Donald Trump has dropped his lawsuit against the Internal Revenue Service over the leak of his tax records, and his government formally announced a $1.776 billion “Anti-Weaponization Fund” to enrich his allies.
Under the terms of the agreement, Acting Attorney General Todd Blanche would appoint five people to a board, who could be fired by Trump at any time. That panel will dole out settlements on the grounds of undefined “Lawfare” and “Weaponization,” and nothing in the settlement requires public notice about who is being compensated or for how much. In fact, the settlement states that Blanche will receive the names of the recipients in a “confidential written report.”
Jan. 6 rioters and others prosecuted for committing crimes on Trump’s behalf are widely expected to apply for millions in compensation without public notice.
In a Substack Live conversation on Monday night, Allison Gill and I discussed the history, the fine print and the possible legal challenges that could block what has been widely denounced as a MAGA slush fund.
The history
Trump sued the IRS earlier this year over the leak of his tax records toward the end of his first presidential term in 2019.
Though the contractor who disclosed those records was prosecuted and convicted, Trump sought $10 billion in taxpayer money without explaining why the leak of records that every other president has released voluntarily damaged him in an amount that’s nearly equal to the IRS’s total budget for 2026.
The terms of the agreement dropping the lawsuit explicitly describe a quid pro quo: The case will be dismissed “in exchange for” the creation of the fund.
Evading oversight
At the same time it announced the agreement, the Trump Justice Department filed a notice of voluntary dismissal arguing that the judge no longer has jurisdiction over the case because the IRS never answered the complaint or filed a motion for summary judgment.
U.S. District Judge Kathleen Williams agreed, but she went a little farther in a three-page order closing the case.
“Because the Notice does not reference any settlement or include a stipulation of settlement, there is no settlement of record,” she wrote. “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 Trump Justice Department explicitly tied the proposed $1.776 billion fund to the settlement.
Read the judge’s ruling in full here, and watch the interview at the top of this newsletter.
