Just when you think there is no further outrage that the President of the United States can perpetrate to top all of the preceding outrages, along comes the Great Settlement Agreement of 2026.
Read it for yourself. It’s only three pages long. It’s titled “Settlement Agreement.” It is, however, not a “Settlement Agreement” within the usual and ordinary meaning of that term. You can call a duck a goose, but it’s still a duck.
Let’s review how we got here. Trump, on January 26, 2026 (while serving as President) filed suit in federal court (SD FL) against the IRS, alleging negligent conduct by an IRS contractor which led to the release of the confidential tax records of millions of people (including Trump), and seeking $10 billion in damages.
This claim is nonsensical and worthless; a reasonable valuation of this claim – i.e., the amount a reasonable person in the claim valuation business would have offered to buy this claim were he allowed to do so – is $0.00. You can’t sue yourself; the President runs the IRS; he can fire any or all of the IRS employees, and he can determine IRS policies (including its litigation policies); the President and an Executive Agency wholly within the scope of Presidential control cannot be legal “adversaries.” So there is no Article III “case or controversy” where the President is on one side of the case, and the IRS is on the other, and without a case or controversy the court has to dismiss the case for want of jurisdiction.
It would be a good question for a Con Law I exam. The short answer portion; it’s too easy for a longer essay.
Trump’s lawsuit was going to be dismissed. Everyone – you, me, Pam Bondi, Todd Blanche, Donald Trump – knew that.
At the court’s first hearing back in February, District Judge Williams noted the “outstanding question as to whether an actual case or controversy existed” between the “parties,” and requested that the “parties” brief the question for her.
No briefing from either one of the “parties,” interestingly enough, was ever forthcoming on the question.[1]
There things remained until May 16, when Trump filed a “Notice of Voluntary Dismissal With Prejudice.”[2] The court, in accordance with ordinary practice (and with the governing Federal Rule of Civil Procedure, Rule 41(a)), dismissed Trump’s claim with prejudice, noting further that “once a notice of dismissal pursuant to FRCP 41(a)(1) is filed, the Court is stripped of jurisdiction.”
So that’s that for Trump’s so-called case.
Here’s an excerpt from the court’s final “Order Closing Case” [available here]:
“Plaintiffs state that they are voluntarily dismissing the instant litigation with prejudice. Because the dismissal with prejudice extinguishes the claims regarding the unlawful disclosure of Plaintiffs’ tax returns, the Court cancels all deadlines, including the date that the Parties were required to submit briefing as to whether an actual case or controversy existed in this matter.”
Judge Williams adds the interesting concluding paragraph:
Because [Trump’s] Notice does not reference any settlement or include a stipulation of settlement, there is no settlement of record. Additionally, Defendants—federal agencies represented by the Department of Justice, which has an independent obligation to uphold the “public’s strong interest in knowing about the conduct of its Government and expenditure of its resources” and the “fair administration of justice,” neither submitted any settlement documents nor filed any documents ensuring that settlement was appropriate where there was an outstanding question as to whether an actual case or controversy existed.
The court, in other words, is saying: “We don’t know why Plaintiff is withdrawing. There may have been a ‘settlement’ between Plaintiff and Defendants, but we have no information about that one way or the other. If there was a settlement, you might want to consider whether it is legitimate, given that it’s just the left hand settling with the right.”
In the ordinary case, the Plaintiff does not have to explain why he is withdrawing his claims; Plaintiffs are free to withdraw their claims for pretty much any reason or no reason at all.[3] It could be because Plaintiff reached some agreement with the Defendant, or because Plaintiff suddenly realizes he will lose the case, or because Plaintiff has had a change of heart, or because Plaintiff has been diagnosed with a terminal illness and wants to spend his remaining days entirely with his family, etc.
But the court here is signaling that this is not the ordinary case. The court doesn’t need to know why Trump is withdrawing, but if there has been some kind of “settlement,” it may not have been “appropriate”; just as you can’t sue yourself, you can’t enter into a “settlement” with yourself to relinquish those claims that you have asserted against yourself.
Then, on May 18th, Trump and the DOJ execute something they call a “Settlement Agreement.” In it, Trump relinquishes his so-called “claims” against the IRS.[4] In exchange, the Defendant agrees (a) to issue an apology to Trump, and (b) to set up an “Anti-Weaponization Fund,” entailing a “systematic process to hear and redress claims of others who, like Plaintiffs, state that they incurred harm from Lawfare and Weaponization.”[5]
This “Anti-Weaponization Fund” will have $1.776 billion* (get it?) at its disposal.
And because the parties to this Settlement Agreement apparently think that you and I and the rest of the American people are complete morons, they say, in the Agreement, that “the corpus of the Anti-Weaponization Fund’s funding … is based on the projected valuation of future claimants’ claims.” It is, therefore, just a coincidence that it comes to 1.776 billion.
The Fund will be administered by five Members, all of whom are to be appointed by the Attorney General (an employee of the President). One Member – but one Member only – must be chosen “in consultation with” (though not necessarily the approval of) “congressional leadership.” Members can be removed at any time, without cause, by the President. The Fund “shall have the power to determine its own procedures for submitting, receiving, processing, and granting or denying claims,” and the Fund “may make those procedures public in whole or in part, in its discretion.”
