Trump sues Manhattan prosecutor over tax returns, says immune from criminal probe

[September 20, 2019]  By Jonathan Stempel and Karen Freifeld

NEW YORK (Reuters) - Donald Trump sued Manhattan District Attorney Cyrus Vance on Thursday, seeking to void a subpoena for eight years of tax returns related to a criminal probe into the U.S. president and his family business.

The lawsuit deepens Trump's efforts to keep his finances under wraps, despite having promised during his 2016 White House run that he would disclose his tax returns.

His lawyers also adopted the broad position that the president is immune from being subjected to a criminal probe while in office, and the U.S. Constitution requires Vance to wait until after Trump leaves the White House.

Trump accused Vance of joining "the campaign of bad-faith investigations and harassment" against him by Democratic officials, including from two U.S. House of Representatives committees that have subpoenaed the Republican president's financial records.

The complaint filed in Manhattan federal court by Trump's lawyers challenges a grand jury subpoena that Vance issued on Aug. 29 to Mazars USA, Trump's longtime accounting firm, for personal and corporate tax returns from 2011 to 2018.

Vance issued the subpoena four weeks after issuing another subpoena to the Trump Organization for records of hush money payments, including to two women prior to the 2016 election who said they had sexual relationships with Trump, which he denies.

Trump said the earlier subpoena did not call for his tax records, a claim Vance's office has disputed, and accused the district attorney of trying to "circumvent" him by demanding the returns from Mazars instead.

"Because the Mazars subpoena attempts to criminally investigate a sitting President, it is unconstitutional," the complaint said. "The court should declare it invalid and enjoin its enforcement until the President is no longer in office."

Trump is running for re-election. His current term ends on Jan. 20, 2021.

Danny Frost, a spokesman for Vance, said the district attorney will respond to the complaint in court. "We will have no further comment as this process unfolds," Frost added.

Mazars is also a defendant in Trump's lawsuit.

In a statement, it said it "will respect the legal process and fully comply with its legal obligations," though as a matter of policy it does not comment on its work for clients.

'HOBSON'S CHOICE'

U.S. District Judge Victor Marrero scheduled a Sept. 25 hearing to consider whether Vance may enforce the subpoena.

Manhattan District Attorney Cyrus Vance Jr. speaks at a news conference to discuss the Concealed Carry Reciprocity Act in the Manhattan borough of New York City, New York, U.S., December 6, 2017. REUTERS/Carlo Allegri

Vance had sought to receive much of the subpoenaed material from Mazars by Thursday, and the tax records by Sept. 23, but agreed to wait until after the hearing.

Trump had argued that Mazars faced a "Hobson's choice" of ignoring the subpoena and risking contempt, or complying with the subpoena and risking liability to him if the subpoena were voided or deemed unenforceable.

"We are pleased that the constitutional issues at stake in this case will receive the appropriate review from the District Court," Trump's lawyer Jay Sekulow said in a statement.

The hush money payments were made to Stormy Daniels, a porn star whose real name is Stephanie Clifford, and former Playboy model Karen McDougal.

Michael Cohen, the president's former lawyer, has admitted to paying $130,000 to Daniels to keep her from talking about her alleged relationship with Trump in 2006, and helping arrange a payment of $150,000 to McDougal.

Cohen is serving a three-year prison term for campaign finance violations, including through the hush money payments, as well as tax evasion and lying to Congress.

Trump is separately trying to block Deutsche Bank AG <DBKGn.DE> from handing over financial records, which the bank has said include tax returns, sought by the House committees.

The federal appeals court in Manhattan heard arguments in that case on Aug. 23. It has yet to rule.

Vance is also pursuing criminal mortgage fraud case against Paul Manafort, a former Trump campaign chairman.

Manafort has sought a dismissal, saying he was already convicted on similar federal charges brought by the office of Special Counsel Robert Mueller, and that trying him again would amount to double jeopardy.

(Reporting by Jonathan Stempel and Karen Freifeld in New York; Editing by David Gregorio, Tom Brown and Lisa Shumaker)

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