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Trump $1.7B Scam is Instantly Gutted | The Breakdown
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No, the president cannot sue himself to establish a slush fund to reward his criminal co-conspirators. Allison breaks down a brief filed by outside parties arguing that the courts don't have jurisdiction to consider the case because you can't sue yourself.
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Hey, everybody, it's Alison Gill from the Daily Beans podcast. And as I'm sure you've heard by now, Donald Trump is attempting to settle a lawsuit that he filed, which he basically filed against himself to create a $1.7 billion taxpayer slush fund to pay off his political allies, including, but not limited to the 1600 plus January 6th insurrectionists who attacked the Capitol and potentially himself and his two adult sons through their business. He's about to turn the January 6th defendants into millionaires, to say nothing of the likes of John Eastman, Jeffrey Clark, Rudy Giuliani, Kenneth Chesbrough, Sidney Powell, Boris Epstein, Roger Stone, Steve Bannon, the Oath Keepers, the proud boys, and anyone else who helped him try to overturn the 2020 election. Anyone else who helped him with his coup. Now, millions of dollars of our money could go to them, our taxes that we thought we were paying to support things like food assistance and Medicare and environmental protections and veterans benefits. Nope. 1.7 billion straight into the pockets of his criminal co conspirators to be distributed by a panel of five people he picks and who he can fire without cause and have no oversight. Now, this all started with a lawsuit filed back in January, January 29th, by Donald, Eric and Don Jr. In their personal capacity, not in the, you know, Trump in his personal capacity, not as president. And that lawsuit is against the irs, the Internal Revenue Service, for damages resulting from the release of his tax returns during his first term. They filed their suit in the Southern District of Florida because they lived there, but also probably because they were hoping to get Judge Eileen Cannon, the corrupt judge that dismissed the Mar A Lago documents case against Donald and his co conspirators. But instead, they got Obama appointee Kathleen Williams. That's the judge in this case. Now, after some legal back and forth since January, Judge Williams wondered if she had jurisdiction to hear this case at all, not because of where it's filed, but because Article 3 of the Constitution requires that two parties in a lawsuit can't be on the same side. And since it was unlikely that Trump or his IRS were going to argue otherwise, unlikely that they would be adversarial, she appointed what's called an amicus curi, a friend of the court, to weigh in, or in this case, a Miki Curi, friends of the court. And here's that order from April 29, okay? It says, quote, the court has concerns about whether it has subject matter jurisdiction in this case. Accordingly, the court appoints attorneys from the following law firms as amici curi to. To assist the court in identifying applicable law governing an analysis of this issue, John Gleason and David o', Neill, there's Donald B. Virili, and there's also Faith E. Gay, and those are the law firms that they're associated with there. Now, Interestingly, back in 20, 20, six years ago, when Trump and the Department of Justice were trying to dismiss the case against his good friend Mike Flynn, who, you know, was pled guilty twice to lying, the court appointed outside counsel to weigh in because Trump and Flynn and the Department of Justice were all on the same side. They all wanted the case dismissed. And two of those lawyers that wrote that brief back for the Mike Flynn case, recommending that Flynn's charges not be dropped, are two of the same lawyers appointed here, John Gleason and David o'. Neill. And, and just a couple of days ago, I think on May 14, they submitted their amicus brief and recommended some fact finding about the relationship between Trump and the irs. Are they colluding? Are they at arm's length? And they also brought up several other factors that could potentially tank this attempted theft of taxpayer money from the Treasury. Now, it's patently absurd that Trump should be able to negotiate with himself to steal $1.7 billion of our money to give to his friends and his business. And that amicus brief, perhaps the only thing right now that stands between our money and his tiny little criminal hands is what I'm going to go over with you today on the Breakdown. Hey, everybody, welcome to the Breakdown. I'm Alison Gill, host of the Daily Beans podcast, which is daily news without Scott Jennings. Yay. Thanks also to Midas Touch for hosting this. I cover a lot of news. I've covered tons of news in the last decade. I've written and recorded over 2,500 shows. I have a pretty good grasp of the importance of certain stories. I've covered tens of thousands of headlines in that