Unprecedented Trump Fund & Mangione Rulings

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1:41This is Bloomberg Law with June Grosso from Bloomberg Radio. Another unprecedented action by President Trump and his Justice Department. The creation of a$1.8 billion fund to pay victims of so-called government weaponization as part of a settlement to end Trump's$30 billion lawsuit against the Internal Revenue Service. A settlement that was not approved by a judge. Under questioning by Democratic Senator Chris Coons today, Acting Attorney General Todd Blanche had to admit it was a first. Has it ever happened that a sitting president sued his own government for$10 billion and then directed the settlement of the case and the establishment of a payout fund?

2:31Not that I'm aware, but there's a lot of things that President Trump's the first of. And in response to questions from Democratic Senator Chris Van Hollen, Blanche would not rule out that rioters who attacked police at the Capitol on January 6th could receive payments from the fund. Will individuals who assaulted Capitol Hill police officers be eligible for this fund? Well, as it makes plain, anybody is... Just let me know if they're eligible for the fund. As was made plain yesterday, anybody in this country is eligible to apply. My guest is an expert in constitutional law, David Super, a professor at Georgetown Law.

3:11David, starting with the lawsuit, let alone the settlement, have you ever seen a lawsuit like this, a sitting president suing part of his government for monetary damages? No, there hasn't. And there have been some pretty compelling cases where you might imagine that happening. You could imagine President Reagan suing for the Secret Service's failure to protect him from John Hinckley. You could imagine some president suing for terrible medical care that they received, the estate of President Garfield, perhaps. But this is an example of norms collapsing. Every president previously, even ones who allowed much more independence of the Justice Department than President Trump does, understood that it would be grossly inappropriate for them to sue a Justice Department that reported to them.

4:04Basically, the same person is controlling both sides of the lawsuit. The plaintiff and the defendant are Donald Trump. Yes, this is a textbook example of collusive litigation. When there's no adversity, when no claims of fact or law are checked by anybody with a contrary interest where they're all agreeing together, it's a settlement agreement between Donald Trump's private lawyers and Donald Trump's Justice Department lawyers. And the Supreme Court has said that you cannot invoke the power of the federal courts on a collusive case. The federal courts are only there to resolve genuinely adverse controversies, which this is not.

4:50This was settled and they avoided a Wednesday deadline in court that would have had them explain whether a case or controversy exists. So they seem to have settled this to get around having to appear in court and explain this case. Yeah, they're really trying to have it both ways. They settled it in a big hurry this weekend to avoid having to explain to the courts why this could be a case, because they can't. So they make the case go away before the judge can dismiss it for lack of jurisdiction. But they use the fact that this case was here as a justification for this settlement, which provides a slush fund for whomever President Trump wants to serve.

5:37Doesn't the court usually have to approve a settlement? The court has to approve a settlement that involves an order of the court, but this settlement provided for the dismissal of President Trump's claims, and courts generally don't have to do that. There are a few exceptions, but this doesn't really fall into one of them. The Justice Department has already been approving seven-figure payouts for some Trump allies who claim they were wrongfully investigated or prosecuted. For example,$1.25 million to former Trump National Security Advisor Michael Flynn, who had actually pleaded guilty to lying to the FBI.

6:18And a similar amount to Carter Page, a former advisor for Trump's 2016 campaign. So that's already going on. How is this fund different? This is different because it isn't paying damages. I would be terribly offended if President Trump ordered the fund to pay him some large sum of money. That would be another example of abuse of the fund, inclusive litigation. But this goes much farther. This is basically taking away the power of the purse from Congress. It is creating a whole new program that Congress never authorized, that Congress never appropriated a dime for, and creating it entirely within the executive branch to spend tax dollars.

