President Donald Trump's decision to abandon his $1.8 billion IRS settlement didn't defuse the legal crisis surrounding it — it just shifted the target, according to a federal trial attorney who has been tracking the case.
Sabrina Haake, a 25-year federal litigator and political analyst who writes the Substack newsletter The Haake Take, argues that Trump dropped the so-called anti-weaponization fund not because of political pressure ahead of the midterms, but to avoid forcing the appointment of a third attorney general. The real threat, she writes, came from an extraordinary intervention by 35 retired federal judges.
On May 27, those judges — spanning both parties — filed a motion to reopen Trump's IRS case on suspicion of fraud against the court. Their motion accused the Department of Justice of deceiving U.S. District Judge Kathleen Williams by announcing a settlement publicly without notifying the court, then using that settlement as legal justification for transferring $1.776 billion in taxpayer money to Trump, his family, and his businesses while purporting to release all federal claims against them.
The judges called it "most egregious conduct involving a corruption of the judicial process itself," writing that the parties "used the proceedings before this Court as a legal pretext" while working to prevent the court from determining whether a legitimate case even existed. If Trump controlled both sides of the same case and personally profited from the outcome, the judges reasoned, there was no legal controversy — only theft.
At the center of it all is Attorney General Todd Blanche. Haake notes that Blanche moved to dismiss the case two days before a brief outlining the court's jurisdiction was due, and that he failed to assert basic defenses the DOJ was legally obligated to raise — defenses the department had previously asserted in a nearly identical prior case involving the same IRS contractor. His failure to mount any defense at all, the judges wrote, "only emphasizes the fraudulent nature of the settlement reached here" and "strengthens the conclusion that the litigation was collusive from the start."
Judge Williams ordered the DOJ to respond to the fraud accusations by June 14. Blanche will be editing that brief knowing that in New York, where he is licensed to practice law, committing a fraud upon the court is considered grounds for immediate suspension or permanent disbarment, according to Haake.
Stripping the larceny from the equation, Haake concludes, does nothing to resolve the underlying fraud finding. The money may be off the table. The judges' accusations are not.