Tracking corruption and abuse of power in the nation’s capital

Federal judge Kathleen M. Williams has reopened a $10 billion lawsuit brought by President Trump against IRS that Trump had dropped before the judge could issue a decision. Interim Attorney General Todd Blanche then proceeded to effect a “settlement” establishing a $1.8 billion taxpayer-supported fund to compensate Trump’s allies, including Jan6ers, who faced Justice Department investigations during the Biden administration. Judge Williams will now be looking to see if the Trump suit —in which Trump was effectively both the plaintiff and the defendant—was collusive and “premised on deception.” Meanwhile, another federal judge, Leonie Brinkema, has issued a temporary order blocking disbursement of funds under the Blanche deal and scheduled a hearing for June 12 in Alexandria, Virginia in a suit alleging that the fund violates the separation of powers, the First Amendment and the Equal Protection clause of the Constitution, as well as the Administrative Procedure Act. In an addendum to the Blanche deal, IRS wouldn’t ever be permitted to audit Trump or his family for anything, even though Trump currently faces a purported tax liability of $100 million for having claimed the same tax write-off twice.

SOURCES: The Hill | New York Times | Washington Post | ProPublica | Politico

Judge Williams reopend the Trump suit in response to a filing by 35 former federal judges who assert that the Blanche deal raised serious questions as to Trump’s “candor toward the court and the manipulation of the judicial system.” Critics and legal watchdogs had swiftly denounced the Blanche deal as a corrupt, taxpayer-funded "slush fund" designed to enrich Jan6ers, including Proud Boys and Oath Keepers, and cement their loyalty as Trump’s “private militia.” The deal was deemed the result of a highly conflicted, collusive “negotiation” in which Trump was negotiating with himself. Under the deal, Trump would have the authority to remove fund commissioners without cause. The deal would appear to violate the 14th Amendment to Constitution, which provides that “any debt or obligation incurred in aid of insurrection or rebellion against the United States… shall be held illegal and void.” It would also appear to violate 26 U.S.C. §7217, which prohibits a request by a president, directly or indirectly, to terminate an IRS audit and requires IRS officials who receive such a request to report them to the Treasury Inspector General for Tax Administration.

SOURCES: Talking Points Memo | MS NOW | Mother Jones | Mediaite | The Guardian | Public Citizen | Zeteo

Litigation:

• Support lawsuit filed by 2 police officers asserting that the fund will unlawfully finance rioters.

Federal action:

• Pass the No Taxpayer-Funded Settlement Slush Funds Act to block the slush fund since Congress did not authorize it.

• Pass the No Rewards for January 6 Rioters Act to bar federal settlement funds from being used to pay Jan. 6 rioters.

• Pass the Ban Presidential Plunder of Taxpayer Funds Act, which restricts sitting presidents and vice presidents from collecting financial damages or settlements from the US government.

• Conduct oversight hearings on the slush fund and the no-audit addendum.

• File complaint with inspector general to review the legality of the no-audit addendum.

Other action:

• Pursue disbarment action against Todd Blanche for engaging in unethical conduct as an attorney.

Legislation: S.4299 - Ban Presidential Plunder of Taxpayer Funds Act | S.3582 - No Rewards for January 6 Rioters Act

The Food and Drug Administration issued new guidance bypassing regular rule-making procedures enabling major tobacco companies to sell fruit-flavored vapes and secure a larger share of the $6 billion e-cigarette market. This policy pivot occurred less than a week after tobacco executives and lobbyists—major financial donors to President Trump's political groups and the White House ballroom—met with him at his Florida golf club to complain about industry regulations. Following the meeting, Trump criticized the regulations to Health Secretary Robert F. Kennedy Jr. and Centers for Medicare and Medicaid head Dr. Mehmet Oz. Consequently, FDA Commissioner Dr. Marty Makary resigned, stating he could not in good conscience lead an agency backing a policy that circumvents established scientific review processes meant to protect adolescents from nicotine addiction.

SOURCES: New York Times | Reuters | Fortune

The Trump administration's guidance expands access to flavored e-cigarettes. The guidance ignited a sharp internal backlash among federal health officials and prominent "Make America Healthy Again" (MAHA) influencers, following reports that Trump personally pressured health officials to loosen the standards after meeting with tobacco lobbyists. The regulatory changes led to the resignation of Richard Danker, a senior spokesperson for Kennedy, and contributed to the ousting of FDA Commissioner Marty Makary, both of whom opposed the relaxed guidance due to concerns about youth addiction. MAHA movement figures and public health experts expressed profound frustration, citing concerns over the tobacco industry's corporate influence over the decision and the long-term health dangers flavored vapes pose to children.

SOURCES: NBC News | Politico

Federal action: Conduct congressional hearings on the failure of the administration to comply with rule-making procedures.

State action: Pass laws, like in California, Massachusetts and New York that ban vape sales or at least the sale of flavored vapes.

Litigation: Sue to enjoin the administration’s circumvention of rule-making procedures by suing under the Administrative Procedures Act, 5 U.S.C. §§ 551–559.