Fury as Trump gets $1.8 billion taxpayer-funded payout from his own government: ‘Stunning act of corruption’

Donald Trump struck a $1.8 billion deal with his own IRS to funnel taxpayer money to his ‘legal’ victims, including the January 6 rioters and their political allies, in a deal Democrats have called the most corrupt presidential act in history.

The president, their son Don Jr. and Eric and the Trump Organization filed suit in federal court for the Southern District of Florida against the Treasury and the IRS following the leak of tax returns.

They agreed to drop their lawsuit on Monday, as well as two other allegations, including damages from the Mar-a-Lago raid in 2022 and the investigation into Russian election interference, in exchange for the government creating a ‘Counter Proliferation Fund’.

The $1.776 billion fund will have the authority to issue formal apologies and monetary relief to plaintiffs. It would be led by a five-member commission appointed by the attorney general, giving Trump the power to remove any member.

While Trump is barred from receiving direct payments from the fund, organizations affiliated with him are not expressly prohibited from making additional payments.

The deal drew the ire of Democrats, including Senate Finance Committee member Ron Wyden, who said it represented a new level of corruption.

“Even by his standards, the move he is now trying to get away with is a staggering act of corruption,” Wyden said.

‘What Trump wants is a $1.7 billion slush fund for right-wing political violence and subversion, and if he achieves this it will be the most brazen theft and misuse of taxpayer dollars by any president in American history.’

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 the intent of this Department to right the wrongs that have been done while ensuring this never happens again.

‘As part of this solution, we are establishing a legal process so that victims of law enforcement and weaponization can be heard and seek compensation.’

The extraordinary order came despite concerns from trial judge Kathleen Williams, who was investigating a possible conflict of interest in Trump’s lawsuit against his own government.

Trump himself admitted last October that it was ‘extremely strange to decide that I was going to pay for it myself’.

But the judge has limited legal authority to halt any settlement agreement.

Minutes after Trump’s legal team announced it was dropping the case on Monday, nearly 100 House Democrats filed a ‘friend of the court’ brief accusing Trump of ‘blatant self-serving’ efforts to impose legal blocks on the fund.

Rep. Jamie Raskin, the top Democrat on the House Judiciary Committee, said in a statement: ‘This case is nothing more than a blackmail designed to take $1.7 billion of taxpayer money from the Treasury and funnel it into a massive slush fund for Trump at the Department of Justice to distribute to his private militia of rioters, rioters and white supremacists, including those who brutally beat police officers on January 6, 2021. The sycophant becomes complicit in his election-stealing plans.’

The Trump administration maintains that the fund is nonpartisan and that anyone who believes they have been mistreated by Biden’s Justice Department can file a lawsuit.

‘QAnon Shaman’ Jacob Chansley, right, wearing a fur hat, during the Capitol riot in Washington, January 6, 2021

It also cites the ‘Keepseagle’ case as a precedent, in which the Obama Administration created a $760 million fund to compensate for decades of racism allegations against the federal government.

The president had previously promised to donate the proceeds from the case to charity.

It’s not yet clear who exactly will benefit from the fund, but its creation reflects Trump’s long-standing allegations that the Justice Department was weaponized against him during the Biden administration.

He cited as evidence since-dismissed charges he faced between his first and second terms of conspiring to overturn the results of the 2020 presidential election and hiding secret documents at Mar-a-Lago. Several Trump aides have been prosecuted, as have the 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 said his decisions were in accordance with the facts, evidence and law.

The Justice Department also investigated Biden for his handling of classified information and filed separate tax and gun cases against Biden’s son Hunter.

Trump’s Justice Department nevertheless actively pursued the President’s revenge agenda, filing criminal charges against political opponents and launching a wide-ranging investigation aimed at establishing a years-long conspiracy among law enforcement and intelligence officials to destroy his political prospects and prevent his return to power.

No charges were brought in this investigation.

A pro-Trump protester carries House Speaker Nancy Pelosi’s lectern through the U.S. Capitol Rotunda after a pro-Trump mob attacked the building on January 6, 2021 in Washington, D.C.

Trump filed a lawsuit in Florida federal court earlier this year, claiming that the previous leak of his and the Trump Organization’s confidential tax records caused ‘reputational and financial harm, public embarrassment, unfairly impairs their business reputation, falsely portrays them, and adversely affects the public reputation of President Trump and the other Plaintiffs.’

In 2024, former IRS contractor Charles Edward Littlejohn, who worked for Booz Allen Hamilton, a defense and national security technology 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.

Those publications were not named in the charging documents, but the disclosure and time frame were consistent with reporting on Trump’s tax returns at The New York Times and reports about the taxes of wealthy Americans at the nonprofit investigative journalism organization ProPublica.

The Times report stated that Trump paid only $750 in federal income tax in the first year he entered the White House, and in some years he did not pay any income tax.

A group of lawyers wrote to the court this month expressing concerns about whether the Justice Department was adequately insulated from the president’s control of the case. Additionally, various ethics watchdog groups filed friend-of-the-court briefs objecting to the president’s case.

Skye Perryman, president and CEO of Democracy Forward, an advocacy group that previously filed a brief, said in response to the impeachment: ‘This case was always a sham and another ploy by the President to access taxpayer funds to line his pockets.’

Perryman vowed that his group would continue fighting against the resolution.