In massive defeat, Trump loses lawsuit challenging subpoena for financial records

By Jan Wolfe

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(Reuters) – A U.S. judge on Monday ruled in favor of a U.S. House of Representatives committee seeking President Trump’s financial records from his accounting firm, dealing an early setback to the Trump administration in its legal battle with Congress.

U.S. District Judge Amit Mehta in Washington also denied a request by Trump to stay his decision pending an appeal.

Last Tuesday Mehta heard oral arguments on whether Mazars LLP must comply with a House of Representatives Oversight Committee subpoena.

Mehta said at the time that financial records from Trump’s long-time accounting firm would be part of a “proper subject of investigation” by Congress, appearing to side with Democratic lawmakers seeking more oversight of the president.

It was the first time a federal court had waded into the tussle about how far Congress can go in probing Trump and his business affairs.

Trump is refusing to cooperate with a series of investigations into issues ranging from his tax returns and policy decisions to his Washington hotel and his children’s security clearances.

Trump’s lawyers argued that Congress is on a quest to “turn up something that Democrats can use as a political tool against the president now and in the 2020 election.”

Mehta’s ruling will almost certainly be appealed to a higher court.

The House Oversight Committee claims sweeping investigative power and says it needs Trump’s financial records to examine whether he has conflicts of interest or broke the law by not disentangling himself from his business holdings as previous presidents did.

Lawyers for Trump and the Trump Organization, his company, last month filed a lawsuit to block the committee’s subpoena, saying it exceeded Congress’ constitutional limits.

Mehta was appointed in 2014 by Democratic former President Barack Obama, who was often investigated by Republicans in Congress during his two terms in office.

Mazars has avoided taking sides in the dispute and said it will “comply with all legal obligations.”

(Reporting by Jan Wolfe; Writing by Jan Wolfe and Howard Goller; Editing by Dan Grebler and Grant McCool)