President Donald Trump's settlement of a lawsuit brought by himself to create a $1.8 billion slush fund for his supporters is perhaps his most audacious act of corruption to date. This move not only violates Department of Justice precedent but also represents a theft of taxpayer money to reward Trump's allies. More critically, it marks a significant step toward autocratic power, allowing Trump to set policy, appropriate funds, and spend money unilaterally, undermining the constitutional separation of powers.
A Dangerous Precedent
“If this became normalized, it would break everything,” said Bobby Kogan, a former Office of Management and Budget official at the Center for American Progress. In January, Trump, his son Eric Trump, and the Trump Organization sued the IRS for $10 billion over the leak of their tax returns by an IRS contractor in 2019. To avoid a judge ruling that Trump cannot sue himself, acting Attorney General Todd Blanche quickly settled the case by announcing a $1.776 billion “Trump Truth and Justice Fund.”
How the Fund Works
This slush fund will reportedly provide reparations to conservative supporters who claim government persecution, including Jan. 6 insurrectionists. Blanche admitted to Congress that the fund will pay out to those who engaged in violence, such as members of the Proud Boys and Oath Keepers. The fund will be overseen by a five-member board, yet to be appointed, with no public transparency. Notably, none of the potential recipients were parties to the original lawsuit.
“This undermines almost all parts of the Constitution simultaneously,” said David Super, a law professor at Georgetown Law. It violates Congress's appropriations power, which requires that no money be drawn from the Treasury without a law. It also violates the Constitution's requirement that courts hear only genuine cases and controversies, as this is a collusive lawsuit. Additionally, it breaches the president's duty to faithfully execute the laws and potentially the 14th Amendment's ban on payments to insurrectionists.
Centralizing Power
The end result is to further centralize power in the White House. Trump has claimed the authority to spend money not appropriated by Congress and to withhold funds that are appropriated. The DOGE's seizure of Treasury payment systems enabled this control. Unlike previous efforts that involved spending or not spending against congressional intent, this slush fund creates money out of thin air using the DOJ's Judgment Fund, a congressionally approved entity for paying settlements. “It's devastating because there's no natural limits on what they can do,” Super said.
Future Implications
This strategy could allow Trump to sue his own government to achieve policies he cannot enact through Congress, such as funding for his projects or a war. However, a future Democratic president could also exploit this scheme. For example, a president could settle a lawsuit for reparations for slavery, creating a trillion-dollar fund, or for a Green New Deal, or for victims of mass deportation. The opportunities for unilateral policy-making are endless.
“If allowed to stand, it could lead to a complete subversion of the Constitution and reordering of government through a loophole no one intended to exist,” the article warns. Congress never intended the Judgment Fund to be used as a personal slush fund, but Trump's actions threaten to normalize this abuse of power.
