How can grand jury secrecy rules block release of Trump financial records?

Question

This NY Times article discussing the Supreme Court ruling that Trump cannot block release of financial records clarifies that this "probably means the records will be shielded from public scrutiny under grand jury secrecy rules until after the election, and perhaps indefinitely".

What does "grand jury secrecy rules" mean? Is there a grand jury here?

Also, I assume a tax firm somwhere in NY has a copy of Trump's financial records and Trump won't willingly hand them over.

Since New York is a deep blue state, I would assume that a state subpoena for this particular case would be issued almost immediately. With subpoena in hand, can't NY prosecutors lean on this accounting firm to hand over whatever documents they have?

I guess my question is why would it take more than 5 months for New York to get their hands on these documents when it's an uncontested blue state with a governor that despises Trump? And what would all this have to do with a grand jury?

Just to clarify: I understand what a subpoena is. I just didn't know these subpoenas were applicable when it's directly related to a Supreme Court ruling and the president of the United States.

Answer 1

Just Me's answer covered the ruling pretty well, so I'll focus on the specifics of a grand jury.

A grand jury proceeding is nothing like a jury trial. It is an investigative tool for the prosecution that is used to get authorization to collect documents and evidence, or to recommend that formal charges be brought. Supposedly, since it is a panel of regular citizens, it is also supposed to be a check against unwarranted accusations, but the system is strongly and almost exclusively tilted in the direction of the prosecutors.

Apparently only the USA and Liberia use these systems, with other nations allowing judges to oversee these functions in preliminary hearings, instead.

The United States and Liberia are the only countries that retain grand juries, though other common law jurisdictions formerly employed them, and most others now employ a different procedure that does not involve a jury: a preliminary hearing. Grand juries perform both accusatory and investigatory functions. The investigatory functions of grand juries include obtaining and reviewing documents and other evidence, and hearing sworn testimonies of witnesses who appear before it; the accusatory function determines whether there is probable cause to believe that one or more persons committed a particular offense within the venue of a district court.

Wikipedia: Grand Jury

Why the required secrecy? It's because it's a completely "ex parte" prosecutorial process. The subject of a grand jury investigation does not even need to be informed that they are being investigated. If they do know about it, they have no right to attend (unless asked), no right to cross-examine witnesses, no right to offer testimony or rebuttal witnesses, no right to offer evidence, no right to challenge evidence. And this is accepted because the person is not yet formally accused of anything - the grand jury is investigating and trying to determine whether a prosecutor has enough to attempt a trial.

As such, evidence obtained and offered is completely one-sided. It is so one-sided that it's considered fairly easy for the state to get charges if they want them.

"The district attorney could get the grand jury to indict a ham sandwich if he wanted to," one Rochester defense lawyer said.

Rochester Democrat and Chronicle, September 2, 1979

It might get completely discredited or not even allowed into a formal trial where the defendant has rights. If these accusations, allegation or claims were allowed to be made public by the state, without any rights of the accused to offer a defense, it could both taint a potential trial, and it could destroy a life based on one-sided innuendo and false accusations. The ability to do so would also tilt the balance of power towards the prosecution, who could bully or force concessions from people just by the threat of publicity of questionable credibility.

“A lie will gallop halfway round the world before the truth has time to pull its breeches on.”

Cordell Hull (there are many variations of this quote dating back to the mid- to early-1800s)

In many states, unless specifically ordered not to (and this does vary), subjects of probes or witnesses are often free to tell about what they said or did. It's usually the state that is bound by secrecy requirements, for the reasons I mentioned above.

In this case, you have Trump and his team involved. They specifically don't want this information getting out. You probably have people who have non-disclosure agreements with Trump, which are not valid when responding to a court action, but that would mean they could testify in front of a grand jury, and later in open court, but they themselves wouldn't, potentially, be able to offer up what they had to say to a grand jury. There might not be any parties who would be free to talk who actually are interested in doing so.

"I assume a tax firm somwhere in NY has a copy of Trump's financial records and Trump won't willingly hand them over.... With subpoena in hand, can't NY prosecutors lean on this accounting firm to hand over whatever documents they have?"

That's a distinction without a difference, and I think that might actually be what is at issue here. A prosecutor might not trust a criminal target to give authentic documents, so they're going to demand them from a third party.

However, I said it's a distinction without a difference for this reason - the accounting firm may have copies of the records, but they are still Trump's personal financial records and documents. A bank or accounting firm might be the service-provider, but they are custodians, not owners, and those are still Trump's information, and there are stringent privacy regulations. The accounting firm or the bank, unless they are accused, themselves, of malfeasance, are agents for the customer, and don't have the right to divulge that information without the customer approval, unless a court orders that the information has to be offered.

The terms of Internal Revenue Code Section 6103 prohibit the IRS and your tax professional from disclosing your tax information to anyone without your explicit consent. Your tax professional can't even release your information to the IRS unless you give her your permission, and the IRS and its employees can't release any information to your tax professional unless you give the IRS permission.....

.... Some Exceptions to the Rule

The IRS lists five circumstances under which your tax information can legally and ethically be shared with certain others.

