The Trump/DOJ Settlement Agreement:—”Completely misguided, morally indefensible.”
Just when you think there can’t be another outrage from the President of the United States that dwarfs all that came before, along comes the so-called Great Settlement Agreement of 2026.
Take a look for yourself. It runs a mere three pages. It bears the label “Settlement Agreement.” Yet it hardly fits the conventional sense of that term. You may call a duck a goose, but it remains a duck.
To understand how we arrived at this point, consider that on January 26, 2026 (while still in office) Trump filed suit in federal court (SD Florida) against the Internal Revenue Service, alleging negligent conduct by an IRS contractor that allegedly led to the disclosure of confidential tax records of millions of people (including Trump), and demanded $10 billion in damages.
That claim was baseless and valueless; a sane appraisal would place its value at $0.00. You cannot sue yourself; the President directs the IRS, can dismiss any or all IRS employees, and can set IRS policies (including its litigation posture). The President and an Executive Agency wholly under Presidential control cannot be legal adversaries. Therefore there is no Article III “case or controversy” with the President opposing the IRS, and without such a case the court would dismiss for lack of jurisdiction.
That would be a nice question for a Constitutional Law I exam. The short answer would fit neatly into a compact essay.
Trump’s lawsuit appeared destined for dismissal. Everyone—yourself included, me, Pam Bondi, Todd Blanche, Donald Trump—knew that.
At the court’s first hearing in February, District Judge Williams highlighted the lingering question of whether an actual case or controversy existed between the parties and asked the parties to brief the issue.
Interestingly, no briefing addressing that question ever materialized from either side.
Things stayed there until May 16, when Trump filed a “Notice of Voluntary Dismissal With Prejudice.” In line with ordinary practice (and the governing FRCP 41(a)), the court dismissed the claim with prejudice, noting that “once a notice of dismissal pursuant to FRCP 41(a)(1) is filed, the Court is stripped of jurisdiction.”
So, that ends the so-called case.
Here is a portion of the court’s final “Order Closing Case” [available here]:
“Plaintiffs state that they are voluntarily dismissing the instant litigation with prejudice. Because the dismissal with prejudice extinguishes the claims regarding the unlawful disclosure of Plaintiffs’ tax returns, the Court cancels all deadlines, including the date that the Parties were required to submit briefing as to whether an actual case or controversy existed in this matter.”
Judge Williams adds the notable concluding paragraph:
Because [Trump’s] Notice does not reference any settlement or include a stipulation of settlement, there is no settlement of record. Additionally, Defendants—federal agencies represented by the Department of Justice, which has an independent obligation to uphold the “public’s strong interest in knowing about the conduct of its Government and expenditure of its resources” and the “fair administration of justice,” neither submitted any settlement documents nor filed any documents ensuring that settlement was appropriate where there was an outstanding question as to whether an actual case or controversy existed.
In other words, the court is saying: “We can’t tell why the Plaintiff is withdrawing. There might have been a ‘settlement’ between Plaintiff and Defendants, but we have no information about it one way or the other. If there was a settlement, you may want to question its legitimacy, given that it would be the left hand settling with the right.”
Under ordinary circumstances, a plaintiff does not need to justify withdrawing a claim; plaintiffs can withdraw for nearly any reason, or for no reason at all.[3] It could be because the plaintiff reached an accord with the defendant, or that the plaintiff suddenly realized the case would be lost, or that the plaintiff changed their mind, or even that a terminal illness dictates spending remaining days with family, etc.
But the court here signals that this is not an ordinary case. The court does not demand the reason for Trump’s withdrawal, but it suggests that if a “settlement” did occur, it might not have been appropriate; just as you cannot sue yourself, you cannot enter into a “settlement” with yourself to relinquish claims you have asserted against yourself.
Then, on May 18, Trump and the DOJ signed what they called a “Settlement Agreement.” In it, Trump gives up his so-called “claims” against the IRS.[4] In exchange, the Defendant agrees (a) to issue an apology to Trump, and (b) to establish an “Anti-Weaponization Fund,” comprising a “systematic process to hear and redress claims of others who, like Plaintiffs, allege they suffered harm from Lawfare and Weaponization.”[5]
This “Anti-Weaponization Fund” would be equipped with $1.776 billion* at its disposal.
And because the parties to this Settlement Agreement apparently assume that you and I and the rest of the American people are complete fools, they state in the Agreement that “the corpus of the Anti-Weaponization Fund’s funding … is based on the projected valuation of future claimants’ claims.” It is therefore no accident that the total amounts to 1.776 billion.
The Fund would be run by five Members, all of whom would be appointed by the Attorney General (a presidential appointee). One Member—only one—had to be chosen “in consultation with” (though not necessarily the approval of) “congressional leadership.” Members could be removed at any time, without cause, by the President. The Fund “shall have the power to determine its own procedures for submitting, receiving, processing, and granting or denying claims,” and it “may” publish those procedures in whole or in part, at its discretion.
