Slush Fund Update!

When we last looked at the brilliant Trump/Blanche plan to steal $1.776 billion from US taxpayers and to put that money into the pockets of Trump’s hardline supporters, I noted that the case was not going to disappear just because Acting AG Blanche has promised that the DOJ isn’t “moving forward” with setting up the Slush Fund. District Judge Williams, you will recall, re-opened the Trump v. IRS case (the one the parties ostensibly “settled”) in order to investigate “grievous allegations that [Trump] voluntarily dismissed this litigation solely to avoid judicial scrutiny of a lawsuit that was collusive from the start and was only filed to provide the imprimatur of legality for an unlawful settlement.”

Judge Williams has now issued her opinion and order in the case, and it’s as damning an indictment of Executive Branch lawlessness as one can imagine. Particularly interesting is the manner in which the “unitary executive theory” ends up biting Trump in the ass.

In ordinary times, of course, this would all be cause for impeachment – another example, as Judge Williams puts it, of “Mr. Trump’s pattern of misusing the courts to serve political purposes.” Today, however, it barely registers a blip on the legal radar-scope. That is not good news for the country as it celebrates its 250th birthday.

Excerpts from Judge Williams’ opinion follow below. Citations omitted; emphases supplied.

The judicial power conferred by the Constitution grants the federal judiciary the right to determine actual controversies arising between adverse litigants, duly instituted in courts of proper jurisdiction. A justiciable controversy must be definite and concrete, touching the legal relations of parties having adverse legal interests. Adverseness is essential to a federal court’s ability to adjudicate the merits of a case where federal courts are restricted to questions presented in an adversary context.

[A]dverseness between litigants is a constitutional minimum that must be satisfied in every federal case seeking judicial determination. There is no Art. III case or controversy when the parties desire precisely the same result. Moreover, the adverseness requirement subsists through all stages of a federal judicial proceeding. With this principle in mind, a court must consider whether one party is actually and formally in control of the other party, and if so, adjudication may be refused….

Here, Defendants’ actions (or inaction), as directed by the DOJ, and the subsequent “resolution” of this lawsuit leads the Court to conclude the Parties’ interest were one and the same. …

The Court’s conclusion regarding the Parties’ shared interest is also underscored by the circumstances surrounding the execution of the “settlement agreement.” First, the “settlement agreement” is signed on behalf of Plaintiffs by Daniel Epstein, a former White House Senior Associate Counsel and Special Assistant to President Trump from 2017 until 2020. Notably, Mr. Epstein was never counsel of record in this case; the Complaint’s signature block identified him as counsel for Plaintiffs but represented that his pro hac vice application was “forthcoming.” Since no such application was filed with the Court, and since, in other matters pending in Florida and elsewhere, Mr. Epstein sought pro hac admission within weeks of filing the complaint, the Court can only surmise that Mr. Epstein was aware that he would never need to appear and litigate the merits of Plaintiffs’ claims….

In dismissing the claims of collusion, Plaintiffs reveal the true position of the Parties and say the quiet part out loud: “Regardless of whether Plaintiffs had ever filed this action, the Government and Plaintiffs still had the power to resolve all disputes between the parties.” The power to resolve was never a question before this Court. Whether Executive Branch actors can privately agree to give themselves and their former clients blanket immunities and billions of dollars in tax monies for legally undefined grievances was never an issue advanced to this Court. The question is whether the Parties could do so by claiming to be adverse and engaging the legitimacy of a court proceeding. The answer is a resounding “No”: The Lead Plaintiff and the Government are one, a fully realized unitary interest. Because Plaintiffs have no answer for the fact that the lead Plaintiff, President Trump, directs and controls the Defendants, this renders this lawsuit non-adversarial, collusive, and jurisdictionally improper.”

And because this fact was so obvious and so insurmountable, the Court finds that this matter was brought for an improper purpose—to gain the imprimatur of judicial legitimacy for a “settlement” that had no viable basis in law or fact. As was observed in another matter brought in this District, “this case is part of Mr. Trump’s pattern of misusing the courts to serve political purposes.” Trump v. Clinton, 653 F. Supp. 3d 1198, 1219 (S.D. Fla. 2023). . . .

The Court concludes that Rule 11 sanctions are appropriate here. . . .

The Parties are prohibited from referring to the purported “settlement agreement,” or using, offering, admitting, or citing any of its provisions in any judicial, administrative, regulatory, arbitration, or any other official proceeding as evidence of a “settlement” reached in this matter.

As to Plaintiffs, they filed a multibillion-dollar lawsuit asserting claims that they knew, or should have known, were time-barred and for an amount of damages unsupported by facts or law. Plaintiffs could make no connection between the billions of dollars they sought, and the recovery authorized under the governing statute. Generally, the “central purpose” of a lawsuit must be to “vindicate rights through the judicial process.” This lawsuit was not brought to vindicate rights; it was brought to manipulate the judicial process to pursue benefits unavailable in litigation because the Parties were not adverse.

In abdicating its responsibility to zealously defend the interests of the United States, the Government entered into a “settlement” that deviated from its litigation posture in similar actions, disregarded DOJ policies, and accomplished objectives beyond those authorized, as well as those specifically prohibited, by law. Under these circumstances, the Court may reasonably infer that the Government failed to defend this lawsuit or to respond to the Court’s jurisdictional inquiry because its position would not withstand judicial scrutiny and because resolution of the threshold issues identified by the Court would not have favored its preferred outcome to this case.

The Parties used the existence of federal litigation as a means of conferring legitimacy upon a course of action that they were unwilling to subject to judicial review. The context of the “settlement,” the relationships of the people involved in negotiating and approving it, the ethical implications of their conduct, and the Parties’ swift efforts to dismiss this case after the Court raised fundamental jurisdictional questions all support this conclusion. Accordingly, the Court expressly finds that Plaintiffs acted in bad faith….

The Court finds monetary sanctions appropriate under its inherent authority and prerogative to police the matters and litigants who avail themselves of its jurisdiction. These monetary sanctions would include the attorneys’ fees incurred by Court-appointed amici … [T]he initial amici—whose appearance was not contested by any Party—and the thirty-five former Federal Judges, whose briefing precipitated this Order, if they wish, may file, within fourteen (14) days of this Order, a memorandum regarding any appropriate reimbursement….

This action was never about a party seeking judicial resolution of a legal issue or a factual dispute. The nature of the suit itself and the conduct of the Parties and counsel from its filing make plain that this was an attempt to use the Court to provide some legitimacy to an agreement to confer immunity to people and entities affiliated with the President and to earmark billions of dollars from American taxpayers to redress grievances not defined in the law.