Thursday, May 23, 2019

Follow-up on Trump hiding his finances - IRS says tax returns must be given to Congress.

In yet another legal loss for Trump, the Washington Post, among other sources, reports that a Confidential draft IRS memo says tax returns must be given to Congress unless president invokes executive privilege.

But let’s begin by debunking part of that headline, the exception for executive privilege.

Executive privilege is the power of the President of the United States and other members of the executive branch of the United States Government to resist certain subpoenas and other interventions by the legislative and judicial branches of government in pursuit of information or personnel relating to confidential communications that would impair governmental functions. …

Since when do tax returns merit such protection? Are Trump’s personal tax records and other financial documents now “confidential communications”? Read on for answers.

The AZ Blue Meanie, “an Arizona citizen who wishes, for professional reasons, to remain anonymous when blogging about politics. Armed with a deep knowledge of the law, politics and public policy, …” weighs in on that IRS legal memo contradicts bogus assertions by Treasury Secretary.

… according to the IRS memo, which has not been previously reported, the disclosure of tax returns to the committee “is mandatory, requiring the Secretary to disclose returns, and return information, requested by the tax-writing Chairs.”

The 10-page document says the law “does not allow the Secretary to exercise discretion in disclosing the information provided the statutory conditions are met” and directly rejects the reason Mnuchin has cited for withholding the information.

“[T]he Secretary’s obligation to disclose return and return information would not be affected by the failure of a tax writing committee . . . to state a reason for the request,” it says. It adds that the “only basis the agency’s refusal to comply with a committee’s subpoena would be the invocation of the doctrine of executive privilege.”

Excuuuse me? On what basis could the president assert executive privilege, which only applies to confidential communications for the purpose of obtaining advice? This is plainly inapplicable to tax forms to comply with income tax filing requirements.

Getting beyond that, the Post reports:

... according to the IRS memo, which has not been previously reported, the disclosure of tax returns to the committee “is mandatory, requiring the Secretary to disclose returns, and return information, requested by the tax-writing Chairs.”

The 10-page document says the law “does not allow the Secretary to exercise discretion in disclosing the information provided the statutory conditions are met” and directly rejects the reason Mnuchin has cited for withholding the information.

So what could be in those financial documents, including tax returns, so damaging that Trump fears their disclosure?

Catherine Rampell speculates about that in this morning’s Daily Star: We don’t know what Trump’s tax returns are hiding. But the hints are troubling.

When you look at the short span of President Trump’s political career, one question jumps out: How much of his craziest and norm-violating behavior is motivated by a desire to keep his financial arrangements secret?

It began with Trump’s bizarre refusal to release his tax returns, in defiance of both a nearly half-century practice and Trump’s own promise that he’d do so.

Then there was his refusal to divest from his sprawling empire, or even put it into a blind trust — either of which would have forced at least some information disclosure to a third party.

There were also the interviews and tweetstorms calling journalists who report on his finances “enemies of the people,” and suggestions that federal officials who audit him are anti-Christian.

Also, his curious personnel priorities. Once it became clear that House Democrats would exercise their explicit statutory authority to get Trump’s tax returns from the IRS, Trump asked Senate Majority Leader Mitch McConnell to prioritize confirmation of Trump’s IRS general counsel nominee ahead of confirmation of a new attorney general. This IRS general counsel pick also happened to have previously advised the Trump Organization on tax issues.

Trump’s treasury secretary has also been spending so much time safeguarding Trump’s tax returns, in violation of that explicit statute, that the activity is reportedly crowding out his day job.

All of which raises the question: Why exactly is Trump (and his administration) expending so much energy and political capital to keep these documents hidden? What could possibly be so disturbing or incriminating to justify such an effort?

One theory is that if Trump’s tax returns or other financial records become public, his supporters would learn that he’s not nearly as rich as he says. Another is that his finances are not exactly on the up and up. Of course, both explanations could be true.

Thanks to reporting from The New York Times, we know that Trump lost more than $1 billion over a decade beginning in 1985. We know that he inherited a fortune from his father but frittered much of that fortune away.

We also know, thanks to other matters of public record — including testimony from the president’s own former attorney, as well as a sworn deposition from Trump himself — that Trump has inflated his net worth when it suited him.

So yes, whatever info Trump’s financial documents reveal about his actual net worth could potentially undermine the core tenet of his sales pitch to his voters.

All of the above could reduce to Trump’s narcissism, his need to be seen as the super businessman. But there are other more sinister financial dealings that might be lurking in his records.

But what he might be a wee bit more worried about relates to the other red flags raised over the years.

Issues such as: Why international transactions involving multiple Deutsche Bank accounts controlled by Trump set off alerts in a computer system designed to detect money laundering , as the Times reported Sunday.

Or why Trump purchased a house for $40 million and flipped it for more than twice that amount in a sale to a Russian oligarch.

Or why, about a decade ago, the self-proclaimed “King of Debt” suddenly began making huge. Debt is highly tax-advantaged in real estate finance. The fact that Trump went on a cash spending spree while interest rates were near zero is fishy at best. Not least because a golf reporter said Trump’s son Eric told him that the organization wasn’t borrowing from banks because it had “all the funding we need out of Russia.” (Eric Trump later denied making the statement.)

We don’t know what Trump is working so hard to hide, but we have a lot of hints. They’re all troubling. Which is precisely why it’s so important that Congress — as part of its constitutionally mandated oversight duties — conduct a forensic audit of Trump’s worldwide financial dealings. That means learning whom he’s been getting money from, whom he owes money to, and what individuals or entities could be using financial influence to exert pressure over policy.

Almost as troubling as whatever it is Trump is trying to hide: Why do all those supposed national security hawks in Trump’s party exhibit so little curiosity about the answers?

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