Judge condemns settlement of Trump’s lawsuit against IRS as self-dealing
A federal judge sharply criticized President Donald Trump’s $10 billion lawsuit against the Internal Revenue Service, calling it an abuse of the judicial process. In her scathing ruling Monday, U.S. District Judge Kathleen Williams lambasted the Trump administration, saying the lawsuit was an inside play and the lawyers should be penalized.
The judge also barred Trump from claiming that a key part of a settlement of the lawsuit — immunity from past tax liability for him, his businesses and his family — is legitimate.
Williams referred a Trump attorney, Alejandro Brito, to the Florida Bar to face potential disciplinary action. She also limited the ability of another Trump attorney, Daniel Epstein, to practice law in the Southern District of Florida, unless he meets certain conditions.
Trump sued the IRS and the Treasury Department — two agencies under the president’s control — early this year, saying he was harmed when a contract worker leaked his tax documents. A settlement agreement with the Justice Department, also under the president’s control, not only gave Trump tax relief, it called for the creation of a $1.8 billion “anti-weaponization fund” that would compensate people who claimed they had been targeted for federal prosecution because of their political beliefs. Acting Attorney General Blanche said last month that the administration would not move forward with the fund.
In her order, Williams noted Blanche’s close association with the lawsuit and settlement. Six days after the settlement was announced, she wrote, “President Trump nominated Mr. Blanche to permanently serve as Attorney General of the United States.”
The ruling came two days before the Senate Judiciary Committee is expected to begin Blanche’s confirmation hearings.
Williams said Trump’s lawsuit and settlement were self-dealing, writing that Trump “improperly employed this lawsuit to justify a particular award in this matter — access to taxpayer funds and exemption from audits and other investigations — which was accomplished by leveraging control over Defendants.”
“Here, Defendants are the Treasury Department — an Executive agency — and the IRS, the largest bureau of the Treasury Department,” Williams wrote. “Both Defendants are unquestionably part of the Executive Branch and ultimately answer to its Chief Executive, President Trump.”
The federal judge cited a recent Supreme Court decision, Trump v. Slaughter, which expanded the president’s executive power over independent commissioners and agencies.
“President Trump’s authority to appoint and remove federal officers as he sees fit is evidence of his ability to exercise control over Defendants,” the ruling states. “President Trump’s supervisory authority directly implicates two key individuals acting on behalf of Defendants: Scott Bessent, the Secretary of the Treasury Department and Acting Commissioner of the IRS, and Frank J. Bisignano, the Chief Executive Officer of the IRS.”
In plain terms, the judge said that civil lawsuits cannot be controlled by the same person on both sides, by one who holds power over both the plaintiffs and the defendants.
‘Scorching condemnation’
One of the nearly three dozen retired federal judges who asked Williams to reexamine the case praised her ruling.
“This is a scorching condemnation of what Judge Williams clearly finds to be a considerable and unprecedented abuse of the federal judicial process,” former Judge John Jones III, who was appointed by President George W. Bush, told Straight Arrow on Monday. “The judge clearly delineates the factual panoply and in so many words accuses the Trump plaintiffs and their counsel of insulting her intelligence.”
Jones added that the reprimand of Trump’s attorneys is significant.
“Referring lawyers to state disciplinary authorities is a major sanction, particularly when one of the lawyers is the acting attorney general of the United States who is about to attend his confirmation hearing,” the retired judge said. “The timing of this opinion could hardly be worse for Mr. Blanche.”
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Ella Rae Greene, Editor In Chief