Every quarter, the Fund “shall provide to the Attorney General a confidential written report” enumerating names of everyone who “received any relief” from the Fund and “the nature of such relief.”
And should you harbor any concerns about fraudulent claims, you can rest easy; the Fund “shall impose controls and systems to avoid fraudulent claims.”
Think it’s a bad deal, or even an unlawful deal, for the American people? Too bad for you! “This Settlement Agreement is enforceable and challengeable solely by Plaintiffs, Defendants, and the United States.”
And, oops! As noted above, the May 18th Settlement Agreement contains a provision under which Trump releases his (non-existent) claims against the IRS. It doesn’t say anything about the IRS releasing its claims against Trump.
That, apparently, was an oversight. Like I said, oops! Oh-so-quietly, on May 19th, the Department corrected that little oversight, notifying the world, in a document signed by Acting Attorney General Blanche, that:
“The United States RELEASES, WAIVES, ACQUITS, and FOREVER DISCHARGES each of the Plaintiffs, and is hereby FOREVER BARRED and PRECLUDED from prosecuting or pursuing, any and all claims, counterclaims, [etc.], whether previously known or unknown, that, as of the Effective Date of the Settlement Agreement [i.e., May 18th], have been or could have been asserted by [the IRS] against any of the Plaintiffs or related or affiliated individuals…”
Wow! Blanche provides no explanation for why this rather important paragraph had been omitted from the original, signed, Settlement Agreement. My guess is: Bad lawyering. Maybe that’s what happens when the DOJ sheds hundreds of competent attorneys.
It is, as Mitch McConnell – Mitch McConnell! – describes it: “the nation’s top law enforcement official asking for a slush fund to pay people who assault cops . . . Utterly stupid, morally wrong.”
You do, though, have to hand it to Trump’s lawyers; they transformed a claim worth $0.00 into a $1.776 billion Fund to be handed out, most likely in secret, to Trump’s supporters, plus they got their client a get-out-of-jail card in connection with any possible liability Trump may have incurred for prior IRS-related defalcations (an immunity that the NY Times estimates may be worth up to $100 million to Trump and the Trump Organization). It’s truly a testament to their immense lawyerly skill that they were able to get the other side to agree to this deal, no?
In the history of this country, there have been many, many people who have stuck their hands, inappropriately and unlawfully, into the public till. Some have ascended to high public office from which they could more easily implement their unlawful schemes. Democrats and Republicans, black and white, Christian and Muslim and Jew, men and women … Sad, but true.
But Donald Trump is more than just the latest member of this very unseemly fraternity – he is doing something truly without precedent. Never before, in the history of the United States, has the grab been conducted so openly and so brazenly, out there in full view of the very public that is getting fleeced.[6]
That this all comes as part of an “Anti-Weaponization” initiative from a president who has refined “weaponization” of the Justice Department into a fine art is beyond irony and beyond satire.
That Trump would like to get his hands on $1.776 billion of taxpayer money to hand out to friends and supporters is no surprise. What is much more difficult to understand is why so many people seem willing to let him get away with it.
The semi-revolt by Senate Republicans in the face of this monstrosity gives me (a little) hope that this may have finally crossed the line, for at least some of his supporters in the Republican party. We’ll see if this gives a few of them the backbone to stand up to Trump, at least so as to nullify (if, indeed, nullification is even a possibility) this “Settlement.”
[1] I can understand why Trump’s lawyers didn’t file a brief addressing the question; there’s nothing they could possibly have come up with to defend the continuation of the suit. But you’d think that the IRS lawyers would jump into the fray, no? Their reluctance to do so can’t have anything to do with the fact that the plaintiff is their boss, could it? Proving the point, no?
[2] A “Notice of Voluntary Dismissal with Prejudice” is a notification to the court from the Plaintiff: “I give up my claims now and forever; please dismiss them with prejudice.” It’s a “notice”, not a “motion”; it’s not asking the court to do something, it’s telling the court what plaintiff has decided to do. Under Rule 41(a)(1), the claim strips the court of jurisdiction once it is filed by the plaintiff, so there’s nothing the court can do anymore, other than close the case.
[3] There are exceptions to this general rule, of course; in class action cases, for example, the court has to approve any voluntary dismissal, which will involve examining the terms of any settlement that the parties have entered into, because the dismissal will affect the rights of third-parties who are parties to the suit but not to the settlement negotiations.
[4] The Agreement reads: “In exchange for the relief provided in this Settlement Agreement, and except as provided herein … Plaintiffs hereby RELEASE, WAIVE, ACQUIT, and FOREVER DISCHARGE Defendants and the United States from, and are hereby FOREVER BARRED and PRECLUDED from prosecuting or pursuing, any and all claims, charges, counterclaims, causes of action, appeals, or requests for any relief, … that – as of the Effective Date – have been or could have been asserted by Plaintiffs …”)
[5] “Lawfare and Weaponization” are defined in the Agreement as the “sustained use of the levers of government power . . . in order to target individuals, groups, and entities for improper and unlawful political, personal, and/or ideological reasons”.
[6] If you know of any actual case to prove me wrong on this, please let me know in the Comments or otherwise.
The post The Art of the Deal appeared first on Reason.com.
from Latest – Reason.com https://ift.tt/N24cVnb
via IFTTT