time. And I can tell you this story is one of the biggest Trump corruption stories of the past decade. One of the biggest, and I never say major breaking, but I do in this particular case. That's something I reserve for very specific stories. And this one gets that has that honor of being major breaking news. And after Trump sued his own IRS for $10 billion, which was bad enough, we learned this week he's in negotiations to settle that lawsuit with the IRS, with himself, basically to create a $1.7 billion slush fund for his friends. I can't see that as anything else besides out and out theft. He's looting the Treasury. That's our money. Three days ago, ABC News reported this. President Donald Trump is expecting to drop his $10 billion lawsuit against the Internal Revenue Service in exchange for the creation of a $1.7 billion fund to compensate allies who claim they were wrongfully targeted by the Biden administration. According to sources familiar the omission, or excuse me, the commission overseeing the compensation fund would have the total authority to hand out approximately $1.7 billion in taxpayer funds to settle claims brought by anyone who alleges they were harmed by the Biden administration's weaponization of the legal system, including the nearly 1,600 individuals charged in connection with the January 6 Capitol attack, as well as potentially, entities associated with President Trump himself. Now, yesterday, we learned from Katherine F. Why he chose $1.7 billion. We were like, all right, so $10 billion lawsuit. Why did he pick $1.7 billion? Quote, I'm told the potential commission tasked with approving payouts to Trump allies will likely be called the President Donald J. Trump Truth and Justice Commission. And the total amount available in the fund will be $1.776 billion. 1776. Now, for rounding purposes, and because I refuse to go along with his stop the steal coup number, I'm going to call it $1.8 billion. And as I said in the introduction, the Obama appointee, Judge Williams in this case asked some lawyers to file a brief about whether the court even has subject matter jurisdict this bogus lawsuit in the first place because he's suing himself. And just this past Thursday night, the good guys shared their thoughts with the court. So let's go over it now. You're going to hear me refer to the good guys, the outside lawyers who wrote this brief as the amici. And they open with this. The framers vested the judicial power of the United States in the federal courts, but they limited those courts jurisdiction. That's U.S. constitution Article 3, Section 1. Article 3 of the United States Constitution constrains the circumstances in which the federal courts may act and the types of matters they may consider. This case implicates the boundaries of this court's Article 3 jurisdiction and in particular, the constitutional requirement that a federal court may decide only actual cases or controversies. So what the amici are saying here is that courts don't have jurisdiction if the parties aren't adversaries. And there's tons of case law about this. And amici cite three here, smartly quoting Gorsuch on the matter, quote, historically, courts have understood the judicial power to extend to only the right to determine actual controversies arising between adverse litigants. That's Muskrat 1911. See TransUnion also, and the quote there, courts are limited to deciding a real controversy with real impact on real persons and cannot adjudicate hypothetical or abstract disputes. And then quoting American Legion from 2019, Gorsuch, so smartly quoting Gorsuch there, Then the amici question whether there's a genuine dispute here, a necessity for subject matter jurisdiction under Article 3 of the Constitution. They write this quote, the case is unprepared. This case is unprecedented. A sitting president seeks monetary damages for alleged harm to his personal interests from an executive agency that he controls that presents significant Article 3 subject matter jurisdiction concerns. While this scenario is novel, the governing legal principles are not. The question at hand is whether the circumstances of this litigation present the kind of real and genuine dispute that is suitable for judicial resolution in an Article 3 court and the Constitution and the applicable case law, and indicate that the court should answer that question by conducting a fact specific inquiry focused on, one, the relationship between the parties and in particular, whether they're sufficiently independent of one another, and two, whether the court could enter a judgment in this case that would have any concrete effect. Now, he goes on to say, quote, adversity is obviously absent where one party is in fact on both sides of the suit. Indeed, it is well established that the courts do not engage and in the academic pastime of rendering judgments in favor of persons against themselves. And that proposition holds even when, quote, the same person sues and defendants in sues and defendants in