US president drops lawsuit against IRS in return for $2.5b ‘slush fund’
Washington: President Donald Trump has settled his lawsuit against the US tax agency by creating an unusual multibillion-dollar fund to compensate victims of so-called government “weaponization” that Democrats quickly identified as a MAGA slush fund.
The Justice Department, whose acting president is Trump’s former personal lawyer Todd Blanche, announced that as part of the agreement, it would set aside US$1.776 billion ($2.48 billion) for a “Proliferation Fund” that would provide compensation to people who claim to be victims of the US government’s laws.
While the Justice Department stated that there were no partisan requirements for filing a lawsuit, Blanche stated that the aim was to correct what he saw as the Trump administration’s weaponization of the US federal government under Trump’s predecessor, Joe Biden.
“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 before and ensure this never happens again,” Blanche said.
“As part of this solution, we are establishing a legal process for victims of law enforcement and weaponization to be heard and seek compensation.”
Democrats expect the money to be used to compensate people convicted or charged over the Jan. 6 riots at the U.S. Capitol, which Trump pardoned on his first day back in office. Theoretically, that could include Trump allies like Steve Bannon or trade adviser Peter Navarro, who went to prison for defying a congressional subpoena on the issue.
Former secretary of state Hillary Clinton said of
Trump, his sons and the family business filed a $10 billion lawsuit against the Internal Revenue Service in January, arguing the agency should have done more to prevent a former IRS contractor from leaking tax returns to media outlets during the president’s first term.
These exits New York Times and ProPublica reported that Trump paid little or no income taxes over a 15-year period during his first year in the White House and most of the previous years, after revealing that he lost far more money than he earned. Trump has long fought to keep the records secret.
Contractor Charles Littlejohn, later pleaded guilty He was sentenced to five years in prison for allegedly leaking documents.
Trump’s lawsuit, filed in the Southern District of Florida, created the highly unusual situation of a president suing the government he leads.
Judge Kathleen Williams said the case may not be viable because “the incumbent president and his named rivals are entities whose decisions are subject to his direction.”
As part of the settlement announced Monday (Washington time), Trump and his family will receive a formal apology but not financial compensation, the Justice Department said.
But the so-called anti-gun fund immediately alarmed Democrats, who accused the Trump administration of funneling taxpayer money to its allies.
More than 90 of them signed an emergency amicus brief filed with a Florida court to try to stop the deal. They argue that only Congress can appropriate federal money and that Congress has not approved the creation of such a fund.
The Justice Department said the money would come from the existing Judicial Fund, which is used to resolve and pay cases. The report suggested there was a precedent: a $760 million fund created by the Obama administration to redress decades of allegations of racism at the Department of Agriculture.
But Massachusetts senator Elizabeth Warren said the latest announcement was a “giant slush fund of taxpayer dollars.” [Trump’s] MAGA dudes,” labeling it as “corruption on steroids.”
The U.S. attorney general who serves Trump will appoint five members to manage the fund, one of whom will be chosen in consultation with congressional leaders. The president may remove any member at any time, but his replacement “must be elected in the same manner as the replacement member was elected.”
Jamie Raskin, the top Democrat on the House Judiciary Committee, said the fund would be “entirely under the control of the United States.” [Trump’s] sycophants and friends”.
“He can fire them whenever he wants if they’re not doing exactly what he wants,” Raskin told cable network MS-NOW. “He can literally instruct them to give money to this person or that person for whatever reason he wants, based on his personal interests. There is no rule of law, no rhyme or reason.”
House Judiciary Democrats also called Trump’s lawsuit a “sham” filed to promote a favorable resolution.
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Michael Koziol is the North America correspondent for The Age and the Sydney Morning Herald. He is a former Sydney editor, Sun-Herald deputy editor and a federal political correspondent in Canberra.Connect with: X or email.
