Judge Orders Reopening of Trump’s IRS Lawsuit Over Fraud and Collusion

After widespread bipartisan outcry, the Justice Department says it is permanently abandoning plans for a $1.776 billion “anti-weaponization” fund. Widely branded as a “slush fund,” it was expected to reward President Donald Trump’s supporters, including those who attacked the Capitol on January 6, 2021. The fund was announced in May as part of a settlement in Trump’s personal lawsuit against the IRS over the leak of his tax data. That case was recently reopened, after dozens of former federal judges filed a motion alleging that Trump’s actions were “collusive.” As Nancy Gertner, one of the judges who joined the motion, explains, “What happened in this case was, essentially, Trump was suing himself. There was no question that Trump was on both sides of the ‘v.‘” Gertner and her fellow judges are represented by attorney Matt Platkin, who says, “It is illegal for the president to ask for any IRS audit to be opened or closed. That is a federal crime.”

TRANSCRIPT

This is a rush transcript. Copy may not be in its final form.

AMY GOODMAN: In a rare reversal for the Trump administration, the Acting Attorney General Todd Blanche told lawmakers Tuesday the Department of Justice would not be moving forward with the $1.8 billion so-called anti-weaponization fund, even after the temporary pause mandated by the court. Blanche had announced the fund just weeks ago as part of a settlement deal with President Trump and his family over their private lawsuit with the IRS over the leaking of Trump’s tax returns years ago. The fund has been widely criticized as a slush fund to provide payouts to January 6th insurrectionists and other Trump allies, even drawing rebuke from some Senate Republicans and dividing the caucus.

This is Todd Blanche, formerly President Trump’s personal attorney, responding to questioning from New York Congressmember Grace Meng on Tuesday.

ACTING ATTORNEY GENERAL TODD BLANCHE: We are not moving forward with the fund, period. … The reasons for the fund is something that President Trump talked about for a long time, which is the fact that there were a lot of people in this country who had their government weaponized against them. The reasons for the fund, I think, were — remain as important as they were before, but we are not moving forward with the fund.

REP. GRACE MENG: Not moving forward ever?

ACTING ATTORNEY GENERAL TODD BLANCHE: Correct.

REP. GRACE MENG: You and Associate Attorney General Woodward signed earlier documents regarding the settlement and this fund. Would both of you now sign and release documents reversing the DOJ’s position on the fund?

ACTING ATTORNEY GENERAL TODD BLANCHE: I’m not — we’re not moving forward with the fund. I’m not sure what that means to sign documents reversing. There’s nothing to reverse. We’re not moving forward with the fund.

AMY GOODMAN: But the story isn’t over. On Friday, District Court Judge Kathleen Williams in Miami ordered the case reopened, after 35 former federal judges filed a motion saying the settlement may have been a fraud on the court and a product of collusion. The president’s attorneys have until June 12th to respond.

We’re joined now by one of those 35 judges, retired federal Judge Nancy Gertner. She served on the bench for 17 years in Massachusetts before retiring in 2011. She joins us from Boston. And we’re joined by former New Jersey Attorney General Matt Platkin, who is serving as co-counsel for the former judges in his four years as state attorney general under Governor Phil Murphy from 2022 to January of this year. He later joined at least 43 lawsuits against the Trump administration and brought several high-profile investigations into Republicans, Democrats and state police. He’s joining us today from Minneapolis.

We welcome you both to Democracy Now! Judge Gertner, let’s go to you first. Explain why you’re talking about this as possibly a fraud on the court, and even if Trump drops it, as the attorney general has said, you’re calling for this case to be reopened, investigated.

NANCY GERTNER: What happened in this case was, essentially, Trump was suing himself — there was no question that Trump was on both sides of the ”v.” — brought this case, essentially, as a fig leaf to justify paying the money. There is a fund that is called the settlement fund, where individuals who sue the IRS, the case is settled, or if the case goes to judgment, they can collect against that fund. And so, the Trump administration believed that the way in which to sort of perfect this fund, to get this money, was to file a lawsuit, and that would sort of dignify what they were doing. It would legitimize what they were doing.

