On January 29th of this year, Donald Trump (in his personal capacity) and two of his sons brought a USD 10 billion lawsuit against the Internal Revenue Service (IRS) over leaks to the press (by an IRS contractor) between 2018 and 2020 about his tax returns. To resolve the suit, the Justice department (DoJ) swiftly settled for USD 1.776 billion (the number references to the birth date of the U.S. as an independent state) before a judge could opine on the frivolousness of the case. The money will be deposited in an “Anti-Weaponization Fund”, which can be used to compensate people that allegedly were wrongly targeted by the DoJ, but will exclude the plaintiffs (i.e. the Trump clan). Pending IRS tax audits involving Mr. Trump, his family and his companies were dropped as part of the settlement. Finally, Mr. Trump also will receive a formal apology “from the United States” (not clear who is referred to here, maybe Mr. Trump himself?).
Cash cow…
The acting DoJ chief, the one who agreed the settlement with the president, is Todd Blanche, who previously worked for Trump as his private lawyer (most famously or notoriously, depending on your view, he defended his boss in 2024 over concealed hush-money payments to Stormy Daniels, a porn star). The governance of the Fund has Trump’s usual hallmarks. The Fund will be administered by 4 commissioners appointed by Mr. Blanche (the acting attorney general) and 1 commissioner appointed in consultation with the Congress leadership, but Trump can fire any of the commissioners without cause. When Mr. Trump leaves office (supposedly after elections in November 2028), any money left in the Fund will flow back to the federal government (before January 1st, 2029). Of course, conflict of interest is properly managed by ensuring that dealings of the Fund (including payment amounts and names of beneficiaries) remain confidential (other than a quarterly report to the attorney general, which itself shall remain confidential). The fact that the president sues an agency, the IRS, which he ultimately controls (a novelty, no other sitting U.S. president has done so) and whose defence is led by lawyers at the DoJ, which he also controls, is just a minor detail (an independent judge, if there still are any left, most likely would have thrown this case out of court because of self-dealing).
The settlement benefits Trump c.s. in that all pending tax cases are closed and any examinations related to tax returns filed before May 18th, 2026, are forever barred and excluded (this was an addendum to the settlement agreement signed on May 18th). The Fund really serves as a slush fund to transfer taxpayer money to Trump loyalists (because that is what most likely will happen). I thought I had seen all in respect of corruption whilst covering Emerging Markets in various roles since 1990. But Trump’s slush fund (the attorney general has the privilege to rename the Fund and I think slush fund should seriously be considered) beats everything I have seen. This comes on top of insider trading, commingling business and political interests and awarding government contracts to loyalists. The 250-year-old U.S., a country that until recently was admired across the world (also by me), has, under the leadership of Donald J. Trump, truly become a banana republic…
