President Donald Trump’s lawsuit seeking $10 billion from the Internal Revenue Service was a total sham, a federal court has ruled.
In a July 13 ruling, U.S. District Judge Kathleen Williams in Miami said the litigation and the subsequent settlement providing $1.776 billion for an “Anti-Weaponization Fund” were “the product of collusion” between the parties.
“In sum, the facts before this court demonstrate there was never adverseness between the parties; there was never a case or controversy; and there was never a question as to who would prevail.”
The order stems from Trump v. IRS, which the president filed in January ostensibly seeking compensation because some of his personal tax information had been leaked to media. Unlike every modern president before him, Trump had refused to make public his tax information.
Judge Kathleen Williams
But in May, the administration agreed to drop the lawsuit in return for creation of a taxpayer-funded slush fund from which to secretly pay Trump political allies including January 6 insurrectionists. The agreement also guaranteed Trump, his family and businesses immunity from future audits or other tax-related investigations.
Acting Attorney General Todd Blanche claimed the settlement automatically excluded the court from reviewing its contents, and in fact it was only his signature that appeared on the document, wrote Williams, who had re-opened the litigation to determine if the lawsuit had merely been a premise to create the “Anti-Weaponization” fund.
Williams said the lawsuit, which “purports to present a controversy” between the plaintiffs and the IRS, was purely one-sided “because one party controls this litigation.”
The absence of any conflict was demonstrated “by President Trump’s influence over the DOJ. During an interview with The New York Times, President Trump publicly expressed his belief in his unequivocal control over the DOJ.”
Hence Blanche’s ability to tell Congress that DOJ was “not moving forward with the fund, period,” following public and congressional backlash and the filing of a separate lawsuit challenging the plan.
“This certitude supports the conclusion that the parties worked in tandem and were never actually adverse.”
“This certitude supports the conclusion that the parties worked in tandem and were never actually adverse. Indeed, ‘a party may not unilaterally repudiate a settlement agreement once it is reached,’” the judge wrote.
Williams concluded that monetary sanctions may be levied against the plaintiffs, including for compensation of lawyers the court used to investigate the case.
She also referred several administration attorneys to their respective state bar associations, including Blanche and Associate Attorney General Stanley Woodward.
Democracy Docket subsequently reported that “Blanche is currently facing multiple ethics complaints filed with the New York Attorney Grievance Committee over alleged misconduct and abuse of investigative powers during his tenure at the DOJ.”
Democracy Forward represented a coalition of public interest groups and former government officials in aiding Williams’ investigation into Trump’s lawsuit.
“This is a major win for the American people,” Democracy Forward President Skye Perryman said. “President Trump used this sham suit to fleece taxpayers and pocket public money.
“On behalf of our clients in other litigation, we will continue to challenge the illegal slush fund the president attempted to create and that we secured a court order blocking in the Eastern District of Virginia.”
Judge Leonie Brinkema in Virginia granted a preliminary injunction in the slush-fund action filed by a former January 6 federal prosecutor and two Capitol police officers. The order prohibits establishment or use of such a fund pending the outcome of litigation.