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This is the Daily Blast from the New Republic, produced and presented by the DSR network. I'm your host, Greg Sargent. As you may have heard by now, the Justice Department just announced that it has reached an agreement
with Donald Trump to settle his $10 billion lawsuit against the IRS.
Guess who controls the Justice Department? Donald Trump. The settlement will transfer nearly $1.8 billion to a new fund that reportedly will be controlled by Donald Trump. So, in short, Trump effectively ordered his own DOJ to reach an agreement with him to
transfer over a billion dollars in taxpayer funds into a new fund that he apparently controls and can use to reward allies. How is this possible? Is there any recourse? And also, isn't this going to backfire?
A new poll shows Trump is getting absolutely crushed on the economy, so good luck for Republicans defending this new arrangement? We're working through all this with legal expert Harry Litman, who writes for the new republic and presides over the talking feds podcast. Harry, good to have you on.
Hey, good to be here, Greg. Thanks. So let's quickly set the stage.
Back in January, Trump sued the IRS for $10 billion due to his tax returns getting leaked
during his first term. Trump was in control of the IRS when that happened, so the lawsuit is baloney, but let's put that aside for now. NeoJ, which theoretically is supposed to be defending the IRS against Trump's lawsuit, now reached an agreement with Trump to settle the suit.
A judge was probably set to throw the suit out of this new arrangement circumvents that. Harry, can you explain and really simple terms? What just happened here with the settlement? Yes, Greg, the judge said, I want to hear from you why there is actually a lawsuit here
“because the Constitution says, you have to have two parties opposed to each other.”
Trump here looks like he's controlling both sides. So by doing this so-called voluntary settlement, the DOJ hopes that it doesn't have to face the music on saying whether it's a real lawsuit or not, and they can just go around and create this fund without any use of the court. This is all designed to circumvent the judge, right?
The judge was about to rule potentially and say this lawsuit is bullshit with throwing it out. By doing this settlement now, DOJ has circumvented the judge just to back up for context. There's something that already exists called the Treasury Department Judgment Fund. Now this entity pays out money to victims of the US government who successfully bring claims
against the government. That fund is subject to various statutory restrictions and oversight since Congress created it. But now, by reaching this settlement, DOJ has created a situation under which that particular
fund pays nearly $1.8 billion to this separate new fund.
And this new thing will supposedly be used to pay, whoever Trump and his allies decide has been victimized by supposed weaponization of the government.
“But the key thing here, Harry, if I understand this correctly, is this new entity won't”
be in the control of the US government in any sense for further reporting. Trump will have total control over the fund's members. It operates outside the US government. It's just a fund that's been filled with taxpayer money that Trump controls. So this fund Donald Trump hopes will not be subject to any kind of congressional or
constitutional constraints of any kind, correct, or maybe you could say, Greg, constraints that anybody will enforce because there are constraints here, even with what the DOJ is saying. Congress has permitted DOJ to settle, but only real lawsuits.
Under the very statutory authority, Congress has appropriated a bunch of mone...
DOJ has a lot of discretion how to use it, but the proper reading I think is it's
got to be for a real lawsuit which this isn't. The big question though will be who can oppose it. Okay, Harry, so what you're saying here is that this fund can only exist theoretically under the law of this new fund that Trump's creating. If the lawsuit that Donald Trump and DOJ are settling with each other is a real lawsuit,
but the rub becomes who decides whether the lawsuit is real or not.
Does the judge have the authority to step in and say, this is not a real lawsuit, therefore the settlement is void or not?
“And now we come to the question, who can make the claim?”
Who can say? It's not a real lawsuit.
You can't cheat the taxpayers out of $1.8 billion, especially to pay off like January six
offenders. And a quick aside here, Greg, is we don't even know the names of who will get money under this. They don't have to say. It is illegal because Congress has said you can use this money only to actually settle
real cases. And it's a fake case, but who can come in now and say this fund is phony baloney? They're going to say, nobody has standing members of Congress, 93 of them filed a brief this morning saying you can't do that, but they don't, I think, have standing. They'll say that you can't go to the court now because the case has been voluntarily dismissed.
It is violating the law. It's going to be, can they get away with it?
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OK, but to be clear, the judge cannot be a member of the DSR network than by being a member of the DSR network than by being a member of the DSR network than by being a member of the DSR network than by being a member of the DSR network. To be clear, the judge cannot step in and say this lawsuit is not real, precisely because Donald Trump has settled it and has now removed it from the agenda very close because he's voluntarily dismissed it so that goes over there she can say you really were abusing me and there's a rule that says you can't I'm thinking of sanctions here she can say other things.
“But I think this separate creation of the fun she now and this is the design no longer can really do anything with and they will take her right away up to the higher court if she tries.”
So DOJ can enter into a settlement with a private individual who happens to be the president would know judicial oversight whatsoever. It all depends if I can be Clinton ask here on the medium on what can means it's not legal the question is can they be stopped this is it's many levels of outrage they're screwing congresses instruction they're really abusing and exploiting the court and of course they're lying to us. And all about trying to whitewash the January 6th episode the can here means can they get away with it as it's so often means in the Trump administration not is it illegal it is illegal.