different capacities. So different capacities is important there because Trump and his adult children are suing in their personal capacities. Trump is not suing in his capacity as president. And the amici are citing case law showing that it doesn't matter whether Trump is suing him as himself or as the president, you still can't be on both sides of a lawsuit. That's what happened in the Michael Flynn case. Flynn and Trump and his DOJ were all on the same side. And back then, like I said, John Gleason wrote a brief advising the court not to dismiss Flynn's case, and that forced Trump to pardon Flynn to actually get the charges dismissed. And we're now also seeing a similar case where Jeanine Pirro has filed a motion to dismiss the charges against the Oath Keepers and the Proud Boys for their role in the attack on the Capitol on January 6th. I'm hoping the judge in that case also asks for an outside lawyer to weigh in, since everyone's on the same side. There too. But at least in the Flynn case, Trump's Department of Justice pretended to have a reason to dismiss the case. They said that Flynn's lies weren't material. Now, in the Oath Keeper's case, Judge Jeanine Box of Wine simply says it's in the interest of justice. Anyway, I digress. Back to the Trump IRS settlement, quote. Similarly, adversity is also absent when one party is the Dominus lytus, or the master of the suit, and controls the conduct of the litigation on both sides. Most often that principle applies following a change in control, either control of one of the parties or over the rest of the claim after the suit is filed, at which point courts have found it necessary to dismiss the suit. That raises the question of whether Trump controls the irs. If he does, similar cases have been dismissed in the past and the amici have some evidence that he controls the irs. Check this out. Quote. With respect to these defendants, specifically, the President's capacity for control is extraordinary. As a member of the President's Cabinet, the Secretary of the treasury is and must be the President's alter ego in the matters of the department where the President is required by law to exercise authority. That's Myers v. US Recognizing that Cabinet officials may be removed at the will of the President. Likewise, the IRS Commissioner is appointed by the President to a five year term and the Commissioner may be removed at the will of the President. And President Trump has shown he's willing to exercise that authority. In August 2025, two months after the IRS Commissioner Billy Long's confirmation, President Trump removed him without providing a reason. And you got to wonder why Trump is on his sixth IRS commissioner. Has he proposed this idea to the others and they said, no way am I breaking the law. You might have immunity, but I don't. But in this case, the fact that Trump is trying to sue himself and potentially colluding with the IRS commissioner and the fact that he's fired at least one of them without cause is actually evidence that he controls the IRS and the IRS side of this lawsuit. But that's not all. Trump has said with his mouth that he controls both sides, quote. There is also reason to believe that the President is in fact exercising his control over the defendants in this case. President Trump's own statements suggest that he believes he has control over the defendants and the Department of Justice lawyers charged with defending the case. On January 31, 2026, two days after Trump filed the complaint, a reporter asked him what it's like to be on both sides of a lawsuit. He responded, it's very interesting. I have another one where, you know, I virtually won the Mar a Lago break in suit and, you know, I have to work out some kind of settlement. I'm supposed to work out a settlement with myself. When asked on February 4, 2026, whether he could direct the attorney General and the Treasury Secretary to pay him, Trump responded, what I would do, Tell him to pay me, but I'll give 100% of the money to charity. I don't want any of that money. I'm supposed to work out a settlement with myself. I would tell them to pay me. Pretty strong evidence he controls both sides here, or at least is attempting to. And as we've said, if he controls both sides, there's no jurisdiction and the case could be dismissed on that basis. Meaning Judge Williams would dismiss Trump's lawsuit against the irs, maybe leaving him no vehicle to settle to create that stupid weaponization slush fund for $1.8 billion. And then the amici clarify. They aren't advising on the merits here, just on jurisdiction. The reason being is that Trump's IRS hasn't even answered Trump's claims. So Trump filed a lawsuit and the IRS hasn't filed an answer like, we won't pay or sure, we'll pay, or we want to consider these things. They haven't answered. If the IRS comes back and says, we're not going to pay this, or if Judge William finds, Judge Williams finds that because Eric and Don are part of the lawsuit, that there's sufficient adversity, that