The Trump administration set the stage for the largest heist in American history this week by creating an illegal fund of taxpayer dollars to compensate President Donald Trump and his allies—including the January 6 insurrectionists for being brought to justice after storming the Capitol in 2021.
The Justice Department’s announcement that it will set a $1.8 billion slush fund to settle a $10 billion lawsuit from Trump himself against the IRS drew widespread outrage from Democrats on Capitol Hill, who are exploring ways to block the payments. It also drew criticism from Capitol Police officers who were injured on January 6, who have filed a lawsuit to challenge the legality of this compensation scheme. Brian Morrissey, the Treasury Department’s top lawyer, reportedly resigned after the fund was announced.
Until now, Trump’s efforts to reward the insurrectionists who sought to illegally keep him in power in 2020 have been more unethical than illegal. Nobody seriously questioned the lawfulness of Trump’s decision to pardon more than 1,500 defendants in January 6–related cases, nor his decision to fire prosecutors who investigated those cases. Not everything that is morally wrong is necessarily illegal.
Trump’s efforts to extract billions in federal tax dollars for personal gain—either for self-enrichment or for rewarding his militant supporters for their coup attempt—may have finally crossed the line. What’s more, he and his associates may have broken the laws in ways that even so-called “presidential immunity” bestowed upon him by the Supreme Court cannot protect him.
When did Congress authorize the creation of this slush fund, you might ask? Well, it didn’t. Congress created a “permanent, indefinite appropriation” known as the Judgment Fund, to “pay many judicially and administratively ordered monetary awards against the United States.” This allows the federal government to comply with court rulings without constantly seeking individual appropriations from Congress each time a court awards compensation to a plaintiff deemed worthy of a legal remedy. Creating slush funds for a president’s insurrectionist co-conspirators is neither what Congress intended nor what it authorized.
The Justice Department claimed that it was creating the Anti-Weaponization Fund as part of a settlement agreement from a lawsuit brought by President Donald Trump himself in his personal capacity against the IRS, which he also runs in his official capacity as president. Overseeing the “negotiations” is acting Attorney General Todd Blanche, who was one of Trump’s own personal lawyers before his appointment as deputy attorney general.
No law degree is necessary to find fault with this arrangement. As conservative legal scholars are fond of reminding us, the Constitution vests the executive power of the United States in the president of the United States. The president cannot shake hands with himself. Any agreement or contract that a president makes with himself binds only himself, and no one else.
To that end, this “settlement” has no legal force beyond that which the Trump administration gives it. Trump’s lawsuit had been assigned to Judge Kathleen Williams in Miami. Last month, she called for additional briefing on whether the lawsuit was constitutionally valid. Article 3 requires courts to only hear “cases and controversies.” In this instance, this means that the parties must be adversarial to one another.
Federal judges typically approve litigation settlements. After the two sides moved to dismiss the case, Williams pointedly noted in her order closing it that she had not agreed to any settlement, nor had one been filed with her.
Because the Notice does not reference any settlement or include a stipulation of settlement, there is no settlement of record. Additionally, Defendants—federal agencies represented by the Department of Justice, which has an independent obligation to uphold the “public’s strong interest in knowing about the conduct of its Government and expenditure of its resources” and the “fair administration of justice,” 28 C.F.R. §§ 50.9, 50.23—neither submitted any settlement documents nor filed any documents ensuring that settlement was appropriate where there was an outstanding question as to whether an actual case or controversy existed.
The absence of judicial review is even more notable when it comes to an addendum to the “settlement” that was revealed on Tuesday after the case was formally closed. In the memo, Blanche purported to immunize Trump from any future prosecutions, claims, costs, and so on related to his past IRS tax returns, as well as his family members and his personal businesses. The Justice Department did not announce this decision; it was uncovered by Politico’s Josh Gerstein instead.
There is no precedent for such brazen corruption in the annals of American history. Nothing else comes close. Watergate seems almost quaint now. Teapot Dome is practically a minor accounting error. The president cannot simultaneously extract billions from the Treasury for corrupt gain while immunizing himself and his family from tax audits. To describe the scheme is to describe its criminality.
