Top Senate Democrats just dropped a major legislative bomb, introducing the “Stop Presidential Embezzlement Act” this week. Newsweek reported that this new bill is a direct response to President Donald Trump’s massive $10 billion lawsuit against the Internal Revenue Service (IRS) and the Treasury Department.
Proposed by Oregon Senator Ron Wyden and Senate Minority Leader Chuck Schumer, the legislation seeks to prevent any current or future president from personally profiting from legal action filed against the federal government while they are in office. If passed, the legislation would impose a 100 percent tax on any settlements or awards received by a sitting president, vice president, Cabinet member, or member of Congress from the federal government.
The legislation comes directly after Trump, his sons Donald Trump Jr. and Eric Trump, and the Trump Organization filed suit seeking damages from the IRS and Treasury. They are pursuing this action because of a historic disclosure of confidential tax data that was unlawfully obtained and later published.
He’d approve the settlement with himself
Trump’s legal team is standing firm on why they’re pursuing this action. They detailed that the defendants, by allowing Charles “Chaz” Littlejohn, a “rogue, politically motivated employee” to release the data, “have caused Plaintiffs reputational and financial harm, public embarrassment, unfairly tarnished their business reputations, portrayed them in a false light, and negatively affected President Trump, and the other Plaintiffs’ public standing.”
While the case centers on alleged harm to Trump and his business, Democratic lawmakers say it raises serious, broader concerns about conflicts of interest. This lawsuit places Trump in the extremely unusual position of being the plaintiff while simultaneously being the head of the executive branch, which is responsible for defending the government through the Department of Justice.
IMO, needing a specific act to prevent presidential embezzlement indicates that there is a convicted felon in the White House. I think Congress should focus its energy on rallying 67 senators to convict him after the House impeaches him. Then we need to clean out his SCOTUS.
— AlotfromLydia (@alotfromlydia) February 7, 2026
Former federal officials have argued that this arrangement threatens the fairness of the proceedings since “President Trump controls both sides of this litigation,” and that “Collusive litigation threatens the integrity of the judicial process.” Trump’s solution is where the embezzlement concerns lie: “I think what we’ll do is do something for charity. We could make it a substantial amount.”
That charitable pledge, however, hasn’t satisfied Democrats. Wyden snapped back, saying, “Saying that Trump’s lawsuit against his own government creates a conflict of interest does not begin to describe the depth of corruption behind what he’s doing.” He argued that the only reason Trump is talking about donating the money is that “even he realizes what he’s doing is indefensible with the public.”
Trump first demanded $230 M from the DOJ/FBI for past investigations — now he’s suing the IRS for $10 billion over unauthorized tax-return disclosures.
— Ashok Dadhwal (@ashokdadhwal196) February 12, 2026
Blurring lawsuits with future political power isn’t justice, it’s a self-serving conflict of interest that weaponizes the courts… https://t.co/TjJRDzaVBw
Wyden concluded that Congress needs to shut down the potential for profit immediately, adding that “Odds are he’d find a way to profit from any settlement or throw it into some vanity project like his fancy ballroom.” Hence, this proposed “Stop Presidential Embezzlement Act” which is designed to ensure that high-ranking officials can’t use their position to extract billions in taxpayer dollars, regardless of the merits of their legal claim.
