Judge Rebukes Settlement Creating Trump’s ‘Anti-Weaponization’ Fund

A federal judge in Florida on Monday issued a scathing rebuke of President Donald Trump’s settlement with the IRS over his leaked tax returns, ruling that Trump, his private attorneys and the Justice Department had manipulated the judicial process to benefit Trump and his allies.

The ruling from Judge Kathleen M. Williams appears to void a settlement the Justice Department announced in May that included an immunity agreement for Trump and his family, along with an attempt to create a nearly $1.8 billion “anti-weaponization” fund for people who claim to have been unfairly targeted by federal authorities.

Williams wrote in the 56-page order that Trump, who filed the suit after returning to office in January, had brought the case “to gain the imprimatur of judicial legitimacy for a ‘settlement’ that had no viable basis in law or fact.”

She prohibited Trump and his family, as well as the IRS and Treasury Department, from referring to “the purported ‘settlement agreement’” or citing it as any evidence of a settlement in the case.

Williams also excoriated the Justice Department and Acting Attorney General Todd Blanche, whose confirmation hearing for attorney general is scheduled for Wednesday. She noted that before the settlement, no attorney from the department had filed a notice of appearance or any document stating the government’s position in the case. She ordered sanctions against the private attorneys involved, referring one of them to the state bar for potential disciplinary action.

“This action was never about a party seeking judicial resolution of a legal issue or a factual dispute,” Williams wrote. “The nature of the suit itself and the conduct of the Parties and counsel from its filing make plain that this was an attempt to use the Court to provide some legitimacy to an agreement to confer immunity to people and entities affiliated with the President and to earmark billions of dollars from American taxpayers to redress grievances not defined in the law.”

William also wrote the government entered into a settlement that “deviated from its litigation posture in similar actions, disregarded DOJ policies, and accomplished objectives beyond those authorized, as well as those specifically prohibited, by law.”

A spokesman for Trump’s legal team said in a statement: “The IRS wrongly allowed a rogue, politically-motivated employee to leak private and confidential information about President Trump, his family, and the Trump Organization to the New York Times, ProPublica and other left-wing news outlets, which was then illegally released to millions of people. President Trump continues to hold those who wrong America and Americans accountable.”

The Justice Department did not immediately respond to requests for comment on the order. A White House spokesperson declined to comment.

Trump and his sons brought the lawsuit against the IRS in January, seeking $10 billion in compensation from the agency over a contractor’s leak of their tax returns to news outlets years earlier.

The “anti-weaponization” fund and immunity agreement quickly became flash points when the Justice Department announced the resolution of the case in May.

Lawmakers and others raised alarms that the fund could be used to compensate people who participated in the Jan. 6, 2021, attack on the U.S. Capitol. Government watchdog groups filed suits to block the fund, and a judge last month issued an order indefinitely barring it from proceeding.

Following uproar from Republicans and Democrats in Congress and multiple legal setbacks, Blanche testified last month in Congress that the fund was “not moving forward.” Justice Department lawyers have made similar statements in court, but Blanche has refused to put that in writing.

A group of former federal judges separately wrote to Williams in May asking her to probe whether the settlement in the IRS case constituted a “fraud on the court” and the result of “collusion” among the parties.

In her ruling Monday, Williams said she was convinced that the president, his private lawyers, and the Justice Department weren’t actually adverse parties in the case, and that the Justice Department failed to “zealously defend” the government’s interests as a defendant in the litigation.

She noted that Blanche had served as Trump’s personal lawyer in his criminal cases, and that Stanley Woodward Jr., the current associate attorney general whose signature appears on the settlement, represented several individuals charged in connection with the Jan. 6 attack. Another lawyer for Trump, Daniel Epstein, served as a White House lawyer in Trump’s first term.

“Instead of either recusing because of their previous representations or vigorously defending this lawsuit as required to do so by DOJ policies and procedures,” Williams wrote, “these lawyers agreed to a ‘settlement’ involving a staggering amount of money potentially benefitting former clients.”

Blanche’s promise to members of Congress that the fund was dead showed that he was essentially representing both sides of the case, Williams said. His “certitude supports the conclusion that the Parties worked in tandem and were never actually adverse,” she wrote, adding that “that there was only one party whose interests were being represented throughout this case.”

Had Trump brought the case while he was a private citizen, Williams said, it might have been resolved in a few months. Instead, she said, he didn’t pursue his claims until he had appointed his former lawyer and a former lawyer who had represented Jan. 6 defendants to top posts in the Justice Department.

“These officials then negotiated on behalf of the United States, with his current lawyers, including his former White House Counsel to reach a ‘settlement,’” Williams wrote. “It is risible to suggest that there was ever adverseness between the Parties.”