Trump’s Tax Returns Remain Hidden. Blame Richard Neal.

July 13, 2020

The American Prospect

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Don’t let the headlines fool you. The Supreme Court’s decision last Thursday in Trump v. Mazars doesn’t deserve much celebration. Although the Court upheld Congress’s right to investigate the president as a general matter, it placed new restrictions on that power and punted on the specific question at hand: Can Congress get immediate access to President Trump’s financial records through his accounting firm? With the case potentially headed for many more months of litigation, there is a significant chance the president’s records will not be made public before the election this fall.

But even an imperfect outcome such as this one didn’t have to deal a fatal blow to the cause of transparency. The main problem is the timing of this ruling, just four months before the presidential election, leaving scant time to respond or follow up. That was avoidable. And one man, House Ways and Means Committee Chairman Richard Neal, deserves the blame for failing to avoid it. His lengthy and unnecessary delays in pursuing the president’s tax returns made this result possible.

This decision, which limited Congress’s right to subpoena the president and sent the specific cases over subpoenas of Trump financial records back to the lower courts, will open up future exercises of congressional oversight authority to specious challenges and potentially fatal delays on vague “separation of powers” grounds. More concretely in the short-term, while the lower courts could, and should, quickly rule that Trump’s financial records must be turned over to Congress, there’s real reason to worry that they won’t act quickly enough.

Significantly, the requests for financial records adjudicated this week didn’t need to be the first ones to end up at the Supreme Court. The Ways and Means Committee’s subpoena to access Trump’s tax returns could have been issued on the first day of the 116th Congress, in January 2019. The request in that case is bolstered by an explicit provision of federal law that empowers Congress to access tax returns, and was written out of fear of self-dealing by executive branch officials.

Tax returns would reveal to lawmakers the structural weaknesses in our current, threadbare presidential financial disclosure system, which may not be adequate in an era of widespread shell companies (such as those owned by Trump). In other words, even more than in Mazars, Congress’s legislative interest in the Ways and Means Committee utilizing its subpoena power is beyond any good-faith dispute.

In 2018, House Democrats swept into the majority with a mandate to act as a check on Trump, and obtaining the president’s tax returns quickly became the symbol of this new accountability-focused posture. It was to be the first flex of the new majority’s muscle. But the man to whom that task fell, newly-minted Ways and Means Chairman Richard Neal, had no real interest in carrying it out.

As days stretched into weeks and then months, Neal insisted that he was merely “documenting the case” and approaching the task “methodically.” It was clear, however, that he was just pushing off what he considered to be an unsavory chore. There was also a political rationale. Neal wanted to get White House support for a bipartisan retirement security bill, which just so happened to include a way to get ordinary 401(k) customers to buy high-cost annuities. This was a gift to some of Neal’s biggest insurance donors.

Neal didn’t bring himself to make the initial request for Trump’s tax returns until April 2019, the day after his retirement security bill passed out of committee. Neal then didn’t issue a subpoena until May, and didn’t sue to enforce the subpoena until July. Only after waiting another seven weeks did he ask the D.C. District Court that the case be expedited—a request that the presiding judge, Trevor McFadden, unsurprisingly denied, noting that “it is unclear why only now the committee asked for expedited consideration.”

By the time all was said and done, Neal had managed to whittle away a quarter of the Congressional session, with nothing on Trump’s tax returns to show for it.  Happily for him, however, the retirement security bill passed Congress as part of a late-2019 appropriations package and was signed by the president.

Neal could have issued his request for Trump’s tax returns on day one, as we urged in January. With tight deadlines for Treasury Secretary Mnuchin to respond and an aggressive litigation strategy, the committee could have advanced its case quickly. It is not far-fetched to imagine that Ways and Means would have been arguing before the Supreme Court in the fall of 2019 and expecting a decision in January 2020.

Even if the Court had issued the same confused ruling in the tax returns case as it did in Trump v. Mazars, an earlier ruling would have meant  an additional six months in which to seek a final resolution upon remand to a lower court. With the extra time, it is much more likely that disclosure would have been compelled ahead of the election.

But instead of being the first case to reach the Supreme Court, the Ways and Means case is presently stalled in D.C. District Court. Judge McFadden has repeatedly delayed a ruling, as he awaits a decision in a case that is currently pending before the full D.C. Circuit Court of Appeals. A case that could have been resolved already is mired in delays, and Trump’s tax returns remain a secret.

Neal seems relatively unbothered by this, telling MassLive on Thursday that, “the challenge we’ve always had here is that the court moves in its own deliberate pace.” This posturing rings hollow, given Neal’s record. While the courts deserve their share of blame for the slow pace, Neal conveniently elides his own central role in slowing this fight and facilitating a disastrous outcome.

Delivering this fundamental midterm promise before voters head to the polls again this fall would have been, no doubt, a consequential political win. But politics aside, accessing the president’s tax returns will facilitate steps toward more effective, less corrupt governance. With Trump’s financial information in hand, House Democrats would be better prepared to legislate around his many conflicts of interest, particularly as lawmakers pour trillions of dollars in stimulus money into the ailing economy.

It is true that Neal’s frequent negotiations with the Trump administration, on annuities and tax reform and the new NAFTA trade agreement and each and every “Infrastructure Week,” might have been less amiable had Neal been a dogged pursuer of Trump’s returns. Whether that trade-off would have been worth it may be yet another area of disagreement between Neal and progressives.

But here is the important point: Trump’s strategy to draw out the tax return fight indefinitely has been clear from the beginning, but it was not inevitable that it would succeed. Faced with a president vowing to run out the clock, Neal should have moved with haste. But the Ways and Means chairman could not, it seems, muster the energy to fight on the public’s behalf and hold this president accountable. Although the Supreme Court ultimately handed Trump his win, if Trump succeeds in his fight to keep his financial records hidden from Congress, no one should forget the leading role Richard Neal played in making that possible.

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