Trump is about to pull off the biggest con in American history
Late last night, while most of the country was asleep, a story broke that should have been on the front page of every newspaper in America this morning. The New York Times reported that the Justice Department, run by the President’s former personal defense attorney, Todd Blanche, is in active internal discussions about whether to settle the President’s $10 billion lawsuit against the Internal Revenue Service. A settlement that would effectively give the man who runs the executive branch of the United States of America a multi-billion-dollar taxpayer payout, with his own former personal lawyer signing the check.
And one of the settlement options on the table, according to two people familiar with the talks, is that the IRS would agree to drop all audits of Donald Trump, his sons Don Jr. and Eric, and the Trump Organization. Forever. The scale of what is happening here cannot be overstated. If this goes through, it will be the largest financial con ever pulled on our country and the American taxpayers.
This all started when Trump filed a lawsuit in January, alongside his two oldest sons and the Trump family business, demanding at least $10 billion in damages over the leak of his tax returns by a former IRS contractor named Charles Littlejohn. Littlejohn pleaded guilty. He is serving five years in federal prison. The leak was real. That part is not in dispute. What is in dispute is everything that comes after, because $10 billion is not a damages figure. It is a number designed to break a record. To put it in perspective, the largest administrative settlement the Justice Department has ever paid under the Federal Tort Claims Act was roughly $138 million, split among 139 women who accused the FBI of mishandling the Larry Nassar sexual abuse case. Donald Trump, the sitting President of the United States, is demanding more than seventy times that, for himself.
A former DOJ lawyer named Rupa Bhattacharyya told NPR that even in the most catastrophic cases the department has ever settled, including injuries to first responders cleaning up after the September 11 attacks, payouts rarely exceeded $10 million. Trump is asking for one thousand times that amount.
And then there is the comparison that shows just how lawless this really is. Hedge fund billionaire Ken Griffin was one of the other wealthy Americans whose tax returns Littlejohn leaked. Griffin sued the IRS, too. His case was settled in 2024. He received zero dollars. The IRS issued a public apology and committed to better data security protocols. That was it. The Justice Department, in defending against Griffin’s suit and others like it, argued in court that the government could not be held liable for the criminal actions of a contractor. That was the government’s position. That is still the government’s legal position in similar cases that are still active. But when the plaintiff is the President of the United States, suddenly the legal theory has to change, and suddenly there are billions of taxpayer dollars on the table.
The case is so legally weak that the federal judge handling it, Kathleen Williams, has already ordered both sides to file briefs by May 20 explaining whether there is even a real legal conflict between them. Her question, in plain English, is this: how can the President sue agencies that he himself controls? How can the two sides be considered adversaries when one side reports to the other? She has scheduled a hearing for May 27 to determine whether the case should be thrown out entirely.
And that is exactly why the Justice Department is racing to settle before May 20. If they settle privately before the judge rules, she cannot stop them. Legal experts told the Times that even if Judge Williams ultimately concluded the settlement was collusive or made in bad faith, she likely could not unwind the money once it changed hands. They are trying to get this done before a judge can call it what it is.
Now here is the part that ties the whole con together. The money would not come from the IRS budget. It would come from something called the Judgment Fund, which is a permanent, standing pot of taxpayer dollars maintained by the Treasury Department to pay out judgments and settlements against the federal government. The Judgment Fund does not require a congressional vote. It does not require any approval from the people whose money it actually is. A check just gets written. A $10 billion payment from the Judgment Fund would be one of the largest single payouts in the fund’s history, by orders of magnitude.
And the dropped audits piece may be even more valuable to Trump than the cash. IRS procedures require a mandatory audit of every sitting president’s and vice president’s tax returns. Mandatory. Not optional. Those audits exist precisely because the head of the executive branch should not be able to escape scrutiny of his own taxes. The leaked returns at the center of this lawsuit, the ones Trump now claims caused him $10 billion in damages, are the same returns that showed he paid little or no federal income tax for years. The Times reported in 2024 that if the IRS ruled against him in the audits already underway, Trump could owe more than $100 million. So a settlement that wipes those audits out, for himself, for his sons, and for the entire Trump Organization, could be worth tens of millions to him personally, on top of whatever cash he extracts.
