Trump Sued the Tax Agencies He Controlled for $10 Billion. His Cabinet Had Money Conflicts Too.

In January 2026, Donald Trump sued the IRS and the Treasury, the tax agencies he controlled, seeking at least $10 billion.¹ In the 109 days the lawsuit was pending, no attorney for the United States appeared or filed a document stating the government's position, although the government had defended similar tax-disclosure cases.² In May his administration announced a deal purporting to bar future IRS audits of Trump, his sons and their entities.² On July 13, Judge Kathleen Williams found that the plaintiffs had acted in bad faith and concluded that the audit bar directly contravened federal law.²

That is the central charge against this administration: public power crossed into the service of private interests. In the tax deal Trump was the plaintiff and the beneficiary.² The same problem surfaced in his cabinet, when Commerce committed up to $1.6 billion to a company whose private fundraising involved the secretary's family firm, and when ProPublica documented more than $11 million in disaster aid expedited after a secretary's donor intervened.³⁴⁵

The Lawsuit and the Deal

Trump, his two eldest sons, and the Trump Organization brought the suit over the disclosure of their tax returns.¹ The leak was real: the contractor responsible, Charles Littlejohn, pleaded guilty and received a five-year prison sentence.²

The May deal provided tax protections for Trump's family.² The agreement also provided a formal apology and a proposed $1.776 billion fund for other claimants, and an order followed releasing the President and related people and entities from broad federal claims, including matters involving previously filed tax returns.² The administration later abandoned the fund: Acting Attorney General Todd Blanche told Congress on June 2 that it would not proceed, but did not commit to withdrawing the separate audit protections.²

Trump had removed the confirmed IRS commissioner, Billy Long, on August 8, 2025, months before he sued.⁶ His Treasury Secretary, Scott Bessent, told senators on June 3 that he was performing the commissioner's duties while also running the department.⁷ Three senators had warned that his 210-day window as acting commissioner expired on March 6; he acknowledged it had, and the IRS, CNBC reported, said on March 13 that he retained authority to perform duties of vacant Treasury offices not filled on an acting basis.⁶⁷ Asked about extending Trump's audit protections to other leak victims, Bessent said Treasury did not grant them, was represented by the Justice Department and would follow the instructions and the settlement.⁶⁷

What the Judge Found

Trump's position was that he was suing in his personal capacity over the leak, and his lawyers argued that dismissing the case deprived the judge of jurisdiction.² U.S. District Judge Kathleen Williams rejected that separation between the plaintiff and the President who controlled the opposing agencies, and held that she retained authority over collateral sanctions.²

She found that the plaintiffs had used their control over the defendants to pursue taxpayer money and exemption from audits and investigations.² The audit bar, she concluded, directly contravened 26 U.S.C. § 7217, which prohibits covered executive-branch officials from requesting an audit or investigation of a particular taxpayer, or its termination.²

Williams barred the parties from using the agreement in official proceedings as evidence of a settlement reached in this case, and expressly left its validity and enforceability as a private agreement undecided.²¹ She restricted one Trump lawyer's admission to her court, referred another to the Florida Bar, and found monetary sanctions appropriate, inviting the initial amici and former judges to seek reimbursement without yet fixing an award.²

On September 29, the Eleventh Circuit denied a stay of the sanctions.¹ For the individual sanctions against the lawyers, its reason was significant doubts about appellate jurisdiction. In reviewing the separate speech-related sanction, the panel found no strong showing of clear error in the collusion and bad-faith findings. It left the appeal itself undecided.¹

The tax deal was Trump's own. The cabinet secretaries in the two episodes that follow were his to appoint, with the Senate's consent.⁸

