Washington: An unprecedented settlement between President Donald Trump and the US government – which he runs – precludes the tax office from ever pursuing claims against him, his family, their trusts and companies, as well as establishing a “slush fund” to compensate his political allies.
A day after the Justice Department announced it would allocate $US1.776 billion ($2.48 billion) to pay damages to alleged victims of government weaponisation and lawfare, acting attorney-general Todd Blanche waived the government’s right to ever pursue tax claims against the Trump family and empire.
In a one-page document uploaded to the department’s website, Blanche says the United States “RELEASES, WAIVES, ACQUITS and FOREVER DISCHARGES each of the plaintiffs” from any past or pending claims that could have been made against them by the tax office.
The government is “hereby FOREVER BARRED and PRECLUDED” from prosecuting or pursuing any and all such claims, Blanche’s memo says.
The protection applies not only to the plaintiffs in the case – Trump, his sons Don Jr and Eric, and the Trump Organisation – but to “related or affiliated individuals” including family members, trusts, parent and related companies, affiliates and subsidiaries.
It pertains to any matters that were raised or could have been raised in the lawsuit, as well as other matters currently pending or that could have been pending, “including tax returns filed before the effective date”.
Previous reporting by The New York Times estimated Trump could be liable for a tax bill exceeding $US100 million, plus interest and potential penalties, if he lost an IRS audit.
Blanche, who is acting as attorney-general after Trump fired Pam Bondi, is a former personal lawyer to the president.
Chuck Schumer, the leader of the Democrats in the Senate, called the agreement “a get-out-of-jail-free card that [Trump] negotiated with himself”. “His corruption knows no end,” Schumer said.
The settlement stems from a $US10 billion lawsuit that Trump and the other plaintiffs brought against the Internal Revenue Service in January, arguing the tax agency should have done more to prevent a former IRS contractor from leaking his tax returns to media outlets.
The leak occurred about seven years ago, during Trump’s first term, leading Democrats to accuse Trump of bringing a “sham” lawsuit now against his own government to extract a favourable settlement.
Part of that settlement, announced yesterday, is the creation of a $US1.8 billion anti-weaponisation fund that will compensate people who successfully claim to have been victims of government lawfare. Claims will be decided by a five-person commission, to be appointed by the attorney-general, who serves the president.
Blanche and Vice President JD Vance both said anyone was able to make a claim from the fund, and it was not limited to Republicans or people charged and convicted over the January 6, 2021, riots at the US Capitol.
But Vance said explicitly: “This is about compensating Americans for the lawfare that we saw under the last [Biden] administration.
“If [former president Joe Biden’s son] Hunter Biden wants to apply for this particular fund, he is welcome to.”
Vance, speaking at the White House press briefing room, also expressed a degree of sympathy for the people accused or convicted of assaulting law enforcement officers on January 6, 2021 – whom Trump pardoned.
“We’re not trying to give money to anybody who attacked a police officer. We’re trying to compensate people where the book was thrown at them, they were mistreated by the legal system,” Vance said.
“Whatever they were accused of – if we think somebody was unfairly prosecuted and deserves just compensation, that’s what this fund is going to exist for.”
The vice president went on to say that American law schools, prisoners’ rights groups and the media regularly expressed sympathy for criminals convicted of heinous crimes.
“You know who never, ever gets an ounce of sympathy when it comes to that disproportionate sentencing?” he asked. “People who voted for Donald Trump and participated in the January 6 protests.”
Blanche was grilled by lawmakers about the fund during a hearing on Tuesday (US time). He committed to releasing quarterly reports about the fund’s activities, though he indicated this would include information about the amounts of compensation awarded and the basis, not the person’s name.
He would not say whether someone convicted of assaulting a police officer on January 6 would be rendered ineligible to receive money from the fund.
At a news conference, associate attorney-general Stanley Woodward also defended the scheme, arguing that he already had the authority to settle any claim brought against the US government.
“Instead of just one person, there are now going to be five,” he said. “I frankly think that we should be ecstatic about the idea that we are going to inject more accountability into the process.”
Before being appointed associate attorney-general, Woodward also worked as a defence lawyer for Trump, his allies and people charged with offences on January 6, 2021. He signed this week’s settlement agreement with Trump on behalf of the Justice Department.
Woodward denied he had a conflict of interest, and said it was too soon to criticise the fund or describe it as a slush fund.
“There’s not been a single claim filed. There’s not been a single payment made. Come see us after we’ve made one of these so-called corrupt payments.”
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Michael Koziol is the North America correspondent for The Age and Sydney Morning Herald. He is a former Sydney editor, Sun-Herald deputy editor and a federal political reporter in Canberra.Connect via X or email.