Mnuchin Clashes With House on Demand for Trump Taxes

Treasury Secretary Steven Mnuchin testifies before the House Committee on Financial Services on Wednesday. Behind the secretary, a graphic recounts various instances when President Donald Trump promised to disclose the tax returns that to date remain shrouded in secrecy. (AP Photo/Carolyn Kaster)

WASHINGTON (CN) – Contradicting reported IRS policy about its obligation to provide such information, Treasury Department Secretary Steve Mnuchin told Congress Wednesday that he will not release the president’s tax returns to keep on the right side of the law.

“I’ve been advised that I am not,” Mnuchin said, when asked by Representative Alma Adams if he was aware that he was in violation of the law by denying their request.

“I never would have done anything to violate the law,” Mnuchin said. “Again, I have been advised that had I turned them over, I would be violating the law.”

Calling it clear the case is “going to litigation,” Mnuchin appeared before the House Committee on Financial Services this morning ostensibly for a hearing on the health of international finance.

The meeting was quickly dominated, however, by an internal IRS memo first reported Tuesday night by the Washington Post. The article describes the memo as saying that Mnuchin must show “returns, and return information, requested by the tax-writing chairs” of Congressional committees, and that the disclosure of tax returns to Congress is “mandatory.”

The only reason the IRS could refuse to hand over the records would be if executive privilege was invoked, the memo reportedly states. 

Mnuchin told Representative Jennifer Wexton, a Virginia Democrat, that he only became aware of the memo when the Washington Post contacted him on Monday.

“We confirmed that I and IRS commissioner [Charles Rettig] were not aware of the letter and had not seen it,” Mnuchin said of the discussion with the Post, adding that he was unsure who the author was, when it was written or why it was not brought to his attention first.

The secretary also said he only reviewed a copy of the draft memo on his way to Wednesday’s hearing.

“In your May 17 letter to Chairman Neal, you rely on advice from the Department of Justice saying the request lacked legitimate legislative purpose,” Wexton said, referring to Representative Richard Neal of the House Ways and Means Committee. “But we’re the legislative branch. We make decisions about legislating.”

“I understand there are three branches of government,” Mnuchin said.

“And you are the executive branch, which executes the laws,” Wexton said. “You don’t make the laws. We make the laws.”

In response to whether he believed the memo was accurate, Mnuchin told the congresswoman that he and Rettig “relied on legal advice” from the DOJ to reach his conclusion.

Representative Adams, a North Carolina Democrat, told Mnuchin she was “losing her patience” with the president, who has offered to produce his tax returns publicly at least 24 times.

“Don’t you think the American people have a right to know?” Adams said.

“No, I don’t,” Mnuchin said. “Presidents are not required to turn them over. The American people knew he didn’t release them before they voted for him.”

Treasury Secretary Steven Mnuchin testifies before the House Committee on Financial Services on Wednesday. (AP Photo/Carolyn Kaster)

The secretary also said he did not believe Trump was “hiding” anything, and he denied any involvement in the president’s decision-making about releasing the documents.

Congressional oversight authority for such records is found in the U.S. Constitution, within many public laws and can also be found in the House and Senate rules, Adams said.  

“I’ve read the law and I have been advised of the interpretation of the law and understand the constitutional issues,” Mnuchin said.

The secretary claimed further that he has been counseled from the Department of Justice that he would then be breaking the law if he complied with the House Ways and Means committee request.

Representative Lance Gooden, a Texas Republican, remarked that Democrats were “obsessed” with the president’s tax returns and asked Mnuchin if he thought there was any reason lawmakers should believe the IRS was not “doing its job” when it came to conducting a proper audit of the president’s taxes.

The secretary said there was not, and that he had offered Chairman Neal a chance to look in on the audit process.

“They won’t take us up on that,” Mnuchin said. “I don’t see why they need any access to returns to understand the audit is fair and going through correctly.”

“Weaponizing” the IRS is a major concern at the agency, Mnuchin told the Republican representative.  

“It affects all taxpayers, in both parties,” he said.

Mnuchin also said he didn’t make departmental decisions based on what may be published on the front of a newspaper or within a confidential memo he hasn’t seen.

“It would have been more interesting [if the memo] would have gotten to me for review first,” Mnuchin said.

Mnuchin said he would consider the internal memo only “to the extent it changes our analysis.”

“This is a very important issue and I would say we have tried to be responsive on hundreds if not thousands of requests,” Mnuchin said. “On this one request, we’ve been advised, there are different legal views, and this is why it will go to the third branch of government. If they opine on Congress’ rights, we’ll adopt those views. This has nothing to do with anything else.”

Though Mnuchin told committee Chairwoman Maxine Waters that the department plans to detail the legal analysis that informed his decision, it is unclear when that report will be released. 

A representative from the Department did not immediately return a request for comment.

“There’s no smoking gun here,” Mnuchin said. “We did a very thorough legal analysis with the Department of Justice and the information in the draft — I don’t believe it’s relevant to the analysis we’ve done.”

Beyond the tax-return debate, Wednesday’s hearing dealt with concerns over the president’s burgeoning trade war with China.

Taxes on goods like baby diapers, infant formula, strollers, high chairs and car safety seats could shoot up 25 percent if the White House kicks tariffs on China into effect.

Mnuchin said: “There will be an exception process as a part of this transaction and I’m monitoring the situation very carefully.”

The secretary also described a recent phone call he had with Walmart Chief Financial Officer Brett Biggs, saying they discussed which items on the tax hike list might be the biggest sellers, and “what can be sourced from other areas and what cannot.”

As to Deutsche Bank, which Democrats say took a blind eye to several suspicious international transactions by the president and his son-in-law Jared Kushner, the secretary avoided answering questions about what oversight his office exerted there.

Mnuchin said the Financial Crimes Enforcement Network, a division of the Treasury, would “follow up and make sure that like everyone else” that the bank followed the regulations on money laundering.

Though unable to comment publicly on the inquiry, the secretary did vow to return a report to the committee in private.

In another discussion, Mnuchin said he would not commit to placing Harriet Tubman on the $20 bill anytime before 2028.

The bill’s redesign was scheduled for release in 2020 and was set to coincide with the 100th anniversary of women’s suffrage.

Mnuchin said his concerns over currency are strictly limited for now to “security and counterfeiting issues,” but the Treasury to release a $10 bill and $50 bill with “new features” prior to 2028.

President Trump, ahead of his election, called the Obama administration’s decision to place Tubman on the bill “pure political correctness.”

To this end Representative Ayanna Presley, a Massachusetts Democrat, asked Mnuchin if it was his personal belief that U.S. currency should reflect the diversity of leadership in the U.S.

Mnuchin said he was focused only on his professional responsibility.

“I can’t separate my personal opinion from the issues of the Treasury,” Mnuchin said.

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