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Trump v. Committee on Oversight and Reform of U.S. House of Representatives

United States District Court, District of Columbia

May 20, 2019

DONALD J. TRUMP, et al. Plaintiffs,
v.
COMMITTEE ON OVERSIGHT AND REFORM OF THE U.S. HOUSE OF REPRESENTATIVES, et al. Defendants.

          MEMORANDUM OPINION

          Amit P. Mehta United States District Court.

         I. INTRODUCTION

         I do, therefore, . . . solemnly protest against these proceedings of the House of Representatives, because they are in violation of the rights of the coordinate executive branch of the Government, and subversive of its constitutional independence; because they are calculated to foster a band of interested parasites and informers, ever ready, for their own advantage, to swear before ex parte committees to pretended private conversations between the President and themselves, incapable, from their nature, of being disproved; thus furnishing material for harassing him, degrading him in the eyes of the country . . .

         - President James Buchanan[1]

         These words, written by President James Buchanan in March 1860, protested a resolution adopted by the U.S. House of Representatives to form a committee-known as the Covode Committee-to investigate whether the President or any other officer of the Executive Branch had sought to influence the actions of Congress by improper means. See Buchanan at 218-21. Buchanan “cheerfully admitted” that the House of Representatives had the authority to make inquiries “incident to their legislative duties, ” as “necessary to enable them to discover and to provide the appropriate legislative remedies for any abuses which may be ascertained.” Id. at 221. But he objected to the Covode Committee's investigation of his conduct. He maintained that the House of Representatives possessed no general powers to investigate him, except when sitting as an impeaching body. Id. Buchanan feared that, if the House were to exercise such authority, it “would establish a precedent dangerous and embarrassing to all my successors, to whatever political party they might be attached.” Id. at 226.

         Some 160 years later, President Donald J. Trump has taken up the fight of his predecessor. On April 15, 2019, the Committee on Oversight and Reform of the House of Representatives issued a subpoena for records to Mazars USA LLP, a firm that has provided accounting services to President Trump. The subpoena called for Mazars to produce financial records and other documents relating to President Trump personally as well as various associated businesses and entities dating back to 2011-years before he declared his candidacy for office. The decision to issue the subpoena came about after the President's former lawyer and confidant, Michael Cohen, testified before the House Oversight Committee that the President routinely would alter the estimated value of his assets and liabilities on financial statements, depending on the purpose for which a statement was needed. For instance, Cohen said that the President provided inflated financial statements to a bank to obtain a loan to purchase a National Football League franchise. But when it came time to calculate his real estate taxes, the President would deflate the value of certain assets. To support his accusations, Cohen produced financial statements from 2011, 2012, and 2013, at least two of which were prepared by Mazars.

         Echoing the protests of President Buchanan, President Trump and his associated entities are before this court, claiming that the Oversight Committee's subpoena to Mazars exceeds the Committee's constitutional power to conduct investigations. The President argues that there is no legislative purpose for the subpoena. The Oversight Committee's true motive, the President insists, is to collect personal information about him solely for political advantage. He asks the court to declare the Mazars subpoena invalid and unenforceable.

         Courts have grappled for more than a century with the question of the scope of Congress's investigative power. The binding principle that emerges from these judicial decisions is that courts must presume Congress is acting in furtherance of its constitutional responsibility to legislate and must defer to congressional judgments about what Congress needs to carry out that purpose. To be sure, there are limits on Congress's investigative authority. But those limits do not substantially constrain Congress. So long as Congress investigates on a subject matter on which “legislation could be had, ” Congress acts as contemplated by Article I of the Constitution.

         Applying those principles here compels the conclusion that President Trump cannot block the subpoena to Mazars. According to the Oversight Committee, it believes that the requested records will aid its consideration of strengthening ethics and disclosure laws, as well as amending the penalties for violating such laws. The Committee also says that the records will assist in monitoring the President's compliance with the Foreign Emoluments Clause. These are facially valid legislative purposes, and it is not for the court to question whether the Committee's actions are truly motivated by political considerations. Accordingly, the court will enter judgment in favor of the Oversight Committee.

