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The Greatest Grift on Earth
This is mostly (L):
Yesterday, Trump's lawyers saw the writing on the wall and realized his and his kids' "lawsuit" against the IRS was going to be carefully investigated by the judge, which would put his latest grift at risk. So, his lawyers filed a "notice" dismissing the fake case with prejudice (notice is in quotes, because it should be styled as a request to dismiss the case). Moments thereafter, Trump's former personal attorney, and current acting Attorney General, Todd Blanche announced the official creation of a $1.776 (get it?) billion slush fund to be doled out by a committee appointed by Blanche. Supposedly, anyone who has felt they've been wronged by the Justice Department is eligible to receive some funds. But you should take that promise with several grains of salt.
This is (V)'s portion, with a few small details added by (Z):
Such flagrant and large-scale grift, and all in one fell swoop, has no real precedent in American history. Wherever Boss Tweed, the Teapot Dome guys and Spiro Agnew are right now, they're surely impressed. If you tried to put this into a movie, the audience wouldn't buy it. But you can't make this stuff up. Really. If you don't believe us, check the story at The New York Times, Forbes, Bloomberg, ABC News, CNBC, or Vox. They can't all be wrong. But if you don't trust any media outlet, then how about a press release from Rep. Jamie Raskin (D-MD), ranking member of the House Judiciary Committee? Here is the first paragraph of Raskin's statement:
Donald Trump is orchestrating a $1,776,000,000 fraud on the American taxpayer to line the pockets of his MAGA political allies, another installment in his ongoing effort to turn the federal government into a personal cash machine for his unpopular extremist movement. This is a massive and unprecedented presidential plunder of the American people. Worse still, this is only the beginning—a declaration that the prior payouts were just a down payment, and that he now intends to earmark billions more in taxpayer dollars for his political allies, sycophants and private militia of unemployed insurrectionists.
Nice that Raskin wrote the number out in full rather than writing $1.776B. Makes it look bigger. Raskin should have written $1,776,000,000.00 though.
Here is the backstory. Trump sued the IRS for $10,000,000,000.00 because IRS supposedly leaked his tax returns. He also filed a couple of other lawsuits against the government. The IRS had to respond to the lawsuits. Instead of saying: "Buzz off, see you in court," the agency, which is ultimately under Trump's control, said: "Let's make a deal. We will give you $1,776,000,000 ($1.776B) to settle all the lawsuits. So, Trump was effectively negotiating with himself, which may be the only way he can actually come out on top in a negotiation. Trump the defendant wanted the problem to go away so he offered Trump the plaintiff a great deal and Trump the plaintiff took it.
The nature of the deal is that Trump gets a giant slush fund run by a secret board Blanche appoints (but that Trump can fire) and which makes secret decisions about what happens to that money. One thing that seems likely is that the Jan. 6 rioters who tried to overthrow the government by force will get some of it. There were 1,600 of them. Suppose each one gets, say, $100,000. That would leave $1,540,000,000 in the slush fund for Trump to do whatever the wanted. Rioters happy, Trump happy, Raskin unhappy, but you can't please all the people all the time.
At the moment, some of the details are fuzzy, presumably intentionally so. Most obviously, it's not clear who can, and cannot, lay hands on the money. Reportedly, the "settlement agreement" bars Trump and his two sons (i.e., the parties to the now-dropped lawsuit) from claiming any portion of the fund. But the Trumps have spent their whole lives doing end runs around rules like this. For example, what if the secret committee decides that the Trump Organization has been damaged to the tune of $1.2 billion? Well, that payment would not go to the Trumps, technically, it would go to the "person" that is their S-Corp. And yet, the money would end up in their pockets, anyhow. Alternatively, this is also a president who has claimed that [THING X] is true of some amount of money, and then moved on to [THING Y] once attention died down. For example, does anyone know anymore where the ballroom donations went, or whether they will ever actually be used on this project? We certainly don't.
This is (L):
Will this scam work? Who knows? George Washington didn't try to rip off the government. Neither did John Adams, Thomas Jefferson or any other president until now. Could someone stop this? Well, there may be a few potential obstacles:
- The Courts: Trump filed his lawsuit in the Southern District of Florida and the judge, U.S.
District Judge Kathleen Williams, is skeptical that the lawsuit is
legit
and that the parties are "sufficiently adverse to one another." She's asked six attorneys not associated with the case
to weigh in and they filed a brief that basically says the lawsuit is bogus and that Trump is effectively on
both sides of the case and is negotiating with himself. At the moment, Williams says that the dismissal has
stripped her of jurisdiction, and thus she has no remaining power to do anything here. However, the matter
could be brought back to life, very possibly by the next non-corrupt AG.
- The Law: Obviously, it's not illegal to sue the IRS but the law is clear about what one
can sue for. Federal
law
allows suits against the IRS or a person who is not an employee for up to $1,000 per disclosure or "actual damages."
