WASHINGTON — After years of clamoring for them, House Democrats finally have an easy path to getting their hands on President Trump’s tax returns. They don’t plan on taking it.
New York State is poised to enact a law that would effectively hand Trump’s state tax returns over to Congress. But the only Democrat entitled to officially request them, Rep. Richard Neal, Chairman of the House Ways & Means Committee, isn’t interested — at least for now.
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Neal’s worry: accessing Trump’s New York returns may sabotage his subpoena for all of Trump’s federal tax returns. Neal worries, according to Bloomberg, that taking the immediate win in New York could jeopardize his legal argument for the IRS filings and reinforce Trump’s position that Democrats are simply on a political fishing expedition.
“If Neal requests the NY state tax returns, he’s undermining his own lawsuit,” said Martin J. Sheil, who served over 30 years as an investigator at the IRS. “That investigation has nothing to do with state tax returns.”
Neal’s cautious posture has sparked frustration on his left flank, including from liberal advocacy group Stand Up America, which argues the House has “no choice” but to go after Trump’s state tax returns.
But his reluctance highlights the tricky spot House Democrats are in. Grappling with Trump’s historic defiance of Congressional oversight, Democrats are pinning their hopes on beating the president in court, where they’ll need robust legal arguments to defeat him. That means they have to pick their battles carefully. Trump, on the other hand, has taken an aggressively broad stance, blocking virtually every effort from Dems, with the hope that the courts will take just long enough to delay House investigators until after the 2020 elections.
“It’s hard to be certain how long these things will take, but it’s definitely months,” said Richard Arenberg, who spent three decades as a Capitol Hill staffer. “And once you move into 2020 and begin to approach the election, the potential is there that Trump could just run out the clock.”
So far, Democrats have the momentum. Federal judges quickly dismissed two Trump lawsuits aimed at blocking Congressional subpoenas for his financial records from his longtime favorite bank, Germany’s Deutsche Bank, and accounting firm, Mazars USA. While those cases are now in the appeals process, Democrats took those quick decisions as a positive indication they’re holding the stronger hand.
Now, they’re hoping to work the same speedy magic with Trump’s tax returns. But that means, at least for the moment, ignoring a chance to review Trump’s New York state taxes.
Treating Trump’s state returns as a back-up plan works just fine with the guy responsible for introducing the New York law in the first place, state Senator Brad Hoylman.
“State legislators like me are not trying to tell Congress how to their job,” Hoylman told VICE News. “I leave it to the wisdom of the congressional tax committees to determine whether they want to take advantage of this.”
“I think Neal is taking a very conservative, very reasoned approach.”
The bill aims to give Congress options in the face of a defiant president, Hoylman said.
“It’s an escape valve for the pressure that’s building up between Congress and the White House,” Hoylman said. “If we can help Congress avoid some sort of constitutional showdown through this legislation, all the better.”
According to Sheil, Neal is right to focus on the federal tax returns first, because the state documents might be less revealing than his full federal returns.
“If I had a choice between seeing the federal tax returns or the state tax returns, I’d take the federal returns,” Sheil said. “I think Neal is taking a very conservative, very reasoned approach.”
Neal’s request rests on a century-old law that clearly states the administration “shall” turn over the returns upon his request.
Trump’s Treasury Secretary Stephen Mnuchin has refused anyway, arguing that Neal’s outreach has no legitimate underlying legislative purpose. Neal has shot back that his committee is checking up on how the IRS audits presidents to figure out whether Congress ought to pass a law covering the practice.
“He’s got such a strong case, he’s going to get those federal tax returns,” said Sheil. “The law is so clear.”
Yet the New York law may come in handy in the event that the conservative majority on the Supreme Court upends Neal’s request, Sheil said.
The New York bill specifies that the chairs of the tax-writing committees have the power to request the returns. That means Neal in the House, and his Republican counterpart in the Senate, Senator Chuck Grassley. So far the New York bill has passed through both houses and now await the signature of Democratic governor Andrew Cuomo.
While it remains unclear what Trump’s federal or state tax returns might reveal, state Senator Hoylman said Trump’s resistance to revealing them should raise red flags.
“Typically in politics, where there’s smoke there’s fire,” Hoylman said.
Cover: President Donald Trump meets with French President Emmanuel Macron in Caen, France, following a ceremony to commemorate the 75th anniversary of D-Day at The Normandy American Cemetery, Thursday, June 6, 2019, in Colleville-sur-Mer, Normandy, France. (AP Photo/Alex Brandon