Every quarter, the Fund would provide the Attorney General with a confidential written report listing the names of everyone who “received any relief” from the Fund and describing the nature of such relief.
And should you harbor worries about fraudulent claims, rest easy; the Fund “shall impose controls and systems to avoid fraudulent claims.”
Think this is a bad deal, or even an unlawful one for the American people? Tough luck. “This Settlement Agreement is enforceable and challengeable solely by Plaintiffs, Defendants, and the United States.”
And, as noted above, the May 18th Settlement Agreement contains a provision in which Trump releases his (non-existent) claims against the IRS. It does not state anything about the IRS releasing its claims against Trump.
That, apparently, was an oversight. As I noted earlier, oops! Quietly, on May 19th, the Department corrected that omission, notifying the world in a document signed by Acting Attorney General Blanche that:
“The United States RELEASES, WAIVES, ACQUITS, and FOREVER DISCHARGES each of the Plaintiffs, and is hereby FOREVER BARRED and PRECLUDED from prosecuting or pursuing, any and all claims, counterclaims, [etc.], whether previously known or unknown, that, as of the Effective Date of the Settlement Agreement [i.e., May 18], have been or could have been asserted by [the IRS] against any of the Plaintiffs or related or affiliated individuals…”
Wow. Blanche offers no explanation for why this crucial paragraph was dropped from the signed original. My hunch is sloppy lawyering. Perhaps that is what you get when the Department of Justice ditches hundreds of skilled attorneys.
As Mitch McConnell—yes, Mitch McConnell—put it: “the nation’s top law-enforcement official asking for a slush fund to pay people who assault cops … utterly stupid, morally wrong.”
Yet you have to credit Trump’s lawyers for their feat: they turned a claim worth essentially nothing into a $1.776 billion Fund to be disbursed—likely behind closed doors—to Trump’s supporters, and they secured their client a kind of immunity from any potential liabilities arising from past IRS-related misdeeds (an immunity that the New York Times estimates could be worth as much as $100 million to Trump and the Trump Organization). It’s a striking example of their legal prowess that they managed to extract this agreement from the other side, doesn’t it?
Throughout American history there have been many people who have interfered with public funds—some rising to high offices where they could more easily push their unlawful schemes. Democrats and Republicans, across the spectrum of race, faith, and gender, have found themselves implicated. It’s a sad but true fact.
But Donald Trump stands apart as more than the latest member of this unfortunate club—he is doing something without precedent. Never before has a major grab been conducted so brazenly, so openly, in full view of the very public who is being fleeced.
All of this takes place under the banner of an “Anti-Weaponization” initiative from a president who has made weaponizing the Justice Department a calling card, which is rich in irony and satire alike.
That Trump would covet $1.776 billion of taxpayer funds to distribute to friends and supporters is hardly surprising. What’s harder to fathom is why so many people seem prepared to let him get away with it.
The uneasy, quasi-revolt among Senate Republicans in response to this monstrosity provides a glimmer of hope that at least some in the party finally recognize the line that has been crossed. We will see whether a few will muster the backbone to oppose Trump, at least to the extent of nullifying (if that is even a live possibility) this “Settlement.”
[1] I understand why Trump’s lawyers opted not to file a brief addressing the question—there was nothing they could propose to defend continuing the suit. Still, one would expect IRS counsel to weigh in, since the plaintiff technically reported to the IRS’s leadership. Their reluctance might reflect the fact that the plaintiff is their boss, no?
[2] A “Notice of Voluntary Dismissal with Prejudice” is a court communication from the Plaintiff declaring, “I abandon my claims now and forever; please dismiss them with prejudice.” It is a “notice,” not a “motion”; it tells the court what the plaintiff has decided. Under Rule 41(a)(1), the claim removes the court’s jurisdiction once filed, leaving the court with nothing to do beyond closing the case.
[3] There are exceptions; for instance, in class actions the court must approve voluntary dismissals because the terms could affect third parties who aren’t parties to the settlement negotiations.
[4] The Agreement states: “In exchange for the relief provided in this Settlement Agreement, and except as provided herein … Plaintiffs hereby RELEASE, WAIVE, ACQUIT, and FOREVER DISCHARGE Defendants and the United States from, and are hereby FOREVER BARRED and PRECLUDED from prosecuting or pursuing, any and all claims, charges, counterclaims, causes of action, appeals, or requests for any relief, … that—as of the Effective Date—have been or could have been asserted by Plaintiffs …”
[5] “Lawfare and Weaponization” are defined in the Agreement as the “sustained use of the levers of government power … in order to target individuals, groups, and entities for improper and unlawful political, personal, and/or ideological reasons.”
[6] If you know of any actual case to prove me wrong on this, please let me know in the comments or through another channel.
