Trump’s tax papers are with the New York Legal professional’s Workplace. However the clock is ticking.
Last Monday, the Supreme Court in an unsigned order of a single judgment denied former President Donald Trump’s request that the state’s highest court suspend a New York State grand jury summons. This subpoena was addressed to Mazars USA LLP, the accounting firm that prepared Trump’s personal tax returns and those of various Trump organizations. Indeed, Trump’s tax returns and underlying tax documents were in the hands of Manhattan District Attorney Cyrus Vance by Thursday.
Trump technically lost the court battle to avoid filing his tax materials, but he may have won the longer-term war.
Trump technically lost the judicial battle not to have to show his tax materials, but he may have won the longer-term war – to slow the progress of the criminal investigation, perhaps to the point where prosecutors don’t see certain cases that have passed can put forward their limitation periods. Recently, New York City law passed a new law that removes the statute of limitations for the length of time a president is in office. Congress has made a similar effort but needs to move faster.
Last week’s Supreme Court ruling on the Mazars US case came as no surprise as Trump had already lost that fight once. Last July, the Supreme Court ruled against Trump’s argument that a sitting president should not be forced to respond to a state subpoena. However, the court mentioned that there might be other, less novel, objections to the subpoena. Trump’s lawyers quickly understood the hint and asked the Supreme Court again to continue the execution of the subpoena. This time they claimed the subpoena was overseas and was issued in bad faith. But the court’s denial of that motion this week finally ended the litigation, and Mazars USA has finally presented the cited documents to New York prosecutors.
All prosecutors know that a financial crime investigation begins with the documents. Our financial system is based on recorded transactions – bank records, tax records, accounting records – and these records become evidence of the crime. Without financial records, other types of evidence, such as testimony or surveillance, are simply not enough to unequivocally prove a case.
Because of this, the courts did not buy the former president’s argument that the subpoenas submitted to Mazars USA – which included all tax return and tax preparation documents, financial reports, contracts and agreements, and all communications with Trump and his requested organizations – were overseas. When prosecutors summon too narrow a range of documents, they run the risk of other relevant – or even exculpatory – documents appearing for the first time in court. This is an opportunity no prosecutor can take.
Without financial records, other types of evidence, such as testimony or surveillance, are simply not enough to unequivocally prove a case.
However, the prosecutors investigating Trump’s financial deals still face a number of challenges. First, almost all violations of federal and state criminal law have a deadline known as the statute of limitations, beyond which a suspect cannot be charged with a crime. The limitation periods vary widely between the federal states and the federal system. Some serious crimes can have statutes of limitations of up to 10 or 20 years. Certain states do not have statute of limitations on murder and some types of sexual assault. Most federal crimes, however, have a five-year statute of limitations. In New York, the suspected financial crimes Vance is most likely to investigate – bank fraud, insurance fraud, and tax fraud – have a statute of limitations of just six years. So Trump is already working to his advantage with a clock that is running down quickly.
Second, financial investigations are time consuming, and a US president under investigation has a number of tools that can take even more time before the statute of limitations goes into effect.
Trump’s challenges to the Mazars USA subpoena, most of which related to his unique position as President of the United States, are a prime example: the Manhattan Attorney’s Office under Vance opened their criminal investigation in the summer of 2018, Mazars USA became on August 29, 2019 displayed. Trump’s first judicial challenge to the subpoena took place in the federal district court, then in the federal appeals court, and finally in the US Supreme Court, leading to the first Supreme Court ruling against him on July 9. 2020. Trump’s second legal challenge followed the same arduous path to the Supreme Court, ending again in defeat on February 22nd. Prosecutors eventually prevailed but had to spend a year and a half procuring only the documents that are usually the starting point for a financial crime investigation.
Third, any prosecutor attempting to investigate a sitting president is constrained by the legal, or possibly political, argument that a sitting president cannot be prosecuted. Indeed, the Justice Department last took this position in a 2000 Office of Legal Counsel opinion, and that opinion remains the Justice Department’s policy to this day. Whether this policy is right or wrong, there would certainly be a lot of manual labor if it were not followed. In the meantime, the watch would continue to tick the statute of limitations.
The potential ramifications of these Justice Department policies are worrying: a sitting or past president would avoid prosecution for a crime whose statute of limitations expired during his tenure as president. A president who has a four-year term would be acquitted of many criminal acts; A president who has two terms of four years would avoid criminal responsibility for almost all crimes committed before or during his first term as president.
New York State has taken sensible steps to address this issue in view of possible federal law enforcement actions against former presidents. On February 10, New York State Legislature passed the New York No Citizen Above the Law Bill sponsored by Senate Deputy Majority Leader Michael Gianaris. The new law provides that when a past president is charged with a New York State crime, the time he was president is excluded from the statute of limitations calculation. Whether this law applies to criminal behavior prior to the law’s enactment remains to be seen, but there is a strong argument that it can be applied if the statute of limitations has not expired by the time the law is passed. Therefore, these laws must be passed as soon as possible.
The federal prosecution of former presidents requires the same protective measures. At last year’s US Congress, the House of Representatives tabled a bill entitled “No President Is Above the 2020 Bill,” introduced by Rep. Jerry Nadler, DN.Y., which breaks the statute of limitations for federal crimes committed by the President or Vice-President before or during their term of office. This bill provides the much-needed balance to the Justice Department’s conclusion that a sitting president cannot be indicted. Congress should act to get it passed quickly. Until then, the clock is still ticking.