         II. BACKGROUND

         A. The 116th Congress and the House Oversight Committee

         On January 3, 2019, the 116th Congress began with the Democratic Party controlling a majority of seats in the U.S. House of Representatives. One of the House's first actions was to adopt the “Rules of the House of Representatives, ” which govern proceedings during the two-year term. This vote took place on January 9, 2019.[2] Rule X of the adopted House Rules, titled “Organization of Committees, ” establishes various standing committees and their respective jurisdictions.[3] Among the standing committees with the broadest purview is the Committee on Oversight and Reform (“Oversight Committee”). Its subject areas of primary jurisdiction range from the lofty-“[o]verall economy, efficiency, and management of government operations”-to the mundane-“[f]ederal paperwork reduction.” House Rules at 8. If there is a common thread running through the subjects within the Oversight Committee's jurisdiction, it is the oversight of the operations and administration of the Executive Branch.

         Each of the House's standing committees possess “[g]eneral oversight responsibilities.” Id. at 9. Those responsibilities are meant to assist the House in (1) “its analysis, appraisal, and evaluation of” “the application, administration, execution, and effectiveness of Federal laws” and (2) “conditions and circumstances that may indicate the necessity or desirability of enacting new or additional legislation, ” and (3) “its formulation, consideration, and enactment of changes in Federal laws, and of such additional legislation as may be necessary or appropriate.” Id. Some of the House's standing committees have “[s]pecial oversight functions.” Id. at 10. The Oversight Committee is one of them. Its “special oversight function” is described as involving the “review and study on a continuing basis the operation of Government activities at all levels, including the Executive Office of the President.” Id. The Executive Office of the President consists of a small group of federal agencies that most immediately aid the President on matters of policy, politics, administration, and management. The President's closest advisors typically are situated in the Executive Office.[4]

         Rule X also vests the Oversight Committee with special authority to conduct investigations. According to the Rule, “the Committee on Oversight and Reform may at any time conduct investigations of any matter without regard to [other rules] conferring jurisdiction over the matter to another standing committee.” House Rules at 11 (emphasis added). In other words, the Oversight Committee is empowered to investigate as to any subject matter, even in those areas that are expressly assigned to other committees. No. other committee possesses such sweeping investigative authority.

         The Oversight Committee's broad investigative power is not new. In each of the four preceding Congresses-all controlled by the Republican Party, including during the final six years of the Obama Administration-the House Oversight Committee enjoyed the same power “at any time [to] conduct investigations of any matter.”[5]

         B. The Oversight Committee's Investigation

         From the start of the 116th Congress, the Oversight Committee, now led by a Democrat, moved aggressively to use its investigative powers. It did not adopt a resolution or issue a public statement defining the scope of what it intended to investigate. Instead, it sent a series of letters to the White House and elsewhere seeking various records regarding the President's personal finances, as well as records concerning his businesses and related entities. For instance, days before the new Congress started, the incoming Chairman of the Oversight Committee, Representative Elijah Cummings, wrote the President's personal lawyer, Sheri Dillon, and the Executive Vice President and Chief Compliance Counsel of the Trump Organization, George Sorial, asking them to produce previously requested “documents regarding the Trump Organization's process for identifying payments from foreign governments and foreign-government controlled entities . . .”[6] In a different letter, the Chairman asked the General Services Administration (“GSA”), the agency that manages federally owned and leased buildings, to produce records concerning the federal government's lease with the Trump Organization for the Old Post Office Building, which houses the Trump International Hotel in Washington, D.C.[7]Chairman Cummings indicated that he sought these records for multiple reasons, including the concern that the lease might violate the Constitution's Emoluments Clauses. Cummings' April 12th GSA Letter at 1.[8] These are but two examples of the types of records requests made by the Oversight Committee at the start of the 116th Congress.