The problem was that the lawsuit, we claim, the evidence suggests, was a sham, that the lawsuit was one part of the administration suing the other. There was no effort to defend it in any meaningful way. In fact, as the judge found, there was a document from the IRS which made it clear what their defenses were in like cases, defenses that they were just not raising in this case because they were just rolling over.

After the case was filed, the judge had a sense that there might be a problem with it, might be collusion, “collusion” meaning they’re — essentially, the same person was on both sides of the ”v.” She closed the case when they sought to dismiss. And then we moved — I’m represented by Matt Platkin, fabulous lawyer. We moved to reopen the case on the grounds that there’s information that the judge didn’t know about, namely that this was collusive. The judge has opened the briefing on this issue. And in addition, she is inquiring about sanctions for lawyers that made misrepresentations in the case. So, I and 34 others believe that this is an administration of — administration of justice issue. You can’t manipulate the courts to broom clean an illegitimate settlement.

AMY GOODMAN: Now, that settlement, Trump’s saying, or his former personal attorney, the now attorney general, Todd Blanche, is saying that they’re not going to give it to these insurrectionists and others in their so-called anti-weaponization fund — others call it a slush fund. But does Trump still get the money?

NANCY GERTNER: He’s saying, or at least my sense of what Todd Blanche was saying is that, in fact, the fund will not be created for these purposes. When I say the fund was created, they can’t claim on the Treasury — to make a claim against the Treasury for this amount of money. It sounds like they’re not going forward with that. But whether or not, whatever their intentions are, there are at least two cases that are challenging the fund, including the one that we filed in, which is the Judge Williams case in Florida. And were she to declare that this was a collusive case and that the settlement was illegitimate, they would have no rights to set up this fund. So, whatever Todd Blanche is saying, the fact of the matter is that the courts could vitiate this fund by determining that it was the product of collusion. I might add again that the judge has indicated that there’s an — that she’s going to inquire about sanctions against the lawyers who may have misrepresented what this case was about to her.

AMY GOODMAN: OK, now we want to go to what they say has not been taken away. The House Appropriations Committee top Democrat, Congressmember Rosa DeLauro of Connecticut, had a tense exchange with Acting Attorney General Todd Blanche Tuesday.

REP. ROSA DELAURO: If I could just follow up on — on, like, what you’re doing on this, is that you’ve taken one piece, and you said, “OK, we have had a ton of backlash on this, on this $1.8 billion slush fund. However, so, we’ll not move on that, but as part of the settlement,” which you’ve said, “which is this immunity for the president and his family and his business, etc., that stands.” Thank you for —

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ACTING ATTORNEY GENERAL TODD BLANCHE: It’s not — it’s not immunity, ma’am. It’s — it’s —

REP. ROSA DELAURO: Thank you. Thank you.

ACTING ATTORNEY GENERAL TODD BLANCHE: It’s a promise.

REP. ROSA DELAURO: It’s immunity.

ACTING ATTORNEY GENERAL TODD BLANCHE: It’s not a — it’s not immunity. It’s not immunity. OK? So it’s not immunity. What it says, it’s like — like, anytime the IRS settles with an individual taxpayer or another company, as part of the settlement, it’s standard. It’s typical for — to get rid of past ongoing audits. It’s not a forward-looking document. It’s nothing that gives any sort of immunity in the future to the president or his family or his organizations. And so, by you saying that, it’s just — it’s not true.

REP. ROSA DELAURO: By you saying what you’ve said, it is not true. So, thank you, and I yield back.

AMY GOODMAN: So, I want to put this question to former New Jersey Attorney General Matt Platkin, co-counsel for the 35 former judges, like Judge Gertner, who challenged the IRS settlement that created the so-called anti-weaponization fund. If you can explain what DeLauro was getting at and what Todd Blanche was denying?

MATT PLATKIN: Well, first of all, let me say how much of an honor it is to represent Judge Gertner and the 34 other judges in this matter.

And what the acting attorney general was saying is just simply not true. You have to take a step back and remember how we got here. The president filed this sham lawsuit. They then purported to settle it in a collusive manner. They wrapped the whole thing up. They announced this fund. That night, the general counsel of the United States Treasury quits. The next morning, after the settlement had already been announced, they announced another settlement that does much more than what the acting attorney general was saying. It actually gives the president and his family broad release from any government enforcement action prior to the date of the settlement. It’s broader than just the IRS. So, when he says it’s typical, there is nothing typical about any of this.

