A group of retired federal judges on Wednesday started what may be the most significant threat so far to the Trump Administration’s plan to take $1.8 billion of U.S. Treasury funds and hand them out to President Trump’s political allies and followers – widely criticized as an illegal “slush fund.” The retired jurists’ maneuver may be even more important if Congress does not step in, on its own, to block that entire plan, as some lawmakers have discussed.
The 35 judges, who served on U.S. courts across the nation, told a current federal judge in Miami that Trump and Administration officials manipulated a lawsuit in her court in what amounted to “a fraud on the court.” The lawsuit, the motion argued, was never a genuine legal dispute but nonetheless was used to create a basis for high-level government officials to set up Trump’s huge payment plan, which would financially compensate Trump associates who supposedly had been victims of past government legal harassment and punishment.
It is not yet clear who might be eligible for payments, but it is expected that among those seeking access to the fund would be hundreds of individuals who were prosecuted (and many convicted) for their roles in the attack on the U.S. Capitol on January 6, 2021, an attempt to undo Donald Trump’s loss in the 2020 presidential election.
The next move in the deepening controversy may be up to U.S. District Judge Kathleen M. Williams of Miami. Earlier this month, she closed the case that Trump had filed in her court, after Trump’s legal team notified her that it had been settled out of court. However, the group of retired judges told her Wednesday that she has the power to reopen it – on her own or at the request of the retired judges – and to investigate the legality of the Trump team’s tactics.
The core of the retired judges’ challenge is that the Miami lawsuit (titled Trump v. Internal Revenue Service) was not a genuine legal dispute, because Trump had filed the lawsuit while he was President and the lawsuit was against a government agency under his control, so there was no jurisdiction for Judge Williams to rule on it. (The U.S. Constitution specifies that federal courts can only decide a real “case or controversy,” and that has always been understood to mean that there must be two sides in any lawsuit, actively engaged in a dispute as adversaries.)
If the judge were now to reopen the lawsuit, and conduct an investigation of whether the lawsuit should never have been filed, that potentially could mean that there was nothing to settle and thus the Trump Administration would have no legal basis for setting up what is being called the “Anti-Weaponization Fund.” (The government money to be put into that Fund can be used legally within the government only to pay what the government owes to someone who has been harmed by official wrongdoing, including what the government agrees to pay in settling a lawsuit against it.)
At this point, though, the retired judges argued that Judge Williams only needs to reopen the case and investigate what has happened. If she were ultimately to rule that the Trump team had engaged in a “fraud on the court,” she could then face the legal consequences of that for the Trump plan.
The maneuver by the judges is based upon provisions in the rules that govern the operation of federal courts in processing civil lawsuits. Various provisions of “Rule 60” allow the reopening of a closed case to correct an “extraordinary circumstance” that comes to light later. Trump filed a civil lawsuit against the IRS, contending that he was wronged when a contractor who worked for the IRS illegally stole tax records of Trump and his family and the Trump Organization business, and disclosed them to news organizations, which then published them. The lawsuit sought money damages of $10 billion.
Trump v. IRS was filed in late January and, before the IRS was to file a formal response to it, the Trump team opted to settle it, earlier this month. They did not share with the judge the plan to get access to Treasury money. The judge, closing the case because she said a settlement ended it, did note that she had questions whether the lawsuit had ever been a genuine “case or controversy.” The Trump Administration disclosed the details of the payoff fund after the judge had closed the case.
The retired judges had not had any role in the case up to Wednesday, but their motion argued that the federal court rules that govern when a closed case can be reopened for “extraordinary” reasons allows a new look requested by non-parties but also can be done by a judge using the fundamental power to guard the regularity and integrity of the judicial process. If Judge Williams chooses not to allow the retired judges to pursue their formal plea against the lawsuit, they urged her to take it on herself and allow them to take part in the role of “friends of the court” – that is, as outsiders to the case but with an interest in it and the capacity to aid the court.
This case, the retired judges contended, qualifies as an “extraordinary circumstance” that justified reopening it. Their motion said: “The parties [the Trumps, their business and the IRS] dismissed the case before the court could complete its inquiry into whether there was an actual case or controversy, and then cited their ‘settlement’ of this case as the legal justification for looting the federal treasury of $1.776 billion dollars and purporting to release all possible federal claims against President Trump, his family and his businesses.”
The Trumps and IRS, the filing added, “used the proceedings before this court as a legal pretext while trying to deprive this court of the opportunity to determine whether there was a real case or controversy in the first place.”
There is no timetable for Judge Williams to respond to the retired judges’ new filing. She may call for new legal arguments to help her decide whether to reopen and, if so, what to do with the case.
