President Donald Trump denied claims that he filed a “collusive” lawsuit against a US agency under his control to orchestrate the creation of a $1.8 billion fund for alleged victims of political “weaponization,” which critics said would be used to enrich his allies and supporters.
Trump’s $10 billion suit against the Internal Revenue Service was not a fraud on the court and Justice Department officials had broad authority to enter into the agreement that led to the now-scrapped fund, Trump’s lawyers argued in a filing Friday night. They accused the former federal judges who raised the objection of relying “entirely on inference and speculation.”
“Based on these bare-bones assertions, they ask the court to wrongly conclude that the entire case was a sham,” his lawyers wrote. “But none of these facts, individually or collectively, constitute evidence of collusion, much less the clear and convincing evidence required to establish fraud on the court.”
US District Judge Kathleen Williams in Miami is considering reopening the case to investigate whether the president and the Justice Department defrauded the court. It’s the latest fallout from the Justice Department’s controversial settlement with Trump, the first president to sue his own government.
Williams ordered Trump to respond to “grievous allegations” by a group of 35 former federal judges, who claimed in a filing last month that Trump and the Justice Department used the case as legal cover to create the fund. Trump effectively controlled both sides of the case, and there was never a legitimate legal dispute for the courts to decide, the ex-judges said.
Lawyers for the ex-judges are set to respond to Trump’s filing by June 19.
In the latest filing, Trump’s lawyers argued that Williams lacks “roving authority to review or approve a settlement between private parties and the government in ordinary litigation.”
Trump’s lawyers pushed back on the ex-judges’ suggestion that the settlement was unlawful because it was not “tethered to a live, fully adversarial case” in which the court has jurisdiction.
“That is not how government settlements work, and it never has been,” they wrote. “The Department of Justice routinely compromises claims that are never litigated.”
If she reopens the case, Williams could order testimony in open court from individuals who were involved, including Trump’s lawyers and aides as well as Justice Department attorneys. The judge ultimately could issue hefty financial and professional penalties.
Acting Attorney General Todd Blanche told Congress earlier this month that the US was not moving forward with the fund, amid a bipartisan uproar that imperiled some legislation. Democrats in particular expressed concern that the fund would be used to dole out millions of dollars to Trump’s allies and supporters, including people who attacked the Capitol on January 6, 2021.
One part of the settlement, however, has survived the retreat: Trump will still get immunity from any probes into the president’s past tax filings under the deal. Several lawsuits are challenging the settlement.
Earlier Friday, a judge in Virginia overseeing a suit challenging the fund entered an order blocking officials from taking action on the fund while the case moves ahead, rebuffing the government’s arguments that Blanche’s public statements about dropping the plan were enough confirmation.
Trump sued in January over the unauthorized disclosure of his tax returns to the press in 2019 by an IRS contractor. The leaker pleaded guilty and went to prison. The Justice Department has consistently argued in related court cases that the IRS isn’t liable for the actions of a contractor.
Williams was already investigating the case before it settled, ordering the Justice Department in April to explain in writing by May 20 how she can oversee the case when the Constitution requires legitimate adversarial disputes for courts to have jurisdiction.
Trump dropped the suit just before that deadline. Williams said she had no choice but to close the case because the government had not yet responded. The settlement did not require her approval because it was not filed with the court or referenced in Trump’s filing dropping the case.
Trump’s “collusive dismissal and clandestine out-of-court settlement constitute a clear fraud on the court,” the ex-judges said in their request to reopen the case.
