Trump uses taxpayer funds to settle lawsuit, creating secretive $1.8bn slush fund

President Donald Trump has reached a settlement in a $10bn lawsuit he filed in his personal capacity against the Internal Revenue Service, an agency he oversees, resulting in the creation of a nearly $1.8bn fund that critics say amounts to a slush fund for his allies. The fund, described by The Guardian as loosely controlled and secretive, will be funded by taxpayer money and is far larger than any damages Trump could have plausibly claimed from alleged leaks of his tax return documents. Members of the Trump administration have not ruled out that January 6 insurrectionists could receive payments from the fund.

The so-called Anti-Weaponization Fund will be administered by four commissioners appointed by Trump’s attorney general and one appointed in consultation with congressional leadership; however, Trump retains ultimate control as he can fire the commissioners. The fund has authority to issue formal apologies for alleged mistreatment of conservative political actors by previous administrations, including those prosecuted during the Biden era. Any unspent money when Trump leaves office will be returned to the federal government, but observers doubt any will remain. There is no requirement for public disclosure of the fund’s work, and required reports to the attorney general are to remain confidential. The settlement also requires the IRS to drop all audits of Trump and his family.

“The machinery of government should never be weaponized against any American,” said Acting Attorney General Todd Blanche. That statement likely surprises many who have faced politically motivated prosecutions by the Justice Department since Trump returned to power, critics said.

The case involved Trump suing an executive agency he claims de facto total control over; the IRS was represented by lawyers from the Justice Department, which Trump also controls. The federal judge questioned whether a genuine conflict existed and commissioned an independent group of lawyers, who filed a brief stating there was “reason to believe that the president is, in fact, exercising his control over the defendants in this litigation.” The settlement was reached just before the judge’s May 20 deadline for the parties to explain their conflict.

The agreement represents an extraordinary instance of bald self-dealing, even in an administration where such blatant corruption has become routine. Trump’s second term has been marked by conflicts of interest and widespread use of public office for personal enrichment, as White House personnel direct the federal government’s purchasing and regulatory power toward those who pay them off, undermining national interests.

Trump’s corruption has not been the dominant media story of his second term, possibly because it is more technical and less lurid than other scandals: his attacks on democratic institutions, mass deportation efforts, ties to convicted pedophile Jeffrey Epstein, and alleged sexual assaults, all of which he has denied. Alternatively, the administration’s self-dealing may escape notice because it is so brazen and unconcealed, benefiting from a public misperception that a cover-up is worse than the crime itself, observers say. This corruption is likely to be one of Trump’s most enduring legacies, setting precedents for future administrations, degrading federal projects, transferring wealth to allies, and fostering cynicism among bureaucrats, politicians, and voters.

Do Americans care about being scammed? They likely would if the extent of Trump’s corruption were made clear and salient, said critics. Democrats have been poor at messaging, often failing to aggressively attack Trump when it matters and unable to dominate public conversation on platforms controlled by Trump allies. However, the issue is worth seizing ahead of the midterms due to its simplicity, they argue. Americans are struggling with higher costs, poor job prospects, and a president who treats them with contempt; they do not like being stolen from or played for fools.

Moira Donegan is a Guardian US columnist.