The So-Called Settlement Agreement

I know I’m supposed to be on hiatus, but I finished grading so I am treating myself to a blog post, and this post may be irrelevant (I hope) by the time my hiatus ends. Although the Department of Justice (DoJ) calls the “Anti-Weaponization Fund” a “settlement agreement,” this arrangement lacks the institutional safeguards that ordinarily constrain government settlements. Normally, adverse parties, judicial oversight, and public scrutiny help ensure that executive officials do not dispose of public claims on terms unreasonably favorable to politically connected litigants. Here, however, executive officials subordinate to the President negotiated an agreement benefiting the President and his allies without any meaningful external review. Functionally, it operates in important respects like a government contract involving the President and the Internal Revenue Service (IRS). It can therefore be analyzed through familiar doctrines of consideration, modification, authority, and public policy.

You can find the text of the Agreement here. The first noticeable thing in this agreement is that there is no formal recital of consideration. Rather, the Agreement cites the civil suit brought by the President, his two eldest sons, and the Trump Organization (the plaintiffs), as well as two other “Pending Agency Claims.” Those were claims that the President brought against federal agencies in connection with investigations into the 2016 election and the President’s unlawful retention of public documents after his defeat in the 2020 election. The Agreement purports to settle both the civil suit and the Pending Agency Claims in exchange for the relief provided in the Agreement.

That relief includes

• An apology to the plaintiffs in the civil case from “The United States”;
• The creation of a process to provide redress to others who were victimized by “Lawfare” and “Weaponization,” which the Agreement describes as the “sustained use of the levers of government power by Democrat elected officials, political and career federal employees, contractors, and agents in order to target individuals, groups, and entities for improper and unlawful political, personal, and/or ideological reasons”; and
• The creation of an Anti-Weaponization Fund (the Fund) from which payouts to the purported victims of said Lawfare and Weaponization will be drawn.

The nomenclature is a bit tricky. The “Anti-Weaponization Fund” is not a fund but a five-member body that adjudicates claims by rules of its own devising and subject to neither oversight nor review. The members of the Fund are to be chosen by the AG (or Acting AG) within 30 days of the effective date of the Agreement. One is to be chosen “in consultation with the congressional leadership,” whatever that means. It doesn’t much matter, as the Fund can operate with only three members, and the President can remove any member at any time without cause. So if the congressional member is not chosen or is removed by the President, there is no urgent need to replace them.

While Acting Attorney General (AG) Todd Blanche claimed in his congressional testimony that any person who felt persecuted by the federal government could make claims on the Fund, the Agreement specifies that it is only intended to benefit people who claim to be the victims of “Democrat elected officials.” If there were any doubt that this Agreement is just a gift to the President’s most vocal supporters, consider also that the Fund, consisting of people chosen by the President’s hand-picked AG and subject to removal by him, will cease to exist in December 2028.

Some people who have been victims of Lawfare and Weaponization by the Trump Administration may think they can avail themselves of the Fund. That would be risky. The members of the Fund might respond, “What part of ‘Democrat elected officials’ do you not understand?” According to the Agreement, “A claimant can choose whether to accept relief from The Anti-Weaponization Fund. If a claimant does so, the claimant must forgo all other relief, including judicial relief, whether previously asserted or not.” James Comey may think he has a strong claim, but the Fund may award him $1, and if he accepts that award, it would extinguish any other claim he might make or might already have made. That said, this seems like poor drafting. It sounds like one can await a decision from the Fund, and if the award is not satisfactory, one could just say, “never mind” and file a legal claim, but I doubt that is how the Fund is designed to work. I suppose what they meant to say is that once you file a claim under the Fund, that extinguishes any other claim, whether or not you prevail in your claim and whether or not you accept the relief offered under the Fund.

The Agreement does not create the $1.776 billion fund. According to this memorandum from Acting AG Todd Blanche (below), that money comes from a prior appropriation that enables the DoJ to settle cases. It is not clear that the Fund is a proper use of that appropriation given that, as noted above, the Agreement is not the product of a proper settlement of a case. While Acting AG Blanche’s memo purports to cite precedents, prior uses of the statutorily-created Judgment Fund involved payouts in settlement of actual adversarial cases that were negotiated between the parties and approved by a federal judge. The Agreement was created to avoid the involvement of any entity outside of the executive branch. In other words, this is a case in which, according to the Unitary Executive Theory, people beholden to Donald Trump agreed amongst themselves to do the bidding of Donald Trump. There is no precedent for that.