And as the congresswoman was noting, the acting attorney general claims he can walk away from the fund, and it’s not even clear what he means by that, because if this was a real settlement, one party can’t just walk away from it. But put that aside for a moment. There still remains the second piece of this about broad releases for the president, an enormously valuable benefit to him and his family that is absolutely inappropriate to give to them. It is illegal. It is illegal for the president to ask for any IRS audit to be opened or closed. That is a federal crime. So, the fact that the acting attorney general is standing up there saying this is typical, and, frankly, misrepresenting what the settlement does, is extraordinary.

AMY GOODMAN: And how significant is it? Because he bristles every time a senator or congressman says, “You’re the former personal defense attorney for Trump.” How significant is this, the current Acting Attorney General Todd Blanche?

MATT PLATKIN: Look, I think it’s — when you’re the attorney general — and I served as attorney general of a state for nine-and-a-half million people — any time you have an actual or an appearance of a conflict, you want to be extraordinarily careful to make sure that the public doesn’t think the process by which you’re approaching a particular case is tainted. So, there are many times where you step aside simply because there’s an appearance. And I think, at a minimum, there’s an appearance issue here.

But, look, the acting attorney general here has done extraordinarily unprecedented things by settling. He, just a week ago, was defending this and signing documents in support of the settlement, which had no legal basis. Now he’s just saying, “Oh, sorry, we’re going to walk away from that,” because he got backlash from Republicans on the Hill. Nothing about this is typical. Nothing about this is grounded in law. And that’s why the motion that these judges filed before Judge Williams in Florida is so critical, so that there could potentially be some accountability.

AMY GOODMAN: Matt Platkin, you’re also representing 93 House Democrats and two federal prosecutors challenging the fund. Can you walk us through the different legal challenges and where they stand now?

MATT PLATKIN: Yeah, I think it’s notable, and I’m extremely proud to represent individuals who have served in all three branches of our federal government. And I think — and by the way, you’re seeing bipartisan opposition to this. So, you’ve seen the judges file before Judge Williams, alleging that this entire proceeding, starting from the filing of the lawsuit through the settlement of it, was a sham and an illegitimate, collusive lawsuit that used the court to access the United States Treasury to pay money that simply the president cannot spend. You’ve separately seen a number of challenges from individuals and organizations, like the two brave and courageous heroes, the prosecutors who worked on the January 6th cases, whose reputations had been unfairly maligned and targeted by this administration, including by this fund, which purports to apologize to, quote-unquote, “victims of weaponization.” We know that the weaponization language has been used specifically for January 6th prosecutors and investigators, dating back to the first day in office, where the president pardoned more than 1,500 insurrectionists, people who contributed to the death of a police officer, Officer Brian Sicknick, who’s from New Jersey. So, you’ve seen a number of cases. And in a case in Virginia, the judge there separately stopped any — the government from taking any action to establish the fund.

So, I think it’s important to note that while Todd Blanche gets up and says things, all the federal government has actually said to date is that they are going to abide by the restraining order that has been put in place in the Virginia case. So, this is an administration who does not have a lot of credibility of following through with its statements, so we are going to be monitoring it very closely, and, as you noted, we’re proud to represent many individuals here.

AMY GOODMAN: In your brief, House Democrats argued the lawsuit and settlement is blatantly unlawful and raises the specter of corruption unparalleled in American history. Could what has taken place here, whether or not they take it off the table, lead to criminal charges, right up to Trump?

MATT PLATKIN: Well, look, I’ll leave any enforcement actions to those in power to make their decisions. But I will say, as Judge Gertner noted, the court here is very clearly looking at whether misconduct occurred. And there are rules about how attorneys conduct themselves. And when we filed the motion before the court, the fact you had 35 former federal judges telling a fellow colleague or former colleague that there may have been a fraud perpetrated on the court and that this lawsuit was intended to unlawfully access the United States Treasury — not some small pot of cash, the United States Treasury, the biggest pot of cash in the world — I think that’s an extraordinary statement.

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