Aside from the conflict of interest and the fact that a party can't be on both sides of a lawsuit, there are additional
defenses that an agency would normally pursue: (1) the statute of limitations is 2 years from discovery of the leak;
Trump has railed against the release since it occurred in 2019, during his first administration, so the suit should have been
dismissed on that basis; (2) Charles Littlejohn, the contractor who's guilty of the leaks, is not an IRS employee, so the
suit should have been brought against Booz Allen (his employer) or Littlejohn; and (3) about those alleged damages,
Trump would be very hard pressed to prove any actual damages based on the leak, let alone $10 billion in damages. Former
IRS and Justice Department officials filed an amicus brief in the case making these arguments. The government
did not. And it's also illegal to promise not to audit a taxpayer or a business, which Trump was also angling for, and
which would be much more valuable to him than the slush fund. It's not clear if that concession is, or is not, in
the as-yet-unreleased settlement agreement.
Precedent here is also important. Trump is among about 150 ultra-rich people like Elon Musk, Jeff Bezos and Michael Bloomberg whose tax information Littlejohn released to some news outlets. Back in June 2024, the IRS settled a lawsuit by Ken Griffin, whose information was also leaked. Griffin had demanded $1,000 per unauthorized disclosure, the maximum allowed by law. He got an apology but no money after 18 months of litigation. - The Lawyers: If this "deal" actually goes through, the lawyers involved are in for a lot
of scrutiny. If there's any evidence of collusion or conflicts of interest—looking at you, Todd Blanche—the state
bars will be all over it. The communications between the lawyers on either side will be pored over with a fine-toothed
comb for evidence of kickbacks or other criminal conduct.
- Trump's Family and Businesses: The Trump businesses, which were party to the now-dismissed
suit, are based in New York and Attorney General Letitia James has been very adept at holding them accountable for their
crimes. Here, there are a few avenues she could pursue under state law: fraud, misuse of public funds, misappropriation,
conspiracy to defraud New York taxpayers—and that's just off the top of our heads. Even if Trump can claim
immunity, which is a big "if" given that he has sued in his personal capacity, his family and businesses
cannot.
- Congress: Assuming Republicans grow a spine or Democrats flip the House in November (much
more plausible), they could launch investigations. If enough members agree there's a problem here, they could impeach,
or try to claw back the money.
Art. I, Sec. 9 of the Constitution includes this sentence:No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time.
This would seem to say that Congress would have to appropriate the money. Would the votes be there? We doubt it, since any senator or representative voting for it would have to defend that vote until the cows come home. Could Trump just write a check for $1,776,000,000.00 and sign it and give it to his board to scan using the banking app the board uses? Needless to say, the audacity here is breathtaking and the legality questionable at best if Trump tries to take the money without a formal appropriation from Congress.
Another possibility is that Trump plans to pay this money out of the Judgment Fund—a permanent fund set up by Congress to pay monetary damages for certain claims without having to go back to Congress each time for the money. But if so, the statute that created the Judgment Fund doesn't allow payments for claims like the ones Trump brought. Which means that if this is Trump's plan, he would be breaking the law.
If Trump tries to pull this off without an appropriation, it is possible that a future AG would regard this as theft and could indict Trump for it. Of course, Trump is almost certain to pardon himself on the way out the door. But the AG could take the position that: (1) self-pardons are not valid and (2) a pardon can only be issued after someone has been convicted of a federal crime, and indict Trump anyway, saying: "Eventually the Supreme Court will have to decide if my position is correct." The AG could also request that the judge refuse bail because Trump is a flight risk. Further, since the theft would have taken place in D.C. the U.S. attorney for D.C. could indict Trump, in which case the pardon wouldn't matter since the president can pardon only crimes against the United States and this could be regarded as common theft or maybe fraud (writing a bad check or equivalent), which violates D.C laws.
This is (Z):
One last observation. Actually, more like a question. Why on Earth would Trump try this before the midterms? Just the attempt is going to be an anchor around the neck of the GOP. And if he actually pulls it off, then the anchor will grow much, much larger. Democrats will use this, and the billion-dollar ballroom, and several other grifts, and note that somehow there's money for Trump and his cronies, but not for, say, healthcare for poor people. That's not only powerful stuff, it would also be political malpractice for the Democrats NOT to exploit it. Trump's not the sharpest tool in the shed, but his political instincts are usually pretty good. Isn't this something that could wait until, say, November 4, 2026?
We have absolutely no information that helps explain what is going on here, so all we can do is speculate. We have seven theories, some of them pretty far out there. After all, we are a full-service operation. Here are our theories, from most to least likely:
- The Judge: Perhaps Trump's lawyers have read the tea leaves and figured out that Williams
was on the cusp of dismissing the lawsuit. They might have re-filed, or they might have appealed, but they may have
concluded it was too difficult to stretch things out for roughly 6 more months. So, this could be a case of "We have to
get while the gettin's good."
- Blanche's Self-Interest: It appears that Blanche was the driving force behind this agreement.
His primary concern right now is getting appointed as the permanent AG. That will be a moot point by the time November
rolls around. So, if he wants to kiss the boss's ample posterior 1,776,000,000,000 times, he has to do it now. Compared
to how much Blanche cares about his own prospects, the fate of the Republican Party is but a grain of sand on the beach.
