President Donald Trump's reported plans to settle a lawsuit against his own administration by establishing a compensation fund for his political allies may have originated with a St. Louis attorney known for brandishing a rifle at Black Lives Matter protesters. Mark McCloskey now represents hundreds of January 6 rioters seeking compensation for time spent in jail. Trump filed a $10 billion lawsuit against the government earlier this year over an IRS contractor illegally leaking his tax returns in 2020. ABC News reported this week that Trump might drop his suit in exchange for creating a $1.7 billion government fund to compensate people allegedly victimized by the Justice Department under President Joe Biden, with Trump controlling a commission overseeing the fund.
McCloskey, who has filed hundreds of administrative claims for personal injury on behalf of rioters charged with crimes related to their actions on January 6, 2021, has been pushing the Justice Department to set up such a fund since last year. "It sounded exactly like what we had proposed almost a year ago," McCloskey told HuffPost. "I have not heard anybody who has positive information telling me one way or the other how this came to be right now, but it certainly is a program that we had recommended."
The Justice Department declined to comment on pending litigation, and the White House did not immediately respond to a request for comment. Trump sued the IRS in January in his personal capacity, and his legal team said in a court filing that it had entered settlement talks with the government. The judge overseeing the case has questioned whether the two sides are actual legal adversaries, given that the president closely directs the same agencies defending the case, and set a hearing for next week. The judge would likely have no say over an out-of-court settlement reached before then.
Democrats expressed outrage over the prospect of the Trump administration settling a lawsuit with Trump's legal team to create a compensation fund for his political allies. "He's trying to create a $1.7 billion slush fund to pay off Proud Boys, Oath Keepers, and other insurrectionists," Representative Jamie Raskin (D-Md.) told HuffPost on Friday. "Congress would never pass that." Senator Ron Wyden (D-Ore.) said the lawsuit has been a shakedown from the start. "This administration is dripping with corruption from top to bottom, but rushing a settlement to steal $1.7 billion taxpayer dollars for a slush fund before a judge can toss your junk lawsuit would be among the most corrupt acts in American political history," Wyden said.
There would be little oversight of the fund, which would draw from an existing pool of money the Justice Department uses to settle lawsuits. Trump would be able to remove any of the five people overseeing the fund for any reason, ABC News reported, and both the payouts and who received them would be hidden from the public. Top Republicans in Congress this week refused to discuss the prospect of Trump settling a $10 billion lawsuit against his own administration in response to HuffPost questions. House Speaker Mike Johnson (R-La.) previously told HuffPost, however, that he did not like the idea of payouts for January 6 rioters. "Doesn't sound like that's appropriate to me, but I have to look into it, I don't know," Johnson told HuffPost in January. Trump has spoken favorably of the idea in the past, telling Newsmax his administration "really like[s] that group of people," referring to the pardoned January 6 insurrectionists.
To McCloskey, who unsuccessfully ran for Senate in 2022, the compensation fund sounds great. "It is what we had suggested, what we had hoped for, and if it actually comes into fruition, I'll be very, very pleased," McCloskey said.
