(Bloomberg) — The U.S. Supreme Court rejected a bid by Donald Trump to keep eight years of his tax returns and other financial records out of the hands of a Manhattan prosecutor conducting a criminal investigation into the former president and his company, the Trump Organization Inc.
The justices without explanation or any published dissent refused to block a subpoena to Trump’s accounting firm by Manhattan District Attorney Cyrus Vance Jr., whose investigation looms as one of the biggest legal threats to Trump. In August, prosecutors suggested in court papers they may be looking into tax fraud, insurance fraud, and falsification of business records charges.
The high court had deferred acting in the case for four months, waiting until Trump again became a private citizen to take a step that could boost a probe that initially focused on hush-money payments to adult-film star Stormy Daniels and another woman who claimed to have sexual relationships with Trump years before he became president. Vance’s investigators have already gotten hold of some of the tax records from other sources, according to people familiar with the matter.
But with Monday’s order, Manhattan prosecutors can now dive into a trove of Trump’s tax records. This wealth of new material will allow investigators to compare statements made by the Trump Organization to the Internal Revenue Service with claims made to banks, insurers and other parties.
“Now they have the evidence that the accounting firm and the corporation have,” said John Moscow, a former chief prosecutor for serious economic crimes at the Manhattan district attorney’s office. “At this point, Trump’s position has to be that he didn’t do anything wrong, because if he did, they’d find it.”
Trump issued a statement after the Supreme Court order calling Vance’s investigation “a continuation of the greatest political witch hunt in the history of our country,” following Special Counsel Robert Mueller’s probe of Russian interference in the 2016 election and two unsuccessful impeachment attempts. He suggested prosecutors in “far-left states and jurisdictions” were trying to “to take out a political opponent.”
Vance has been beefing up his team in anticipation of receiving Trump’s tax records. Late last year, the district attorney hired FTI Consulting, a leading forensic accounting firm, to assist in the investigation. Earlier this month, Mark Pomerantz, a former federal prosecutor, came aboard as a special assistant district attorney, according to Vance’s spokesman, Danny Frost.
As head of the criminal division of the Manhattan U.S. Attorney’s office from 1997 to 1999, Pomerantz oversaw complex fraud and organized crime prosecutions, including that of organized crime boss John Gotti Jr. He’s more recently been a top corporate defense lawyer at Paul Weiss Rifkind Wharton & Garrison, from which he is taking a leave of absence to work with Vance.
Trump’s accounting firm, Mazars USA, isn’t contesting the subpoena. Mazars declined to comment on the Trump tax records Monday, but said it was “committed to fulfilling” its professional and legal obligations.
Monday’s rejection effectively shuts down the avenue the high court left open for Trump in July, when the justices rejected his claim of sweeping immunity for sitting presidents from state criminal subpoenas but said he could press more specific objections. Two lower courts rejected Trump’s contention that the subpoena was too broad and was issued in bad faith, prompting the now-former president to turn to the Supreme Court.
Vance had agreed to hold off enforcing the subpoena while the Supreme Court considered Trump’s new arguments.
Any material Vance receives would be covered by laws protecting grand jury secrecy, meaning it isn’t likely to become public anytime soon.
Trump told the Supreme Court he will suffer “irreparable harm” if the materials are turned over. “Even if the disclosure of his papers is limited to prosecutors and grand jurors, the status quo can never be restored once confidentiality is destroyed,” his lawyers said in court papers.
Vance said the year-plus delay has already hampered the investigation.
‘A Lot to Do’
Trump “has had multiple opportunities for review of his constitutional and state law claims, and at this juncture he provides no grounds for further delay,” Vance argued. “His request for extraordinary relief should be denied, and the grand jury permitted to do its work.”
Following this morning’s order, Vance’s office said, “The work continues.”
Given the complexity of Trump’s financial statements, the broad range of records that Vance’s office will now have to pore over and the political sensitivity surrounding an investigation of this magnitude, the process will take time, said Moscow.
“There’s a lot to do,” he said. “It’s not going to be quick, it’s going to be thorough.”
The New York Times in September published an analysis of at least two decades of Trump’s closely-guarded tax records, reporting that he paid just $750 in federal income tax in 2016 and in 2017. The Times said Trump reported huge business losses, effectively wiping out all income taxes in 10 of the previous 15 years as well.
The case is Trump v. Vance, 20A63.
(Updates with Trump statement)
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