{"id":91,"date":"2026-05-27T10:09:09","date_gmt":"2026-05-27T10:09:09","guid":{"rendered":"https:\/\/frontierhousingreport.com\/?p=91"},"modified":"2026-05-27T10:09:09","modified_gmt":"2026-05-27T10:09:09","slug":"trumps-slush-fund-could-end-up-costing-recipients-billions","status":"publish","type":"post","link":"https:\/\/frontierhousingreport.com\/?p=91","title":{"rendered":"Trump\u2019s Slush Fund Could End Up Costing Recipients Billions"},"content":{"rendered":"
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The Justice Department\u2019s $1.776 billion \u201canti-weaponization\u201d fund, which would pay out public money in compensation for alleged overreach in federal prosecutions, including for the insurrectionists who stormed the Capitol on January 6, 2021, has been accurately described as one of the most nakedly corrupt actions in American history. It would give a tacit endorsement from every American taxpayer to the notion that the Capitol Riot\u2019s only transgression, for example, came from those who tried to punish its perpetrators for attempting to halt the outcome of an election.<\/p>\n

Read more The Miller Doctrine<\/a><\/p>\n

News of the fund has triggered massive political backlash and at least temporarily derailed a party-line reconciliation bill funding immigration enforcement operations for the next three years. Senate Republicans didn\u2019t want to go on the record siding with Donald Trump\u2019s crony slush fund, and left Washington rather than being confronted with such a question in a reconciliation \u201cvote-a-rama.\u201d What they will take up in June is currently unknown.<\/p>\n

More from David Dayen<\/em><\/strong><\/p>\n

There are efforts within Congress to kill the slush fund, but those will inevitably run up against Republican politics in the wake of Trump demonstrating full control of the party base in recent primaries. Congress has the power of the purse, but it delegated the authority for the Justice Department to pay out settlements unilaterally when it established something called the Judgment Fund in 1956. Any attempt to change that legislatively will almost certainly meet the president\u2019s veto pen.<\/p>\n

Yet there is another potential deterrent to January 6th rioters or anyone else taking money from the fund: a mechanism whereby any American can recover improper government payments deemed \u201cfalse claims,\u201d plus significant additional damages. Recipients of the slush fund, under this approach, could have to pay back three times as much money as they took out.<\/p>\n

This would get around a key legal concept that could frustrate opponents of the anti-weaponization fund: standing to sue. Two Capitol Police officers have already sued to block the fund, and two other cases have been filed against the fund. But none of these plaintiffs were party to the lawsuit between Trump and the IRS that spawned the fund, and ordinary taxpayers cannot sue the government simply to alter how government funds are spent.<\/p>\n

But if a judge can be convinced that this fund, established with no transparency and no congressional or judicial oversight, which emerged from a lawsuit between a sitting president and his own government, and is arguably contrary to the purpose of the Judgment Fund from which it derives authority, is an unconstitutional scheme to defraud the government by its very structure, then anyone<\/em> can sue to recoup the money, and then some, under the False Claims Act of 1863.<\/p>\n

ADAM LEVITIN, A GEORGETOWN LAW PROFESSOR<\/strong> and former adviser to the Consumer Financial Protection Bureau, first proposed this idea. The False Claims Act (FCA) is a Civil War\u2013era law passed to crack down on fraudulent payments to government contractors, but it has been expanded to crack down on fraudulent beneficiaries, too. The FCA makes it a crime to \u201cknowingly present, or cause to be presented, a false or fraudulent claim for payment or approval.\u201d<\/p>\n

To acquire useful information from people with knowledge of such false claims, Congress gave any American the ability to file an FCA case on behalf of the government as a \u201cqui tam\u201d action\u2014the term comes from a Latin phrase that translates to \u201cwho sues on behalf of the King, as well as for himself.\u201d The relator of the qui tam action is entitled to a portion of any recovered proceeds. This has been used by whistleblowers to uncover unlawful federal health care payments, as well as fraudulent federal insurance claims on the mass of foreclosures after the 2008 housing bubble collapse.<\/p>\n

