The agreement was entered into after a federal court issued an order requesting that it be briefed on whether it had jurisdiction to hear the case. The court noted that Trump “is the sitting president and his named adversaries are entities whose decisions are subject to his direction,” so it was unclear whether the case could “satisfy Article III’s case or controversy requirement.” If a court found that there was no legitimate case or controversy, it could dismiss the lawsuit and Trump would not be able to settle the case. Indeed, the IRS under the Trump administration has defended—and sought dismissals of—similar suits brought by victims of the IRS leak that included Trump’s taxes.
In a move that evaded that outcome and any judicial review, Trump voluntarily dismissed the case with prejudice taking the matter out of the court’s hands before it could rule on the matter. In accepting the dismissal, the court noted that there was no settlement of record. However, that same day, Trump and DOJ entered into this so-called settlement. That settlement seeks to create “The Anti-Weaponization Fund,” constituting $1.776 billion to be drawn from the Treasury Department’s U.S. Federal Judgment Fund for the purpose of paying reparations to people who submit claims that the government was “weaponized” against them. The settlement fund is controlled by a committee of five people who are selected by the attorney general; can be fired by the president at will; face no public reporting requirements of their operations; and will be able to secretly distribute the funds to people making claims. Anyone who has been harmed by government “weaponization” can make claims to the committee, including the nearly 1,600 people Trump pardoned for their roles in the January 6 insurrection, during which police officers were attacked and the U.S. Capitol was breached.
However, none of this has yet gone into effect. First, a federal judge has temporarily enjoined the settlement fund pending a hearing on the matter in June 2026. Second, 35 former federal judges filed a motion before the judge handling the underlying lawsuit requesting use of the Federal Rules of Civil Procedure to reopen the case and void the dismissal. The motion alleged that the settlement was collusive in that the parties to the action were never truly adversarial and it constituted a fraud on the court.
The court responded to the grave allegations in the motion and issued an order requiring Trump to respond to: “(1) the charges of collusion and whether the Parties were truly adverse; (2) the assertion that the dismissal in this case was premised on deception by the Parties; and (3) the question of whether this case should be reopened because the Court was the ‘victim of fraud.’” In doing so, the court noted its awareness that the IRS reportedly issued a 25-page memorandum outlining how the agency could defend against Trump’s lawsuit.
As the court of jurisdiction may yet do, it is worth examining the extent to which this purported settlement agreement is an expansive—potentially extralegal—giveaway to Trump, his family, and his businesses that far exceeds the scope of typical government settlements. Usually, government settlement agreements incorporate only the issues and parties in the case at hand—in this case, the improper public release of Trump’s tax returns by an IRS contractor. That did not occur in this instance and may thus also conflict with internal DOJ policies providing that settlements are to be “specifically limited to the immediate subject matter of the claim.” *
In addition to the payola fund created by the settlement purportedly directly relating to the issues in Trump’s lawsuit, the one-page addendum appears to be so expansive as to effectively be a preemptive universal civil and potentially criminal pardon—something unprecedented in the American legal system—for any and all wrongdoing committed by the Trump family, the Trump Organization, and all related entities, whether known or unknown by the government, that occurred before May 19, 2026. The sweeping addendum was signed by Acting Attorney General Todd Blanche, who was Trump’s criminal defense attorney.
Paragraph (c)(1) of the addendum prohibits the IRS or DOJ from investigating or auditing tax improprieties. Part (c)(2) prohibits any investigations or prosecutions against the Trump family, Trump Organization, or its related entities attributable to “Lawfare and/or Weaponization,” which are described, but not defined, in broad and nebulous terms in the full settlement agreement.** Part (c)(3) appears to be a universal prohibition on investigation or prosecution—in that it applies not just to DOJ and the IRS—but also incorporates “other agencies or departments” of the federal government, seemingly without limitation. This could well include the Securities and Exchange Commission (SEC), DOJ, FBI, the Department of Labor, the Department of Homeland Security, the Federal Trade Commission, the Financial Crimes Enforcement Network (FinCEN), or any other federal agency. In short, this settlement seemingly is an attempt to put not just President Trump but also his entire family and business empire above the law for anything that occurred prior to May 19, 2026.
