By Shayna Jacobs
New York - A federal appeals court ruled Wednesday that Manhattan's district attorney can enforce his subpoena for President Donald Trump's tax returns, rejecting a bid by Trump's lawyers to kill the request on grounds it's a malicious political ploy and potentially setting up another high-stakes showdown at the Supreme Court.
Though the district attorney has agreed not to enforce his subpoena immediately while Trump asks the high court to hear his case again, Wednesday's ruling marks another blow for the president, who has fought for more than a year to shield his financial records from investigators, and follows separate, jarring revelations about the enormity of his debt.
The ruling was issued by a panel of the 2nd US Circuit Court of Appeals, which concluded, "We have considered all of the President's remaining contentions on appeal and have found in them no basis for reversal."
District Attorney Cyrus Vance Jr. is seeking eight years of the president's tax returns and related documents as part of his investigation into alleged hush-money payments made ahead of the 2016 election to two women who said they had affairs with Trump years prior. Trump denies the claims. Investigators want to determine if efforts were made to conceal the payments on tax documents by labeling them legal expenses.
Trump's lawyers had argued Vance was on a "fishing expedition" and out to harass the president, saying the grand jury subpoena to Trump's accounting firm, Mazars USA, was issued in "bad faith." But the district attorney's office had indicated recently that its probe also includes dealings at the Trump Organization, the president's family business that oversees hundreds of subsidiaries. If the company deceived lenders or insurance companies by manipulating the value of its assets, fraud charges would potentially apply, officials have said.
The three-judge panel who heard the president's appeal shot down his claim that the district attorney's investigation is limited only to the alleged payments made by Michael Cohen, Trump's former lawyer, to adult-film actress Stormy Daniels and former Playboy model Karen McDougal - saying in their ruling that the "bare assertion . . . amounts to nothing more than implausible speculation."
"Similarly," the ruling says, "the President's allegations of bad faith fail to raise a plausible inference that the subpoena was issued out of malice or an intent to harass."
"It is far from reasonable to infer that a single subpoena would define the entire scope of a grand jury's investigation, particularly in complex financial investigations," the ruling says. Multiple subpoenas are often issued "seeking different information from different recipients" during investigations, as new clues are revealed.
Trump's lawyer Jay Sekulow said the president would be petitioning the Supreme Court for a stay, a legal ruling that halts proceedings while an issue is litigated. The district attorney's office declined to comment.
Vance's bid for Trump's tax records has been stalled since last year, when he issued the subpoena to Mazars.
Trump's lawyers, who have signaled that they would ask the Supreme Court to look at the case again, have already lost at the high court, which in July rejected their initial argument that, as president, Trump is immune from prosecution. The justices said, however, that Trump could try again with a different approach.
Trump's appeal arrived at the 2nd Circuit after U.S. District Judge Victor Marrero, in August, rejected Trump's latest argument and wrote in his decision that "justice requires an end to this controversy."
Trump has long resisted disclosure of his tax records and did not voluntarily release them while campaigning in 2016, as had been customary for presidential candidates.
Late last month, the New York Times published an explosive report on Trump's tax returns, detailing massive write-offs that enabled him to pay no federal income taxes for many years - and just $750 for two years in a row. It also revealed he has hundreds of millions of dollars in debt with loans coming due soon.