ALBANY – In the 6,200 words it took to compose Senate bill 5072A and an accompanying memo explaining its need, the words “Donald Trump” do not appear. Nor do the words “President of the United States.”
The bill, being called the Trust Act, is intentionally broad, but it has a single target: Trump.
It seeks to provide a means – via the New York State tax commissioner – for U.S. congressional investigators to get their hands on something the IRS won’t provide them: Trump’s tax returns.
“The fact that Congress has been denied access that federal law requires the (U.S.) Treasury to provide is very disturbing. But New York, as a state, doesn’t have to sit back and be an observer. We have a special role to play because the president is a New York State resident and, therefore, has been required to include his worldwide income on his New York State tax returns," said Assemblyman David Buchwald, a Westchester County Democrat and sponsor of the same bill in the 150-member Assembly.
If Trump’s taxes are in their sights, the bill’s sponsors, however, have used a very broad brush: It would allow three congressional committees in Washington to obtain state tax information on any New York resident or corporation filing returns in the state.
“This should scare the hell out of the average person who lives in New York," Senate Minority Leader John Flanagan, a Suffolk County Republican, told his colleagues on the Senate floor moments before the Democratic-controlled chamber easily passed it.
On Monday, Democrats who dominate the Assembly will discuss the bill in private. With the Democratic Senate having now acted, and Gov. Andrew M. Cuomo in support, Buchwald said he anticipates “broad recognition” within the Democratic conference “that this is the most viable approach.’’
In Washington, congressional Democrats are following the Albany tax bill's march to passage. U.S. Rep. Jerrold Nadler, a Manhattan Democrat who chairs the U.S. House Judiciary Committee investigating Trump, said the New York bill will help Congress “maintain the rule of law."
“This bill is a workaround to a White House that continues to obstruct and stonewall the legitimate oversight work of Congress," said Nadler, a former eight-term member of the State Assembly.
Single target, broad approach
Should New Yorkers be worried that three committees in Congress might be able to get their hands on anyone’s New York returns? Is this a slippery slope where members of Congress – whether Republicans or Democrats in power in the decades ahead – could be handed a new tool with which to launch investigations of individuals, industries or political causes that might have some sort of tax nexus to New York State?
The answers vary sharply, and predictably, by partisan divides.
“We’re going to let them, political hacks (in Washington), decide when they want to invade your privacy. … Today, it’s because you are a Democrat, tomorrow it’s because you’re a Republican, the next day it’s because you want to run for Congress," State Sen. Andrew Lanza, a Staten Island Republican, told senators.
Democrats offer two paths of reasoning.
On one hand, they acknowledge the effort is all about Trump. “The truth is that this is a dangerous time in America when we have a president who is defying the norms of checks and balances and the balance of power in this country, when you have congressional committees being ignored," State Sen. Michael Gianaris, a Queens Democrat, told senators last week.
“New York State Senate Democratic Majority Stands Up to President Trump," blasted the headline on the Senate’s website Friday about the bill’s passage.
On the other hand, they say the bill’s language had to be sweeping in nature.
“My goal is to make sure what we’re doing is constitutional," Buchwald, the Assembly sponsor, said in an interview.
Buchwald said it is no accident that Republicans are slamming the broadness of the bill. He said it would invite constitutional challenges if its terms were aimed at one person. “I don’t think it’s appropriate at all to further the inevitable presidential lawsuit against an action like this," he said.
In his Senate floor comments last week, State Sen. Brad Hoylman, a Manhattan Democrat and sponsor of the bill, slammed Trump for “stonewalling” Congress on his tax returns – a stance that U.S. Treasury Secretary Steven Mnuchin last Monday further stamped with a letter to Congress denying a request to get the president’s taxes.
“If they won’t do it, New York can," Hoylman said of Trump’s taxes.
Bill of attainder?
But before the vote was official, Hoylman rose from his seat to add what he described as an important addition to the official record.
“This is not a bill of attainder. This does not apply to one individual. … This applies to every New Yorker," he said, adding, “We’re not singling out any individual or any corporation."