Lutnick's Family Firm Beside a Federal Investment

At Commerce, the private interest was the secretary's family firm. Howard Lutnick signed an ethics agreement requiring him to divest his Cantor Fitzgerald stake; members of Congress reported that he transferred much of it to his adult sons, months after the divestiture deadline.⁹ The sons led the firm and held a controlling ownership stake, leaving the Commerce Secretary's family invested in businesses his office could affect.⁹ In February 2026, after the Supreme Court had rejected the tariffs, Representative Jamie Raskin questioned reports that Cantor bought importers' potential tariff-refund rights for 20 to 30 cents on the dollar, citing a firm letter claiming a trade in roughly $10 million of them; Cantor denied executing such trades, and whether it did remained disputed.¹⁰ Cantor said a salesman had mistakenly believed a transaction would be approved; Raskin rejected that explanation as inconsistent with the firm's letter.¹⁰

On June 3, 2026, Commerce announced a USA Rare Earth package worth up to $1.6 billion: an incentive award and a loan agreement, both funding limits under signed agreements.³ On July 7, four members of Congress wrote to Cantor and USA Rare Earth seeking answers.⁴ Their letters described Cantor as a lead placement agent, alongside Moelis, for the $1.5 billion in private capital the company had to raise to meet Commerce's financing conditions.⁴ They cited CEO Barbara Humpton's account that Lutnick personally opened doors at federal agencies after a November 2025 meeting, and said he had refused to answer their earlier questions.⁴ They put USA Rare Earth's financing costs at about $50 million and estimated that it may have paid Cantor millions, possibly tens of millions; Cantor's actual fee was not publicly disclosed.⁴

Lutnick answered in September, on CNBC. The Daily Beast reported that he said he did not know Cantor was involved, his children had bought his companies, and he no longer participated in them; the purpose, he said, was to reduce dependence on China for critical minerals.¹¹ Those points matter: a son's business is not automatically the father's asset, and developing domestic minerals is a public purpose.¹²³¹¹ The lawmakers also recorded Humpton's explanation that USA Rare Earth chose a team that already knew the company, and traced the relationship to Lutnick's time leading Cantor; they said that history sharpened questions about what he knew.⁴ His answers do not resolve whether he honored his separate recusal pledge, which the lawmakers quoted as barring his participation for a year in specific-party matters where he knew Cantor was a party or represented one.⁴ The lawmakers sought records to determine whether his involvement violated his ethics obligations.⁴ USA Rare Earth's August 10 results reported first commercial yttrium metal production in Britain and rare-earth oxide qualification samples in Colorado; the company still targeted commissioning of its new South Carolina facility in 2028.¹³ Those milestones show production progress, without establishing how much U.S. dependence on Chinese minerals had fallen.¹³

Noem's Donor Got Through While Disaster Victims Waited

At the Department of Homeland Security (DHS), the private interest was a donor's access to the secretary. Naples, Florida, had spent months seeking approval for federal money to rebuild its pier.⁵ Then, ProPublica reported, Mayor Teresa Heitmann asked a local cardiologist, Sinan Gursoy, for help; Gursoy had given at least $25,000 to support Secretary Kristi Noem's 2022 campaign for governor.⁵ On August 11 he told the mayor he had texted Noem.⁵ By August 27 FEMA was telling the city it intended to expedite funding.⁵ Noem expedited more than $11 million in FEMA money, then flew to Naples on a government plane to tour the pier, stayed for the weekend, and dined with Gursoy, according to records and the mayor's interview.⁵

Other communities were waiting for the same signature. ProPublica reported that a DHS policy required Noem's personal sign-off on expenses over $100,000, while communities in North Carolina and central Texas complained of delays.⁵ It also relayed CNN's reporting that critical search-and-rescue teams took days to deploy during the Texas floods because Noem had not signed off; Noem denied delays in that response.⁵ Republican Senator Ted Budd said Hurricane Helene-related requests were stacking up on her desk, and that he could not get calls returned or money initiated.⁵

DHS said the pier episode had nothing to do with politics: Noem also helped Ruidoso, New Mexico, at a Democratic governor's request, and Naples had endured failures by both FEMA and the city since 2023.⁵ Noem said her expense policy saved billions; the report gives no independent figure for those savings.⁵ That defense establishes a legitimate disaster-recovery purpose. It does not explain the donor-assisted jump from stalled requests to expedited funding, and DHS did not answer ProPublica's questions about Gursoy's role or his relationship with Noem.⁵

