In a remarkable and unprecedented U-turn last week, Donald Trump went into full retreat. His acting attorney general and former personal lawyer, Todd Blanche, announced the scrapping of an extraordinarily controversial $1.8 billion (€1.54 billion) taxpayer fund. The fund had been set up to compensate Trump supporters for their alleged legal persecution by the previous administration.
This was a bridge too far for many of his loyal republican supporters in congress, and for the judge who, apparently inadvertently, enabled the plundering by Trump of state assets. Such is the egregiousness of this now failed plunder of state coffers, however, that it remains a story that needs recounting.
Blanche did not undo the other part of the unique “settlement” brokered between Trump’s lawyers and former lawyers now working for the state, in the president’s flimsy $10 billion suit against the tax service (IRS). The settlement also gave broad immunity to Trump, his family and businesses from all supposedly politically inspired lawsuits, including tax audits.
The AG wrote that the Government is “forever barred and precluded” from pursuing claims against Trump involving “lawfare and/or weaponisation” or tax returns. At a stroke, a potential tax liability of, some estimates suggest, $100 million looked to have been wiped out.
The US constitution grants congress, not the president, control of the federal purse: “No money shall be drawn from the Treasury, but in consequence of appropriations made by law.” The Founders presumed that the people’s representatives in congress would jealously guard that prerogative.
Not so these days. Trump’s writ is absolute: he spends taxpayers’ money as he pleases, unconstrained by a republican congress and a supine Supreme Court. Whether waging war, building walls on borders, imposing tariffs, or corruptly enriching himself and his family, such constitutional niceties are just tiresome inconveniences.
And so, not content with pardoning 1,500 rioters prosecuted for storming the Capitol in January 2021, on day one of his second term, Trump revved up his personal revenge project by sacking droves of public servants, lawyers and police officers involved in investigating him, and by launching Department of Justice (DOJ) investigations into those who crossed him. Compensation for the “persecuted” was coming, he promised. Then he decided to sue the tax authorities (IRS) over the leaking of his tax returns by a subcontractor.
The New York Times rightly described it as ‘an episode of presidential corruption so blatant and threatening to constitutional order’ that it has no parallel in modern times
When Miami federal judge Kathleen Williams ventured that the two sides in her court were not actually adversaries, hinting she might dismiss the case, Trump’s team pulled it. The DOJ announced a mutually agreed settlement of the grandest scope: the €1.8 billion “anti-weaponisation fund” to compensate anyone against whom the state had taken politically motivated prosecutions. Eligibility would be judged by a panel of Trump nominees.
There was no need to fight and win the case – Trump’s lawyers discovered a new way to legally access taxpayers’ cash. A little known but long-standing Treasury-administered fund, the Judgment Fund was empowered by congress to pay out court awards against the state to successful plaintiffs.
But the fund is dangerously vulnerable, Michigan professor Samuel Bagenstos, a former lawyer for the Office of Management and Budget, warned in January. “An administration that wished to spend money on projects or beneficiaries not authorised by congress could simply encourage its desired recipient to bring a lawsuit against the US and then settle that lawsuit (no matter how frivolous) by making a payment from the Judgment Fund.”
And, lo and behold, Trump did exactly that, publicly acknowledging with ridiculous candour his purpose as the case opened: “I am supposed to work out a settlement with myself.”
Judge Williams has not yet had her final say, however. Last Wednesday, a bipartisan group of 35 former judges asked her to revisit the IRS case. She ordered Trump’s lawyers to respond by June 12th.
Separately, a temporary pause on the fund was issued in a Virginia court, also with a June 12th hearing.
All of this is enough, it seems, to give Trump’s lawyers the jitters.
Several other cases on the validity of the settlement, specifically on the legality of Judgment Fund payments to various parties, are pending.
Having trampled through the constitution’s separation of powers, destroyed the global alliances and trust that have preserved peace in the world, and sanctioned what amounts to genocide in Gaza, Trump has been engaging in self-dealing and corruption on the grandest of scales.
The New York Times rightly described it as “an episode of presidential corruption so blatant and threatening to constitutional order” that it has no parallel in modern times. “Americans should be clear-eyed about what the president is doing. He is taking their money and showering it on criminals.”
