Todd Blanche Describes the Huge, Unprecedented Favors Granted by Trump’s IRS ‘Settlement’ as ‘Typical’

President Donald Trump’s brazenly corrupt “settlement” of his lawsuit against the IRS included a jaw-dropping order in which Acting Attorney General Todd Blanche purported to shield him and his family from liability for tax violations and any other federal offenses they may have committed prior to May 19. During his confirmation hearing on Wednesday, Blanche, who is seeking Senate approval of his nomination as attorney general, repeatedly misrepresented the scope and nature of that sweeping immunity deal.

In response to questions from Sen. Richard Durbin (D–Ill.), Blanche preposterously claimed his promise of protection was “typical” of settlements between the IRS and taxpayers. “This type of settlement is done regularly,” he said. “When we enter into settlements like that, we do it with all kinds of people. It’s not just President Trump. It doesn’t make any of those individuals above the law.”

Blanche was referring to settlements of tax disputes. That comparison is inapt for several reasons.

First, Trump’s lawsuit, which was joined by two of his sons and the Trump Organization, did not involve a dispute about tax liability. It alleged damages caused by an IRS contractor’s illegal disclosure of the plaintiffs’ tax returns, an issue that has nothing to do with the question of whether they owe the IRS money.

Second, even in cases that do involve alleged tax violations, it is not “typical” for settlements to include a promise that the IRS will never pursue any other claims based on past returns. After Blanche revealed his order, former IRS Commissioner Daniel Werfel told the Associated Press he was not aware of any previous cases in which the IRS had agreed to “permanently forgo examination of previously filed tax returns for a specific person or business.”

Third, the IRS immunity in this case, which could save Trump more than $100 million in back taxes, interest, and penalties, not only covers the plaintiffs who filed the lawsuit. It also encompasses all “related or affiliated individuals…or parties.”

Fourth, Blanche’s order extends far beyond the IRS. It says “the United States” is “FOREVER BARRED and PRECLUDED” from pursuing “any and all claims” against Trump or his family regarding “any matters currently pending or that could be pending” before the IRS, the Treasury Department, or “other agencies or departments.” In other words, the order purports to shield Trump and his relatives from the penalties that ordinary Americans face when they run afoul of federal law.

That unprecedented relief resembles a preemptive self-pardon, except that it extends further, covering civil as well as criminal offenses. But according to Blanche, his order does not mean Trump and his family are “above the law.” In support of that conclusion, he noted that they are still liable for any future offenses they may commit (which is also true of pardon recipients). And despite the broad language of his order, Blanche flat-out denied that it goes beyond the IRS.

Sen. John Cornyn (R–Texas) noted that Blanche’s order “purports to apply” to “other agencies or departments.” He wondered whether it would bar “investigation by the Securities and Exchange Commission or some other federal agency.”

“No,” Blanche said. “It binds only the IRS and, by extension, the Treasury.”

Cornyn disagreed. “I hear what you’re saying,” he replied, “but I certainly don’t read that in the agreement.”

Cornyn, whose résumé includes stints as a state judge, a justice on the Texas Supreme Court, and his state’s attorney general, probably knows a thing or two about parsing legal language. So do the 35 retired federal judges, including former 4th Circuit Judge Michael Luttig and several other Republican appointees, who objected to Trump’s “settlement agreement” and urged U.S. District Judge Kathleen Williams to reopen the case.

“The plain language of this extremely broad provision sweeps in [IRS] audits of Plaintiffs’ tax returns and all other claims the United States might have against Plaintiffs,” Luttig et al. noted in their May 27 motion (emphasis added). These are “extraordinary benefits for which no consideration was provided to the government,” they added. The former judges reiterated that point in a June 19 brief, saying Blanche’s order provides “monumental relief,” granting “a capacious and extraordinary general release that purports to forfeit claims for substantial sums in unpaid taxes and other potential damages and fines.”

