Memo: Condemn Trump’s Unconscionable Slush Fund & Urge Congress to Act

WASHINGTON, D.C. – Donald Trump and his compromised Department of Justice (DOJ) have created a $1.77 billion slush fund to make pay outs to Trump supporters and cronies, as well as likely to Trump and his family. This scheme amounts to the creation of a January 6 Insurrectionist Payment Fund. The DOJ has now also agreed that the government will not investigate or audit Trump’s already filed tax returns, crossing the line into illegality.

We urge you to editorialize against Trump’s slush fund and demand Congress take action to block any payments from the fund.

The looting of $1.77 billion of public money to pay Trump and his cronies comes as Americans are expressing a high degree of economic distress and the administration is overseeing cuts to health care and food support on the grounds that the government does not have the money to pay for such life-saving programs.

Background on creation of the fund

• Trump filed a bad-faith lawsuit based on the illegal leak of his tax returns, an action that occurred while he was president of the United States. 
• He sought $10 billion in damages, a ridiculous number with no relationship whatsoever to any privacy injury he might claim. The leak release plainly did not significantly injure his reputation, because he was subsequently elected president.
• Because the case involved Donald Trump on both sides, there was no way for the case to move forward. Here is an amicus brief from Citizens for Responsibility and Ethics in Washington (CREW) and Public Citizen explaining that the case created an impossible conflict of interest for DOJ attorneys and that payments to Trump would be unconstitutional emoluments. 93 Members of Congress filed an amicus brief making similar arguments. 
• Lawyers at the IRS urged that Trump’s claims be challenged in court but they were ignored.
• The federal judge had indicated her skepticism of the case, but before the court could act, and with no DOJ lawyer ever appearing in court to contest Trump’s claims, Trump and his Department of Justice conspired to drop the case and agree on an out-of-court settlement. 

In sum, the slush fund was created out of a bad-faith lawsuit that had no chance of success.

Details of the fund

• The DOJ has published the agreement requiring a settlement fund.
•  We do not know if there are any other terms – a second agreement was published the day after the first – and Public Citizen has filed a public records request to make all relevant deals public.
• The deal provides for an “Anti-Weaponization Fund” to be governed by a five-member panel. Four members will be appointed by Trump’s interim Attorney General and his former personal lawyer/current personal DOJ fixer Todd Blanche, and the fifth will be appointed by Blanche in consultation with Congress.
• The panel will make up its own rules for determining how to resolve claims and make payments, subject to broad guidelines about “totality of circumstances.”
• The panel’s decisions are not required to be made public.
• The panel’s decisions are not subject to appeal or any outside review.

There is no doubt that this slush fund will be open to claims by January 6 insurrectionists. Both Donald Trump and Todd Blanche have said as much. Other miscreants from the first Trump term, such as Roger Stone and Rudy Giuliani, will also have potential claims.

The fund is also open to claims by Trump, his family and his businesses (although not for the alleged harm from the IRS legal or the prosecutions about classified information or efforts to undermine the 2020 transfer of power) and there is every reason to suspect that Trump will seek hundreds of millions from the fund for himself and his family.

In sum, the slush fund will be subject to no meaningful controls or transparency and should be expected to make large payouts to January 6 insurrectionists and Donald Trump and his family, among others.

The promise not to audit

• An addendum to the original settlement shields Trump from any audits over tax returns he has filed.
• The portion of the dirty deal crosses the line into illegality.
• 26 U.S.C. §7217 bars presidential requests to terminate audits made either ‘directly or indirectly’ and requires IRS officers and officials who receive such requests to report them to the Treasury Inspector General for Tax Administration. Failure to do so may subject those officers to criminal prosecution.
• Therefore, if Acting AG Todd Blanche tries to effectuate this settlement by directing the IRS to end audits underway or not to conduct audits it would normally undertake, both he and Donald Trump will be violating the law and putting IRS officers at risk.

In sum, the abusive agreement not to audit or investigate Trump’s tax returns will cross the line into illegality if Blanche tries to put it into effect.

What Comes Next

•  Police officers injured by insurrectionists on January 6 have already filed a lawsuit to block the slush fund from proceeding.
• Other lawsuits are likely.
• However, there is one certain way to prevent abusive payouts: Congress can act to block any spending from the fund.
• Congress will have a chance to act in votes coming as soon as today in the reconciliation process, in upcoming appropriations bills (as this is an abuse of appropriated taxpayer money), and at other moments.

In sum, Congress has the power to block this travesty from moving forward. Every Member of Congress should be forced to go on the record about this monstrous looting of taxpayer monies, again and again, until January 6 Payment Fund is shut down.