Those proceeds are significant: Anyone found guilty of a false claim must not only pay back the ill-gotten funds, but three times the amount in damages. That means that anti-weaponization fund recipients would risk having to pay much more back in the future, while going through years of litigation. Debts incurred by FCA violations are not even dischargeable in bankruptcy.<\/p>\n

What\u2019s more, anyone involved in the conspiracy, up to and including acting Attorney General Todd Blanche, may be liable for damages to the United States as well. The five-person committee administering the fund would face similar legal risk, which could prevent the Justice Department from finding anyone willing to take the job. As a judgment would be a civil, rather than criminal, liability, individuals could not be pardoned for violating the FCA. It could even implicate the president himself, who admitted to agreeing to the fund\u2019s payouts to others, since the ruling in Trump v. United States<\/em> that presidents are immune from prosecution for undertaking \u201cofficial acts\u201d applied primarily to criminal liability.<\/p>\n

It is true, as Levitin concedes, that the federal government can and dismiss it. This would be the outcome of any qui tam filed during the Trump administration. But such actions can be filed at least six years after the false claims, putting us well into the next presidency.<\/p>\n

Read more In Massachusetts Today, Uber and Lyft Drivers Went Union<\/a><\/p>\n

That could form a key part of the deterrent. Candidates for president in 2028 could state definitively that they would direct their attorneys general to file False Claims Act cases against anti-weaponization fund recipients, or that they would not stand in the way of any qui tam actions. If prominent individuals stood up to say that they would pursue qui tam cases for anyone who received money or acted in the distribution of it, that could only add to the deterrent.<\/p>\n

The presiding judge in the original case, Trump v. IRS<\/em>, Kathleen Williams, was stripped of her ability to oversee the fund when Trump dismissed the case against the IRS. With no formal settlement, the Justice Department can use the Judgment Fund without legislative oversight. The Justice Department has cited other uses of the Judgment Fund, in particular a case during the Obama administration which settled discrimination claims by Black farmers, but that case was presided over by a federal judge, who had supervisory authority over the disbursement.<\/p>\n

The recipients of the anti-weaponization fund money were not parties to Trump\u2019s lawsuit against the IRS and have no legal case with the government. That could lead courts to view their claims as false. Appeals could reach the Supreme Court, which may be inclined to protect Trump\u2019s concoction. But fund recipients could be wiped out just by the legal fees before then.<\/p>\n

Attorneys with government experience as well as experience prosecuting FCA cases described the idea as totally unique and unprecedented, matching the unprecedented nature of the anti-weaponization fund. That makes it hard to predict the outcome. One issue is whether it can be proven that the administrators of the scheme \u201cknowingly\u201d initiated a false claim, and whether the recipients \u201cknowingly\u201d received one. The FCA statute does not require \u201cproof of specific intent to defraud,\u201d and states there would be liability if a plotter or recipient of the fund proceeds \u201cacts in deliberate ignorance of the truth or falsity of the information.\u201d<\/p>\n

There are some indications that the Justice Department is aware of the False Claims Act vulnerability. In a May 18 Blanche memo announcing the anti-weaponization fund, he stated: \u201cOnce the funds are deposited into the Designated Account, the United States has no liability whatsoever for the protection or safeguarding of those funds.\u201d That suggests a desire to make the fund an independent organ with an arm\u2019s-length relationship to the federal government.<\/p>\n

\u201cI think that\u2019s in there to cut off FCA claims,\u201d said Rupa Bhattacharyya, a former Justice Department official who was special master for the victim fund set up after the September 11 attacks. \u201cIf they are transferring it to a third party, is there a false claim on the United States?\u201d <\/p>\n

This may not be an ironclad framework, since the money would ultimately be drawn from the government, even if it was outsourced to an independent fund. Said Bhattacharyya, \u201cI think we should test that in court.\u201d <\/p>\n

Conservatives have been known to toss out theories that are widely derided by the legal profession, only to become case law years later. The novel False Claims Act interpretation could be the left-wing antecedent to this, in service to stopping outright and obvious corruption.<\/p>\n

\u201cI do think that that the potential consequences should be spelled out for anyone who has a hand in this fund,\u201d Bhattacharyya said.<\/p>\n

Read more The Mechanic vs. the Billionaire with Dan Osborn<\/a><\/p>\n<\/div>\n


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