Justice Dept. announces $1.8 billion fund in settling IRS suit
WASHINGTON — The Trump administration announced Monday the creation of a $1.8 billion fund to compensate those who claim they were targeted by the Biden Justice Department and Democrats, forging a pipeline to funnel taxpayer money to President Trump’s allies.
The highly unusual “antiweaponization” fund, denounced by critics as a political slush fund, was unveiled just after Trump withdrew his lawsuit demanding at least $10 billion against the IRS. It was an apparent effort to skirt oversight by the judge in the case who had expressed concern that the suit represented self-dealing between the president and a department run by his former defense lawyer, Todd Blanche.
The tandem moves amounted to an end-run that stripped Judge Kathleen M. Williams, who had been overseeing the IRS case in the Southern District of Florida, of her appointed role in approving a formal settlement agreement. By dismissing the case in its entirety, Trump was able to reach an agreement with his own appointees without risking the rebuke of an impartial and independent arbiter.
The cash value of the fund was set at $1.776 billion, a nod to the nation’s founding. The Justice Department added in its announcement that its creation was intended “to provide a systematic process to hear and redress claims of others who suffered weaponization and lawfare,” though it offered few other details, including who might qualify.
In addition to withdrawing his suit against the IRS, Trump will also drop separate administrative claims. Those include his demand the government pay him $230 million for investigations into his 2016 campaign’s potential ties to Russia and into his handling of classified documents after he left office.
Trump, his two sons, and his family business, which sued the IRS together, would receive an apology but not be paid out of the new fund, officials said.
It remains unclear whether the announcement represents a serious effort to disburse cash or a provocative distraction intended to provide the president with political cover as he retreats from a dubious lawsuit he was about to lose, or some combination of both.
Trump and the department’s leadership have repeatedly accused Democrats of weaponizing federal law enforcement against their enemies. They have yet to provide evidence of illegality, or political animus, in the two federal prosecutions of Trump or in investigations into his allies.
“The machinery of government should never be weaponized against any American, and it is this department’s intention to make right the wrongs that were previously done while ensuring this never happens again,” Blanche said in a statement announcing the proposal.
He added, “As part of this settlement, we are setting up a lawful process for victims of lawfare and weaponization to be heard and seek redress.”
A memo signed by Blanche, just over one page in length, offered only the vaguest outline of how the fund will operate. It did not define “weaponization,” specify the process by which claims would be assessed, or even enumerate the actual amount of money that would be distributed.
The amount specified in the department’s news release, with its symbolic value, “does not represent the value of any claim by plaintiffs, but rather is based on the projected valuation of future claimants’ claims,” Blanche wrote in his memo.
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Money for the fund will come from a special, unlimited account available to the Justice Department for settling lawsuits. A group of five people, selected by Blanche, will oversee its operations, though Trump can fire its members at will. The fund will stop processing claims on Dec. 15, 2028, weeks before Trump leaves office.
Creation of the fund, which could be used to compensate Trump supporters who ransacked the Capitol on Jan. 6, 2021, is sure to please a president who has demanded not only retribution but recompense. But it could create major political problems for congressional Republicans already dealing with the political ballast of his unpopularity — and who will now be forced to say if they support or oppose allocating taxpayer cash to his allies at a time when many Americans are struggling economically.
Williams had been considering dismissing Trump’s IRS suit on her own because he effectively controls both his personal lawyers bringing the complaint and the government lawyers who are supposed to respond to it. She had ordered the Justice Department, which has yet to make an appearance or filing in the case, and Trump’s lawyers to brief her by Wednesday to explain whether they were actually in opposition — or were colluding to achieve a mutually agreeable outcome.
In their filing Monday, Trump’s lawyers said their dismissal meant that “no judicial analysis is appropriate” for the suit.
The substance of Trump’s suit stems from the leak of his tax returns to The New York Times in 2019. Trump, two of his sons, and his family business argue that the IRS should have done more to prevent a former contractor from leaking tax information to the Times and ProPublica.
While federal law allows for people to sue the IRS when their tax information is leaked, legal experts saw clear flaws in Trump’s suit and said the Justice Department had defended other, similar cases brought by plaintiffs who were not the president.
Just minutes after Trump’s lawyers informed Williams of their intention to dismiss the suit, 93 Democratic lawmakers filed court papers accusing the Justice Department of having “colluded” with Trump and asking the judge to throw out the case herself.
“Never in the history of the United States has a sitting president sought a monetary settlement from the government he leads — let alone sought many billions of dollars in taxpayer funds,” lawyers for the lawmakers wrote.
The filing by the lawmakers suggested how jarringly Trump’s move had short-circuited normal court business. The president’s lawyers essentially beat the lawmakers to the draw by dismissing the case on their own, hamstringing the lawmakers’ ability to stop a settlement from going through.
But lawyers for the lawmakers argued that the judge still had the power not to accept the dismissal, given its unusual nature. It was also possible to bring a separate lawsuit directly challenging the validity of the compensation fund.
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This article originally appeared in The New York Times.
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