The agreement resolves an unprecedented lawsuit filed by Trump, in which he sought US$10 billion from the Internal Revenue Service, arguing it should have done more to prevent a former contractor from leaking his tax returns to the media.
Trump will receive an apology but no financial payment.
Instead, the Justice Department will set up a pool of money controlled by his allies that can dole out payments to those who claim to have suffered “weaponisation or lawfare” by the US government. Those terms have frequently been used by Trump and his allies to describe the criminal cases against them, including those arising from the attack on the US Capitol on January 6, 2021.
Trump’s lawsuit, and the resulting settlement, has been widely criticised as an attempt to direct taxpayer money to his own purposes.
“This case is nothing but a racket designed to take US$1.7 billion of taxpayer dollars out of the Treasury and pour it into a huge slush fund,” Representative Jamie Raskin of Maryland, the top Democrat on the House Judiciary Committee, said in a statement.
The Justice Department said there are no partisan requirements to file a claim with the “Anti-Weaponisation Fund.”
The total sum, US$1.776 billion, is a nod to the signing of the US Declaration of Independence in 1776.
“It is this Department’s intention to make right the wrongs that were previously done while ensuring this never happens again,” said Todd Blanche, the acting attorney general who formerly served as Trump’s defence attorney in three criminal cases.
Federal prosecutors who worked on cases against Trump and his political allies repeatedly rejected claims that the cases were politically motivated or an abuse of the legal system.
Blanche will appoint four of the five members of the commission who will decide the merits of the claims. The commission can authorise payments to those who demonstrate they were targeted for “improper and unlawful political, personal and/or ideological reasons,” according to the settlement agreement. As examples, it cites Biden-era moves that conservatives have condemned, including prosecutions of activists for obstructing access to abortion clinics.
Trump, at a White House event on Monday evening, said he was not involved in the creation of the fund, though the settlement was signed by his personal lawyers.
“These were people that were weaponised and really treated brutally by a system that was so corrupt,” Trump said of those eligible for payments.
Legal experts described the arrangement as highly unusual both because of the nature of Trump’s lawsuit against the IRS and because funds of this scale typically are either created by an act of Congress or supervised by a court.
“This is completely unprecedented for a variety of reasons,” said Rupa Bhattacharyya, a former Justice Department lawyer who oversaw a fund for victims of the September 11, 2001, attacks. “For taxpayer money to be given to the executive branch to dole out in a way with such little restriction just lends itself to abuse and corruption.”
The payouts are set to come from a separate fund Congress set aside to settle and pay legal claims against the US government. As part of the settlement, Trump will also drop administrative claims against the government over the FBI search of his Mar-a-Lago resort for classified documents in 2022 and the investigation into potential ties between his 2016 presidential campaign and Russia.
The IRS lawsuit arose from former IRS contractor Charles Littlejohn’s leak of Trump’s tax returns to media outlets, including the New York Times and ProPublica, in 2019 and 2020. Littlejohn was later convicted and sentenced to five years in prison. These returns showed that Trump paid little or no income taxes in many years, the Times reported in 2020. (Reuters)