Okay now this entirely circumstance congress congress didn't create this fund the Trump fund though it did create the bigger thing that the money is coming out of as you pointed out a number of democrats just entered a filing in the court where the lawsuit was being mitigated arguing that Trump and DOJ colluded to agree on this corrupt settlement payout to Trump's fund.
These democrats say this empowers the judge to step in and invalidate the set...
But the law out there and the law that they'll bang right into if it goes higher says that they don't that it's really for congress to push back I do think read now that people are aware of what happened you're going to see oversight you're going to see a spotlight. But I think a motion to invalidate the settlement itself. DOJ will come in and say no standing and I think if not at the district court level I think higher up the courts will agree there's not standing from the congressman go and do your political push back.
I'm the majority in congress of the standing to do this very possibly if congress was doing it as an entity which they're not and but it doesn't really if there were a majority in congress against it they would pass a law name when you can't we're the ones who appropriate money you can't use our money just to do your slush fund here here is the law of course he would he would veto it. But yes they could if if everyone were in on it and this is going the political oversight is going to cause Republicans to be in an uncomfortable spot of supporting this total rank violation and including the possibility of all of congress were to come in possibly there'd be standing.
“I just to be clear for people if Republicans in congress wanted to put a stop to this today they could pass a law saying that this is not permitted what Trump is doing is not permitted.”
Would probably veto it and then Republicans could join with Democrats to override the veto so if Republicans wanted to stop this they could right your scenario Greg 100% solid where they to do that in pass a law.
But congress appropriates money after all that's one of like six problems with what he's trying to do here right so just to be clear Republicans won't do this they will.
Trump to go forward with really one of the most corrupt schemes I think we've seen in modern memory right I think so I think this is the worst thing that's happened in the government since the actual partings on January six I do think the Democrats will try hard to force some kind of vote that makes Republicans have to take some ownership here because this.
“I think to high heaven and no Republican will want to put their impromotor on it so that'll be the political maneuvering to try to make that happen.”
I want to point out for people that it's very easy to get cynical about Republicans going along with everything that Trump does and I do expect them to mostly go along with this one.
But they don't always they are stopping the ballroom money to billion dollars that Trump and the White House are demanding for security for the ballroom Republicans are genuinely split over that and that the fate of that is hanging the balance so here's a case where I think this could be just as hard for Republicans to support. Look I really agree he is now at record levels of 22% more disapproving than approve if they can maneuver if the Democrats can maneuver to put them on the hot seat I think a lot of who would actually be for here's what's going on here Greg if he had just come out and said I'm going to give out 1.7 billion dollars of your money sorry about the.
The most expensive gases to the people who storm the barricades generally people would really have a political meltdown he's doing that but worse because he's trying to in a convoluted and secretive way make it look like it's just a settlement of a case which it is not so yes if Republicans have to own it in some way. Could really pose the possibility of a more space and daylight between them and Trump now and let's clarify Trump is going to control this fund all the members are appointed by acting attorney general Todd Blanch and Trump can fire them at will for any reason.
Now to your point about how this is going to be bad for Republicans we just had a new New York Times poll with absolutely brutal news for them Trump's approval is only 37% and on the economy it's 33% with 64% disapproving 31 points underwater on the economy. Meanwhile Democrats are leading Republicans in the generic house ballot matchup by 11 points among registered voters 50% to 39% among independence Democrats lead by 51 to 33 that's an 18 point lead that's staggering.
If I'm a house Republican I'm absolutely dreading having to defend in a arran...
So we just on our podcast two Republicans David French, Mike Murphy or former Republican said if that 11% generic advantage for Democrats olds then all of this term and wrong about the Supreme Court will just go away and be an asterisk but that's the question but I surely agree this news on polls is I think.
“I'm unprecedentedly bad we are getting very late in the day for them to have to defend such a thinking to hell arrangement as this.”
Okay Harry just to make this simple what's going to happen is he going to get away with this or not how do you see it playing out so I think it's going to be a political question so I might punt that back to you I do think the idea is going to come in and say. Sure how can you do this and make trouble but it won't be trouble that goes to the losses so I think it will come to Congress and you know I'm on this very issue I think I have been seeing around corners for a while but this one if you put a gun to my head and I'm so sorry you readers of the new republic and fans of the daily blast as you should be.
I think if they really push it they'll get away with it but it may come back to bite them in an impeachment account if the house changes side so the judge is basically going to say I'm sorry Democrats who have brought this action you don't have standing to do it.
“Right I'm going to I want to hear from the lawyers I want to sign sanctions but I cannot step in and make this slush fund go away at the end of the day republicans are going to regret this victory for Trump I think.”
Harry Letman thanks for walking us through all that complexity man it's pretty just just spiriting stuff hey thanks a lot Greg always good being with you.
