like what was going on in New York, are strictly confidential,
which, as the court pointed out, should prevent the very stigma that the president anticipates. Chief Justice Roberts, who
wrote the opinion of the Court, also dismissed the president's concern about thousands of local prosecutors trying to make a name for themselves by investigating the president. The court pointed out
that the legal system already has safeguards to protect against the abuse of prosecutors
that the president envisions. And while it's true that
the Supremacy Clause bars local officials from interfering with
the president's duties, if a prosecutor is attempting
to usurp the president rather than simply investigate a crime, then the president can
challenge that in court, which is exactly what President
Trump did in this case. And while the president and
the Department of Justice argued that state prosecutors should be subject to a higher standard in order to get evidence
from the president, the Supreme Court disagreed holding that it would not be proper for state criminal subpoenas to be subject to a higher standard. And the broader point was that, "the public interest in fair
and effective law enforcement "cuts in favor of comprehensive
access to evidence." So if state grand juries had
to meet a higher standard, it would, "hobble the grand jury's ability "to acquire all information
that might possibly bear "on its investigation." The Court also echoed Vance's concern that the evidence would be
lost if prosecutors had to wait until the end of the
president's term to see it. At the end in this first
case, Trump versus Vance, the Court remanded the case back to the lower court of
appeals for additional argument. In that argument President Trump can make new arguments about the subpoenas and try to prevent the
subpoenas from being enforced. But he can't argue that he is immune or that a higher standard should apply. While there are still
legal questions to decide, President Trump is probably
going to lose most, if not all of the battles that
he is going to have to fight in the court of appeals. So while the biggest battle
is over, the war is not. And President Trump will probably
continue to make arguments that these specific
subpoenas are overbroad or make other smaller arguments about why they shouldn't be enforced. So it's possible that this
issue will not be resolved before the 2020 election. Though, since this was a
grand jury proceeding anyway, it wasn't going to be open
to the public in any event. Which takes us to the other tax case that was decided at the same
time, Trump versus Mazars. While Trump versus Vance was
a defeat for the president, Trump versus Mazars some argue
that the president prevailed, at least because he's
going to delay the effect of the decision, at least for now. This case was kicked
off when President Trump sought injunctive relief on four subpoenas issued by three separate house committees: the House Financial Services Committee, the House Intelligence Committee, and the House Oversight Committee. These subpoenas were sent to
Trump's accounting firm again, as well as to financial
institutions he used for personal and business reasons. The goal of these subpoenas according to the House committees is to exercise their
basic roles of oversight in legislative responsibilities. Now, how would this information be used? Well, the committee said
it would inform Congress on subjects like whether they need to impose new international
money laundering restrictions to evaluate current ethics
laws for presidents, or determine if it should be mandatory to have future presidents
disclose their tax returns. And obviously it goes without saying that it might inform past and
future impeachment inquiries. Now, Donald Trump argued that congressional committees
are only authorized to issue subpoenas for a
true legislative agenda, not for any law enforcement reason. That would be the purview of the executive branch exclusively. And President Trump also
made the very broad claim of executive privilege stating that, "Whatever powers Congress holds, "it may not deploy them in a
way that keeps the President "from fulfilling the
obligations of his office." Now the House of Representatives argued that this matter had already been decided citing Clinton versus Jones
in which a sitting president was not immune from civil litigation. The House committees argued that, "Article II does not
confer on a president, "the power to resist compulsory
process directed at him," unless "there is impairment
of the Executive's ability "to perform its constitutionally
mandated functions." The House committees argued that this is clearly not
the case in this situation since the subpoenas were not
even directed at the president. So there's no actual burden
on the president himself. Congress argued that it
has the legislative purpose for seeking information if
a subpoena seeks information that will inform Congress on a subject that would likely lead to legislation. Well, detractors argued that
these assertions were so broad that it would allow the House to seek personal
information from a president about anything if it somehow
could be used to justify a law. The Supreme Court ruled seven to two in a way that sort of splits
things down the middle. The Court did reject
President Trump's claim that he can raise executive
privilege over the information and did acknowledge that
Congress has the power to subpoena information from the president so it can craft legislation effectively. However, the Supreme
Court limited that power and held that congressional
subpoenas are valid only they serve a "valid
legislative purpose" and are not intended to be
law enforcement efforts. And the Supreme Court for the first time articulated a four-part test to determine if the
subpoenas can be enforced against the executive branch. But just as it did in the Vance case, the Supreme Court rejected
President Trump's argument that Congress needs to prove
that the records are critical or some incredibly high standard. Applying such a high standard
here Robert's explained, again, he wrote the opinion
for the Supreme Court, "would risk seriously impeding Congress "in carrying out its responsibilities." But the Court also dismissed
arguments by the House that these subpoenas
should be treated like any other request for documents. The Court held that the House
did not take into account "the significant
separation of powers issues "raised by congressional subpoenas "for the president's information," and articulated that when lower courts have to decide whether to
enforce a congressional subpoena into records involving the
president, the courts should "perform a careful analysis
that takes adequate account "of the separation of
powers principles at stake." Among other things, courts should consider whether the president's
papers are really necessary, because the information
cannot be obtained elsewhere, whether the subpoena is as
limited in scope as it can be while still serving Congress's power, what evidence Congress
has offered to establish that a subpoena advances a
valid legislative purpose, and what burdens a subpoena
imposes on the president. And because the lower courts did not adequately consider these factors, probably because these factors didn't exist before
the Supreme Court case, the cases will now return to those courts for additional proceedings. So there were two crucial questions posed by the Vance and Mazars cases. First, can of state subpoena a current president's personal records as part of a criminal investigation? And the answer to that is yes, a state prosecutor has the right to subpoena a sitting president or third parties who hold information about the current president. And those inquiries are not bound by any kind of higher burden than would normally happen
under a state investigation. And the second question
was whether Congress can subpoena a president's
personal information outside of a formal impeachment inquiry? And the answer is basically yes, but although Congress may have the right to subpoena personal
information about the president, it will need to show that there is really a legislative purpose for the information, and Congress can't necessarily
do a fishing expedition into the president's personal information. In the end, the Court
affirmed that the president is not above the law, but the justices also kick the can down the road a little longer,
pretty much guaranteeing that we won't see the
president's financial records before the vote in November. Now I have a lot more to say about the political
implications of these decisions and what it means in terms of the public actually getting
access to the tax returns, but that's probably not safe for YouTube, which is why I put my
extended discussion on Nebula. My creator friends and I teamed
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that extended discussion about the president's tax returns and all of the implications there. The bar has been set so low that rejecting these
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the Court's decisions? And do you think that there
should be a federal law requiring presidential candidates to reveal their tax returns? Leave your objections in the comments and check out this playlist over here with all of my other real law reviews talking about the protests and
COVID-related legal issues. There's a lot going on in the law. So click on this video
and I'll see you in court.