So, what does this mean if the court does not reopen the case and void the settlement agreement?
It means that ongoing IRS audits that could result in the Trump Organization paying a penalty of $100 million will simply vanish.
It means that the federal government may be forever barred from reviewing, investigating, conducting oversight, or seeking enforcement against the more than 500 Trump-related business entities for anything that occurred prior to May 19, 2026, whether there was an ongoing review or even if the improper actions that require investigation have not yet come to light.
It means that DOJ and the SEC could be forever barred from reviewing matters related to Trump’s crypto venture World Liberty Financial (WLF) that occurred prior to May 19, 2026. Allegations of fraud that are leveled against the company by investor Justin Sun*** may not be pursued. Any investigation related to reported sales of crypto tokens to organizations connected to “a notorious North Korean hacking organization, a sanctioned Russian ‘ruble-backed sanctions evasion tool,’ an Iranian crypto exchange and Tornado Cash, a known money-laundering platform” would likely be prohibited. Meanwhile, the Trump family has raked in over $2.6 billion in cash and gifts since the November 2024 election. A significant portion, “at least $1.2 billion,” of that total is from Trump’s primary crypto ventures. This includes investments in WLF by individual investors—both domestic and foreign—and other countries, made seemingly to curry favor with the president. Investors in Trump’s crypto ventures have since had investigations into their dealings dropped; received pardons; and benefited from favorable policies and regulatory rollbacks.
It means that any potential bribes paid to, favors done for, or pressure placed on foreign officials, if any, to expedite the construction of international Trump Organization projects would become difficult, if even possible, to pursue under the Foreign Corrupt Practices Act or other laws.
It means that federal agencies would have difficulty, if they are able to at all, reviewing the more than 3,500 stock trades conducted on behalf of President Trump in the first quarter of 2026. Several of his stock purchases occurred ahead of time or in parallel with touting—and even announcing major deals for—the companies in which he invested, such as Nvidia, Intel, Dell, and Boeing.
And all of this benefits the Trump family and its businesses on the backs of American taxpayers. It is a get-out-of-jail-free card and a weaponization of the government that are straight out of the authoritarian playbook.
This has been one of the most brazen examples of a conflict of interest committed by a public official in U.S. history—and never has a DOJ been so complicit in undermining the rule of law. It is heartening that the court is requiring Trump to respond to serious allegations of misconduct, but it should never have reached this point in the first place. It is paramount that the American people and Congress understand the gravity of these illicit actions and hold those responsible accountable. And, for Congress, this means affirmatively rejecting the slush fund while the court is deliberating and holding those attempting to engage in these conflicts of interest—especially those within DOJ—accountable.
*Author’s note: Paragraph C of the May 19, 2026, settlement addendum provides: “The United States RELEASES, WAIVES, ACQUITS, and FOREVER DISCHARGES each of the Plaintiffs from and is hereby FOREVER BARRED and PRECLUDED from prosecuting or pursuing any and all claims… whether presently known or unknown, that—as of the Effective Date of the Settlement agreement—have been or could have been asserted by Defendants against any of the Plaintiffs or related or affiliated individuals (including, without limitation, family or others filing jointly), or parties including trusts, parent, sister, or related companies, affiliates, and subsidiaries, by reasons of, with respect to, in connection with, or which arise out of (1) any matters that were raised or could have been raised in the Case or the Pending Agency Claims; (2) Lawfare and/or Weaponization; or (3) any matters currently pending or that could be pending (including tax returns filed before the Effective date) before Defendants or other agencies or departments.”
**Author’s note: The settlement agreement does not have a definitions section, but describes “Weaponization” and “Lawfare” in a one-sided manner, applying only to Democratic officials, as: “the sustained use of the levers of government power by Democrat elected officials, political and career federal employees, contractors, and agents in order to target individuals, groups, and entities for improper and unlawful political, personal, and/or ideological reasons….”
***Author’s note: Justin Sun invested more than $75 million in WLF and settled an SEC civil fraud investigation in which he was accused of fraudulently making $31 million in proceeds for just a $10 million penalty.