Trump loses NY federal court fight to keep tax returns secret from Manhattan DA probe

Key Points
  • A federal judge dismisses President Trump's lawsuit seeking to block the release of his personal and corporate tax returns to the Manhattan district attorney.
  • DA Cyrus Vance Jr. is eyeing how the Trump Organization accounted for hush money payments made to two women, porn star Stormy Daniels and Playboy model Karen McDougal, to keep them quiet about alleged affairs with Trump.
  • Trump's lawyers immediately appeal the ruling.
US President Donald Trump and First Lady Melania Trump (not pictured) return to the White House in Washington, DC, on August 4, 2019.
Alastair Pike | AFP | Getty Images

A federal judge on Monday dismissed President Donald Trump's lawsuit seeking to block the release of his personal and corporate tax returns to the Manhattan district attorney, who is conducting a criminal investigation related to the president's company.

U.S. District Judge Victor Marrero's ruling flatly rejected what he called the "extraordinary claim" by Trump that while president he is immune not only from criminal prosecution but also from being criminally investigated by a state prosecutor or anyone else.

Marrero said that under Trump's theory, not only his behavior would be immune from an investigation, but so would suspected "misconduct of any other person, business affiliate, associate or relative who may have collaborated with the President in committing purportedly unlawful acts."

"This Court finds aspects of such a doctrine repugnant to the nation's governmental structure and constitutional values," Marrero wrote in his 75-page decision in U.S. District Court in Manhattan. Marrero said if Trump's argument was allowed, it could "frustrate the administration of justice" in regard to a president's conduct.

Trump's lawyers immediately appealed the ruling.

Less than two hours later, the U.S. Circuit Court for the Second Circuit granted a temporary stay of enforcement of a grand jury subpoena for eight years of Trump's tax returns from his accoutants, Mazars USA, pending an expedited review a a panel of that court's judges.

Shortly thereafter, the U.S. Justice Department filed an appearance in the case, saying it would make arguments in support of Trump.

Read the court's ruling here.

Trump, in reaction to the ruling, suggested that congressional Democrats are in cahoots with DA Cyrus Vance Jr. to try to bring him down. "The Radical Left Democrats have failed on all fronts, so now they are pushing local New York City and State Democrat prosecutors to go get President Trump," he tweeted.

Trump tweet

Trump's personal lawyer Jay Sekulow told NBC News, "We are very pleased that the Second Circuit Court of Appeals has issued a stay of the subpoena issued by New York District Attorney Cy Vance."

A spokesman for Vance declined to comment. But Vance's office later Monday asked the appeals court to order the parties to file legal briefs in the case over the next several days and set oral arguments, "if any," for this coming Friday.

Trump's legal team also want a quick hearing in the case, but not as quick as Vance suggested. In a letter to the appeals clerk, a lawyer for Trump asked the court to order briefs to be filed starting Friday, and to be finished by a week later.

The court then "should hear oral arguments as soon as it deems practicable."

Vance's office had objected to a federal court becoming involved in the dispute. Prosecutors also had accused Trump's legal team of trying to delay execution of the subpoena so that the statute of limitations for potential crimes that Vance is investigating would expire.

The saga of Trump's taxes
The saga of Trump's taxes

Vance's investigation includes an inquiry into whether the Trump Organization violated the law in how it accounted for hush money payments to two women, Stormy Daniels and Karen McDougal, ahead of the 2016 election.

Both women were paid to keep them quiet about their claims of sexual affairs with Trump years earlier.

Trump denies having sex with either woman, but his then-personal lawyer, Michael Cohen, paid Daniels for her silence, and the Trump-friendly tabloid The National Enquirer paid off McDougal.

The judge's ruling came right before a 9 a.m. deadline that Trump's lawyers had set.

The lawyers had told the judge that they would ask the Second U.S. Circuit Court of Appeals to handle the dispute if Marrero did not issue his ruling by then.

Trump has repeatedly fought efforts by prosecutors and lawmakers to release his tax returns, breaking a decades-long tradition of presidential candidates.

— CNBC's Kevin Breuninger contributed to this report