Judge voids IRS settlement that gave Trump immunity, refers Trump lawyers for discipline
“A U.S. judge on Monday voided President Donald Trump’s settlement with the IRS that gave him and his companies sweeping tax protections and initially set up a nearly $1.8 billion government fund to pay victims of so-called government weaponization that was later abandoned,” reports Reuters.
“A federal judge said Monday that President Donald Trump’s lawsuit against the IRS over his leaked tax returns was filed for an ‘improper purpose’ as she referred” his “attorneys for disciplinary actions,” reports The Associated Press. That was in
a scathing decision that referred one of his lawyers for discipline and characterized the $10 billion complaint as an exercise in self-dealing.U.S. District Judge Kathleen Williams accused Trump of having manipulated the court system when he sued a federal agency under his control, bypassing a requirement that parties in a lawsuit must have adverse interests and laying the groundwork for a settlement last spring that granted him immunity from tax audits and created a fund to compensate allies of the president who say they were unjustly persecuted.
Though the practical impacts of the ruling may be limited given the administration’s public pronouncements that the so-called $1.776 billion Anti-Weaponization Fund has been abandoned, the judge’s ruling nonetheless amounts to a scathing rebuke of the Trump administration and resurfaces a politically damaging storyline for Acting Attorney General Todd Blanche just as he prepares to face the Senate Judiciary Committee for his confirmation hearing on Wednesday.
“The nature of the suit itself and the conduct of the Parties and counsel from its filing make plain that this was an attempt to use the Court to provide some legitimacy to an agreement to confer immunity to people and entities affiliated with the President and to earmark billions of dollars from American taxpayers to redress grievances not defined in the law,” Williams wrote in her ruling.
Reuters adds that:
U.S. District Judge Kathleen Williams found that Trump and the IRS, which he oversees as president, were not truly adverse to each other as is required in civil lawsuits under the U.S. Constitution. Williams referred a Trump lawyer in the case, Alejandro Brito, and senior Justice Department officials who signed off on the settlement to state bar authorities to determine if their actions violated legal ethics rules.
This was a corrupt slush fund to pay taxpayer money to political allies.
The Democrats do this sort of thing, too — as we chronicled in the past — but this was even more brazen.
The Obama and Biden administrations also created political slush funds. “Kamala’s brother-in-law fleeced taxpayers for billions to give to left-wing groups and lawyers,” notes attorney Ed Whelan, who was deputy assistant attorney general during the Bush administration.
The New York Post reported on this depressing reality about Kamala’s brother-in-law, Tony West, who would have held a high-ranking position in the Harris administration had she been elected. “He invented a new form” of “graft” while in the Obama administration, as head of the Justice Department’s Civil Division, it notes. Prior to 1977, Congress had to approve any settlement of over $100,000 in lawsuits against the U.S. government. That ensured compliance with the Constitutional requirement that Congress control the government’s purse. That cap would have prevented Trump’s $1.776 trillion slush fund, which disturbs even some Republican lawmakers.
But in 1977, seeking relief from the ever-growing number of settlements to review, a Democratic Congress removed the $100,000 cap on settlements in lawsuits against the U.S. government,
handing the Justice Department a permanent blank check to pay settlements unilaterally, in any amount, out of an account known as the Judgment Fund.” Run by the Treasury Department, the Judgment Fund’s secrecy is so complete that our often-penetrated CIA might study it for lessons. The limited data released omits recipients, the facts underlying the case, and often the lawyers involved. By statute, attorneys’ fees awarded need not be disclosed. A Government Accountability Office study concluded that “no one knows the number of claims processed by the federal government each year.”
Still, for three decades, the integrity of Justice’s officials sufficed to prevent abuse. Then, in 2009, Tony West took over the department’s Civil Division, the division that litigates and settles lawsuits. Once West arrived, his deputy emailed colleagues asking “can you explain to Tony the best way to allocate some money toward an organization of our choosing?” Settlements became the vehicle for paying off political allies.
For example, in late 2010, after a Supreme Court victory, DOJ lawyers were on the cusp of winning a decade-long fight against discrimination claims by 91 Hispanic and female farmers. That’s when West intervened and, as The New York Times put it, “engineered a stunning turnabout.” DOJ agreed to a $1.33 billion settlement which included thousands of farmers who had never claimed bias. The deal was made over the “vehement objections” of the department’s career lawyers. The Times’s investigative report described West’s settlement as a “runaway train, driven by racial politics . . . and law firms that stand to gain more than $130 million in fees.” The projected settlement size ballooned to over $4.4 billion as additional plaintiffs were added, including Native American farmers. The government’s statistical expert was appalled: “‘If they had gone to trial, the government would have prevailed . . . It was just a joke. . . . I was so disgusted. It was simply buying the support of the Native Americans.’” This dirty deal also inflated the number of claimants, creating a $60 million windfall for the plaintiff’s lead lawyer, a member of the Obama/Biden transition team.
But West did not just bilk taxpayers. He shook down corporations, too. In a series of bank settlements, his team added increasingly aggressive provisions requiring the institutions to make nearly a billion dollars in mandatory donations to Democrat-supporting activist groups. Donations were given double credit against required targets, incentivizing these payments over direct relief to victims of the housing crises.
West’s team specifically structured the terms to ensure that they would benefit only their political allies while leaving conservative groups ineligible. An internal email shows West deputies rewording a settlement’s donation provisions to ensure the bank could not select a “conservative” property rights organization as a recipient….The largesse delighted liberal groups. An email circulated saying they ought to build a “statue” to West and “bow down to this statue each day after we receive our $200,000+.” In this legal shakedown, California’s attorney general at the time, Kamala Harris, was an active participant, cosigning the agreements for her state.
To a lesser extent, the Biden-Harris Administration also employed West’s corrupt strategy to reward its political allies using taxpayer money. For example, the Biden Justice Department paid $2 million to FBI Agents Peter Strzok and Lisa Page for producing their anti-Trump texts to Congressional investigators. Strzok and Page claimed their rights under the Privacy Act had been violated, but their text messages were sent on government-provided cell phones that feature explicit banner warnings that users lack any reasonable expectation of privacy. As the New York Post notes, “DOJ had ample basis” to defeat this lawsuit in court rather than settling it. (Federal appeals courts have ruled that there is no reasonable expectation of privacy in such devices, in cases such as United States v. Simons (2000)).
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