'A $1,700,000,000 Fraud on the American Taxpayer': Trump to Drop IRS Suit in Exchange for MAGA Slush Fund

The top Democrat on the House Judiciary Committee on Thursday accused US President Donald Trump of "orchestrating a $1,700,000,000 fraud on the American taxpayer to line the pockets of his MAGA political allies" amid new reporting on the terms Trump is seeking in talks to settle his $10 billion lawsuit against the Internal Revenue Service.

ABC News reported late Thursday that Trump is expected to drop his lawsuit in the coming days "in exchange for the creation of a $1.7 billion fund to compensate allies who claim they were wrongfully targeted by the Biden administration." The money would come from the Treasury Department's Judgment Fund, which pays out court judgments and settlements against the federal government.

The president is also expected to receive a public apology from the IRS for the leak of his tax returns during his first White House term.

Rep. Jamie Raskin (D-Md.) said in a statement that the reported settlement terms represent "another installment" in Trump's "ongoing effort to turn the federal government into a personal cash machine for his unpopular extremist movement."

"This is a massive and unprecedented presidential plunder of the American people," said Raskin. "Worse still, this is only the beginning—a declaration that the prior payouts were just a down payment, and that he now intends to earmark billions more in taxpayer dollars for his political allies, sycophants, and private militia of unemployed insurrectionists."

“The president has no authority to conjure up billion-dollar compensation schemes or raid the Judgment Fund, which exists to settle valid lawsuits. Trump is systematically converting neutral government mechanisms into a presidential slush fund to build his army of political dependents," Raskin continued. "Congress must act immediately to reassert the power of the purse and stop this brazen looting of taxpayer funds before this ‘pilot program’ for corruption becomes the permanent operating system of our government."

According to ABC, which cited unnamed sources who emphasized that the settlement's terms should not be considered final until officially announced, the deal is "expected to prohibit Trump from directly receiving payments related to those three legal claims; however, entities associated with Trump are not explicitly barred from filing additional claims."

"The arrangement would be an unprecedented use of taxpayer dollars with little oversight," ABC noted. "Under the terms of the potential settlement agreement, President Trump would have the authority to remove members of the commission running the fund without cause, and the commission would be under no obligation to disclose its procedures or decision-making process for awarding more than a billion dollars."

ABC's story came on the heels of reports earlier this week revealing internal Justice Department discussions on settling Trump's lawsuit, which he filed in late January. Last month, a federal judge questioned the constitutionality of Trump's suit, noting that "he is the sitting president and his named adversaries are entities whose decisions are subject to his direction."

"Real story: Judge was about to throw out the case because Trump controls both parties," Rep. Dan Goldman (D-NY) wrote late Thursday. "Before it’s dismissed, Trump tells both parties to reach a 'settlement.' Settlement shields Trump from any future audit and creates a secret slush fund that can dole out money to anyone with no transparency."

"Mind-boggling corruption," Goldman added.