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Trump loses first round to keep taxes from NY prosecutors

Bob Van Voris and Christian Berthelsen, Bloomberg News on

Published in Political News

NEW YORK -- President Donald Trump is closer to losing control of his tax filings after years of defying a modern presidential norm of disclosing them to the public.

A federal judge in New York ruled that Trump can't stop his accountants, Mazars USA LLP, from turning over his taxes and other financial documents to Manhattan District Attorney Cyrus Vance Jr., whose office is investigating whether the Trump Organization falsified business records related to hush-money payments.

Unless Trump can quickly win a delay or reversal of the ruling, Vance could soon start receiving the material. The president is already appealing the decision.

The ruling marks another crack in the legal wall Trump has constructed around his personal financial records. Two judges have already ruled against Trump in other cases, with the president appealing those decisions. The stakes of the legal fight have only increased with the Democrats' announcement of a formal impeachment inquiry.

Lawyers from Vance's office told Marrero that they would keep the material secret.

"This court cannot endorse such a categorical and limitless assertion of presidential immunity," U.S. District Judge Victor Marrero wrote in his ruling. "The expansive notion of constitutional immunity invoked here to shield the president from judicial process would constitute an overreach of executive power."

Vance is seeking evidence about hush payments made to adult film star Stormy Daniels and former Playboy model Karen McDougal. Federal prosecutors last year charged Trump's former personal lawyer, Michael Cohen, with coordinating payments to Daniels and McDougal at the direction of Trump, whom federal prosecutors famously referred to as "Individual 1" in court papers.

Cohen pleaded guilty last year to campaign-finance violations, tax evasion, bank fraud and lying to Congress and is serving a three-year prison term. In a remarkable turnabout, the same Justice Department that prosecuted Cohen and labeled him as "Individual 1" took preliminary steps this month to back Trump's argument that the president can't be investigated by state authorities.

 

In the other cases involving Trump's records, the House Ways and Means Committee is trying to get six years of his tax records from the Internal Revenue Service. Trump sued separately in Washington to block a New York law that would let Congress get his state tax returns. And he's fighting subpoenas from two other House committees that are trying to get financial information from Mazars and from his bankers, Deutsche Bank AG and Capital One Financial Corp.

Congressional Democrats want to get hold of the records to investigate matters including Trump's possible business ties to Russia and violations of the Constitution's emoluments clauses, which curbs a president's ability to take payments from foreign and domestic governments or officials.

In the Vance case, lawyers for Trump made sweeping claims that the U.S. Constitution protects him, his companies and his business associates from criminal investigation. Trump sued Vance and Mazars in his individual capacity, not as president. Mazars took no position in the case.

Vance's investigation is focused on determining whether business records were falsified to hide the nature of the payments to Daniels and McDougal, which were made before the 2016 presidential election. The Justice Department has for decades taken the position that the Constitution protects presidents from being charged criminally while in office. But the question of whether he can be probed by state authorities has never been tested in court. Vance is also investigating Trump's companies.

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