7:07How did they even come up with this number,$1.8 billion? Where did that even come from? Well, I'm guessing it came from some marketing person because it's$1.776 billion, which I guess is meant to invoke what happened in the beginning of our revolution. But that's rather ironic because our revolution was against a king who claimed absolute power to himself and didn't take legislatures and the people very seriously. It's ironic in the extreme that we are naming something after our moment of liberty that collapses a very important part of that liberty. They're saying that there is going to be a committee, but the president can fire anyone he wants on the committee.

7:56I mean, are there any safeguards in place? Absolutely none. This is a 100 % slush fund. The president or the attorney general will appoint without Senate confirmation all five members of this committee. If any of them do anything the president doesn't like, he can fire them and replace them with whomever he wants. So the committee is completely subservient to the president on both a macro and a micro level. So this is allowing the president to distribute $1.776 billion to whomever he wants based on whatever they want. There are plenty of people sitting in federal prison right now who are clearly innocent and can prove it, but the Supreme Court has sharply narrowed habeas corpus and similar forms of relief, so the fact that you are actually innocent is not sufficient to get your conviction overturned.

8:56These are people who have no evidence that they were innocent, have no evidence of prosecutorial misconduct. None of that's required here. We're simply paying them because they're on Team Trump. I mean, is there anything you can compare this fund to where the idea even came from? Well, I could probably find use of precedence in Tammany Hall and other corrupt political machines. I wouldn't be surprised if Victor Horvath had a few of these kicking around. But within the context of American democracy, no. The Justice Department's press release compares this to a fund that compensated Native Americans under the Obama administration.

9:39But that was an adversarial lawsuit between the plaintiffs and the Justice Department. And that settlement was approved by a court. It was a court order. And had there been anything improper there, the court was entirely free to reject it. if it thought the litigation was collusive, if it thought the settlement was unjust or was not in the interest of the United States. There were clear safeguards. By contrast, this whole thing is designed to avoid judicial scrutiny. They didn't want the judicial scrutiny that would come tomorrow with a court saying, how can you possibly be adverse to one another when you're both controlled by Donald J.

10:19Trump? You've written about this for the balkanization. Explain why you think this fund is unlawful? Article 1 of our Constitution says that no money shall be drawn from the Treasury except where Congress has enacted an appropriation. And the Anti-Deficiency Act, which goes back over 100 years, gives teeth to that and makes it a federal crime with two years in prison if you distribute federal funds without a valid appropriation. This is an attempt to circumvent that. They're claiming they can use the judgment fund, which is an appropriation, but it's for settlements arrived at in accordance with law.

11:05And one provision of federal law says you cannot obtain the jurisdiction of the federal courts collusively. Another provision of federal law says that federal lawyers have to follow the same ethical rules that apply in their states, and those rules prohibit collusive litigation. So the very fact that this case is Donald Trump versus Donald Trump means that it is not eligible to be settled under the judgment fund. So in light of the settlement, the judge has closed the case involving Trump's suit against the IRS. But Democrats are asking a court to block the settlement, saying it lacks the bare minimum required to file a lawsuit to opposing parties.

11:53And nearly 100 Democrats signed an amicus brief in the district court for the Southern District of Florida. But do they have standing to bring a lawsuit? Arguably, they don't need standing because every federal court is obliged to determine its own jurisdiction, even if nobody withstanding raises it. If you and I decide that we're going to have a lawsuit in federal court and there's no jurisdiction, the court will kick us out even though you and I are both very happy to be there. So the Democrats can ask the case to be kicked out. The problem is it already has been. That's the essence of the settlement is that Trump, the plaintiff, agreed with Trump, the defendant, to dismiss the case.

12:41And the worst that a court could do probably is dismiss the case. I suppose they could sanction the lawyers. Coming up next on the Bloomberg Law Show, I'll continue this conversation with Georgetown Law Professor David Super. Are there any remaining legal impediments to this weaponization fund? I'm June Grosso, and you're listening to Bloomberg. Support for the show comes from Public. Public is an investing platform that offers access to stocks, Options, bonds, and crypto. And they've also integrated AI with tools that can assist investors in building customized portfolios. One of these tools is called Generated Assets.