         The investigative demand that sparked this lawsuit was issued on January 8, 2019. On that day, Chairman Cummings wrote to Pat Cipollone, the White House Counsel, asking the President to produce “documents related to President Trump's reporting of debts and payments to his personal attorney, Michael Cohen, to silence women alleging extramarital affairs with the President before the election.”[9] The prior year, in May 2018, the Office of Government Ethics had concluded that the President should have disclosed a payment made by Cohen as a liability on the President's public financial disclosure report.[10] Chairman Cummings noted in the January 8thletter that the Oversight Committee “has jurisdiction over a wide range of matters, including the Ethics in Government Act of 1978, ” a law that requires “all federal officials, including the President, to publicly disclose financial liabilities that could impact their decision-making.” Cummings' January 8th Letter at 1. On February 1, 2019, the White House Counsel responded to Chairman Cummings that the President was prepared to consider making some documents available for review.[11]

         Chairman Cummings wrote the White House Counsel again on February 15, 2019. See Cummings' February 15th Letter. He opened by stating that, by his January 8th letter, “the Committee launched an investigation into the failure of President Donald Trump to report hundreds of thousands of dollars in payments and liabilities to his former attorney, Michael Cohen, to silence women alleging extramarital affairs during the 2016 presidential campaign.” Id. at 1. Chairman Cummings explained that “[t]he Committee's interest in obtaining these documents is even more critical in light of new documents obtained by the Committee from the Office of Government Ethics (OGE) that describe false information provided by lawyers representing President Trump . . . ” Id. The letter went on to detail a timeline of recent events starting with statements made by the President's lawyers to the Office of Government Ethics and to the public about a supposed purpose of the Cohen payments unrelated to the election; followed by the President's disclosure of the Cohen payments on his 2017 Financial Disclosure form as a liability of less than $250, 000; and then revelations by federal prosecutors that the Cohen payments in fact exceeded the $250, 000 reported by the President. Id. at 2-6. In the end, Chairman Cummings cited Congress's “plenary authority to legislate and conduct oversight regarding compliance with ethics laws and regulations” as the source of its authority to make the records demand, as well as its “broad authority to legislate and conduct oversight on issues involving campaign finance.” Id. at 7.

         C. Subpoena to Mazars USA LLP

         On February 27, 2019, Michael Cohen appeared for a public hearing before the House Oversight Committee.[12] By this time, Cohen had pleaded guilty to a host of federal felony charges, including tax evasion, campaign finance violations, and making false statements to Congress.[13]During his testimony, Cohen alleged that financial statements prepared by the President's accountants falsely represented the President's assets and liabilities. See Cohen Testimony at 13, 19. Specifically, Cohen stated that, in his experience, “Mr. Trump inflated his total assets when it served his purposes . . . and deflated his assets to reduce his real estate taxes.” Id. Cohen supplied the Oversight Committee with portions of the President's Statements of Financial Condition from 2011, 2012, and 2013, some of which were signed by Mazars.[14]

         Following Cohen's testimony, Chairman Cummings wrote to Mazars on March 20, 2019. The letter first summarized aspects of Cohen's testimony accusing the President of manipulating financial statements to suit his purposes; it then identified a half-dozen questions about assets and liabilities reflected in the President's Statements of Financial Condition that Cohen had provided to the Oversight Committee. See Cummings' March 20th Letter at 1-3. Chairman Cummings stated that these financial statements “raise questions about the President's representations of his financial affairs on these forms and on other disclosures, particularly relating to the President's debts.” Id. at 1. The letter concluded by asking Mazars to produce four categories of documents with respect to not just the President, but also several affiliated organizations and entities, including the Trump Organization Inc., the Donald J. Trump Revocable Trust, the Trump Foundation, and the Trump Old Post Office LLC. See Id. at 4. The records requested included statements of financial condition, audited financial statements, documents relied upon to prepare any financial statements, engagement agreements, and communications between Mazars and the President or employees of the Trump Organization. See Id. The relevant time period identified for the requested records was “January 1, 2009, to the present.” Id. In his initial letter to Mazars, Chairman Cummings did not articulate any legislative purpose for the records requested.

         A week later, on March 27, 2019, Mazars responded that it “cannot voluntarily turn over documents sought in the Request.”[15] Mazars cited various federal and state regulations and professional codes of conduct that prevented it from doing so. See Mazars March 27th Letter at 1.

