Fears grow of DOJ becoming ‘piggy bank’ for Trump as allies seek lucrative settlements

Legal experts and White House critics are worried the Justice Department (DOJ) could become a piggy bank for those with grievances as President Trump and a number of his allies pursue million-dollar settlement claims.

While Trump’s push for $230 million in compensation for two probes into his conduct would be the most lucrative of the suits, others in his orbit are also seeking millions from the DOJ.

That group includes Sen. Lindsey Graham (R-S.C.), who has said he intends to take advantage of a provision tucked into the bill to reopen the government that allows 10 senators to sue for $1 million after their phone records were obtained by special counsel Jack Smith without notifying them. 

The Justice Department also appears to have reversed course in existing settlement disputes with other Trump allies, an unusual move after fighting multimillion-dollar requests.

Prior efforts from Trump’s former National Security Advisor Michael Flynn and former Trump White House lawyer Stefan Passantino to score settlements with the DOJ hit roadblocks in court, but Bloomberg reported the two are now in renewed discussions with the Justice Department.

Flynn’s earlier suit sought $50 million in damages from the DOJ over claims of malicious prosecution. He brought the suit after initially pleading guilty to lying to the FBI as part of special counsel Robert Mueller’s investigation. Passantino is seeking a settlement with the DOJ over his treatment by the Jan. 6 committee. He claims his career was hindered after a former client, Cassidy Hutchinson, said he encouraged her to withhold information from the panel.

“It is egregious partisan grifting that Donald Trump has clearly authorized to pay his allies with taxpayer money,” argued Rep. Dan Goldman (D-N.Y.), a former federal prosecutor.

“There are absolutely no grounds for the senators to get any money, Donald Trump to get any money, Michael Flynn — who pled guilty — to get any money, it is a miscarriage of justice and gross abuse of our criminal justice system and taxpayer funds to essentially extort Donald Trump’s own Department of Justice to pay off his buddies,” Goldman told The Hill.

The Justice Department has a judgment fund used to pay out settlements — a limitless pot of money that critics say risks becoming too easily tapped by Trump’s allies.

“The judgment fund is an easy target for this sort of — for lack of a better word — corruption. Because it’s a permanent indefinite appropriation that basically contains as much money as is needed for the United States to pay its debts that are incurred in litigation and there’s no limit on it,” said Rupa Bhattacharyya, who previously served as the top career DOJ official reviewing settlements and who also oversaw the September 11th Victim Compensation Fund.

“Because that fund exists, it sort of is an easy target for people who want to find a place from which to pull money to settle some grievance.”

Critics of Trump see the requests as nothing more than a way to enrich the president and his allies, particularly those connected with probes into two events he continues to rail against: the Mueller investigation and Jan. 6. 

Rep. Zoe Lofgren (D-Calif.), a member of the Jan. 6 panel whose actions Passantino has contested, said she sees the settlement talks as an effort to “rip off the taxpayers.”

“These are all activities that were approved judicially. I mean, Flynn pled guilty to a felony, was [later] pardoned. What’s the basis for compensation for wrongdoing? There is none. It’s just a way for greed heads to suck money out of the public treasury at taxpayers’ expense,” she told The Hill.

None of the settlements has thus far been approved and none of the 10 senators who got the green light to launch suits has yet done so. The House unanimously passed a bill to reverse the provision, seeing it as a self-enrichment scheme, but Senate Majority Leader John Thune (R-S.D.) has resisted calls to bring it to the floor.

But the discussions with Flynn and Passantino could signify a shift in DOJ position after the department has previously resisted settlements for the two men. 

It’s also surprising given the setbacks the two faced when first making such claims in court.

In December, a federal judge appointed by former President George W. Bush dismissed the malicious prosecution claim brought by Flynn, determining he had not sufficiently supported the claim.

In January, a federal judge in Georgia tossed Passantino’s suit, finding the government couldn’t be held liable for the claims he made under the Federal Tort Claims Act.

“The fact that both cases were dismissed once does suggest that the government has significant legal defenses,” Bhattacharyya told The Hill.

“A court in both cases found the cases subject to dismissal, at least in the first go round. … You would ordinarily expect where the government has significant defenses for the government to play out those defenses before considering any form of settlement.”

The DOJ declined to comment for this story.

The discussions have already prompted one watchdog group to demand documents related to the settlements.

Democracy Forward on Wednesday filed a series of public records requests related to the ongoing discussions with Flynn and Passantino.

“The American people deserve to know whether the Trump-Vance administration is seeking to use public authority and taxpayer money to benefit politically connected insiders,” said Skye Perryman, president of Democracy Forward, in a statement. 

“These secret discussions and the possibility of enormous tax-payer funded payments to former officials close to the president raise profound ethical, constitutional, and public-integrity concerns.”

Jesse Binnall, an attorney for both Flynn and Passantino, described both men’s suits as a push for justice after both men were denied opportunities.  

Of Flynn, Binnall said that “rogue FBI actors orchestrated a politically motivated hoax to attempt to shatter his life, all while staging a soft coup against President Trump, draining millions in lost opportunities and legal fees from Flynn while the government lavished payouts on those very bad-faith saboteurs. We hope that the mediation is a step toward justice.”

Meanwhile Passantino’s “30-year career of service and integrity was unblemished until zealots on the January 6 Unselect Committee peddled fabricated claims against him to advance a political agenda,” Binnall said.

“Their actions destroyed his reputation, threatened his livelihood, and cost him millions—while protecting their enablers. His lawsuit seeks accountability, warning that congressional show trials will face scrutiny,” he added.

The settlement given to the family of Ashli Babbitt, who was killed after she entered the Capitol on Jan. 6, could also be taken as a positive sign for those pursuing settlement claims.

In June, the Justice Department agreed to settle a wrongful death claim filed by the family to the tune of $4.75 million.

The officer who shot Babbitt was cleared of any wrongdoing, and while Bhattacharyya said it’s not unusual for the government to settle wrongful death cases, some aspects of the Babbitt settlement gave her pause.

“I was surprised by the amount, I think, given how early it was in the case before there had been any really significant discovery,” she said, as the case was otherwise set to go to trial in 2026.

“It usually happens a little bit later in the process, once there’s been an opportunity to really get discovery and understand what the facts were and what was going on. And a lot of that hadn’t happened yet. … So I was surprised by the timing, and I was surprised by the amount.”

Goldman said that while Flynn and Passantino had already pushed for settlements, the Babbitt agreement “opened the floodgates for people to realize that under Donald Trump the Department of Justice is a piggyback.”

Bhattacharyya said the mounting requests show the importance of having career staff review settlement demands.

“This is why it is so critically important that you have people at the department making decisions who are basing those decisions on good faith assessments of what the government’s legal risk is and when and how taxpayer money should be spent to settle claims brought by people who are claiming the government injured them. That’s why you have career staff who generally make these decisions, or at least make the underlying recommendations,” she said.

“Like anything else in government, it depends on good faith actors. If you don’t have good faith actors, then things can go bad really fast.”