The Administration’s $1.776 Billion Anti-Weaponization Fund Has No Basis In The Law

Former federal judges contending Trump lawyers committed “fraud on the court” persuaded a sitting judge in Miami to take extraordinary action on May 29 and reopen the closed IRS case that prompted the creation of the $1.776 billion “anti-weaponization” fund. U.S. District Judge Kathleen M. Williams did so to investigate the judges’ claims that a so-called settlement — with its fund and accompanying immunity from tax claims against Trump, his family, and their businesses — is “a result of collusion” between the parties. The judges who moved to reopen the case, appointed by presidents of both parties, allege Trump lawyers deceived Judge Williams when they asked her to dismiss the case while claiming there was no settlement involved.

Earlier this year, Trump, as an individual U.S. citizen, sued the government seeking $10 billion for damages that he and his sons, Don Jr. and Eric, had allegedly suffered because of the unlawful release of certain income tax returns by an IRS contractor during his first term. The filing immediately raised questions regarding the potential conflict of interest posed by a lawsuit in which Trump was both plaintiff and, because of his effective control of the Department of Justice as President, defendant. Williams instructed the parties to address the issue whether, in legal parlance, the lawsuit presented a “case or controversy,” a basic requirement for a lawsuit to proceed. The concern was obvious: If Trump was effectively both plaintiff and defendant, how could the lawsuit present a legitimate dispute between two adverse parties, appropriate for judicial resolution?

The judge never had a chance to address that question, because Trump withdrew his lawsuit – it was obvious that Judge Willliams would dismiss it — thereby terminating the court’s jurisdiction in the matter and the court’s authority to approve or disapprove any settlement. At the same time, Todd Blanche, the president’s former defense lawyer who now heads the Justice Department, announced the creation of the $1.776 billion “Anti-Weaponization” fund to compensate people for alleged damages from “weaponization and lawfare,” with the compensation decisions to be made exclusively by a panel effectively appointed by and controlled by Trump. Blanche also announced that, as part of this “settlement,” Trump, his family, and their businesses were given complete immunity from any liability arising from IRS audits for past tax returns.

It is neither partisan nor an exaggeration to observe that both elements announced by Blanche are unprecedented and are fundamentally contrary to the Rule of Law. There is no legal basis for this arrangement – which is inaccurately called a settlement – that provides for an almost $2 billion fund and the provision of IRS tax immunity for Trump and his family.

First, the fund that was created, no doubt at Trump’s direction, will involve no judicial or other independent oversight. Its procedures, the people who will receive payments and everything else about it will be determined by a panel over which Trump has unfettered control. It’s difficult to characterize this arrangement as anything other than an opportunity to transfer taxpayer money to the president’s supporters, potentially including more than 1,500 convicted felons who participated in the January 6 Capitol insurrection.

Second, the immunity provided to Trump and his family is incredibly broad and protects them from potential tax liability unrelated to the lawsuit Trump filed — immunity not otherwise available to them under our legal system.

Also on May 29, U.S. District Judge Leonie Brinkema in Virginia temporarily blocked transfer of the $1.776 billion to the fund, the consideration of any claims submitted to the fund, and any disbursement from the fund. The freeze is in force until an adjudication of claims that the “settlement” violates the separation of powers, the First Amendment and Equal Protection clause of the U.S. Constitution, as well as the federal Administrative Procedure Act.

Editor’s note: On June 2, Todd Blanche told lawmakers that “we are not moving forward with the fund.” However, Mr. Blanche also announced that immunity from IRS audits of past tax returns for Trump, his family and their businesses will remain in place. At this time, Judge Williams’ order reopening the IRS case also remains in effect.