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Judge: Trump IRS Lawsuit 'Improper' 07/14 06:13
WASHINGTON (AP) -- President Donald Trump's lawsuit against the Internal
Revenue Service over his leaked tax returns was filed for an "improper
purpose," a judge said Monday as she referred one of his lawyers for potential
disciplinary action and characterized the $10 billion complaint as an exercise
in self-dealing.
U.S. District Judge Kathleen Williams accused Trump and his lawyers in a
scathing ruling of having manipulated the court system when he sued a federal
agency under his control, bypassing a requirement that parties in a lawsuit
must have adverse interests. The lawsuit ended in a settlement that granted the
president immunity from tax audits and established a $1.776 billion fund to
compensate Trump allies who believe they have been unjustly persecuted.
The judge stopped short of explicitly voiding the deal shielding Trump from
tax scrutiny but said the government cannot claim in official proceedings that
the agreement was the result of a legitimate legal process.
"Whether Executive Branch actors can privately agree to give themselves and
their former clients blanket immunities and billions of dollars in tax monies
for legally undefined grievances was never an issue advanced to this Court,"
said Williams, an appointee of President Barack Obama. "The question is whether
the Parties could do so by claiming to be adverse and engaging the legitimacy
of a court proceeding. The answer is a resounding 'no.'"
The ruling comes just ahead of a key confirmation hearing
Though the practical impacts of the ruling may be limited since the lawsuit
was voluntarily dismissed months ago and the administration has already
abandoned the $1.776 billion "Anti-Weaponization Fund" that came out of it, the
order nonetheless amounts to a scathing rebuke and tees up a politically
uncomfortable line of questioning for Acting Attorney General Todd Blanche as
he faces the Senate Judiciary Committee for his confirmation hearing on
Wednesday.
"The nature of the suit itself and the conduct of the Parties and counsel
from its filing make plain that this was an attempt to use the Court to provide
some legitimacy to an agreement to confer immunity to people and entities
affiliated with the President and to earmark billions of dollars from American
taxpayers to redress grievances not defined in the law," Williams wrote in her
ruling.
She added: "Ensuring that our courts are used only for the express purpose
created by the Constitution is the obligation of every judge and an obligation
that this Court must discharge in light of the matter before it."
The $10 billion suit against the IRS and Treasury Department in January
accused the agencies of a failure to prevent a leak of the president's tax
information to news outlets between 2018 and 2020.
In May, however, the administration announced that it was settling the case
and creating a fund to compensate people who believe they've been mistreated by
the criminal justice system. The fund was quickly shelved amid bipartisan
backlash, though the Trump administration has said it intends to proceed with a
separate element of the deal affording Trump and family members protection from
tax audits.
From the start, the judge had appeared skeptical of the complaint and
assigned a group of attorneys to determine whether there was a conflict in the
case since, as sitting president, Trump was suing "entities whose decisions are
subject to his direction."
Even after the settlement was revealed, she directed Trump attorneys to lay
out their positions on whether the parties in the case were truly adverse to
each other, whether the dismissal of the lawsuit was premised on deception and
whether the case should be reopened.
She made clear in her ruling that she was not satisfied by the lawyers'
answers.
"After a review of the record, and the Parties' statements, the Court
declines to adopt or accept the credulous exercise of divorcing President
Trump's current job title from an understanding of what happened here," she
wrote.
The ruling also raises the possibility of disciplinary actions
The judge referred Trump attorney Alejandro Brito, who filed the case, for
possible disciplinary action before the state bar in Florida and said another
lawyer, Daniel Epstein, will not be granted permission to file within the
Southern District of Florida for up to a year.
A spokesman for the Trump legal team responded to a request seeking comment
from Brito with a statement that blamed the IRS for allowing the president's
tax returns to be leaked.
The judge also ordered that her ruling be sent to the state bars in New York
and the District of Columbia, where ethics complaints have been filed against
Blanche and Associate Attorney General Stanley Woodward.
Williams pointed to Blanche's congressional testimony in early June in which
he revealed that the fund was no longer moving forward. Though nothing had been
filed in court, Blanche appeared confident in his testimony that he "could
speak for, and bind, both sides of this matter," Williams said.
"Acting Attorney General Blanche's apparent capacity to speak for both
Plaintiffs and Defendants, sign a 'settlement' document on behalf of all
Parties to this action, and then repudiate part of that agreement, demonstrates
that there was only one party whose interests were being represented throughout
this case," the judge wrote.
The judge also raised ethical concerns about Blanche and Woodward's
involvement in the settlement given Blanche's past representation of Trump as
well as Woodward's previous defense of Jan. 6 defendants and a co-defendant in
Trump's classified documents case.
"Instead of either recusing because of their previous representations or
vigorously defending this lawsuit as required to do so by DOJ policies and
procedures, these lawyers agreed to a 'settlement' involving a staggering
amount of money potentially benefitting former clients," she said.
Blanche denied in a CNN interview last spring that he had developed the
settlement terms, saying, "The president has outside counsel, and their
counsel, the Department of Justice, not me."
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