Personal attorneys working for President Trump are weighing possible legal action against the cable news network MSNBC and a private journalist for reporting a portion of the president’s 2005 tax returns, a move the Trump legal staff believes could have violated federal privacy laws, the FOX Business Network has learned.
Continue Reading Below
Trump’s tax returns were published Tuesday by DCReport.org, a website operated by David Cay Johnston, a Pulitzer Prize winning investigative reporter. They were simultaneously aired on MSNBC’s “The Rachel Maddow Show.”
Legal experts say any case would be a long-shot given First Amendment protections for journalists and an important Supreme Court precedent that dates back to the famous 1971 “Pentagon Papers” case. Trump would also have to show that the journalists were complicit in stealing his tax returns—which both Johnston and Maddow have denied.
“Trump’s lawyers could try and sue but they will get the crap kicked out of them in court,” said veteran white collar attorney Stanley Arkin. “It’s the First Amendment. What are they going to sue them for? Stealing the returns? Nobody made any money out of it. Nobody was bribed.”
White House spokeswoman Hope Hicks would neither confirm nor deny the president’s interest in a possible lawsuit against MSNBC or Johnston.
In a statement, MSNBC told FOX Business: “There is no legal prohibition against journalists publishing these tax returns. It is protected by the First Amendment and Supreme Court precedent.
Johnston, who obtained the tax documents before appearing on MSNBC, wrote a biography called “The Making of Donald Trump” in 2016 and won the Pulitzer Prize at The New York Times for exposing loopholes and inequities in the U.S. tax code. He didn’t respond to emails or telephone calls for comment. During the MSNBC broadcast, Johnston said he received Trump’s tax documents anonymously through the mail.
Trump, a billionaire real estate mogul with business interests around world, has refused to release his tax returns, citing an ongoing audit by the Internal Revenue Service. The move has been controversial since it broke from recent protocol dating back to the presidency of Richard Nixon in which presidents released their tax returns to disclose possible conflicts of interest.
Democrats in Congress have claimed that a full airing of Trump’s tax returns could show conflicts involving his real estate and branding empire and his White House dealings.
Trump maintains no such conflicts exist now that he has handed over operational duties of the Trump Organization to his sons, Eric and Donald Jr.
The 2005 tax documents aired by MSNBC and published by Johnston, however, provided no evidence to substantiate possible conflict of interest claims; the two pages of Trump’s 1040 tax forms showed little more than that Trump earned $153 million in income in 2005, and paid $38 million in taxes.
In fact, some political commentators have suggested that Trump himself leaked the forms because they portrayed his tax issues in a relatively positive light, namely that he made a lot of money and paid an effective tax rate of 24%, which is higher than what former President Obama paid in 2015 and even what large corporations pay to the government.
Still, people close to President Trump say he was incensed by their release, believing possibly that the documents were stolen, and that Johnston and MSNBC should not have aired what he believes to be illegally obtained personal information.
On Wednesday morning, Trump tweeted out:
Does anybody really believe that a reporter, who nobody ever heard of, "went to his mailbox" and found my tax returns? @NBCNews FAKE NEWS!— Donald J. Trump (@realDonaldTrump) March 15, 2017
After another MSNBC host, Joe Scarborough, suggested Trump himself leaked out the documents, Trump’s personal attorney Michael Cohen tweeted:
Later that day, the president told Fox News host Tucker Carlson: “I have no idea where they got it but it’s illegal and they’re not supposed to have it and it's not supposed to be leaked…It’s certainly not an embarrassing tax return at all, but it’s an illegal thing they’ve been doing it, they’ve done it before and I think it’s a disgrace."
During the presidential campaign, The New York Times published a portion of Trump’s 1995 New York State tax returns, which showed then candidate Trump took a $916 million loss on his taxes that year. The large loss would have allowed Trump to cancel the same level of taxable income over nearly the next two decades. Marc Kasowitz, an attorney for Trump, wrote The Times that it was illegal to publish the returns, but no lawsuit was filed.
People with knowledge of the matter say Cohen is now at the center of the debate over whether to file a lawsuit for the latest tax disclosures. Cohen would neither confirm nor deny whether he and Trump are contemplating a lawsuit.
Legal experts say one federal law at the center of possible legal action would be the Unauthorized Disclosure of Information Act, which makes it illegal to publish an unauthorized tax return or “return information” without receiving authorization from the individual whose taxes are being reported on.
According to the federal statute, any violation of the law “shall be punishable by a fine not exceeding $5,000 or imprisonment of up to five years."
Still, various First Amendment precedents protect journalists from such sanctions. In 1971, the US Supreme Court ruled against the Nixon administration, which tried to stop The New York Times and other news outlets from publishing the so-called Pentagon Papers, which were a classified government study of US involvement in Vietnam.
In the landmark ruling, the court said the government needed to show a heavy burden of proof to upend the First Amendment and stop the publication of the documents involving the machinations of public officials.
Legal experts tell FOX Business that other precedents would shield journalists from legal action unless reporters were directly involved in a theft of the tax documents, which Johnston has denied. In fact, Columbia Law School Professor John Coffee said if Trump went ahead with a lawsuit, he could end up in the same position as Richard Nixon was in in 1971 during the release of the Pentagon Papers.
“MSNBC is in the same position as The New York Times,” if Trump sues as the president, Coffee said. “If Trump sues as an individual, he will then be subject to discovery and depositions, which he will not like.”