Editor’s Note: This is the second part of a two-part essay on the Trump administration’s $1.776 billion “Anti-Weaponization Fund”—the administration’s most grave dereliction of duty since the January 6th pardons themselves. Part One catalogued the multiple layers of legal violation: the collusive non-lawsuit, Judge Williams’s declaration that no settlement exists, the Judgment Fund statutes and DOJ regulations trampled, and the administration’s cynical bet that the corrupt architecture is legally unreachable. This part details the most recent developments in what has now become a full-blown scandal, analyzes the gravest injury of all—the one done directly to the American people—and ends by discussing possible lines of resistance to the whole racket.

Trump and Blanche are betting they can get away with the IRS settlement and its $1.8 billion fund, but they already are facing a rip current of resistance.

The bet is that the heist is politically outrageous but legally stitched up: file an unconstitutional lawsuit, then voluntarily withdraw it before the judge could rule; bury a billion-dollar fund in the fine print of a phony settlement; count on a compliant Republican majority to swallow the violations of congressional appropriations law without a word. One or two news cycles, then move on.

But it’s not working out that way so far.

The scandal is metastasizing.

The days since Acting Attorney General Todd Blanche announced and defended the agreement have been brutal—for Blanche in particular.

Trump has left Blanche to take the heat, claiming on Monday that he knows “very little about it” and “wasn’t involved in the creation of it.” This from the man who said he was “supposed to work out a settlement with myself” and instructed the Treasury Secretary to “tell ‘em to pay me.” The president who openly boasted about controlling both sides of his own lawsuit suddenly has no idea how the resulting $1.776 billion fund came to exist.

It falls to Blanche to defend this toxic waste dump, and he has jumped to the task with his characteristic eagerness to please the man who controls his future at DOJ. Blanche has repeatedly suggested that the arrangement is not unprecedented and that Trump “isn’t taking a dime.” Both arguments have been blown out of the water.

The New York Times reported Wednesday that career lawyers at the IRS last month prepared a 25-page memorandum laying out multiple defenses to Trump’s lawsuit and recommending the Justice Department move to dismiss it, as it had done in other similar cases. It identified two likely winning arguments, including one that DOJ successfully advanced in another case with the same facts.

That puts the lie directly to Blanche’s suggestion that the “settlement” here is basically business as usual—unless he means business as usual for Trump, who, of course, calls the shots. Instead of the vigorous defense the case demanded, DOJ rolled over in a lawsuit its own client agency had told it was meritless and should be dismissed.

The day after the settlement was announced, DOJ quietly expanded the agreement with a further sweetener: the IRS will forgo any audits of Trump, his family, and related entities. IRS procedures require an annual audit of the president’s tax returns. A 2020 New York Times investigation found that a loss in one pending audit could cost Trump more than $100 million. That $100 million is a personal benefit to Trump, funded directly by taxpayers, on top of the more than $20 each of the 84.2 million American families are already absorbing to pay for the $1.8 billion fund.

That makes Blanche’s assurance to the Senate that “President Trump isn’t taking a dime” comically misleading. Trump and his family have effectively been handed a blank check on tax evasion and tax fraud—written by all of us. Recall that when we finally got a glimpse of Trump’s taxes, they revealed a shocking pattern of dubious deductions and past losses. This add-on guarantees that scrutiny of exactly that kind of conduct is now permanently off the table.

As I wrote in Part One, this scandal has layers, and each one is more rotten than the one beneath. The multiple legal violations have been well-catalogued. The fundamental illegal core is that the purported settlement was of a collusive lawsuit that couldn’t be brought in federal courts and couldn’t lawfully be the basis of an expenditure from the congressional Judgment Fund. But cataloguing the legal violations risks becoming a fog that obscures something simpler and more fundamental.

Imagine Trump had brought, and voluntarily dismissed, the sham lawsuit, and rigged a bogus settlement for $5,000. It would have been obnoxious. It would have been legally defective in every way described in Part One. But it would not have been the most serious political scandal of Trump 2.0. The scale and the identity of the beneficiaries are what elevate it to one.

That is because the deepest offense here is not the legal violations—grave as they are—but the unconscionable affront to the American people. That affront operates on two distinct levels.

The first is financial. Trump “settled” a case worth nothing at all—a case the judge declared left no settlement of record, that could not be heard in the federal courts, and that his own agency’s lawyers said should be dismissed. Moreover, Trump’s underlying claims, even if they could be brought, were worth at most a few thousand dollars under the governing statute, which caps damages at $1,000 per unauthorized disclosure. In return, the public pays as much as $2 billion or more for the dismissal of a worthless lawsuit. That dwarfs the payouts in the Teapot Dome scandal—where, moreover, the government at least got some oil in return. The art of the deal, indeed.

