Democrats Eye Trump's Crypto Fortune and Pentagon Deals; White House Calls Subpoenas 'Blatant Criminality'

The White House has formally warned incoming House Democrats that their planned congressional investigations into President Donald Trump's family business dealings could cross the line into 'blatant criminality'.

According to reporting by CBS News and PBS NewsHour, White House counsel Will Scharf delivered the constitutional warning in a formal letter to California Representative Robert Garcia, who is poised to assume the chairmanship of the powerful House Oversight Committee when the new Congress convenes in January 2027.

Scharf argued that subpoenas issued to harass executive officials or interfere with government functions lack a legitimate legislative purpose and could trigger counter-investigations.

Garcia rejected the warning, stating that Trump 'appears to have something to hide' whilst insisting that congressional oversight authority derives directly from Article I of the United States Constitution rather than executive permission.

With Democrats projected to hold at least 254 House seats and 54 Senate seats following the midterm elections, the escalating legal confrontation previews a sweeping legislative clash over cryptocurrency ventures, defence contracts, and cabinet accountability.

'Abusive and Capricious Threats'

In the letter, sent on Monday, Scharf reminded Garcia that congressional investigations must serve a 'legitimate legislative purpose'.

He warned that threats against executive branch officials meant to deter public service, or processes designed to 'abuse or instil fear', could cross into criminality. Issuing unlawful subpoenas to deprive citizens of their constitutional rights 'may warrant further investigation', he wrote.

Scharf accused Democrats of 'abusive and capricious threats' and of seeking to 'abuse the legislative process to intimidate and to interfere with lawful functioning of government'.

Trump went further on Saturday. On Truth Social, he accused Democrats of 'extortion', said they 'should be held accountable' and directed the Justice Department to investigate, CBS and Al Jazeera reported.

What Democrats Want To Probe

Garcia's committee plans to examine Trump family crypto ventures and companies linked to the president's sons that received Pentagon contracts.

Other targets include a £1.5 billion ($2 billion) investment made in 2021 by Saudi Arabia's sovereign wealth fund into Jared Kushner's private equity fund, and Donald Trump Jr.'s wedding festivities in the Bahamas, which CBS said were partly paid for by a Russian oligarch.

Garcia's panel also plans to examine alleged pay-to-play schemes and kickbacks tied to Department of Homeland Security contracts, corporate donations funding the new White House ballroom, the actions of federal immigration authorities and the Jeffrey Epstein scandal.

Cabinet officials face scrutiny too. On Tuesday, the Republican-led House voted 211 to 204 to send Republican Rep. Thomas Massie's resolution to impeach Defence Secretary Pete Hegseth to committee, effectively shelving it, Stars and Stripes reported. House Minority Leader Hakeem Jeffries said Democrats will 'run Pete Hegseth out of town' once they take over.

'Lawyer Up'

Garcia, a California Democrat, was unmoved. 'It appears Donald Trump has something to hide,' he said, adding that Congress's authority 'comes from Article I of the Constitution, not from the permission of the White House'.

He called the White House threats an attempt to infringe on his committee's oversight rights and said Congress would not be deterred by 'baseless threats'. Shortly after the midterms, Garcia told the Trump administration to 'Lawyer up'.

The clash previews a bruising two years. During Trump's first term, Democratic-led House committees sought his financial records from his accounting firm and two banks, and Trump fought them all the way to the Supreme Court.

In its July 2020 ruling in Trump v Mazars, the court sent the cases back to lower courts and set out safeguards for subpoenas seeking a president's papers. It stressed that subpoenas must serve a 'legitimate legislative purpose', while acknowledging that lawmakers have 'significant legislative interests'.

No subpoenas have been issued yet, as Democrats do not take control of the committee until the new Congress convenes in January.