And we have to talk about who is sitting at the negotiating table on the government’s side. Todd Blanche, who is currently serving as both Acting Attorney General and Deputy Attorney General after Trump fired Pam Bondi in April, was Trump’s lead criminal defense lawyer. He defended Trump in the New York hush money case that ended in 34 felony convictions, and in the Mar-a-Lago classified documents case that Jack Smith brought before Trump won the election, which was later dropped. Stanley Woodward, the Associate Attorney General, represented Walt Nauta, who was Trump’s co-defendant in that same Mar-a-Lago case. He also represented Kash Patel, who now runs the FBI, and Peter Navarro, the White House trade adviser. And the new number two at the deputy attorney general’s office, Trent McCotter, was representing Steve Bannon as recently as January.
Under Justice Department policy, any settlement above $4 million has to be approved by the Deputy or the Associate Attorney General. So the people deciding how much taxpayer money to send to Donald Trump are the people who used to defend Donald Trump and his inner circle for a living. There is no plausible version of this where they are operating at arm’s length from him. They are his lawyers. They just happen to be paid by us now.
Trump himself has been remarkably honest about what is happening. He has told reporters, on camera, “I’m suing myself.” When asked how he planned to manage being on both sides of the lawsuit, he said he would “work out a settlement with myself.” He has said he might donate the money to charity, or he has said he might use it to help pay for the new White House ballroom he is building. The story keeps changing. What does not change is the fact that the money will move, and Trump always finds a way to personally benefit when it does, regardless of what he says.
And while all of this is happening, Trump has been making dramatic changes to the agency from which he is about to extract billions. Since taking office in January 2025, his administration has cut the IRS workforce by roughly twenty-five percent. Tens of thousands of employees were pushed out through buyouts, voluntary retirements, and layoffs. The completely made-up “Department of Government Efficiency,” or DOGE, run for most of last year by Elon Musk, before effectively shutting down, pushed to fire 6,700 newer IRS employees, coaxed 4,700 longtime employees into quitting, and planned 6,800 more layoffs after that. Forty-five percent of the staffing reductions came specifically from the enforcement division. That is the division responsible for auditing wealthy taxpayers and large corporations. The Congressional Budget Office estimated that the rescissions of IRS funding alone will cost the federal government $65.8 billion in lost revenue over the next ten years, because rich people and big companies who used to be afraid of getting caught no longer have to be. The Treasury Department itself projected a $500 billion drop in tax revenue this year, a ten percent collapse in what the government is supposed to collect.
This is one of the clearest examples of the richest people in America, including the man currently in the Oval Office, getting their enforcement agency gutted so they can pay less in taxes. Not from legitimate tax deductions, but by dismantling the agency that would catch them. And at the same time, that same gutted agency is being asked to write the same president a check, paid for by the taxpayers whose money the agency is no longer collecting from the rich. The cuts and the payout are not separate stories. They are the same story. The agency is being weakened so it can be drained, and the man draining it is the one who weakened it.
This is what economists used to call kleptocracy. The word comes from the Greek for “rule by thieves.” We used to use it to describe governments we considered unserious or beneath us, places like Putin’s Russia or Yanukovych’s Ukraine, where the head of state and his family used the machinery of the state to enrich themselves at the public’s expense. Yanukovych built a private estate worth hundreds of millions while Ukrainians lived on average salaries of a few hundred dollars a month. Putin’s inner circle, his close friends and oligarchs, transferred control of state oil and gas assets into private hands, with the proceeds flowing back to Putin’s network. The mechanism was always the same: capture the institutions, then drain them. None of these men saw the government as a public trust. They saw it as a personal asset.
What is happening with the IRS lawsuit is a textbook example of the same pattern. The President of the United States is using the legal system to extract personal wealth from the Treasury, while his hand-picked appointees, who used to be his lawyers, decide how much he gets. The man who is supposed to defend the public interest is the one being defended against, and the people doing the defending work for him.
And the sons being added to the lawsuit are not a footnote. They are the whole point. Don Jr. and Eric run the Trump Organization. They are the next generation of the family business. By writing them into the suit, Trump is making sure that any settlement, any audit-dropping protection, any cash flows not just to him but to his children and to the corporate entity that holds the family’s wealth. If a settlement drops audits of the Trump Organization, the protection lasts well beyond his presidency. It protects the empire he is handing down. It is dynasty-building, paid for by us.