The second offense is moral and civic. The American people are being compelled to fund—and by funding to implicitly endorse—a bounty for the people who stormed the Capitol, beat police officers, and tried to stop the peaceful transfer of power. All of us are, in effect, being conscripted into Trump’s campaign to rewrite the history of January 6th. The message the fund sends—that the rioters were victims, that their convictions were injustices, that the government owes them not accountability but a check—is sent in all of our names, with all of our money. We are being made, without our consent, co-signatories to the biggest lie of Trump’s presidency.

Outgoing Republican Sen. Thom Tillis put the case in exactly those terms: “I think it’s stupid on stilts,” Tillis said. “When you take money from me to give to a purpose that I vehemently disagree with, that’s tyranny.”

At the Senate hearing, Sen. Jeff Merkley (D-OR) asked Blanche directly: “Do you feel they should get compensation after being convicted of violent acts against police officers?” Blanche’s demurral—“My feelings don’t, don’t matter, Senator”—was as revealing as any direct admission.

The notorious offenders who will soon be lining up for their millions have confirmed the worst expectations about the fund’s intended uses. A lawyer representing January 6th defendants declared that “everybody’s very excited about it.” Tommy Tatum, charged with civil disorder for interfering with police, hailed the fund as historic: “This is the UNITED STATES DEPARTMENT OF JUSTICE acknowledging the possibility that Americans were targeted through political abuse of government power.” Pardoned rioters are already discussing how to spend their anticipated windfalls: new cars, new houses, money to scrub their names from Google. One pardoned rioter charged with child molestation allegedly promised to pay off his victim with the payout he was certain was coming.

Trump and Blanche are trying to divert focus from the prototypical beneficiaries by suggesting the fund is nonpartisan. At his Senate hearing, Blanche blithely asserted that the fund is for “anybody... It’s not limited to Republicans.” But a few surprising beneficiaries can’t alter the fundamental character of Trump’s largesse with the public’s money. And in any event, we won’t even know who gets the money. The identities of recipients and the amounts they receive are to remain confidential, known only to the attorney general. The claim of evenhandedness is unverifiable by design.

The beneficiaries will not consist solely of the 1,600 January 6th defendants. Many others who took up Trump’s corrupt fight will surely line up at the trough: the fake electors from seven states; Trump aides who paid legal fees responding to Jack Smith’s grand jury; Republican members of Congress whose phone records were seized; One America News, which settled defamation suits for promoting 2020 election lies and is “seriously considering” filing a claim; and MyPillow’s Mike Lindell, who claims $400 million in losses from “weaponization.”

How’s that for a parade of horribles? It’s like a remake of Night of the Living Dead.

Trump and Blanche designed this to be legally unreachable. Taxpayers generally cannot sue to contest specific government expenditures. Members of Congress face enormous standing hurdles. Judge Williams’s courthouse door is closed. Even if enough Republicans join Democrats for a counteracting law, Trump will veto it. The architecture is built to be beyond the reach of the law.

I will be writing more about these obstacles, and whether and how they might be overcome. The take-home point is that the pushback must be immediate, impassioned, and countrywide.

The scheme already has generated the biggest Republican pushback of Trump 2.0. Capitol Hill Democrats are up in arms, which Trump probably expected, but Republicans are adding their dissent to Tillis’s tart comment. Just yesterday, Republicans abandoned plans to take up an immigration bill out of reported deep concerns about the $1.8 billion fund, a development the New York Times called “stunning.”

More ominously for Trump, Senate Majority Leader Thune told reporters that “there are and will continue to be a lot of questions that the administration is going to have to answer.” Senator Mitch McConnell lamented, “So the nation’s top law enforcement official is asking for a slush fund to pay people who assault cops? Utterly stupid, morally wrong—take your pick.” Pennsylvania Congressman Brian Fitzpatrick went further, telling reporters he “100%” wants to prevent the fund. He has sent a letter to DOJ demanding answers and is already drafting legislative text to stop it. Look for him to have company in his party before too long.

The task now is to keep these fires burning. All of us need to keep the issue front and center through the midterms and beyond, when, if the Democrats take the House, it will be time to consider impeachment.

We have to make the case, in every forum, including the office and the kitchen table, that this grotesque scheme is a bridge too far. Every Blanche appearance should include a demand to make public the identities of the fund’s beneficiaries. Every Republican member of Congress should be asked at every town hall whether they support giving taxpayer dollars to the people who beat police officers on January 6th. The Democrats should bring up any procedural device to force Republicans to state their position about the fund on the record. And every Republican who voices support should be made to answer for it on the ballot in November 2026.

Trump’s presidencies have been defined by self-dealing, but never as raw and consummate as here—a barely disguised, immense enrichment of himself and his allies that would make Putin and Orbán proud. He has pushed democracy to the precipice.

Harry Litman is a former United States Attorney and the executive producer and host of the Talking Feds podcast. He has taught law at UCLA, Berkeley, and Georgetown and served as a deputy assistant attorney general in the Clinton Administration. Please consider subscribing to Talking Feds on Substack.

Reprinted with permission from Talking Feds.