1. The IRS can disclose your information to your state's taxing authorities, but the state must make its request in writing.

2. Your tax information can be provided to law enforcement, but only if law enforcement has a valid court order for accessing it.

3. IRC Section 6103(k)(6) is a bit vaguer. It "allows the IRS to make limited disclosures of return information in the course of official tax administration investigations to third parties if necessary to obtain information that is not otherwise reasonably available." "Tax administration investigations" translates to audits and similar probes. If you or another party are being audited, and if your tax record provides vital, necessary information to that investigation, the IRS can share only that information.

4. The IRS can share your tax information with the Social Security Administration, but only to establish your liability for FICA taxes. It can't divulge any other data or information. SSA employees are bound by the same code of ethics as the IRS, and this exception doesn't extend to state Social Security administrators. It's only valid at the federal level.

5. Your information can be shared if you authorize it using Form 8821 or Form 2848.

The Balance - Tax Information Is Confidential: How To Protect Yours

Now, that cited article is specific to tax information, but since all of Trump's financial records are the foundation for his tax filings, I am fairly confident it's all considered to be tax records.

So..... the courts DID rule that the information has to be offered, but they are still in the grand jury portion of the process, so those records are shielded by the secrecy protections. If those documents are relevant evidence, in an actual trial, they will be offered as evidence and would then eventually become part of the public record, because trials are public proceedings, and the evidence would also be part of the public record.

So, it's not that the state of NY has to wait for at least five months to get the records, it's that there won't be any kind of public proceeding where the documents can be revealed to the rest of us for at least that long, if ever.

The grand jury is still in the middle of doing what it does. It had to stop and wait for a ruling on access to these documents. Grand juries can take weeks or months to grind through their business. Once charges are filed, just about any court is going to rule that an actual trial will have to wait until the President is not serving the nation, which takes priority. Even if they didn't, and Trump was charged, it's often many months or even years before one gets to the actual trial, especially if the defendant has the means to hire a law firm with a lot of resources to put towards the defense. That's simply how the process unfolds.

Here are a few admittedly speculative scenarios -

1. The records show nothing illegal, but that Trump's many claims of financial prowess are bluster and salesmanship, and that's what he wanted to keep secret. Since his re-election campaign will be concluded by time this might come out, maybe he won't care. If he's President, still, it will be "oh well, so what? I have important business to do," and it has no substantive impact on anything.

2. The records are evidence of criminal behavior, in which case, if he's President or not, he definitely won't want it to come out.

3. The records don't show anything illegal, but are potentially embarrassing, and the president, notoriously brand- and image-conscious doesn't want it to come out, especially if he's out of office, since presidents are most able to cash in on their former status of president immediately after their terms are up.

If either #2 or #3 are the case, the President will still fight to have those records disallowed, or somehow sealed, maybe even by declaring them to be "classified," though a President Biden could just as easily de-classify them. A more likely scenario, depending on the strength of the case, might be for Trump to cut a deal to something that is, relatively, a slap on the wrist, but where those documents would never get to be introduced as evidence in a public trial, because there would be no actual trial with a plea deal.

So it's entirely possible we will not see them at all for most of his remaining lifetime. If that was the goal of Trump's legal team, then they accomplished it, in all likelihood.

Answer 2

Because the case is nowhere near over yet.

In Trump v. Vance the Supreme Court merely decided that the President does not have absolute immunity from such state subpoenas, and the state does not have to satisfy a "heightened showing of need" to obtain the data (interestingly, the decision appears to be substantially based on Clinton v. Jones, where President Clinton sought similar Presidential immunity from state action.):

... The President, acting in his personal capacity, sued the district attorney and Mazars in Federal District Court to enjoin enforcement of the subpoena, arguing that a sitting President enjoys absolute immunity from state criminal process under Article II and the Supremacy Clause. ... the argument of the United States as amicus curiae that a state grand jury subpoena seeking the President’s documents must satisfy a heightened showing of need.

The Supreme Court rejected the "absolute immunity" argument:

... confirms that federal criminal subpoenas do not “rise to the level of constitutionally forbidden impairment of the Executive’s ability to perform its constitutionally mandated functions.” Clinton v. Jones, 520 U. S. 681, 702–703. But the President claims that state criminal subpoenas necessarily pose a unique threat of impairment and thus require absolute immunity.

... That argument, however, runs up against the 200 years of precedent establishing that Presidents, and their official communications, are subject to judicial process ...

The President does not get absolute immunity from the state actions in question here.

And the Supreme Court rejected the "heightened need" argument as well:

A state grand jury subpoena seeking a President’s private pa-pers need not satisfy a heightened need standard, ...

Nor does the state have to meet a "heightened need standard".

