By Jan Wolfe and Andrew Goudsward
WASHINGTON, May 18 (Reuters) – U.S. President Donald Trump’s administration said on Monday it had created a $1.76 billion fund for victims of political “weaponization” to settle a lawsuit Trump had filed against his own government over the alleged mishandling of his tax records.
The agreement resolves an unprecedented lawsuit filed by Trump, in which he sought $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 “weaponization or lawfare” by the U.S. 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 U.S. Capitol on January 6, 2021.
Trump’s lawsuit, and the resulting settlement, has been widely criticized as an attempt to direct taxpayer money to his own purposes.
“This case is nothing but a racket designed to take $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-Weaponization Fund.”
“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 defense 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 department released few details about how it will determine who receives payouts.
A spokesperson for Trump’s legal team reiterated claims that Trump had previously been “illegally targeted” by the federal government and said Trump will “continue his fight to hold those who wrong America and Americans accountable.”
ORIGIN OF THE CASE, DROPPED CLAIMS
Trump, his adult sons Donald Trump Jr. and Eric Trump, and the Trump Organization, sued the IRS in January, arguing the agency should have done more to prevent a former contractor from disclosing their tax returns to media outlets during the president’s first term.
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.
The litigation against the IRS raised novel legal questions, including conflicts of interest, about whether a president can sue his own government.
Under the U.S. Constitution, federal courts may only hear genuine disputes between litigants with opposing stakes in the outcome.
U.S. District Court Judge Kathleen Williams in Miami, who oversees Trump’s lawsuit, wrote last month that it was unclear whether the parties to the lawsuit were “truly antagonistic to each other.”
(Reporting by Andrew Goudsward, Susan Heavey, Katharine Jackson and Jan Wolfe in Washington, D.C.; Editing by Andy Sullivan, Chizu Nomiyama and Bill Berkrot)
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