Judge puts Manhattan prosecutors' request for Trump tax returns on hold

NEW YORK (Reuters) - A federal judge on Wednesday put Manhattan prosecutors’ request for eight years of President Donald Trump’s tax returns on hold until at least Thursday, ordering the prosecutors and Trump’s lawyers to try to negotiate a temporary agreement on how to handle the request.

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“I would suggest that the parties go home, sober up, decompress, get together between now and tomorrow,” U.S. District Judge Victor Marrero told lawyers for Trump and for Manhattan District Attorney Cyrus Vance at a hearing in Manhattan federal court.

Vance had subpoenaed the returns and other records from Trump’s longtime accounting firm Mazars USA on Aug. 29 as part of a criminal investigation. Earlier this month, Trump sued to block the subpoena, arguing that a president is immune from criminal investigation while in office.

Marrero suggested that the two sides should try to reach a deal that would allow Vance’s office to start getting records other than the tax returns while the dispute works its way through the court.

While campaigning for the presidency in 2016, Trump broke with a decades-old convention of candidates releasing their tax returns publicly.

Trump’s lawsuit against Vance is one of several efforts to shield his personal finances from investigation.

Separately, Trump is trying to block Deutsche Bank AG from handing over his financial records, which the bank has said include tax returns and which have been sought by Democrats in Congress. A federal appeals court in Manhattan heard arguments in that case on Aug. 23 and has yet to rule.

William Consovoy, a lawyer for Trump, argued at the hearing that state prosecutors do not have the power to criminally investigate a sitting president.

“That is the cost of having a unitary executive,” he said. “That is the choice of the framers of our constitution.”

Solomon Shinerock, a lawyer for Vance’s office, said Trump had failed to establish that he would be irreparably harmed by the subpoena.

“The true harm falls on the state’s process,” Shinerock said.

Mazars, also named as a defendant in Trump’s lawsuit, said in a statement that it would “respect the legal process and fully comply with its legal obligations.” It said that as a matter of policy, it does not comment on its work for clients.

The scope of Vance’s investigation is not publicly known.

Marrero signaled that if the parties failed to reach a deal by Thursday, he was likely to delay the subpoena until next week to give federal prosecutors in Manhattan a chance to decide whether they would take a position in the case.

Marrero ordered them to inform him by Monday whether they plan to join the case, and said that if they do, they must lay out their position in a court filing by Wednesday.

The subpoena on Mazars came four weeks after Vance issued a separate subpoena to the Trump Organization for records of hush money payments to two women prior to the 2016 presidential election. The women, the adult film star known as Stormy Daniels and former Playboy model Karen McDougal, have said they had sexual relationships with Trump, which he has denied.

Reporting by Brendan Pierson in New York; Editing by Noeleen Walder and Bernadette Baum