Judge Reopens Trump Suit Against IRS to Determine If It Was “Premised on Deception” After Another Judge Temporarily Blocked the “Deal” That Created a $1.8B Slush Fund
NEWS & RESEARCH
Federal judge Kathleen M. Williams has reopened a $10 billion lawsuit brought by President Trump against IRS that Trump had dropped before the judge could issue a decision. Interim Attorney General Todd Blanche then proceeded to effect a “settlement” establishing a $1.8 billion taxpayer-supported fund to compensate Trump’s allies, including Jan6ers, who faced Justice Department investigations during the Biden administration. Judge Williams will now be looking to see if the Trump suit —in which Trump was effectively both the plaintiff and the defendant—was collusive and “premised on deception.” Meanwhile, another federal judge, Leonie Brinkema, has issued a temporary order blocking disbursement of funds under the Blanche deal and scheduled a hearing for June 12 in Alexandria, Virginia in a suit alleging that the fund violates the separation of powers, the First Amendment and the Equal Protection clause of the Constitution, as well as the Administrative Procedure Act. In an addendum to the Blanche deal, IRS wouldn’t ever be permitted to audit Trump or his family for anything, even though Trump currently faces a purported tax liability of $100 million for having claimed the same tax write-off twice.
SOURCES: The Hill | New York Times | Washington Post | ProPublica | Politico
ANALYSIS & OPINION
Judge Williams reopend the Trump suit in response to a filing by 35 former federal judges who assert that the Blanche deal raised serious questions as to Trump’s “candor toward the court and the manipulation of the judicial system.” Critics and legal watchdogs had swiftly denounced the Blanche deal as a corrupt, taxpayer-funded "slush fund" designed to enrich Jan6ers, including Proud Boys and Oath Keepers, and cement their loyalty as Trump’s “private militia.” The deal was deemed the result of a highly conflicted, collusive “negotiation” in which Trump was negotiating with himself. Under the deal, Trump would have the authority to remove fund commissioners without cause. The deal would appear to violate the 14th Amendment to Constitution, which provides that “any debt or obligation incurred in aid of insurrection or rebellion against the United States… shall be held illegal and void.” It would also appear to violate 26 U.S.C. §7217, which prohibits a request by a president, directly or indirectly, to terminate an IRS audit and requires IRS officials who receive such a request to report them to the Treasury Inspector General for Tax Administration.
SOURCES: New York Times | Talking Points Memo | MS NOW | Mother Jones | The Guardian | Public Citizen | Zeteo
HOW TO FIX IT
Litigation:
Congress members should consider suing to block the slush fund under the Constitution’s Emoluments Clause.
Support lawsuit filed by 2 police officers asserting that the fund will finance rioters and violate equal protection clause of Constitution.
Federal action:
Pass the No Taxpayer-Funded Settlement Slush Funds Act to block the creation of the slush fund since Congress did not authorize the fund.
Pass the No Rewards for January 6 Rioters Act to bar federal settlement funds from being used to pay Jan. 6 rioters.
Pass the Ban Presidential Plunder of Taxpayer Funds Act, which restricts sitting presidents, vice presidents, and their immediate families from collecting financial damages or lawsuit settlements from the US government.
Conduct oversight hearings on the slush fund and the no-audit addendum.
File complaints with the Treasury or DOJ inspector general to review the legality of the no-audit addendum in light of 26 U.S.C. §7217.
Other action:
Pursue disbarment action against Todd Blanche for engaging in unethical conduct as an attorney.
Legislation: S.4299 - Ban Presidential Plunder of Taxpayer Funds Act |S.3582 - No Rewards for January 6 Rioters Act