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She wrote that the deal had “no viable basis in law or fact.”
US District Judge Kathleen Williams threw out a settlement between President Donald Trump and the IRS on Monday, according to CBS News, CNN and Associated Press.
The deal would have ended a massive lawsuit over leaked tax records. Instead, the judge called it a sham.
Williams wrote that the lawsuit was filed for an “improper purpose.” In her scathing 56-page opinion, she added that the deal had “no viable basis in law or fact.”
The judge also concluded that the plaintiffs “acted in bad faith.”
The IRS lawsuit and $1.8B fund
The case was announced in January, when Donald Trump sued the IRS and the Treasury Department for $10 billion over a leak of his tax returns.
The case was later dropped when the Trump administration and the IRS reached a settlement. Then the Justice Department announced the creation of a nearly $1.8 billion “anti-weaponization fund,” which was to be used to compensate Trump’s allies.
In effect, it would give the administration the ability to pay his supporters using taxpayer money.
But Judge Williams made it very clear in her opinion what she thought of the settlement and the fund:
“The nature of the suit itself and the conduct of the Parties and counsel from its filing make plain that this was an attempt to use the Court to provide some legitimacy to an agreement to confer immunity to people and entities affiliated with the President and to earmark billions of dollars from American taxpayers to redress grievances not defined in the law,” the judge wrote.
No real conflict
Because the president technically oversees the agencies he was suing, the court found no real conflict. The administration was essentially suing itself.
Unsurprisingly, Williams noted that there was never any real question about who would prevail.
The judge quickly penalized Trump’s lawyers. Daniel Epstein is now barred from practicing in this local district for a year. Meanwhile, his colleague Alejandro Brito has been referred to the state bar for potential disciplinary action.
Under the microscope
The fallout also reached the Justice Department. Williams sent her order to the state bars of New York and Washington, D.C. This will aid ongoing ethics complaints against Acting Attorney General Todd Blanche and Associate Attorney General Stanley Woodward. Both officials signed the controversial deal.
Initially, the deal featured the massive $1.776 billion fund meant to pay Trump’s political allies. Amid intense public anger, the government backed away from that plan
But another key clause remained. It shielded the Trump family from future audits into his past tax filings.
The timing is terrible for the administration. On Wednesday, Blanche faces a Senate confirmation hearing to officially lead the Justice Department. This scathing court decision is sure to spark tough questions from lawmakers.
A spokesperson for Trump’s legal team blasted the decision, according to CNN. Defending the original lawsuit, they argued that the IRS allowed a “rogue, politically motivated employee” to leak private records. They added that the president will continue holding people accountable.