         On April 12, 2019, Chairman Cummings distributed a memorandum to Members of the Oversight Committee (“Memorandum”), advising them of his intent to issue a subpoena to Mazars.[16] Under a section titled “Need for Subpoena, ” Chairman Cummings cited to Cohen's testimony that the President had “altered the estimated value of his assets and liabilities on financial statements, ” as well as to the records Cohen had provided to support these claims. Cummings' April 12th Mem. at 1-2. He also referenced “[r]ecent news reports” raising “additional concerns regarding the President's financial statements and representations.” Id. at 1. In the “Conclusion” section of the Memorandum, Chairman Cummings listed the purposes for seeking the Mazars-held records:

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 Committee's interest in these matters informs its review of multiple laws and legislative proposals under our jurisdiction, and to suggest otherwise is both inaccurate and contrary to the core mission of the Committee to serve as an independent check on the Executive Branch.

Id. at 4. Chairman Cummings allowed 48 hours for Members to offer their views on issuing the subpoena. See Id. The Committee's new Ranking Member, Congressman Jim Jordan, responded, declaring the action “an unprecedented abuse of the Committee's subpoena authority to target and expose the private financial information of the President of the United States.”[17]

         Notwithstanding the Ranking Member's objection, on April 15, 2019, the Oversight Committee issued the subpoena to Mazars that is the subject of this lawsuit. The subpoena sought the same four categories of records identified in the March 20th letter relating to the President and his affiliated organizations and entities. See Subpoena, ECF No. 9-2, Ex. A, at 3 [hereinafter Subpoena]; see also Cummings' March 20th Letter at 4. The subpoena, however, differed in one respect-it narrowed the relevant time period by two years to “calendar years 2011 through 2018.”[18] Subpoena at 3.

         D. Procedural History

         1. Plaintiffs Seek Injunctive Relief

         On April 22, 2019, President Trump, along with his affiliated organizations and entities (collectively “Plaintiffs”), [19] filed this lawsuit. See Compl., ECF No. 1 [hereinafter Compl.]. They originally named as defendants Chairman Cummings; Peter Kenny, the Chief Investigative Counsel of the Oversight Committee; and Mazars. Plaintiffs asked the court, among other things, to declare that the Oversight Committee's subpoena to Mazars “is invalid and unenforceable” and to issue a “permanent injunction quashing Chairman Cummings' subpoena.” Compl. at 13. With their Complaint, Plaintiffs filed an Application for a Temporary Restraining Order and Motion for Preliminary Injunction. See Pls.' App. for a TRO, ECF No. 9; Pls.' Mot. for Prelim. Inj., ECF No. 11; Stmt. of P&A in Support of Pls.' App. for a TRO and Mot. for Prelim. Inj., ECF Nos. 9-1, 11-1 [hereinafter Pls.' Stmt.]. The Application asked the court to enter an order “prohibiting Defendants from enforcing or complying with Chairman Cummings' subpoena so that the Court can decide Plaintiffs' motion for a preliminary injunction.” Pls.' Stmt. at 14.

         Following discussions with the Oversight Committee, Plaintiffs consented to the Committee's intervention as a defendant in this matter and agreed to dismiss Chairman Cummings and Kenny as defendants. See Consent Mot. of the Oversight Committee to Intervene, ECF No. 12; Joint Stip., ECF No. 15. The parties settled on a briefing schedule on Plaintiffs' motion for preliminary injunction, which the court entered. Minute Order, Apr. 23, 2019. The Oversight Committee also agreed to postpone the date for Mazars to produce records until seven days after the court ruled on Plaintiffs' motion. See Id. That agreement made it unnecessary for the court to enter a temporary restraining order.

         2. Consolidation under Rule 65(a)(2)

         Under the entered schedule, the parties were to appear before the court for oral argument on May 14, 2019. Five days before the hearing and one day after the parties had completed briefing, the court entered an order announcing its intention to consolidate the hearing on the preliminary injunction with the “trial on the merits, ” as is permitted under Federal Rule of Civil Procedure 65(a)(2). See Order, ECF No. 25 [hereinafter Order]. The court explained the reason for consolidation as follows:

The sole question before the court-Is the House Oversight Committee's issuance of a subpoena to Mazars USA LLP for financial records of President Donald J. Trump and various associated entities a valid exercise of legislative power?-is fully briefed, and the court can discern no benefit from an additional round of legal arguments. Nor is there an obvious need to delay ruling on the merits to allow for development of the factual record.

