President Donald Trump is facing outrage after reports emerged that he may abandon his massive lawsuit against the IRS in exchange for a stunning $1.7 billion taxpayer-funded settlement scheme that critics say could function as a political slush fund for Trump allies and loyalists.
The proposal has sparked alarm among legal analysts and watchdogs, with journalist Mehdi Hasan calling it one of the most brazen corruption scandals in modern American history.
“How is this not the biggest scandal in the United States right now?” Hasan wrote Friday in Zeteo.
“How is a sitting president getting away with suing the government he is in charge of and then settling the case, effectively with himself, to gain access to more than a billion dollars of taxpayer cash?”
Trump originally sued the IRS after portions of his tax returns were leaked in 2019. But according to an ABC News report published Thursday, Trump is now considering dropping the $10 billion lawsuit in exchange for the creation of a $1.7 billion compensation fund.
The fund would reportedly be used to settle claims from people who allege they were harmed by what Trump and his allies describe as the Biden administration’s “weaponization” of government and the legal system.
Critics say the arrangement would effectively hand Trump enormous influence over how taxpayer money gets distributed — with little transparency or oversight.
According to ABC News, the proposed fund would operate with minimal accountability, and Trump would reportedly have the power to remove members of the commission overseeing the money “without cause.”
Even more alarming to watchdogs, the commission would allegedly not be required to publicly disclose how decisions are made regarding the distribution of more than a billion dollars in federal funds.
Hasan blasted the proposal as a taxpayer-funded reward system for Trump loyalists.
“Donald Trump is planning on using our tax dollars to (re)pay his friends — and his thugs,” Hasan wrote. “It’s a corrupt slush fund for MAGA.”
The reported arrangement is already fueling accusations that Trump is using the power of the presidency to personally benefit political allies while bypassing traditional safeguards designed to prevent corruption and abuse.
Legal experts and ethics advocates warn that the optics alone are extraordinary: a sitting president suing the federal government he now controls, then negotiating a settlement that could place massive sums of taxpayer money under his indirect influence.
So far, the White House has not publicly addressed the growing backlash over the proposal. But for critics, the plan represents yet another example of Trump blurring the line between public office and personal political gain — this time on a billion-dollar scale.
