Justice Department gives Trump $1.8B

The Justice Department said on May 18 that it settled President Donald Trump’s lawsuit over the leak of his tax returns by creating a $1.776 billion “Anti-Weaponization Fund” and issuing a formal apology to Trump, Donald Trump Jr., Eric Trump and the Trump Organization. The department said the plaintiffs would receive no direct cash payment, but would drop the case with prejudice and withdraw two administrative claims tied to the Mar-a-Lago search and what Trump has called the Russia investigation “hoax.” The money will come from the federal Judgment Fund, a permanent appropriation used to pay certain settlements and judgments, according to the department. The fund is set to process claims through late 2028 and can award both money and formal apologies. ### How did a tax-return leak case turn into a $1.776 billion fund? The original lawsuit was filed in federal court in South Florida after Trump and related plaintiffs accused the Treasury Department and Internal Revenue Service of failing to prevent the leak of tax information to news organizations. The Justice Department said the settlement was part of President Donald J. Trump v. Internal Revenue Service and described the new fund as a process to hear claims from others who say they suffered “weaponization and lawfare.” (justice.gov) Acting Attorney General Todd Blanche said in the department’s announcement that “the machinery of government should never be weaponized against any American.” Principal Associate Deputy Attorney General Trent McCotter said the fund would hear claims from people who say they were targeted for “political, personal, or ideological reasons.” The department said there are “no partisan requirements” to file a claim and that unused money will revert to the federal government. (justice.gov) ### What did the IRS agree to beyond the fund itself? A one-page addendum posted by the Justice Department on May 19 expanded the settlement to cover Trump’s tax disputes more directly. Politico reported that the document says the IRS is “forever barred and precluded” from pursuing examinations of Trump, related or affiliated individuals, related trusts and businesses over tax returns filed before the settlement took effect on May 18. (justice.gov) The Justice Department told Politico that, “as is customary in settlements,” both sides executed waivers of claims that were or could have been brought, and added that the agreement applied to existing audits, not future ones. Former IRS Commissioner John Koskinen called the arrangement a “terrible precedent,” according to Politico. CNBC separately reported that former federal prosecutors said the settlement would immunize Trump and his family members from tax consequences tied to pre-settlement filings. (politico.com) ### Why are lawyers saying Congress matters more than the courts here? CNBC reported on May 20 that former federal prosecutors said Congress is the strongest institution positioned to challenge the fund’s use of taxpayer money. The lawyers told the network that lawsuits could delay payouts or possibly end the fund, but said congressional action would have the best chance of constraining it. (politico.com) Chris Mattei, a Connecticut trial lawyer and former federal prosecutor, told CNBC the arrangement was “among the most corrupt acts we’ve seen.” CNBC said Mattei was referring both to the compensation fund and to the settlement language barring IRS audits or enforcement actions against Trump and family members over earlier filings. ### Who is trying to stop it now? (cnbc.com) Two police officers who defended the U.S. Capitol on Jan. 6, 2021, sued in Washington federal court on May 20 to block the fund, Bloomberg reported. Bloomberg said the officers described the arrangement as “the most brazen act of presidential corruption this century.” (cnbc.com) House Judiciary Committee Democrats also moved on May 20 to seek subpoenas for officials involved in creating the fund, according to Politico’s congressional live coverage. Rep. Jamie Raskin, the panel’s top Democrat, also introduced legislation to bar federal money from being used for the fund, according to The Hill and Axios search results surfaced by web reporting. (bloomberg.com) ### What happens next, and when will the next test come? The Justice Department said the fund must send quarterly reports to the attorney general identifying who received relief and in what form. The department also said the fund can be audited at the attorney general’s direction and must stop processing claims no later than Dec. 1, 2028, though Time reported the claims process is set to conclude no later than Dec. 15, 2028. (politico.com) The nearer-term tests are already underway. The Jan. 6 officers’ case was filed on May 20 in Washington federal court, and House Democrats’ push for subpoenas and funding restrictions began the same day. Any court rulings, committee action or attorney general reporting requirements will provide the next concrete measure of whether the fund can begin making payouts. (bloomberg.com) (justice.gov)