That's it. That's all the Supreme Court decided here. The Supreme Court did not decide that President Trump must comply with the subpoena. And to emphasize that the case isn't over:

Rejecting a heightened need standard does not leave Presidents without recourse. A President may avail himself of the same protections available to every other citizen, including the right to challenge the subpoena on any grounds permitted by state law, which usually include bad faith and undue burden or breadth. When the President invokes such protections, “[t]he high respect that is owed to the office of the Chief Executive . . . should inform the conduct of the entire proceeding, including the timing and scope of discovery.” Clinton, 520 U. S., at 707. In addition, a President can raise subpoena-specific constitutional challenges in either a state or a federal forum. As noted above, he can challenge the subpoena as an attempt to influence the performance of his official duties, in violation of the Supremacy Clause. And he can argue that compliance with a particular subpoena would impede his constitutional duties.

And finally (emphasis mine):

941 F. 3d 631, affirmed and remanded.

The case is nowhere near over - the Supreme Court just opined that, contrary to Trump's legal claim, the Constitution does not grant the President absolute immunity from state actions such as this, and the case will continue in lower court. Note well that the decision was based in part on the rejection of similar claims made by President Clinton.

In response to:

Since New York is a deep blue state, I would assume that a state subpoena for this particular case would be issued almost immediately.

That's exactly what President Trump is fighting here - a state subpoena for his tax records. Per the Supreme Court's decision:

... The President, acting in his personal capacity, sued the district attorney and Mazars in Federal District Court to enjoin enforcement of the subpoena ...

With subpoena in hand, can't NY prosecutors lean on this accounting firm to hand over whatever documents they have?

No, because subpoenas can be challenged in both federal and state court, which is what President Trump is doing, both as a private citizen and as President. Per the Supreme Court's decision here, President Trump has

... the right to challenge the subpoena on any grounds permitted by state law, which usually include bad faith and undue burden or breadth. When the President invokes such protections, “[t]he high respect that is owed to the office of the Chief Executive . . . should inform the conduct of the entire proceeding, including the timing and scope of discovery.” Clinton, 520 U. S., at 707. In addition, a President can raise subpoena-specific constitutional challenges in either a state or a federal forum. As noted above, he can challenge the subpoena as an attempt to influence the performance of his official duties, in violation of the Supremacy Clause. And he can argue that compliance with a particular subpoena would impede his constitutional duties.

Only after such court fights have been settled would the accounting firm (apparently Mazars in this case - they're actually mentioned in the Supreme Court decision) have to hand over the records - assuming the subpoena survives the fight.

Answer 3

The other answers do a good job answering the question as written, but I want to focus a bit more specifically on the source of this confusion.

On July 9th, the Supreme Court actually ruled on two very similar cases about whether Trump's financial records were immune to subpoenas:

• Trump v. Vance dealt with subpoenas from New York prosecutors
• Trump v. Mazars USA dealt with subpoenas from House committees

In both cases, the court dismissed Trump's argument that he was immune from all criminal proceedings and investigations so long as he remained in office.

In Trump v Mazars USA, however, the court found that there were still open questions about the extent of the House's subpoena power which lower courts need to address before the Supreme Court can rule:

In the decision on congressional subpoenas, Trump v. Mazars USA, No. 19-715, Chief Justice Roberts stressed the novelty of the question before the court. ... He wrote that the House had acknowledged “essentially no limits on the congressional power to subpoena the president’s personal records.” ...

Chief Justice Roberts said lower courts should assess whether the records were truly needed by performing “a careful analysis that takes adequate account of the separation of powers principles at stake, including both the significant legislative interests of Congress and the unique position of the president.”

Supreme Court Rules Trump Cannot Block Release of Financial Records

The result of this is that President Trump's financial records will very likely be released to the Manhattan DA office, but they will not yet be released to the House. If the House had gotten access to these records, it's likely they would have been released, at least in part, to the public. However, since they're only being released (at this time) to the grand jury, then the grand jury secrecy rules will prevent the public from seeing this information, at least in the short term.

Answer 4

The question seems to indicate a misunderstanding of how the U.S. legal system works:

The U.S. government cannot simply seize the private information of individual citizens without due process. Neither can the states.

This holds even if the person is the President, famous, infamous, suspected of a crime, or some complete rando. The ruling doesn't really change this, it just means that the President's records can be subpoenaed. But just because they have a not illegal subpoena now doesn't mean that they've "won" and can just have what they want: subpoenas can be challenged.

So just because the New York government putatively hates Trump and wants that information (that desire communicated by way of a subpoena for it) does not automatically mean that they get it. For one thing they have to give a convincing (and convincing in spite of the obvious rebuttals that Trump's legal team will make) legal reason why they want it, and "embarrassing a President we don't like" does not qualify.

As I said above, what the ruling is about is that the President is not automatically immune from a state subpoena: if he were he could just say no. What the ruling does not say, and indeed per PoloHoleSet's excellent answer goes out of its way to say that it doesn't say, is that the President has to automatically comply with any subpoena issued: he still has all of the same due process protections as any citizen.

Which means that in the course of issuing the subpoena the attorneys for New York will have to cross the t's and dot the i's, and then Trump's attorneys will argue that they didn't, probably well past the point where public attention is still focused on this topic. IANAL, but it looks like he can still stall this: possibly forever, probably long enough for it to not matter as much.