DEMOCRACY WATCHWhat Can Be Done About President Trump’s Slush Fund?
Others have examined the details and criticisms of Trump’s slush fund, noting that its aim is to financially reward people who have broken the law in order to serve Trump’s interests. Here, I focus on legal issues and remedies.
Editor’s note: Attorney General Todd Blanche, in a congressional hearing earlier today, told lawmakers that the Trump administration was not “going forward” with the plan to create the $1.776 billion fund.
On May 18, federal judge Kathleen Williams dismissed two of President Trump’s legal claims: (1) his $10 billion lawsuit against the IRS for failing to stop a former contractor from illegally disclosing Trump’s tax returns to the New York Times and ProPublica; and (2) his $230 million claim for legal fees related to the 2022 search of Mar-a-Lago and the investigation of his alleged ties to Russia. In exchange, the government agreed to create an Anti-Weaponization Fund—$1.8 billion to compensate persons who can show they were wrongly targeted victims of “lawfare.” The fund will reportedly be administered by a five-member commission, appointed by the attorney general and removable by the president. Among the possible beneficiaries are the 1,600 participants in the January 6 Capitol riots. Additionally, in a one-page supplemental agreement signed only by Acting Attorney General Todd Blanche, but announced after Judge Williams had dismissed the lawsuit, the IRS agreed to forgo certain audits and claims against Trump, his family, and related businesses.
Many of the details and criticisms of the so-called slush fund have been examined in earlier blog posts by Mike Fox, Walter Olson, Dan Greenberg, and Tad DeHaven & Molly Nixon. Here, I focus on legal issues and remedies.
Trump’s deal is supposedly modeled after Keepseagle v. Vilsack (2011), in which a $760 million Obama-era Judgment Fund repaid Native Americans for alleged discrimination in connection with the Department of Agriculture’s farm loans. The Judgment Fund was authorized by statute (31 U.S.C. 1304) and still exists as a means by which to bypass separate appropriations every time the government is ordered to pay litigation damages. But some legal experts question whether the Judgment Fund is available to finance Trump’s anti-weaponization scheme.
First, the Judgment Fund itself may be unconstitutional. It effectuates a permanent delegation of Congress’s appropriations power, without adequate guidelines or guardrails. Second, Trump’s suit against the IRS was quite different from the Keepseagle case: Trump’s suit involved a plaintiff (the president) who exercised effective control over the agency he was suing (the IRS). And yet, federal courts are authorized to hear only cases or controversies, which require, among other things, adversarial parties. Moreover, Keepseagle ended with a class action settlement, which was approved by the court. Judge Williams, by contrast, agreed to dismiss Trump v. IRS, expressly noting that there was “no settlement of record.”