An expert in federal and New York tax laws said the “bill of attainder” arguments miss the mark about the real intent of the U.S. Constitution. Bans on such bills of attainder are directed at laws that single out individuals or groups for punishment without a trial.
“This has nothing to do with a bill of attainder," said Richard Pomp, a law professor at the University of Connecticut who, in the mid-1980s was tapped by then Assembly Speaker Stanley Fink to head a commission got enacted major changes to the New York tax codes.
Indeed, Pomp believes, New York lawmakers could have narrowly constructed the tax release bill to directly target Trump. He believes the broader language, instead, is being used for possible further investigations by Congress down the road. “I think they’re worried about the day when they’re going to be looking at a person other than the president. So, why limit the (legislation) when you have one shot here to get a chance to change the law?” Moreover, he said, “I don’t think they wanted to look like they were on a witch hunt.’’
A partial look at Trump’s taxes
Pomp believes there could be some “slippery slope” concerns with the broadness of the bill, but he thinks it can withstand constitutional challenges in court.
“Here’s the real rub … I don’t think it’s going to provide what they hope for," Pomp said.
He explained that the bill allows for the release of New York returns sought by Congress. What that means is Congress could get New York returns showing, for instance, Trump’s business losses and gains and other such insights about his personal and business activities.
But Pomp does not believe New York will be able to turn over federal tax returns and other documents that Trump annually submitted to Albany with his state returns. It is those federal returns – along with worksheets – that show far more details about how Trump might have come up with a business loss or gain for a particular tax year.
“What (congressional Democrats) really want are the underlying work papers. I don’t think they’re going to get those (from New York),’’ Pomp said.
If New York State went beyond turning over Trump’s state returns and added in all the federal documentation he filed with Albany over the years, Pomp said: “I think if I were the president I would immediately move for injunctions."
The White House did not respond to a request for comment.
While noting the attention their effort is getting, the bill’s sponsors in New York also are trying to downplay the perceived ramifications. For instance, they note New York tax officials already share – routinely and as part of audits – New Yorkers’ tax information with the IRS and out-of-state tax agencies.
Moreover, the three congressional committees at play here – the House Ways and Means, Senate Finance and Joint Committee on Taxation – already possess the authority to request from the IRS the tax filings of any American. In Trump’s particular case, the president’s IRS is refusing to comply with the congressional request for his returns.
Enter New York State, which has been the legal residence of Trump, who grew up in Queens and lived in Manhattan much of his adult life.
In rejecting efforts to turn over Trump’s returns, Mnuchin, the treasury secretary, told congressional Democrats last week that the request “lacks a legitimate purpose.’’
That’s an interesting term when considering the pending New York legislation by Buchwald and Hoylman. Their bill states: upon the written requests of any of the three congressional committees for “any reports or returns” filed with New York, the state tax commissioner “shall” – which means “must” – disclose that information to them. But it can be done so only if those federal committees certify the tax returns are for “a specified and legitimate legislative purpose.’’
Who decides if the request is for a legitimate purpose? The state tax commissioner, who is appointed by the governor, who in this case – Cuomo, a Democrat – has rhetorically pounded Republican Trump for not releasing his taxes.
The New York bill was recently amended to require the tax commissioner to redact information, also in the commissioner’s judgment, that constitute “an unwarranted invasion of personal privacy.’’ Three examples were given: social security and bank account numbers and home addresses.
Pomp, the law professor, said a “useful addition” to the New York bill would be to require the tax department to notify individuals whose state returns are being sought by Congress and then allow them to challenge the release of the information. Such routes are often taken by state agencies when reporters and others seek documents through the Freedom of Information law.
On Monday, Assembly Democrats will gather in a private conference room on the Capitol’s third floor to decide whether the bill goes to the floor. In Albany, all bills that go to the floor are passed. It would be a surprise if Assembly Democrats kill the measure.
Still, some Assembly Democrats are pondering the issue.
“It’s something on which you have to tread very carefully as passions are certainly inflamed by this current president," said Assemblyman Sean Ryan, a Buffalo Democrat. "But, once you establish a law to allow congressional committees to reach into New York State, that law lasts forever. So, the current political climate will pass, but the precedent we establish will stay,"