Mnuchin says Treasury lawyers consulted White House on Trump tax returns

[April 10, 2019]  By David Lawder

WASHINGTON (Reuters) - U.S. Treasury Secretary Steven Mnuchin said on Tuesday that Treasury Department lawyers had held "informational" discussions with the White House about an expected request from House Democrats for President Donald Trump's tax returns.

Democrats are pursuing Trump's returns under a legal authority that aims to prevent interference from the White House on the Treasury's decision whether to release the tax returns, in what the White House chief of staff has called a "political stunt."

Mnuchin said at a House Appropriations subcommittee budget hearing that the conversations had taken place before House of Representatives Ways and Means Committee Chairman Richard Neal's request last week for six years of Trump's tax returns.

But in a second hearing later in the day, Mnuchin said the department had never sought permission from the White House on the issue regarding the release of the tax returns.

As a presidential candidate in 2016, Trump defied decades of precedent by refusing to release the tax documents and has continued to keep them under wraps as president, saying his returns were "under audit" by the Internal Revenue Service.

White House acting Chief of Staff Mick Mulvaney said on Sunday that Trump's tax returns would never be handed over to Democratic lawmakers, in defiance of their efforts to learn more about the former real estate mogul's personal finances.

An attorney for Trump on Friday blasted the request from Democrats as "a misguided attempt" to politicize the tax laws, accusing lawmakers of harassment and interference in IRS audits. The Democrats' request is expected to lead to a long court battle.

Representative Mike Quigley, the Democrat who chairs the appropriations subcommittee on financial services and general government, pressed Mnuchin on Tuesday for more detail about the contact between Treasury and White House lawyers.

"I think this committee would like to know if in those communications, the White House had expressed their desire to you or anybody else at Treasury what their views (are) or how you should act on this matter," Quigley said. "So if you would pass that on, it would be greatly appreciated."

Mnuchin said he personally has had no conversations with anyone in the White House about the request, and was not briefed on the contents of the prior conversations between Treasury and White House lawyers.

U.S. Treasury Secretary Steven Mnuchin testifies before a House Financial Services Committee hearing on the "State of the International Financial System" on Capitol Hill in Washington, U.S., April 9, 2019. REUTERS/Aaron P. Bernstein

"I believe that was purely informational," he said of those discussions. "We had obviously read in the press that we were expecting this. I personally wasn’t involved in those conversations."

'FOLLOW THE LAW'

Speaking at a separate hearing of a hearing of the U.S. House Committee on Financial Services, Mnuchin said: "We would not ever ask for the White House's permission on this nor did they give us the permission."

At both hearings, Mnuchin said the Treasury would "follow the law" regarding Neal's request for Trump's tax returns, adding that was being reviewed by the Treasury's legal department.

Democratic Representative Carolyn Maloney said the communication between Treasury and the White House over the request for Trump's returns was "deeply troubling."

"We need to get to the bottom of this," she said.

Democrats are relying on a provision in the Internal Revenue Service code enacted in 1924 after the Teapot Dome oil leases scandal rocked President Warren Harding's administration. They say it requires the Treasury secretary to turn over any tax returns to the chairmen of the congressional tax committees who request them for investigative purposes.
 

But if Congress takes the administration to court over Trump’s taxes, little case law would be available to help guide judges, legal experts say. That is both because the statute cited by Neal to obtain the returns has hardly ever been contested, and because most document disputes between the legislative and executive branches of government are resolved by negotiation.

(Reporting by David Lawder; Additional reporting by Chris Prentice; Editing by Dan Grebler and Peter Cooney)

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