A federal judge is sanctioning Donald Trump’s legal team after finding that the president filed a dubious lawsuit against his own IRS for the sole purpose of forcing a settlement that bailed out Trump and his family from tax investigations.
“This action was never about a party seeking judicial resolution of a legal issue or a factual dispute,” Florida District Judge Kathleen Williams wrote Monday.
Williams said Trump’s personal lawyers and his own administration schemed the court to “provide some legitimacy” for an alleged “settlement” that would provide some “immunity” to the president, his family members and their businesses — and to “earmark billions of dollars from American taxpayers to redress grievances not defined in the law” in what critics called a “slush fund” for his allies.
The judge’s lengthy takedown of the administration’s actions also refers Trump’s attorney Alejandro Britto to the Florida Bar for potential disciplinary action. Another Trump-allied attorney, Daniel Z. Epstein, is also blocked from joining cases in the district for at least a year.
The lawsuit was brought “for an improper purpose — to gain the imprimatur of judicial legitimacy for a ‘settlement’ that had no viable basis in law or fact,” Williams wrote.
Trump and the IRS reached a “settlement” agreement earlier this year after the president sued his own administration for $10 billion, pitting his personal lawyers against his own Department of Justice.
As part of that agreement, the IRS agreed to formally drop any tax investigations into the president, his family and his companies.
The agreement also included plans for a $1.8 billion compensation fund — plans that were abandoned by the administration after they were blocked in court.
A memo signed only by Acting Attorney General Todd Blanche and dated May 19 said the IRS is “forever barred and precluded” from pursuing “examinations” into Trump and “related or affiliated individuals,” including his family, trusts and “related companies, affiliates and subsidiaries.”
That immunity, which applies only to existing audits and not future investigations, shields the president from a potentially damaging ruling that could have cost him more than $100 million, according to The New York Times, which was among several outlets to obtain Trump’s leaked tax return data, which prompted Trump’s lawsuit.
“As is customary in settlements, both sides have executed waivers of a variety of claims that were or could have been brought,” Justice Department spokesperson Natalie Baldassarre told The Independent at the time.
“There would be little point in settling several significant claims if either party could simply turn around and seek to initiative more adverse claims that could have been pursued previously,” she added. “This is only with respect to existing audits, not future.”
After the suit was filed, Williams appointed a team of outside lawyers to help her untangle the unusual nature of the case. In their brief to the court on May 14, they stopped short of recommending the lawsuit be dismissed but noted the “significant” issues at stake and suggested the court should hear more from the parties involved.
“This case is unprecedented,” they wrote. “A sitting president seeks monetary damages for alleged harm to his personal interests from an executive agency that he controls.”
Trump and the IRS never filed a response, and on May 18, the Justice Department published a press release announcing the “Anti-Weaponization Fund,” which promised massive taxpayer-funded payouts to alleged “victims” of government “weaponization,” including January 6 rioters and close allies of the president.
That same day, Trump’s lawyers filed a notice with Williams’s court that the president was dropping his lawsuit.
And on May 19, in a separate memo that Blanche later called an “attorney general order,” the Justice Department granted the president immunity from tax investigations.
Following the administration’s agreement to end Trump’s lawsuit, a group of 35 former federal judges urged Williams to open the case, which “raises profound questions about the parties’ candor toward the court and manipulation of the judicial system,” they wrote.
“The court was deceived,” they wrote, arguing that Trump and the IRS essentially laundered a “settlement” through the court’s legal credibility.
“The parties to this case are using this lawsuit as the legal justification for these actions,” they said. “This is not speculation; the parties themselves have proclaimed it, repeatedly.”
This is a developing story