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16:36The same deal is resulting in a nearly$1.8 billion fund to compensate individuals who believe they were targeted politically. I've been talking to Professor David Super of Georgetown Law. David, does it seem like the Justice Department has covered all the bases? Is there any legal impediment to this fund? I don't think so. Usually when the administration does something Congress doesn't like, the answer is we'll cut off funding. But here, Congress never provided funding for something like this, so there's no funding to cut off. Congress, I suppose, could try to pass a law saying don't do this. The president would obviously veto it.

17:16But even if they did that, the president would say, what's done is done. This is gone. The Supreme Court could entertain a lawsuit that this is unconstitutional. The Supreme Court held many years ago that the only way to enforce the establishment clause that prohibits government from funding religion is to allow individual taxpayers to sue that their monies are being inappropriately spent. They could say absolutely the same thing about the appropriations clause, that when taxpayers allege that their money is being taken without an appropriation from Congress, that they can get into court. But given how cooperative this Supreme Court has been with the president, I don't see that very likely.

18:03And so we had Todd Blanche in his testimony not ruling out anything, not ruling out, hey, out to people who are convicted of attacking police officers. So there are no boundaries here. Also, there's no indication that any of this would be known to the public. You know, Blanche started talking about privacy concerns. Well, they require a confidential report of who is paid to be submitted to the attorney general. Now, what is and is not a public record is not a matter for the attorney general or the president to determine. It's a matter of the Freedom of Information Act. So I believe there's a good chance that this will eventually come out.

18:49But in the meantime, they have a slush fund that they can pay anyone they want. And saying we wouldn't make a payment to people who assaulted police isn't very persuasive from people who have pardoned or commuted the sentences of people who assaulted police. Clearly, if you assault police on behalf of Team Trump, there's a different standard. We've watched as Todd Blanche has had James Comey indicted. He has indicted the Southern Poverty Law Center. People say this is sort of him trying out, trying to be the attorney general that Trump wants. This seems to be like the highlight of it. They're doing this without any supervision from a court, just doing what they want.

19:35It seems to me like one of the most egregious things the Justice Department has done under Trump. They have been for some time taking advantage of the Supreme Court's restrictions on access to federal court to do things that are not legally defensible, but where they won't be forced to defend themselves in court because the Supreme Court disallows the challenges. So the notion of doing something that's unlawful but unlitigable is actually old news for these people. They didn't put together something that's legal here. They actually misdrafted the papers, so this isn't really eligible for payment from the judgment fund because the amount that is specified in the press releases is not in the settlement papers.

20:24So you can't say that they have to draw$1.776 billion from the judgment fund to settle the case because on the terms they settle it for,$1 would suffice. Everything above that is Todd Blanche giving a gift to his boss, probably in the hopes of getting the word acting knocked off of his title. And I just wanted to explain. So there is a fund where the Justice Department doesn't have to get court approval and can pay out settlements to people like it has done to Michael Flynn, even though Michael Flynn had pleaded guilty and then took it back, and Carter Page. So they have other ways of compensating people that they want to without needing any approval from a court.

21:11They do. So in that sense, this is nothing new. This is taking it to an industrial scale, and it's saving the people who were tried and convicted of assaulting Congress or other unlawful acts and saying, you don't have to pay for a lawyer, you don't have to file a claim, you don't have to go through the procedures anyone else would go through. Just send us a letter, tell us how you were harmed, and the check will be in the mail. The second Trump administration has been all about trying to erase what happened on January 6th. And it seems to be more and more blatant and that the Justice Department doesn't care anymore about following the rules or at least giving the appearance of following the rules.

