A federal judge ruled on July 13 that President Donald Trump’s lawsuit against the IRS over his leaked tax returns was an example of self-dealing that was filed for an “improper purpose.”
The judge said that because Trump exercises control over the IRS and the U.S. Department of Justice as president in a lawsuit he filed in his personal capacity, the interests of the litigants were not truly opposed to each other as is required in civil lawsuits.
She also criticized the president’s legal team, referring one attorney for disciplinary review and denying another the ability to act in the case for one year.
Trump denied the settlement was an example of self-dealing, framing the fund as part of a legitimate effort to secure government accountability by compensating victims of lawfare and allegedly politically motivated prosecutions from President Joe Biden’s term and before.
Trump and his legal team had said the tax leak and subsequent investigations were part of a broader trend in which federal agencies were weaponized against Trump. The president’s supporters say the lawsuit was needed to deal with those investigations they argued were aimed at undermining his political effectiveness.
“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,” she said.
The plaintiffs in the case “have no answer for the fact that the lead Plaintiff, President Trump, directs and controls the Defendants,” and this “renders the lawsuit non-adversarial, collusive, and jurisdictionally improper.”
The plaintiffs who brought the case were the president, his sons Donald Trump Jr. and Eric Trump, and the family business, The Trump Organization LLC.
Williams said that she could not “adopt or accept the credulous exercise of divorcing President Trump’s current job title from an understanding of what happened” in the case.
Even the amount of taxpayer money that would have gone to the fund, $1.776 billion, “speaks of a ‘branding’ effort rather than a deliberate and thoughtful calculation of damages,” she said. The nation just celebrated the 250th anniversary of its founding on July 4, 1776.
Williams said the plaintiffs acted in bad faith and initiated a lawsuit “to provide cover for a collusive settlement,” for “improper purpose of dishonestly advancing a political narrative,” and to obtain “the imprimatur of judicial legitimacy for a ‘settlement’ that had no viable basis in law or fact.”
The lawsuit is “part of Mr. Trump’s pattern of misusing the courts to serve political purposes,” she said.
In a May 29 order, Williams said she was probing whether fraud had been perpetrated on the court after 35 former federal judges formally requested the probe. They alleged that the lawsuit was collusive, meaning that Trump and the IRS were working together for a disposition of the case favorable to Trump instead of properly litigating it in the usual adversarial setting of a court.
The same day, Judge Leonie Brinkema of the U.S. District Court for the Eastern District of Virginia issued an order separately blocking the Trump administration’s efforts to establish the Anti-Weaponization Fund and to make sure no funds were “irreversibly disbursed” before litigation over the fund had an opportunity to play out.
Blanche had said on May 19 that the IRS would no longer pursue claims against Trump, members of his family, or his business over allegedly unpaid taxes. Trump previously said on Truth Social that he “gave up a lot of money” in the settlement to create the new fund.
In her new order, Williams prohibited Trump, his sons, and the family business from referring to or citing the settlement agreement in any future legal proceeding. This appears to undercut the provisions of the settlement that granted protections to the plaintiffs, such as barring IRS audits or investigations into past tax matters.
The judge said a copy of her order will be mailed to the New York Bar and the District of Columbia Bar, where ethics proceedings are currently pending against Blanche and Associate Attorney General Stanley Woodward, respectively. This means the order itself could serve as evidence in those proceedings.
Trump has nominated Blanche, who is now acting attorney general, to serve permanently in the post. The Senate Judiciary Committee is scheduled to begin his confirmation hearing on July 15. The lawsuit and its ramifications are likely to be discussed at the hearing.
A Justice Department spokesperson criticized the new ruling.
“There was no collusion in this case, and the partisan judge who speculated otherwise has disregarded decades of precedent,” the official told The Epoch Times without elaborating.
President Barack Obama appointed Williams to the bench in 2011.
The official said the lawsuit was filed by Trump in his personal capacity, as well as by family members, who were “all victims of admitted violations of law.”
“There was a live dispute because the plaintiffs sought relief that the government had not provided,” and they did not receive any money and were barred from receiving any from the now-defunct fund.
The Epoch Times reached out for comment to Trump’s legal team. No reply was received by time of publication.