"Americans deserve better than years of red tape and failed disaster responses," Noem wrote.⁵ "Under @POTUS Trump, this incompetency ends."⁵ Naples moved forward; Budd's complaints described a system still failing other disaster communities.⁵ The reporting did not establish that Gursoy bought a favor; the unequal access is clear.⁵

The Pattern and the Charge

The questions about Noem and money did not end at the pier. ProPublica reported that a nonprofit that did not have to disclose its donors paid her private company an $80,000 fundraising fee in 2023; her federal financial disclosure named the company but not the nonprofit or the payment.¹⁴¹⁵ American Resolve Policy Fund's 2024 tax return also records a $137,842 fundraising payment to Ashwood Strategies; CREW reported in January 2026 that this payment was also absent from Noem's federal disclosure.¹⁶¹⁷ Her form said the income it reported for Ashwood was received solely by the LLC, and that she received no personal income or other distributions from it.¹⁵ Her lawyer told ProPublica she complied with the law and that the Office of Government Ethics analyzed and cleared her information concerning the entity.¹⁴ He did not answer whether that office knew of the payment, and the experts ProPublica consulted assessed the omission as a likely federal ethics violation.¹⁴

A third secretary drew the same kind of question. The Daily Signal reported in August 2026 that Transportation Secretary Sean Duffy's travel show, featuring his wife and nine children, had debuted, with Trump sending them off from the White House in its first episode.¹⁸ Duffy conceived the show, the outlet reported, after Trump asked his Cabinet for creative ways to celebrate America's 250th birthday.¹⁸ A nonprofit financed it with sponsors including Boeing and Toyota, companies regulated by his department; Forbes relayed The Wall Street Journal's report that each had donated $1 million to fund the series.¹⁸¹⁹²⁰ Six senators had asked in June for the department's Office of Inspector General to investigate potential misconduct and violations of federal laws, rules and regulations.¹⁹ The department's response, Forbes reported, was that career ethics officials had cleared every aspect of Duffy's participation, and the Daily Signal reported that no taxpayer funds covered production or family expenses and that the family would receive no salary or royalties.²⁰¹⁸ The senators' letter also records his defense that the show promoted tourism and travel as part of his official America 250 responsibilities; the senators questioned regulated companies financing an official government activity through a nonprofit as well as the alternative of their paying for personal travel.¹⁹ ProPublica had reported that Duffy bought Microsoft shares on February 7, 2025, despite being prohibited from holding them, and sold them on February 11; his department said outsiders managed the account and he had no input on timing.²¹²² The agency ethics official certified his transaction report as compliant with applicable laws and regulations, based on the information it contained.²²

Trump chose these officers, and one of them stayed in his government after leaving the cabinet.⁸²³²⁴ Roll Call reported that Noem was replaced at DHS in March 2026; the President's March 7 summit transcript identifies her as his special envoy for the Shield of the Americas.²³²⁴ The strongest constitutional defense is that the President decides whom to appoint and retain.⁸²⁵ The accountability argument follows from that same control: he can answer for how he uses it, while each official's conduct still requires its own evidence.⁸²⁵

The law protects him in other ways. The criminal conflicts provisions, including Section 208, expressly exempt the President, while his appointees remain subject to their own financial-conflict and impartiality rules.²⁶¹²²⁷ Trump v. United States gives a former President absolute criminal immunity for core constitutional acts and at least presumptive immunity for other official acts, but none for unofficial conduct; courts cannot use motive to decide which category an act falls into.²⁸ Both protections govern criminal prosecution.²⁶²⁸ Congress's separate impeachment power reaches abuse of public trust, as Hamilton described it.⁸²⁹

The charge is that Trump's administration failed to keep public decisions apart from the private interests of the President and his officials. The harms are concrete: tax protections fashioned for the President's own family, public money exposed to conflicted decisions, and disaster victims waiting for approval.²³⁵ Trump's own tax litigation makes his responsibility direct: he sought private relief while controlling the agencies across the table.²