One day after the effective date of the Agreement, Acting AG Blanche issued this Addendum to that Agreement. The Addendum provides that the United States will never pursue any claims of any kind against the plaintiffs. The Addendum purports to preclude future federal claims in a manner that resembles and expands on executive self-exculpation.

A few quick observations from the perspective of contracts law. It seems clear that the Addendum is invalid for lack of consideration. The Addendum appears to confer sweeping additional immunity-like protections without any corresponding new undertaking by the plaintiffs. The parties to the agreement could argue that the Agreement itself provides consideration, but that’s not generally how contracts law works. The fact that the parties are adding sweeping new provisions to an already completed agreement is just more evidence that the process is collusive rather than adversarial.

In any case, any government agency that chooses to pursue claims of whatever kind against the plaintiffs should not be deterred from doing so by the Addendum. A court would have strong grounds for treating the Addendum as an unenforceable gift promise. Moreover, the Agreement provides that it “may be modified only with the written agreement of the Parties.” The Addendum is signed only by the Acting AG and thus seems to violate the Agreement’s procedural rules for modification. Finally, it is not clear from the Addendum itself what authority Acting AG Blanche possesses to bind agencies beyond DOJ, including the IRS, but I suppose that problem could be remedied if it needed to be.

The question of whether there is good consideration for the Agreement is trickier. The answer turns on whether the plaintiffs have given anything of value in abandoning their lawsuits. As to the President’s $10 billion claim against the IRS, the answer would appear to be no. The timing of the Agreement strongly indicates that the matter was about to be dismissed for lack of adversity. In all of the cases, the President was effectively suing himself. He bragged “I’m supposed to work out a settlement with myself.” He made similar comments about the other two lawsuits. Moreover, the IRS successfully defended itself against other suits by people whose tax returns had been leaked just as had the President’s. Arguably, the cases were frivolous and subject to dismissal, but that does not necessarily mean that their settlement value was zero. The President settled other seemingly meritless cases brought against law firms and acknowledged that the firms “had done nothing wrong.“

In the alternative, some constitutional law scholars have argued that the Agreement and the Addendum are void for public policy reasons or because the Agreement would violate §4 of the Fourteenth Amendment, which provides that “neither the United States nor any state shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States . . . .” Of course, § 4 may only have been intended to apply to the Confederacy, but contemporary interpretive approaches do not always treat original expected applications as dispositive of constitutional meaning.

The Addendum clearly violates public policy to the extent that it shields the plaintiffs from any accountability for their prospective unlawful conduct. Arguably, the Agreement itself violates public policy because it is inconsistent with separation of powers. Those who think they have been victims of governmental misconduct have causes of action that they can bring before an Article III court. Neither the Agreement itself nor public statements explain the need for creating an extra-judicial fast-track to recovery for the President’s political allies.

If the Agreement and its Addendum are likely unenforceable from a contractual perspective, who would have standing to challenge them? The Agreement provides that it “is enforceable and challengeable solely by Plaintiffs, Defendants, and the United States,” which seems to be an attempt to prevent other persons or entities from raising legal challenges to the Agreement’s enforceability. Future government agencies seeking to bring actions against the plaintiffs would have standing with respect to the Addendum, but the Agreement is more of a challenge. The Agreement purports to limit enforceability and challengeability to the parties and the United States. But while private parties may define who has contractual enforcement rights, they cannot contract away Article III standing or preclude judicial review of governmental action. To the extent the Agreement is implemented through federal funds or administrative structures, nonparties who suffer cognizable legal injuries would remain free to challenge those actions notwithstanding the exclusivity clause.

Moving beyond contractual matters, it seems like one quick fix would be for Congress to pass a new law providing that no monies from the Judgment Fund or any other federal source may be used for the Anti-Weaponization Fund. Personally, I would like to see Congress go farther. When the President demands that people endowed with a public trust skirt or violate the law, people who comply with those demands need to be permanently removed from public office and stripped of their professional licenses. Congress can impeach Acting AG Todd Blanche who, given his prior representation of the President in his personal capacity, is operating under a conflict of interest. The Senate should not only convict him but bar him from serving in a federal office. The appropriate bar organization(s) can then disbar him. Such punitive measures are likely the best way to create a counterweight to the President’s power over public officials.