21:58No, they don't. And the very sloppiness with which this is drafted, the huge departures between the press release and what's actually in the document, and the blatant disregard of federal law and the Constitution is rather striking here. I should say this is not limited to January 6th people. Indeed, January 6th isn't even mentioned in the settlement. So it's whomever they want to give money to. If you want to give money to a campaign worker who says that they were stressed out when Trump lost, there's nothing to stop them from doing that and no way to check it. The only limitation here, and this may be real, is that because these are payments without a valid appropriation, they are violations of the Anti-Deficiency Act, which means they're felonies.

22:49And I think most people will expect that on the way out, President Trump will pardon Todd Blanch and Stanley Woodard and all the top-level people. But if you're a rank-and-file Treasury or Justice Department official and you're being asked to participate in this thing, this is a felony. You are putting yourself in personal criminal jeopardy. The statute of limitations is five years, which will run after this term of presidency is over. I think we're going to see some people making some very difficult choices in those agencies as to whether they want to be involved with this and risk criminal liability.

23:25This issue, though, does seem to be resonating with people. I think this is resonating with people because of the blatancy of the corruption of it. I was speaking earlier to a reporter from another country, and she said, excuse me for asking. I'm from such and such a country, which is very corrupt. And I said, well, I'm an American, and at this point, we're pretty corrupt, too. Support for the show comes from Public. Public is an investing platform that offers access to stocks, options, bonds, and crypto. And they've also integrated AI with tools that can assist investors in building customized portfolios.

24:02One of these tools is called Generated Assets. It allows you to turn your ideas into investable indexes. So let's say you're interested in something specific like biotech companies with high R &D spend, small cap stocks with improving operating margins, or the S &P 500 minus high debt companies. Chances are there isn't an ETF that fits your exact criteria. But on public, you just type in a prompt and their AI screens thousands of stocks and build a one-of-a-kind index. You can even backtest it against the S &P 500. Then you can invest in a few clicks. Go to public.com slash market and earn an uncapped 1 % bonus when you transfer your portfolio.

24:40That's public.com slash market.

24:59at public.com slash disclosures. Running a small business takes everything you've got, but with Chase for Business, you're not alone. They bring together local support and a broad range of resources to more than 7 million customers. With a deep understanding of your day-to-day needs, they provide products and guidance built to help you thrive. Right now, earn$500 when you open a new Chase Business Complete Checking account for new business checking customers with qualifying activities. Offer expires June 18th, 2026. Chase Business Complete Checking has the flexible tools you need to accept payments, make deposits, and manage your finances with confidence.

25:35Learn more at chase.com slash podcast biz offer. Chase, make more of what's yours. These may apply to Chase Business Complete Checking accounts. The$500 offer is available for new business checking accounts with qualifying activities through June 18, 2026. Eligibility and qualification requirements must be met. Additional restrictions may apply. Please speak with a business banker for more information. JPMorgan Chase Bank, N.A., member FDIC. We buy insurance for peace of mind, but every year millions of claims are denied. Not because people did anything wrong, but because their policies quietly excluded what happened.

26:11Insurers know every detail. Policyholders rarely do. That's why My Policy Advocate exists. For just 27 cents a day, their platform reads your policies and explains where you are vulnerable. They don't sell insurance, they deliver transparency. Before you trust your policy to protect you, let My Policy Advocate tell you what it really says. Go to MyPolicyAdvocate.com. A New York State Court judge has ruled that prosecutors can use a gun and notebook seized from Luigi Mangione's backpack against him at his trial for the killing of UnitedHealthcare Group Executive Brian Thompson, but ruled that other evidence was improperly obtained.

26:51Judge Gregory Caro said police had obtained a warrant when they seized evidence, including a 9mm gun and a notebook where Mangione discussed his desire to, quote, whack a CEO, but that officers in Altoona, Pennsylvania improperly searched his backpack at a McDonald's earlier that day. Joining me is former federal prosecutor Robert Mintz, a partner in McCarter & English. Bob, give us the background here. To set the stage here, police responded to a McDonald's in Altoona, Pennsylvania, after receiving a call about a suspicious person who looked like the alleged shooter of United Healthcare CEO Brian Thompson.