Donald Trump, his children, and the Trump Organization filed a lawsuit April 29 against Deutsche Bank and Capital One, in an attempt to prevent the lenders from turning over information about the Trumps’ financial dealings that was subpoenaed by Congress.
The banks are not alone in being squeezed between Trump’s White House and Congress.
Other companies already caught in the burgeoning battle between the two branches of US government include the Trump Organization’s long-time accountant Mazars, and Jones Day, where former White House attorney Donald McGahn is supposed to be heading a new “government regulations” practice, but is more likely to be tied up in legal wrangles for months to come.
There will be more. The Democrat-controlled House is probing everything from the Trump family’s alleged tax evasion to security practices at Trump-owned resorts to the corporate beneficiaries of White House’s family separation policy. Nearly any private company or individual who engaged with Trump companies, the Trump transition team, or any part of the Trump administration should be prepared to be caught up in the dragnet, legal experts tell Quartz.
Trump is fighting Congressional oversight the same way he did to contractors he owed money and journalists who wrote critical articles about him as a private businessman: with lawsuits. Trump is suing Mazars is to prevent the accounting firm from turning over 10 years of personal and company financial information to the House oversight committee, which is probing whether he broke federal laws by overstating his net worth to banks to get loans. He is suing Deutsche Bank over information related to $2.5 billion in loans the bank made to Trump since 1998, subpoenaed by the House financial services committee.
In coming months, expect to see more companies forced to decide between angering the president or infuriating the elected lawmakers who craft the rules that guide their industries. Along the way, they’ll face big legal bills, potential damage to their reputations, fines, or worse.
Company executives “don’t want to make this decision,” said one DC-based lawyer and expert on Congressional hearings. Instead, they’re happy to “dump this whole thing in a judge’s lap,” and let the court decide. Trump’s lawsuit against Mazars will be heard in a Washington, DC district court, and his suit against Deutsche Bank in a Manhattan federal court. The judges in both cases are Barack Obama-era appointees.
The lawsuits may delay when companies and individuals need to give information about Trump to Congress, but few legal experts in DC think they’ll prevent most transfers.
Ultimately, there’s little legal precedent for a company or individual ignoring a Congressional subpoena, as Margaret Taylor, a a fellow in Governance Studies at the Brookings Institution and former Congressional council, wrote on Lawfare recently:
The power of Congress to investigate and obtain information is very broad. While there is no express provision in the Constitution that addresses the investigative power, the Supreme Court has firmly established that such power is so essential to the legislative function as to be implied from the general vesting of legislative powers in Congress.
So far, as predicted, companies caught in the DC crossfire have tried to stay neutral. “As a firm we will respect this process and will comply with all legal obligations,” said a spokeswoman for Mazars. Deutsche Bank said it was “committed to providing appropriate information to all authorized investigations and will abide by a court order regarding such investigations.”
Deutsche Bank may have sensed trouble coming. In early 2016, the bank denied the Trump Organization a loan, because it was worried about “reputational issues,” according to American Banker. “One concern was that it would be difficult to collect debt from Trump if he won the presidential election,” the magazine said.
Already, Jones Day has reportedly incurred the president’s wrath. The firm was replaced as chief counsel to Trump’s 2020 reelection campaign, Politico reports citing administration officials, because of “disappointment” with McGahn’s testimony to FBI special counsel Robert Mueller. McGahn is being subpoenaed by the House, but Trump may block him from testifying, the White House says.
House Democrats have vowed to ignore the lawsuits and press ahead.
“As a private businessman, Trump routinely used his well-known litigiousness and the threat of lawsuits to intimidate others,” the House financial services committee said in a statement after the Deutsche Bank lawsuit became public, “but he will find that Congress will not be deterred from carrying out its constitutional responsibilities.”
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