House Democrats move to block Trump's alleged $1.7 billion IRS settlement deal

House Democrats, led by Rep. Jamie Raskin (D-MD) and Rep Joe Neguse (D-CO), are looking to block President Donald Trump's attempt to settle his lawsuit against the Internal Revenue Service (IRS) in exchange for what they have labelled a $1.7 billion "slush fund" meant to compensate his allies, including 1,600 people involved in the Capitol attack on January 6, 2021, with an amicus brief.

The filing argues that the lawsuit is "unconstitutionally collusive" and not a "real case or controversy," given that President Trump is on both sides of the case. They called for Judge Kathleen Williams, who is presiding over the case, to dismiss the lawsuit for "lack of jurisdiction."

"This is pure fraud and highway robbery. This case is nothing but a racket designed to take $1.7 billion of taxpayer dollars out of the Treasury and pour it into a huge slush fund for Trump at the DOJ to hand out to his private militia of insurrectionists, rioters, and white supremacists, and sycophant accomplices," Raskin said in a statement.

As many as 93 House Democrats signed on to the amicus brief, with the House Democrats' Litigation Task Force spearheading the motion. Task Force Co-Chairs Jamie Raskin and Joe Neguse, both members of the House Judiciary Committee, with Raskin the ranking Democrat, Richard Neal (D-MA), a member of the Ways and Means Committee, and House Minority Leader Hakeem Jeffries (D-NY), were at the forefront of this effort.

Trump has reportedly already dropped the lawsuit, suggesting the motion may not be successful in its intended aim. The withdrawal also does not suggest that Trump has dropped the idea of a settlement. Democrats are likely to push this aggressively, highlighting how critical the issue is as they look to cement a narrative of Trump's excesses ahead of the pivotal November midterms.

Contents of the amicus brief

Democrats, in their argument, suggest that the lawsuit raises the "specter of corruption unparalleled in American history," terming it an effort to "undermine the Constitution." The House Democrats argue that the lawsuit should be immediately dismissed for lack of subject matter jurisdiction because it is an unconstitutionally "collusive" suit. They first contended that the court lacks subject matter jurisdiction because the suit is collusive. 

They asserted that the limited case does not carry "adverseness" as Trump exercises "maximalist" supervision and control over agencies he is suing, foreclosing any doubt that they are acting independently.

The brief cites Trump's own public statements, including an admission on Air Force One where he stated, "I'm supposed to work out a settlement with myself," and another instance where he explicitly stated he would tell his Treasury Secretary and Attorney General to "pay me."

Another argument in the filing refers to the Justice Department's "failure" to raise "winning arguments" to dismiss the case. They also refer to past instances where the DOJ successfully deployed such arguments in near-identical cases.

In the concluding argument, they write that "filing a collusive lawsuit only to immediately dismiss it to produce a collusive settlement that is illegal multiple times over would not only be legally barred; it would also raise serious questions about whether the parties have manipulated the court system to achieve illicit ends." They urged the court to exercise its "sua sponte authority" to examine any voluntary dismissal entered to advance such a scheme.