A federal judge has reopened President Donald Trump’s $10 billion IRS lawsuit to determine if the action was a ruse to create a nearly $1.8 billion slush fund to secretly pay political allies.
Kathleen Williams
U.S. District Judge Kathleen Williams in Miami issued an order May 29 declaring her intention to determine if the administration violated a federal rule barring attorneys or their clients from filing baseless actions for improper purposes, including to reach pre-determined settlements.
In a subsequent development, The New York Times reported June 1 that Trump has changed his mind about the so-called “Anti-Weaponization Fund” that generated opposition from prominent Republicans and other lawmakers and may have threatened passage of a reconciliation measure.
Judge Williams’ decision was prompted by a motion filed by 35 former federal judges to reopen Trump’s lawsuit against the IRS.
“The non-party movants explain that although there is no settlement of record in this matter, public documents and announcements indicate that the dismissal of this case was premised on a purported settlement between the parties,” Williams explained in the order. “Here, the non-party movants advance grievous allegations that plaintiffs voluntarily dismissed this litigation solely to avoid judicial scrutiny of a lawsuit that ‘was collusive from the start’ and was only filed to provide the imprimatur of legality for an unlawful settlement.”
The motion filed by the former judges noted Trump’s questionable settlement with the IRS also stipulates the IRS is “FOREVER BARRED and PRECLUDED from” prosecuting Trump, his companies, family members and associates for “known or unknown” matters “currently pending or that could be pending (including tax returns filed before the effective date) before defendants or other agencies or departments.”
Williams ordered the administration to respond to the claims raised by her motion to determine if her court was the “victim of fraud.”
Williams ordered the administration to respond to the claims raised in her motion by June 19 in an effort to determine if her court was the “victim of fraud.”
The challenge now facing the administration stems from Trump v. Internal Revenue Service, which Trump, his two oldest sons and the Trump Organization filed in January ostensibly in response to the leaking of the president’s tax documents during his first term. Trump is the only president in modern history not to make public his tax returns as a matter of public transparency.
But before the litigation could proceed, Trump’s U.S. Department of Justice announced a settlement in which the president dropped his $10 billion compensation demand in exchange for immunity from IRS investigation and creation of the “Anti-Weaponization Fund” of $1.776 billion. The account would compensate January 6 insurrectionists and other administration allies who have been investigated, indicted or sued for civil or criminal activities by Democratic administrations.
Multiple national commentators declared this the single most corrupt action ever undertaken by a U.S. president.
The arrangement faces other legal obstacles, as well. Two U.S. Capitol police officers and a coalition including a former U.S. attorney filed separate lawsuits to block the creation or use of the slush fund. A federal judge subsequently issued an order temporarily blocking the fund as litigation continues.
Daniel Hodges
The action filed by former U.S. attorney and January 6 prosecutor Andrew Floyd, immigration protestor Jonathn Caravelo, the City of New Haven, Conn., the National Abortion Federation and Common Cause claim the proposed fund is unconstitutional because it exceeds executive branch authority, bypasses congressional and judicial oversight and seeks to use taxpayer dollars to pay — and thus encourage — anti-democracy and anti-abortion activists.
In their lawsuit, two police officers assaulted by pro-Trump rioters at the U.S. Capitol argued the “Anti-Weaponization Fund” is dangerous and illegal.
“If they get this payout, then they’ll have significant financial resources, and they have no ethical qualms about it, so what would stop them from carrying out any more violence?” Plaintiff Daniel Hodges told NPR.
Faced with the court blockade, Trump appeared June 1 to be willing to scrap the deal.
“Some administration officials privately expressed relief that the judge’s ruling showed a way out of what most had seen as a mess of the Trump team’s own making,” The New York Times reported. “But as with all things involving Mr. Trump, he could still decide to reverse course, especially as he tracks media coverage of his decision.
“The decision by Mr. Trump to back down — at least for now — came after rare pushback from members of his own party, who normally fall in line behind him. Still, Republicans on Monday cast serious doubt on whether the president would ultimately be willing to kill off the fund, which likely would have distributed huge sums to Mr. Trump’s allies, suggesting they needed firmer assurances that he would follow through.”
Related: