Trump's Slush Fund to Reward Jan. 6 Insurrectionists Is Grotesquely Corrupt
It also quietly excuses Trump and his family from accountability for underpaying past IRS tax bills
Donald Trump’s attempt to engineer a $1.8 billion taxpayer-funded slush fund for those in legal trouble for promoting his interests is one of the most notable legal stories in recent memory. The fund—which is structured as a legal settlement, administered by loyalists, and shielded from judicial review or future accountability—is envisioned as a way to help victims of government “weaponization.” By this the administration means people like Jan. 6 rioters and others who got into legal trouble while trying to keep Trump in power.
There were early warnings that Trump might do this. “Months before the $1.8 billion ‘anti-weaponization’ fund was announced, Ed Martin predicted Capitol rioters would get millions, even if it took until 2028,” reports NBC News. Legal journalist Roger Parloff was among the first to dig into the actual language of the purported settlement. What he found was a document deliberately crafted to foreclose accountability and scrutiny. Here are some of his takeaways:
“The Trump/Blanche ‘settlement’ fund purports to be challengeable only by those who colluded to create it.”
“To help themselves to nearly $2B of our tax dollars, claimants present evidence to the (wink-wink) ‘settlement’ fund that they were victims of ‘Lawfare’ or ‘Weaponization,’ terms that are nowhere defined.”
“The fund is administered by 5 people chosen by Acting AG Todd (‘I love you, sir’) Blanche, and are removable at will by Trump.”
“The identities of those given our tax dollars, and how much, will be kept secret from us, and known only to … Blanche.”
“The procedures for processing these claims can be as secret as Blanche’s appointees choose to make them.”
Each of those features would be troubling on their own. When taken together, they describe a fund designed not to adjudicate claims fairly but to distribute money to preferred parties without any mechanism for public accountability.
Two additional provisions make the picture complete. Under provisions IV–G, H of the settlement, the fund must wrap up operations and liquidate by December 2028, ensuring that later administrations cannot get their hands on it (or more to the point, I suspect, its records). It also has a second, longer section purporting to exclude judicial review. The following is from VI–B: “there shall be no appeal, arbitration, or judicial review of claims, offers, or other determinations.”
The sum transferred is to be $1.776 billion, a number that is cute but reveals the arbitrariness at work. (There is a baldly mendacious recitation that it is the sum expected to be paid had claimants gone through regular legal process.) No judge had anything to do with that number. Trump had sued the federal government claiming that his own IRS appointees failed to prevent a rogue actor from unlawfully leaking part of his tax returns. U.S. District Judge Kathleen Williams expressed skepticism as to whether the parties were genuinely adverse, since Trump appointed and could fire the officials charged with defending the U.S. Treasury against him. Trump dropped the suit, forcing the judge to relinquish her jurisdiction, and then within hours unveiled the “settlement,” which at that point could proceed without judicial supervision.
Under an addendum to the supposed settlement, the Internal Revenue Service is “FOREVER BARRED and PRECLUDED” (capitals in original) from asserting future claims against Trump, his companies, and his family over any misconduct or deficiency connected with tax returns filed up to the present date, whether known or unknown. This is not a narrow carve-out but a blanket, permanent grant of immunity from federal tax liability for the president, his family, and the Trump business empire for all returns filed up to now. It was issued by the president’s own former personal attorney, now the acting attorney general.
Nice deal if you can get it! Maybe you can get it if you’re “negotiating,” adversely or otherwise, with someone who serves at your pleasure. And Trump does seem to have at least one high-exposure dispute with the feds over his taxes.
Economist Justin Wolfers notes one consolation: “He promised to release his tax returns as soon as there were no more audits pending, and now there are no more audits pending.”
The fund’s architects have not been without supporters. The most common line of defense is that prior administrations did something similar, setting a precedent for creative use of large-scale settlements by the government. But my Cato colleagues Tad DeHaven and Molly Nixon, who take on that argument in a recent post, note that Blanche points to prior USDA discrimination settlements with Native American, Hispanic, and female farmers as comparable precedents.
No, they aren’t. As DeHaven and Nixon explained: “Those cases did indeed tap the Judgment Fund, but the eligible claimants for those funds were generally within the category of those whose cases had been settled [and] for the same USDA discrimination alleged in the lawsuits.” This new slush fund, by contrast, is not structured to assist victims of improper tax disclosure.
Instead, the level of generality as to offense committed and injury suffered is set high enough to give the fund broad discretion to reward friends and turn away foes. No neutral third party administration, no appeal, no public accounting, and of course zero court supervision from the get-go, the whole thing having been engineered to escape scrutiny by any judge. Not much of a comparison to the Clinton- and Obama-era USDA discrimination settlements (which indeed deserved the vigorous criticism I and others directed at them at the time).
It’s also true, of course, that the persons and groups given money in those settlements had not been prosecuted for crimes, often violent, meant to prevent the peaceful transfer of power following an election.
Harvard professor of government Ryan Enos calls this “the most brazenly corrupt action in U.S. Presidential history.” I’m not prepared to pronounce either way on that, although it seems fair as applied to the presidents I’ve followed over my lifetime.
Nick Catoggio of The Dispatch puts it well:
It’s simple theft packaged in the argle-bargle of “weaponization” and “compensation” to make it palatable to populist dimwits searching for a way to excuse it morally. Even the mechanism is postliberal to the core: Trump’s habit of using flimsy lawsuits to squeeze money out of parties that he knows won’t dare refuse him reduces law—ostensibly an instrument of justice—into a vehicle of extortion.
How does he get away with it? You already know that, too.
The president behaves with impunity because he believes most of his party will unthinkingly defend anything he does, and he’s correct.
It all points not only to corruption but to a march toward authoritarian rule imposed by way of the streets. Trump intends to use public money to reward followers who broke the law, often violently, to keep him in power despite the election returns. That sends a dangerous message that if they try that again, they may come out not just with a get-out-of-jail pardon, but with a fortune.
An earlier version of this article was first published in Walter Olson’s newsletter.
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