So what can be done? Trump and his allies appear to be operating under the assumption that they cannot be prosecuted for these acts in the future. One can hardly blame them for it: The Supreme Court’s disastrous invention of “presidential immunity” in the 2024 case Trump v. United States has paved the way for all sorts of crimes by the Trump administration since he returned to power last January.
It is important to note, as always, that “presidential immunity” is not real. The Constitution does not explicitly grant any form of immunity to presidents, nor can it be implicitly derived from the constitutional text. If anything, the text requires presidents to “take care that the laws be faithfully executed,” which a president cannot do if he is breaking them. Presidential immunity is utterly alien to our traditions and our national culture. Trump v. United States was wrong the day that it was decided. It is not constitutional law, and it barely pretends to be.
So emboldened is Trump, however, that he may have breached even the Roberts court’s expansive vision of his own impunity. Roberts’s opinion in Trump v. United States lays out a three-part scheme for presidential immunity. For acts within a president’s “conclusive and preclusive constitutional authority,” Roberts claimed, there is absolute immunity from criminal prosecution. As Justice Sonia Sotomayor pointed out in her dissent, this would immunize presidents from taking bribes in exchange for pardons—a message that Trump apparently took to heart—and insulate them from ordering the military to kill their political opponents.
But beyond that sphere, presidential immunity gets weaker. Most presidential powers as we understand them come from powers delegated or authorized by Congress, not from Article 2 of the Constitution. For all other official acts, Roberts claims that the president only gets “at least presumptive immunity.” And for unofficial acts, there is no criminal immunity.
The full bounds of the categories have not been tested in court since the ruling. Since there are so few presidents, it is also not exactly easy to build up case law on the matter. Even within the funhouse mirror of the court’s new jurisprudence, however, basic logic can still reign supreme.
If Trump were to claim even a single dollar from the Anti-Weaponization Fund, he would be violating the domestic emoluments clause in Article 2. The clause specifies that the president receives a fixed salary, but simultaneously bars him from accepting “any other Emolument from the United States, or any of them.” What counts as an “official act” by a president is a nebulous concept at best under the Supreme Court’s reasoning. If there is anything that falls outside that scope, however, it would be something that is explicitly forbidden by Article 2.
Federal law also makes it a felony offense for federal officials to steal or embezzle federal funds. In addition to the president himself, Trump’s subordinates may have also placed themselves in future legal peril by executing the scheme on his behalf. Philip Allen Lacovara, a former deputy solicitor general, argued in Bloomberg Law on Wednesday that the agreement amounted to a “collusive settlement” that could open the participants up to criminal charges.
“Collusive settlements are a species of fraud,” Lacovara explained. “Most typically, they involve self-interested deals in which a person with insurance agrees to settle a bogus claim or commits to an unreasonable payment in the hope of foisting the costs on an insurance company. Courts find settlements to be fraudulently collusive when, for example, there is no real effort to defend against liability or to contest the exaggerated claim for damages.”
Lacovara noted that the statute of limitations for these offenses, if dated from this week, would extend into 2031—well into the next president’s term. Presidential immunity, insofar as it exists, extends only to the president and not to his subordinates. Trump may try to shield Blanche and other associates from future prosecutions through preemptive pardons, but he could not save them from bar associations, which can review their professional misconduct and impose sanctions.
Any funds disbursed by the Anti-Weaponization Fund may also be recoverable by lawsuits from ordinary Americans, Lacovara noted. Under federal law, recipients of stolen federal property “are deemed to hold it in trust for the real owner—the American taxpayers—even if they are ignorant of the illegality of the scheme,” he explained. “In addition,” he continued, “the federal False Claims Act allows private citizens to sue anyone who collects money based on a false claim—such as having been the ‘victim’ of ‘weaponization’—and to recover penalty damages from the recipient of ill-gotten federal money.”
Trump went to great lengths since last year to rewrite his criminal history and the January 6 prosecutions by framing himself as the victim of “lawfare” and the “weaponization of the federal government” under former President Joe Biden. By trying to steal almost $2 billion from the federal government, he has only confirmed that the scandal was never that he was prosecuted by the Justice Department—it was that he escaped scot-free. That is, at least for now.
