Legal Ruling on Withheld Ukraine Aid Could Shake Up Impeachment Trial

WASHINGTON — Congress’ investigative arm may be about to add a new wrinkle into the Senate’s impeachment trial of President Donald Trump sparked by the nearly two-month holdup of Ukraine security assistance last year, which Democrats charge Trump orchestrated to extract political favors.

As early as this week, the Government Accountability Office could release its legal opinion on whether Trump and senior White House officials violated the Nixon-era budget law that requires executive branch agencies to spend appropriated funds according to lawmakers’ wishes.

Sen. Chris Van Hollen, D-Md., who initially requested the GAO ruling last year, said he believes that Trump violated the 1974 law aimed at preventing such presidential “impoundments.” But he wouldn’t go so far as to label that an impeachable offense.

“The House charges of abuse of power do not relate directly to the (1974 budget law), they relate to the president of the United States improperly using taxpayer funds to … pressure Ukraine into interfering in the 2020 election on his behalf,” he said. “But look, this is all part of the picture that’s being painted. But I don’t want to elaborate further until we see what the GAO opinion is.”

Nevertheless, in a Dec. 23 letter to GAO, Van Hollen wrote that Trump’s withholding of the aid was illegal and part of a “scheme” to, as the House impeachment inquiry charged, “use the powers of his office to solicit foreign interference on his behalf in the 2020 election.”

Speaker Nancy Pelosi, D-Calif., in a letter Friday announcing she planned to transmit the two House-adopted articles of impeachment this week to the Senate, cited concerns voiced by some Pentagon and Office of Management and Budget officials about possible violations of the 1974 budget law.

The hold was formally initiated July 25, the day of Trump’s now-infamous “do us a favor, though” call with Ukrainian President Volodymyr Zelenskiy. While the letter was initially signed by Mark Sandy, a career OMB official, it was renewed several times by a political appointee, Michael Duffey, which budget veterans have said is highly unusual. Sandy testified in private before House investigators in November that two OMB officials resigned over the aid holdup, at least in part due to concerns about potential budget law violations.

Late last year, Democrats renewed their calls for administration officials including Duffey to testify before Congress, citing newly unearthed communications between top OMB and Pentagon officials they say buttress their argument.

In one instance, the Pentagon prepared a draft letter saying the Defense Department had repeatedly warned OMB that if the hold continued beyond Aug. 19, it would jeopardize the department’s ability to obligate the funding by Sept. 30. Since the money was expiring at the end of the fiscal year, if the department couldn’t get the money out the door, it would disappear, potentially putting the agency in violation of the 1974 law.

Ultimately the funds were released on Sept. 12, but the Pentagon still couldn’t obligate $35.2 million of its $250 million fiscal 2019 Ukraine military assistance appropriation in time; Congress had to extend the funds’ availability in a stopgap funding law. The remaining $141.5 million in State Department foreign military financing funds were obligated on time.

The 1974 law gives presidents two options to avoid spending appropriated funds. They must ask for a “rescission,” or cancellation, which triggers a congressional vote to approve the request, or a “deferral,” which allows a funding pause under certain specific circumstances, as long as lawmakers are notified.

Critics charge the Ukraine aid hold neither met any of the law’s criteria, nor was accompanied by the required notification to Congress. A deferral also needs to end in time to “prudently” obligate the funds before they expire, which did not occur in the case of the Pentagon aid.

White House officials dispute the allegations. In a Dec. 11 letter, OMB General Counsel Mark R. Paoletta wrote to GAO that the “pause in obligations of the Ukraine funds” was a “programmatic delay,” not an illegal deferment. An administration official said that while some budget officers questioned the holds, they were approved as legal by the general counsels at both OMB and the Pentagon.

Congress passed the 1974 law after a fight with President Richard M. Nixon over his refusal to spend billions of dollars appropriated under the Clean Water Act to help build wastewater treatment plants. But for all the law’s initial drama, it was written to provide Congress with the tools to “control” impoundments and free up withheld funds rather than to punish the president or executive branch employees for illegal withholding, experts on the law who spoke on condition of not being identified said.

If the GAO finds a violation, the most it can do is sue the administration to release the funds. But that has only happened once, in 1975, when the GAO filed a lawsuit that was later dismissed after parties to the suit agreed the funds in dispute had been released.

Over the years, the GAO has reported periodic illegal impoundments, including during the Trump administration and others during the presidencies of George H.W. Bush, Bill Clinton and George W. Bush. Typically, the funds were released for obligation, making a lawsuit unnecessary.

Two other avenues exist for responding to illegal withholding. Parties that claim they are entitled to the funds under the law can sue in federal court to obtain the money if they can demonstrate legal standing, experts said. Lawmakers also can respond to impoundments through legislation, such as extending the availability of Ukraine aid in the fiscal 2020 stopgap law.

In the most recent example of an illegal deferral, the GAO in December 2018 cited the Department of Homeland Security for withholding $95 million that had been appropriated for a Coast Guard national security cutter. The 418-foot cutters support homeland security and defense missions including interdiction of drugs smuggled out of Colombia. DHS said it delayed obligating the funds while it was reviewing the potential impact of a proposed rescission of the funds passed by the House but not enacted into law in that form. GAO said the withholding was illegal because the president did not transmit the special message. The GAO took no further action because by that time the funds had been obligated.

The White House might also push back against a GAO finding on constitutional grounds. In a memorandum to agency general counsels Nov. 5, OMB’s Paoletta wrote that when an agency of the legislative branch interprets a law differently, the executive branch is not bound by its views due to the separation of powers principle. The memorandum related to GAO findings on a separate law that bars spending money that has not been appropriated, but a similar argument could be applied to the impoundment law.

Some lawmakers want to add stronger provisions to the impoundment law. Van Hollen, for example, offered an amendment that was adopted by the Senate Budget Committee Nov. 6 when the panel approved a budget process overhaul bill.

The amendment would codify a GAO opinion that OMB cannot withhold funds until they expire without congressional approval, and require the budget office to publicly post apportionment documents and make other information available to the Budget and Appropriations committees to provide an early warning of withholding. It’s unclear what chance the Senate Budget Committee bill has of making it to the Senate floor.

Van Hollen said he plans to introduce a stand-alone bill with similar provisions within weeks and will seek to implement his proposals through fiscal 2021 appropriations legislation. House Budget Chairman John Yarmuth, D-Ky., intends to introduce legislation with a similar purpose in the next couple of months that he said in a statement will “directly focus on restoring and protecting Congress’ power of the purse, increasing accountability and transparency of the Executive Branch, and addressing the unprecedented overreach of this Administration.”

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