- The Money: The exact state of Trump's finances has always been something of a mystery,
though he certainly appeared to be in dire straits as of 2024, particularly given that he still owes $600 million or so
in the fraud and E. Jean Carroll cases. It seemed that his fortunes were saved by his various grifts, most obviously
Trump Media & Technology Group and the two bitcoin products. However, the TMTG stock and the bitcoins have both
fallen off a cliff, value-wise. If Trump did not cash out, or if he secured loans with stock/bitcoin that is now nearly
worthless, he could be dealing with a serious cash crunch right now, and he might not be able to wait until November for
an infusion of funds. And again, anyone corrupt enough to pull this "compensation fund" scam is corrupt enough to
redirect a bunch of the money to their own pocket, no matter what they have promised otherwise.
- The Emperor's Clothes: This whole thing stinks to high heaven, and surely there are many
unhappy Republicans in Congress right now, who know they are going to get hammered for this.
It would only take a few defectors in the House for Congress to go after Trump for this, and we can absolutely
envision a coalition of the Democrats, plus Rep. Thomas Massie (R-KY), plus a few other budget hawks/swing-district
Republicans getting a bill to the floor via discharge, and sending it over to the Senate.
The Senate is a bigger problem because of the filibuster. Still, the members there don't want to be known as the defenders of the Trump slush fund. If you start with the 47 Democrats and independents, add in the Republicans who hate Trump and are leaving the Senate anyhow (Bill Cassidy, R-LA; Mitch McConnell; R-KY; Thom Tillis, R-NC), add in the Republicans who are moderates and tend to oppose this kind of self-dealing (Susan Collins, R-ME; John Curtis, R-UT, Lisa Murkowski, R-AK), add in the Republicans who are facing tough reelection battles and don't want to give their opponents a cudgel to yield (Jon Husted, R-OH; Pete Ricketts, R-NE; Dan Sullivan; R-AK) and then top it off with the maverick budget hawk Rand Paul (R-KY), you can see a dim, but real path to 60 votes in the Senate.
Anyhow, the closer that we get to the midterms, the less leverage Trump has to punish defectors, and the more that members who hope to keep their jobs will fear the wrath of the voters. So, Team Trump may have counted noses, and decided that right now is when the iron is hot, in terms of preventing Congress from getting involved. Mild support for this theory comes from the fact that the newly defeated and newly unencumbered Cassidy was furious yesterday, calling the $1.776 billion a "slush fund" that tramples all over Congress' power of the purse. - Trump Is Losing It: It is clear that Trump is not well, cognitively. How unwell is hard to
say, but he's certainly got issues. Meanwhile, he's also surrounded by yes men who are terrified of crossing him. It is
at least possible that if he gets fixated on "MONEY!", he can't be talked down, and can't be made to properly understood
that a longer timeline would be better.
- Trump Wants to Lose the Midterms: The previous entry on this list is a little on the
conspiratorial side, and the conspiratorial bent deepens even more fully moving forward. Anyhow, it could be conscious,
it could be subconscious, but perhaps Trump would be happier if the Republicans lost one or both houses of Congress in
November. Even when he's leading a trifecta, he gets very little done, anyhow. By contrast, if the Democrats control at
least one chamber of Congress, he can spend 2 years blaming them for everything under the sun. It won't work on all
voters, but it will get the base excited in a way that passing one or two substantive bills a year does
not.
- Trump Is Dying: Trump is about to undergo his fourth physical in the last year, and has shown other physical symptoms of... something he refuses to discuss. He could think he might be dying, or he could be actually dying. If so, well, it is unlikely that President Vance will sign off on a $1,776,000,000.00 fund whose board answers to the Estate of Donald John Trump. So, it may be necessary to get this done before it's too late.
Again, these are just our best guesses. And we acknowledge that some of them are pretty conspiratorial. But it's not like Trump hasn't given us reason to be suspicious of sinister things going on behind the scenes. Anyhow, if readers want to tell us we're out to lunch, or want to offer alternate theories as to why Trump would pursue something so impolitic just months before a crucial midterm election, the e-mail address is comments@electoral-vote.com.
We'll also say a couple of other things about the politics of this. First, the "1776" thing is just a little too precious. We don't think a single person will say "You know, I wasn't liking this idea, but it's patriotic, so OK!" However, we could imagine people who look at this and conclude that all of Trump's "patriotism" is just performative B.S., and that other "patriotic" projects, like the Arc de Trump, are actually scams.
Second, the terms by which the slush fund will operate are pretty broad, because they want to be able to pay out a lot of different kinds of cronies. But what happens if James Comey applies for some money? Or Letitia James? Or Sen. Mark Kelly (D-AZ)? The shadowy figures who are going to administer the fund won't pay those people, of course, and they will be able to go on TV and/or file lawsuits that bring all kinds of attention to the fact that the whole thing is just self-dealing. That trio, joined by a few others, could give Trump & Co. several black eyes before this is all said and one.
And that brings us to the end of an item with a very rare contributors' signature. Can you tell which part was written by which person? If it helps, the word count is fairly even; around 33% each. (V, L & Z)
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