And the IRS lawsuit is not the only place where this pattern is showing up. The One Big Beautiful Bill Act, which Trump signed into law last year, was sold to the public as a crackdown on fraud and waste. The framing was that the government had been hemorrhaging money to people who did not deserve it, and that tightening eligibility for programs like Medicaid and SNAP would save taxpayers billions. What it actually does is take food assistance away from working families, strip health coverage from people with disabilities, impose new work requirements that knock people off Medicaid for paperwork errors rather than fraud, and shift costs onto states that cannot absorb them. And when this administration says it is cutting fraud, what we are actually watching is money being moved out of the pockets of working Americans and into a pot that the president and his allies can draw from.
This is our time to put pressure on our representatives about it. Senator Ron Wyden of Oregon, along with Chuck Schumer, Peter Welch, and Ben Ray Luján, introduced legislation back in February called the Stop Presidential Embezzlement Act, which would impose a 100 percent tax on any settlement a sitting president, vice president, cabinet member, or member of Congress receives from the government as a result of a lawsuit filed while in office. It will not pass the current Senate. But every senator we send to Congress in 2026 who would vote for that bill is a senator who would make this kind of self-dealing impossible going forward. Every House seat we flip is a check on this behavior. The path to stopping thefts like this depends on what happens in November.
In the meantime, we keep our money out of the hands of the people enabling this. We support the journalists who are still chasing the story. The New York Times broke this. Independent reporters are working it from every angle. Please support them and share their work. Ironically, as I was almost done writing this, I saw both Liz Oyer and Jim Acosta both talking about this today. They are both excellent at the work they do, and I encourage you to read and listen to their reporting as well.
We also need to name exactly what is happening and make sure that everyone can see it for what it really is. A theft. A theft of public money by a public official, from the public, for his own family. That is what is being negotiated inside the Justice Department. That is the deal on the table.
And as brazen and sickening as this is, the truly diabolical part is that the president of the United States might get away with not just the money, but the real win, the audits getting dropped. The part we need to hold onto is that someone inside the Justice Department, or close to it, picked up the phone and called a reporter at the New York Times. They risked their job, and maybe more, to make sure this deal could not be quietly finished in the dark. That is pretty remarkable. That is a person, somewhere in the federal government, who looked at what was being discussed and decided the public deserved to know. People like them are still in there. Career attorneys, career analysts, career civil servants who took an oath to the Constitution and not to a man, and who are willing to uphold it. Every time one of them leaks a story like this, the regime loses a little more control over the narrative. We get a little more time to fight back, and a reminder that there are still people willing to do the right thing even when the president will not. That is why I still have hope for America. And you should, too.
I’ll see you tomorrow,
Heather
PS. You can make a significant difference right now by subscribing to my Substack. Your support helps me cover more ground and keep telling the truth about the lies and destruction unfolding in this country.
This commentary represents my personal opinions and analysis of matters of public concern, informed by publicly available information. Any references to individuals constitute opinion and commentary protected under the First Amendment.
Picture of the day: Edited: These are from Central Park. Spring brings so much hope and beauty.
Sources:
https://www.cnn.com/2026/05/13/politics/justice-department-considers-settling-trump-irs-leak-lawsuit
https://www.npr.org/2026/02/18/nx-s1-5702503/trump-government-lawsuits-pay-himself-billions
https://www.cbsnews.com/news/irs-ken-griffin-apology-tax-return-leak/
https://www.propublica.org/article/trump-irs-audit-chicago-hotel-taxes
https://www.cbsnews.com/news/larry-nassar-victims-justice-department-settlement-fbi/
https://www.washingtonpost.com/national-security/2026/04/02/trump-fires-bondi-doj/
https://fiscal.treasury.gov/judgment-fund/
https://www.cbsnews.com/news/treasury-department-booz-allen-hamilton-trump-tax-leak/
This it's not going to be the biggest con of America history only, it's going to be the biggest con in the history of all the democracys of the world... If this family of thieves isn't prosecuted and condemned after they leave office, the US will never recover from this, it will be forever smeared from this, showing that after all the lawless country, the country where everything is possible, as long you have money is the US.,that after all the paper tiger is the US government and his laws....
This is what Timothy Snyder calls “superpower suicide”.