there, you know, there are people arguing here, then the court could ask the amici for arguments on the merits. And here's what they say about that. Quote. If the court allows this case to proceed, meaning if it makes it past the jurisdiction argument, it may choose to seek the input of an amicus on the merits, as discussed above. So long as the dispute remains adverse in an Article 3 sense, the court is well within its power to appoint an amicus to argue points the parties do not dispute. Notably, however, the court concludes if the court concludes that adversity is lacking either at the outset or later on in the case based on the party's future litigation conduct, appointment of an amicus would not cure that deficiency. In other words, Judge, if you decide there's no real adversity here, if you conclude that Trump controls both sides of this lawsuit, then this thing is over. You can't get past jurisdiction. So there's an order of operations here. You have to decide jurisdiction before you get into the merits. And then if you say there is, then you can appoint us to weigh in on the merits. But if you say there isn't jurisdiction, you kind of have to dismiss the case because appointing an amicus can't cure the lack of jurisdiction, can't fix it. We would have nothing to say on the matter. But aside from all that, aside from Trump being in control of both sides of the lawsuit, thereby stripping the court or any court of jurisdiction, there are other problems with this lawsuit. Quote, DOJ has also successfully argued in a related case that the plaintiff's Privacy act claim fails because he didn't sufficiently plead damages traceable to any alleged violation of the Privacy Act. And that's from a case called Griffin. Similar defenses appear facially plausible here. The $10 billion in damages sought may not be recoverable under section 7431, even if the court were to find in plaintiff's favor. In addition to these potential defenses, other amici have noted that the claims here may be time barred under 26 US code section 7431D because they're based on conduct that occurred more than two years ago. These are what I call the even ifs of a case. And John Gleason is really good at the even ifs. So even if the judge finds Trump is not in control of both sides and you let this case go forward, Trump hasn't demonstrated he's entitled to damages traceable to any alleged violation of the Privacy Act. And even if you did find that he was entitled to damages under the Privacy act, the statute of limitations has expired. That's like four levels of no no adversary, no jurisdiction, no damages, no statute of limitations. The last part of this 24 page amicus brief are the recommendations that the amici make to Judge Williams. And I'm pretty sure that Williams will take the advice of the amici. We don't know yet, but that's all pretty solid stuff. Quote. Because the relationship between the parties is essential to the adversity inquiry, it could be useful for the court to obtain additional information about the degree to which defendants and their lawyers are insulated from the President. The court might request information from the parties about what measures, if any, they've taken to ensure that the defendants and the DOJ lawyers assigned to this case are free to exercise independent litigation judgment and act solely in the best interest of the defendants. The irs, it is particularly important to evaluate whether they have any protection if they take steps that could result in the defeat of the President's claims. Any such measures must be considered against the Backdrop of the President's public assertion of direct control over the government, defendants and their attorneys, as well as his previous public statements regarding his control over this particular matter. To first find out if Trump is colluding with the irs. Have they sent emails back and forth? Have they had phone calls? Have they had a meeting in the Oval Office where they talked about this, you know, being on this, all being on the same side? Or are they negotiating at arm's length? Have they taken steps to insulate the IRS from Donald Trump? Like, is there a memo out there from the administration promising that the IRS doesn't have to go along with Trump? You're free to make your own decision here, irs. You don't have to listen to me, and I can't punish you if you, if you don't. I can guarantee this has not happened, but it's important to get that on the record. But the amici says you could, you could do this. You could find out this information. You could bring people in under oath and, and ask them if they've colluded in this case, if they've been threatened with being fired like the previous five IRS commissioners for no reason. I bet it was this reason, but that's total speculation. Next quote, the court may also wish to inquire into the independence of, of the other plaintiffs, aside from the President, to the extent this court finds their participation relevant. It may wish to determine whether