Plaintiffs who successfully blocked Donald Trump’s “Anti-Weaponization Fund” in court are asking a federal judge to strike down an IRS immunity deal that shields the president, his family and their businesses from tax investigations.
The lawsuit — brought by a former federal prosecutor and other ideological and political opponents of the Trump administration who were allegedly victims of federal government retaliation — was refiled Thursday after Acting Attorney General Todd Blanche salvaged the president’s IRS deal in a protracted debate over his nomination as the nation’s top law enforcement official.
“This scheme is an unprecedented, unlawful and breathtakingly corrupt attempt by the president and members of his cabinet to manipulate the legal process and laws intended to prevent political interference to achieve benefits that President Trump and his political allies could not have obtained lawfully,” according to the lawsuit.
Trump and his own Department of Justice agreed to a so-called “settlement” agreement earlier this year after he sued his own IRS for $10 billion in January. As part of the deal, the Justice Department agreed to create a nearly $1.8 billion fund for alleged “victims” of government “weaponization,” while Trump, his sons and their businesses were granted immunity from tax investigations, shielding the president from potentially damaging rulings that could have cost him more than $100 million.
In an apparent effort to win the votes of Republicans skeptical over his nomination, Blanche agreed to “rescind” plans for the “weaponization” fund, which the judge overseeing the lawsuit has indefinitely blocked. But the IRS immunity deal remains on the books.
“The IRS should not be weaponized to shield President Trump, his family, and their businesses from paying their fair share of federal taxes or from being subject to proper review and audits by the agency,” New Haven Mayor Justin Elicker, among plaintiffs in the case, said in a statement.
“Every American is asked to pay their taxes, every American is expected to be truthful on their taxes, and every American is subject to federal tax audits to ensure the integrity of their tax statements,” he added.
The one-page immunity memo, which was signed by Blanche, prevents the IRS from auditing the president’s tax returns and from recovering any underpaid taxes from ongoing investigations, “giving the president a lucrative and unconstitutional emolument,” according to the lawsuit.
“That would be unprecedented under any circumstance,” made all the more remarkable for the president’s “eye-popping $2.2 billion” in earnings since returning to the White House, plaintiffs wrote.
The lawsuit accuses the immunity deal of violating federal law that prohibits the president from asking the IRS to end audits of particular taxpayers, including his own.
Plaintiffs are asking a judge to “halt and permanently set aside the creation and operation of the lawless fund and to set aside the corrupt immunity order,” according to the complaint.
Thursday’s filing comes just weeks after Virginia District Judge Leonie Brinkema indefinitely blocked the Trump administration from implementing what critics called a “slush fund” for Trump’s political allies after Blanche and Justice Department officials claimed they were “not moving forward” with the plans.
In a statement before this week’s Senate committee vote on whether his nomination as Attorney General moved forward to the full chamber, Blanche conceded that the fund is “rescinded and shall have no force or effect.”
Critics, including Democratic members of Congress, have argued that the statement does not say whether a similar fund could be created in the future, or if the Justice Department will use existing channels to issue taxpayer-funded payouts to the president’s allies, including January 6 rioters.
Blanche’s order “is not a binding representation that DOJ will not proceed with the Anti-Weaponization Fund in any manner or under any name,” according to the lawsuit. “Nor could it make such a representation. It is signed only by Acting AG Blanche, and the parties to the collusive Trump agreement that created the fund have not made a binding modification to that agreement.”
Absent a court-ordered injunction that prohibits the Trump administration from moving forward with the fund, they “can resurrect the fund at any time,” plaintiffs wrote.
Trump has “made clear that he intends to keep the fund alive,” they wrote.
Blanche “cannot tell the public the slush fund is dead while preserving every legal mechanism necessary to resurrect it at a moment’s notice,” according to Skye Perryman, president and CEO of Democracy Forward, which is representing plaintiffs in the case.
“This amended complaint shows that despite repeated public claims that the slush fund has been rescinded, the administration has refused to dismantle the agreement that created it and refused to foreclose bringing it back,” she said.
The Senate Judiciary Committee voted along party lines Tuesday to advance Blanche’s nomination to the full Senate, where he is expected to be confirmed by a narrow margin.