According to Blanche, however, that “monumental relief” is business as usual at the Justice Department. “That’s the standard language that we use when we enter into settlements between plaintiffs and the IRS,” he told Cornyn. Blanche, in other words, wants us to believe that such settlements routinely include blanket immunity from investigations of past conduct by the IRS and all “other agencies or departments.”

Why would Blanche ask us to believe that? Because he is keen to show that the president did not receive special treatment in this case by virtue of his position. But he obviously did.

Trump and the other plaintiffs absurdly claimed that the unauthorized disclosure of their tax returns had caused “at least” $10 billion in damages. In addition to offering an unlikely estimate of the injury he had suffered, Trump missed the statutory deadline for filing such claims, meaning his lawsuit was legally doomed right out of the gate. Even if Trump had filed his lawsuit on time, he would have faced the challenge of arguing that an IRS contractor qualifies as an “officer or employee of the United States”—a point that the Justice Department has disputed in other cases involving similar claims.

Despite those legal weaknesses, the Justice Department never bothered to contest Trump’s claims, in sharp contrast with the way it usually handles such cases. That is not surprising, since the government’s lawyers answer to Trump. And in case there was any chance that they would nevertheless do their jobs, Trump foreclosed that possibility by decreeing that they could not take any legal positions at odds with his.

In a scathing decision on Monday, Williams concluded that the case was a sham from the beginning, since both sides were controlled by Trump. The plaintiffs and the defendants “worked in tandem and were never actually adverse,” she wrote. Trump’s lawsuit, she said, was nothing more than a pretext for “a ‘settlement’ that had no viable basis in law or fact.”

Not so, Blanche told Sen. Mike Lee (R–Utah) on Wednesday. “Was there any improper coordination of any kind between the Department of Justice and the Trump team as to this settlement?” Lee asked. “No, not at all,” Blanche replied.

That assurance is hard to square with Trump’s own description of this cozy arrangement, which he called “a settlement with myself.” It is also inconsistent with Blanche’s unilateral decision to nix the $1.8 billion “Anti-Weaponization Fund” that was a central feature of the original “settlement agreement.” If that arrangement were actually an agreement between adverse parties, Blanche would have had to obtain the plaintiffs’ written consent to the modification, which he did not do.

Blanche provided further evidence of collusion when he unilaterally issued his promise of immunity, which he presented as an addendum to the main agreement even though he was the only person who signed it. His conduct made it clear that he was simultaneously acting as the head of the Justice Department and Trump’s personal lawyer.

After eliciting Blanche’s improbable denial of collusion, Lee averred that the case was settled “based on an apology without any compensation being awarded, without the president receiving a penny.” Although that is obviously not true, since the IRS immunity is worth a lot of money to Trump, Blanche agreed with Lee’s characterization.

The “settlement” was “completely consistent with the Federal Rule of Civil Procedure 41, which absolutely allows what happened here to happen,” Blanche said. “It happens in hundreds, if not thousands, of cases around the country every year.”

In reality, nothing like this has ever happened before. No other similarly situated plaintiff has ever received benefits remotely like those that Blanche approved for his boss, which initially included $1.8 billion in taxpayer money for Trump’s allies and supporters as well as potential personal savings in the neighborhood of $100 million.

How does that compare to the settlements obtained by other plaintiffs who have sued the IRS under the same law that Trump invoked? Unlike Trump, billionaire hedge fund manager Kenneth Griffin, whose tax returns were leaked by the same IRS contractor, filed his lawsuit on time. Also unlike Trump, Griffin had to contend with Justice Department lawyers who were keen to pick apart his claims. After a year and a half of litigation, Griffin dropped his case in exchange for an apology from the IRS.

As Lee noted, Trump also got an apology. But he got a lot more than that: huge favors for himself, his family, and his supporters, all at taxpayers’ expense. According to Blanche, that was “typical,” and Trump’s status as president had nothing to do with it. If you can believe that, you can also believe that Blanche as attorney general would have the integrity required to pursue justice rather than the president’s personal interests.