Second judge rules President Trump can't block Congress's subpoenas of his banking records

Kevin McCoy
For the second time this week, a federal judge rejected requests to block Congress from obtaining Trump's financial records.

NEW YORK —  A federal judge on Wednesday denied President Donald Trump's effort to block subpoenas from Democratically-controlled House committees that seek records from two financial companies for investigations of him, his family, his businesses and others.

In a decision that dealt Trump a second defeat on similar congressional efforts this week, U.S. District Judge Edgardo Ramos ruled that the subpoenas passed constitutional muster, had a “legitimate legislative purpose,” and were in the public interest.

Ramos also ruled that Trump lawyers had made sufficient arguments that allowing the committees to obtain at least a decade of Trump financial dealings transacted through Deutsche Bank and Capital One Financial Corp. could cause “irreparable harm” to the president and his companies.

However, the judge said that impact was outweighed by the constitutionally enshrined investigative authority of the federal government’s legislative branch.

Separately, Ramos denied the request by the Committee on Financial Services and the Permanent Select Committee on Intelligence to consolidate his ruling by applying it to the underlying merits of the lawsuit.

Citing a lengthy list of U.S. Supreme Court rulings and other legal precedents, the judge said he felt it was unlikely that Trump would ultimately prevail in the legal fight. 

“Accordingly, the court will not enjoin the committees’ efforts to enforce the subpoenas,” said Ramos as he concluded a nearly hour-long reading of his decision in a packed lower Manhattan courtroom.

Ramos denied Trump lawyer Patrick Strawbridge’s request for an immediate stay of the ruling.

Rep. Maxine Waters, chairwoman of the House Financial Services Committee, and Rep. Adam Schiff, chairman of the House Intelligence Committee, praised Ramos' decision, calling it a victory for Congress.

“Congress’ authority to conduct relevant oversight has been repeatedly challenged by this Administration," the two Democratic lawmakers said in a statement. "The decision made in the U.S. District Court for the Southern District of New York today is a victory for the role of Congress as a co-equal branch of government and for the important work our Committees are doing in protecting and serving the interests of the American public.”

Strawbridge told the judge “it’s probably a safe bet” that the Trump legal team would immediately ask the U.S. Court of Appeals for the Second Circuit to review the ruling and issue a stay that would delay or block any immediate release of the records to the congressional panels.

Trump, his three eldest children, The Trump Organization and other businesses had argued that Deutsche Bank and Capital One Financial should not be required to turn over the information because subpoenas issued by the House panels "have no legitimate or lawful purpose."

"The subpoenas were issued to harass President Donald J. Trump, to rummage through every aspect of his personal finances, his businesses, and the private information of the President and his family, and to ferret about for any material that might be used to cause him political damage," Trump lawyers argued in the Southern District of New York federal court complaint they filed on April 29.

U.S. District Judge Amit Mehta in Washington, D.C., rejected a similar argument on Monday, ruling that Trump cannot block his longtime accounting firm, Mazars USA, from providing his financial records to the House Oversight and Reform Committee. The panel subpoenaed the records to compare them with testimony from Trump’s former personal lawyer, Michael Cohen, and with government disclosure forms.

Trump's lawyers filed a notice of appeal of that ruling on Tuesday with the U.S. Court of Appeals for the District of Columbia Circuit.

Ramos and Mehta were nominated for their federal court appointments by President Barack Obama.

During legal arguments in New York on Wednesday, Strawbridge and Douglas Letter, an attorney for the House committees, largely echoed legal arguments in their previous court filings. 

The House panels argued in a May 10 court response that the Trump records are needed for "wide-ranging investigations of issues bearing upon the integrity of the U.S. financial system and national security, including bank fraud, money laundering, foreign influence in the U.S. political process, and the counterintelligence risks posed by foreign powers' use of financial leverage."

Donald Trump, together with his family, from left,

However, Letter told Ramos on Wednesday that the committees also have issued similar subpoenas to nine or ten others unrelated to Trump. 

The case represents a legal end-run around a Republican president and businessman who, breaking with decades of federal government tradition, has refused to make public his tax returns. As a result, the House committees subpoenaed records from the two major financial institutions frequently used by Trump and his companies.

Trump's legal team, in turn, filed the lawsuit against Deutsche Bank and Capital One. The financial companies have not taken any position of their own in the dispute, and have signaled they would comply with any court orders. Attorneys for the companies declined to comment specifically on Wednesday's ruling. 

Trump's attorneys argued the congressional committees' subpoenas had failed to identify "any legislative purpose — let alone a potential piece of legislation — that their requests are designed to advance." 

They also contended that the subpoenas violate the federal Right to Financial Privacy Act and would cause Trump and other plaintiffs "irreparable harm" if the confidential records in question are released. 

The House panels argued that the Trump plaintiffs haven't established a likelihood of irreparable injury, and contended that the Right to Financial Privacy Act doesn't apply to Congress.

Contending that congressional committees have constitutional rights to investigate, lawyers for the House panels cited a 1975 U.S. Supreme Court ruling that said the scope of Congress's power of inquiry "is as penetrating and far-reaching as the potential power to enact and appropriate under the Constitution."

The Deutsche Bank financial records are of particular interest to both Trump and congressional investigators.

Deutsche Bank loaned more than $2 billion to Trump and his businesses during a long relationship in which the German financial institution financed Trump skyscrapers and other ventures and in return used Trump projects to build its investment banking business, The New York Times reported in March.  

Regardless of the outcome, Deutsche Bank has started providing some Trump financial records to the office of New York Attorney General Letitia James, CNN reported in late April. James subpoenaed the records after former Trump attorney Michael Cohen claimed that Trump had inflated the value of his assets.

Follow USA TODAY reporter Kevin McCoy on Twitter: @kmccoynyc

This article originally appeared on USA TODAY: Second judge rules President Trump can't block Congress's subpoenas of his banking records