the President and his co plaintiffs, these are his two kids, have distinct interests in this litigation or whether the President is the real party in interest. The court might also seek information about whether the President retains any control over interest in the Trump Organization in case its presence in the suit poses the same or similar adversity problems as his own. In other words, find out why he put his kids on this lawsuit and whether he retains any control over his businesses. Or did you just include the kids to pretend you have no interest in this money? And are there documents showing that you colluded with your kids to put them on this lawsuit to try to show that there's interest beyond your own? I'm sure Trump will argue, I'm not going to get any of the money. I'm going to send it to Sidney Powell and the Oath Keepers. Doesn't matter. It doesn't matter when you're talking about subject matter jurisdiction. Now, finally, what's DOJ's role in this? We know about Trump and the IRS so far, but what about Trump's personal attorney, Todd Blanche, who's in charge of the Department of Justice here's? What they say. The court may consider further inquiring into the circumstances surrounding the defendant's litigation conduct to determine whether the atypical treatment of this case can be attributed to some factor other than the President's ability to control the defendants. The court might ask why the Department of Justice's approach to litigating this case appears to depart from its approach in similar cases, as well as what steps the defendants are taking to ensure that settlement discussions are conducted at arm's length and without risk of collusion. The court may also find it appropriate to inquire whether, if the parties settle this suit, whether the Department of Justice intends to comply with applicable regulatory requirements and to account for limitations on the relief available under the causes of action asserted. And there's a quote here from a case in any civil matter in which the Department is representing the interest of the United States or its agencies, it will not enter into final settlement agreements or consent decrees that are subject to confidentiality provisions, nor will it seek or concur in the ceiling of such documents, providing only for damages, costs and fees, providing for damages and limited forms of equitable relief, and making it unlawful for executive officials, quote, to request directly or indirectly, any officer or employee of the Internal Revenue Service to conduct or terminate an audit or other investigation of any particular taxpayer with respect to the tax liability of such taxpayer. In other words, what's the DOJ do? Are they going to follow the rules if a settlement is reached, meaning you can't file those conditions under seal, including conditions that might include dropping the audit against Trump's tax returns or initiating audits of your enemy's tax returns? That's important. And this is $1.7 billion slush fund. Is the settlement that they're discussing right now, per abc. Are they colluding or are they at arm's length? Is DOJ going to follow the rules? You got tax audit stuff in there. What are the conditions of the settlement? And do you plan on keeping him secret, which is against the rules? It's interesting. All really important questions. If I were a betting woman, I would bet that Judge Williams orders some kind of fact finding to determine what we kind of already know to be true, that Trump is suing himself when they're colluding and that the case should be dismissed, that there's no subject matter jurisdiction under Article 3. But as the amici point out, it can't really be determined at this early stage without some fact finding first. So maybe look for an order from Judge Williams to get more information on whether this is a legit case. Now she could just dismiss it on the grounds that Trump said himself he controls both sides of this case because she could say I don't have any jurisdiction here. You control both sides. You said so yourself. Dismissed. But without that extra fact finding stub, you leave open the possibility of an appeals court sending it back down to you saying you didn't do any fact finding, do some more fact finding, do some more further inquiry. Now, if the case is ultimately dismissed by this judge on jurisdiction grounds, that raises all kinds of questions about what happens next. Can Trump still settle a dismissed case? Will he ignore the court totally and just set up the slush fund anyhow? Will it get appealed to the very corrupt Supreme Court? I will follow it all and keep you posted. Thanks so much for watching and thanks to Midas for this platform. Thanks for trusting me to break down these filings into laypeople's terms, but you can keep up with all the news with appropriate profanity by listening to the Daily Beans podcast wherever you get them. And I will see you here at next week on the Breakdown.
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