Donald Trump has struck a $1.8 billion deal with his own IRS to funnel taxpayer money to victims of ‘lawfare’, including January 6 rioters and his political allies, in a settlement that Democrats are calling the most corrupt presidential act in history.
The President, his sons Don Jr and Eric, and the Trump Organization filed suit against the Treasury and IRS in the Southern District of Florida federal court after the leak of their tax returns.
They agreed to drop their suit Monday, as well as two claims, including for damages resulting from the raid on Mar-a-Lago in 2022 and the Russian election interference probe, in exchange for the government’s creation of the ‘Anti-Weaponization Fund.’
The $1.776 billion fund will have the power to issue formal apologies and monetary relief owed to claimants, including Trump’s political allies and the 1,600 January 6 defendants. The fund will consist of a commission of five members appointed by the Attorney General, with Trump given the power to remove any member.
While Trump is barred from directly receiving payments from the fund, entities associated with him are not explicitly prohibited from filing additional ones.
The settlement drew immediate fury from Democrats, among them Senate Finance Committee member Ron Wyden, who said it represented a brazen new level of corruption.
‘Even by his standards, the move he’s trying to get away with now is a stunning act of corruption,’ said Wyden.
‘What Trump wants is a $1.7billion slush fund for right-wing political violence and subversion, and if he follows through, it will be the most brazen theft and abuse of taxpayer dollars by any president in American history.’
The President sued the IRS in January over the 2019 leak of his tax returns to the press
Acting attorney general Todd Blanche said of the case: ‘The machinery of government should never be weaponized against any American’
Acting Attorney General Todd Blanche said: ‘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.
‘As part of this settlement, we are setting up a lawful process for victims of lawfare and weaponization to be heard and seek redress.’
The extraordinary arrangement comes despite the misgivings of the judge in the case, Kathleen Williams, who was investigating a potential conflict of interest as Trump sued his own government.
Trump himself conceded last October that ‘it’s awfully strange to make a decision where I’m paying myself.’
However, the judge has limited legal authority to halt any settlement deal.
Minutes after Trump’s legal team announced it was dropping the suit on Monday, almost 100 House Democrats submitted a ‘friend-of-the-court’ brief accusing Trump of ‘blatant self-dealing’ as they seek to put legal blocks on the fund.
Rep. Jamie Raskin, the ranking Democrat on the House Judiciary Committee, said in a statement: ‘This case is nothing but a racket designed to take $1.7 billion of taxpayer dollars out of the Treasury and pour it into a huge slush fund for Trump at DOJ to hand out to his private militia of insurrectionists, rioters, and white supremacists, including those who brutally beat police officers on January 6, 2021, and sycophant accomplices to his election stealing schemes.’
The Trump administration claims that the fund is non-partisan and that anyone can file a claim if they believe they were mistreated by Biden’s DOJ. The President has previously vowed to donate any proceeds he receives from the lawsuit to charity.
‘QAnon Shaman’ Jacob Chansley, right with fur hat, during the Capitol riot in Washington, Jan. 6, 2021
It was not immediately clear who precisely will stand to benefit from the fund but its creation reflects Trump’s long-running claims that the Justice Department during the Biden administration was weaponized against him.
He has cited as proof the since-dismissed criminal charges he faced between his first and second terms of conspiring to overturn the results of the 2020 presidential election and retaining classified documents at Mar-a-Lago. Several Trump aides were also prosecuted, as were hundreds of MAGA supporters who stormed the Capitol on January 6, 2021.
Merrick Garland, who served as attorney general during the Biden administration, has repeatedly denied allegations of politicization and has said his decisions followed facts, the evidence and the law.
His Justice Department also investigated Biden for his handling of classified information and brought separate tax and gun prosecutions against Biden’s son Hunter.
Nonetheless, Trump’s current Justice Department has actively pursued the president’s retribution campaign and grievances, bringing criminal charges against some of his political opponents and initiating a wide-ranging investigation that aims to establish a years-long conspiracy between law enforcement and intelligence officials to destroy Trump’s political prospects and keep him power.
No charges have been brought in that investigation.
Trump filed a lawsuit earlier this year in a Florida federal court, alleging that a previous leak of his and the Trump Organization’s confidential tax records caused ‘reputational and financial harm, public embarrassment, unfairly tarnished their business reputations, portrayed them in a false light, and negatively affected President Trump, and the other Plaintiffs’ public standing.’
In 2024, former IRS contractor Charles Edward Littlejohn, who worked for Booz Allen Hamilton, a defense and national security tech firm, was sentenced to five years in prison after pleading guilty to leaking tax information about Trump and others to two news outlets between 2018 and 2020.
A pro-Trump protester carries the lectern of Speaker of the House Nancy Pelosi through the Rotunda of the U.S. Capitol Building after a pro-Trump mob stormed the building on January 6, 2021 in Washington, DC
The outlets were not named in the charging documents, but the description and time frame align with stories about Trump’s tax returns in The New York Times and reporting about wealthy Americans’ taxes in the nonprofit investigative journalism organization ProPublica.
The Times report found Trump paid $750 in federal income tax the year he first entered the White House, and no income tax at all some years, thanks to reported colossal losses.
A group of lawyers wrote to the court this month, expressing concerns about whether the Justice Department was properly insulated from the president’s control of the case. Additionally, several ethics watchdog groups have filed friend-of-the-court briefs challenging the president’s lawsuit.
Skye Perryman, president and CEO of Democracy Forward, an advocacy group that filed an earlier brief, said in response to the dismissal: ‘This case was always a sham, and another ploy by the President to access taxpayer funds to line his pockets.’
Perryman vowed that her group would continue to fight the settlement.
