President Trump, his two eldest sons and the Trump Organization moved Monday to dismiss their $10 billion lawsuit against the Internal Revenue Service over the leak of his tax returns, ending a case filed last year in Miami federal court days after reports that the administration is preparing a $1.7 billion fund to compensate the president's allies.
The voluntary dismissal short-circuits a constitutional question the trial judge was about to take up and shifts the fight from a courtroom Trump effectively controls to Congress, where Democrats are already moving to brand the parallel compensation fund a political payout funded by taxpayers.
What was filed
The notice filed in U.S. District Court in Florida dismisses the suit "with prejudice," meaning the plaintiffs cannot refile the same claims, CNBC reported. The dismissal came two days before a deadline U.S. District Judge Kathleen Williams had set for the Justice Department and Trump's attorneys to explain whether a "case and controversy" existed given that the president is suing federal agencies whose decisions are subject to his direction.
Trump filed the suit in January, alleging the leak of his and the Trump Organization's confidential tax records by former IRS contractor Charles Littlejohn in 2019 and 2020 caused "reputational and financial harm." Donald Trump Jr. and Eric Trump are also named plaintiffs.
The parallel fund
ABC News reported last week that Trump was prepared to drop the suit as part of a deal that would create a more than $1.7 billion fund to pay settlements to allies of the president who say they were wrongly investigated or prosecuted by the Biden administration. The court filing did not mention any terms of a deal, and CBS News reported that a Justice Department spokesperson and Trump's legal team did not respond to requests for comment on the settlement.
In a statement to CBS News after the ABC report, a Trump legal spokesperson said the "IRS wrongly allowed a rogue, politically-motivated employee to leak private and confidential information about President Trump, his family, and the Trump Organization to the New York Times, ProPublica and other left-wing news outlets."
The counterpoint
Rep. Jamie Raskin of Maryland, the top Democrat on the House Judiciary Committee, called the proposed fund "unconstitutional" in an interview Sunday on ABC's "This Week."
"This, of course, is a political grievance fund that Donald Trump can use to pay off his friends," Raskin said. "If these people have a valid cause of action, they should bring it to the court like every other American does, and use the system of due process, and proving things by clear and convincing evidence, or a preponderance of evidence, go and prove it. But the idea that Donald Trump can just pass it out like a pardon is absurd."
Other Democratic members of Congress described the proposed pool as a "slush fund," CNBC reported. The IRS did not immediately respond to a request for comment, and the White House had not publicly defended the proposed fund's structure by press time.
The administration has not disclosed which Trump allies would be eligible to draw from the $1.7 billion pool or on what terms, leaving the next test to a Congress that controls the appropriations the fund would require.