Id. The court made the decision to consolidate conscious of the need to expedite these types of cases. In Eastland v. U.S. Servicemen's Fund, the Supreme Court stated that motions to enjoin a congressional subpoena “be given the most expeditious treatment by district courts because one branch of Government is being asked to halt the functions of a coordinate branch.” 421 U.S. 491, 511 n.17 (1975); see also Exxon Corp. v. F.T.C., 589 F.2d 582, 589 (D.C. Cir. 1978) (describing Eastland as emphasizing “the necessity for courts to refrain from interfering with or delaying the investigatory functions of Congress”). The court also was cognizant of the fact that the Constitution's Speech or Debate Clause forecloses Plaintiffs from compelling discovery from the Oversight Committee, its Members, or staff. See Eastland, 421 U.S. at 503 (stating that “a private civil action, whether for an injunction or damages, creates a distraction and forces Members to divert their time, energy, and attention from their legislative tasks to defend the litigation”); see also Gravel v. United States, 408 U.S. 606, 616-22 (1972). Relatedly, the D.C. Circuit has recognized that evidence relevant to determining whether Congress has acted in its legislative capacity is likely to come largely, if not exclusively, from public sources. See Shelton v. United States, 404 F.2d 1292, 1297 (D.C. Cir. 1968) (observing that relevant sources of evidence include “the resolution of the Congress authorizing the inquiry, ” “the opening statement of the Chairman at the hearings, ” and “statements of the members of the committee . . . or of the Staff Director”) (citations omitted). The court ordered the parties to submit any additional evidence to the court or lodge an objection to consolidation by May 13, 2019. Order at 2.

         Plaintiffs protested the court's consolidation order, but the Oversight Committee did not. See Pls.' Objections to Rule 65(a)(2) Consolidation, ECF No. 29 [hereinafter Pls.' Objections]; see also Oversight Committee's Resp. to the Court's May 9, 2019 Order, ECF No. 31. Plaintiffs asserted that, in briefing only a motion for preliminary injunction, they were constrained in their arguments on the merits. See Pls.' Objections at 4 (“Nor have the parties had the opportunity to fully brief the important constitutional questions that this case presents.”). They also maintained that they needed more time to obtain additional evidence, specifically (1) a memorandum of understanding negotiated between Chairman Cummings and a Chair of a different House Committee, which they believed the Ranking Member of the Oversight Committee would voluntarily disclose to them, and (2) communications between Mazars and the Oversight Committee. Id. at 6-7. Plaintiffs did not assert that they could obtain discovery from the Oversight Committee. See generally id.

         At the May 14th hearing, the court heard further argument from Plaintiffs on consolidation, and overruled their objection. The court found that no additional briefing would aid in its decision- making, as the parties had comprehensively presented the issues and cited all applicable precedent. See Hr'g Tr. at 34. Indeed, Plaintiffs could identify no new argument that they would make if given the chance to do so. Id. at 34-36. To allow for Plaintiffs' asserted need to gather additional evidence, the court left the record open until May 18, 2019. Id. at 75. Plaintiffs already had submitted some additional evidence after the consolidation order, which consisted of news reports of public statements of various Members of Congress. See Supp. Decl. of William S. Consovoy, ECF No. 30 [hereinafter First Supp. Decl.]. Plaintiffs added two more letters from the Ranking Member before the record closed. See Second Supp. Decl. of William S. Consovoy, ECF No. 34.[20]

         E. Cross-Motions for Summary Judgment

         The legal issues presented do not require the court to resolve any fact contests because the material facts are not in dispute.[21] Accordingly, having ordered consolidation under Rule 65(a)(2), the court treats the parties' briefing as cross-motions for summary judgment. See Mar. for Life v. Burwell, 128 F.Supp.3d 116, 124 (D.D.C. 2015) (reviewing case consolidated under Rule 65(a)(2) as cross-motions for summary judgment); Indep. Bankers Ass'n of Am. v. Conover, 603 F.Supp. 948, 953 (D.D.C. 1985) (same).

         III. LEGAL PRINCIPLES

         A. Congress's Broad ...


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