The odd setting up of what appears to be a corrupt slush fund for the allies of President Trump

Contract law is a fascinating subject: it is about how parties can create legal obligations and rights between themselves which otherwise would not exist.

Constitutional and other forms of public law are, of course also fascinating: for they set out what can and cannot be done by those charged with public power.

And when contract law and constitutional law mix, then the results are even more fascinating.

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The legal suit brought by President Trump (and his son and his corporation) against his own government is extraordinary for many reasons.

In particular two things stand out.

First, there does not seem to be a dispute capable of being adjudicated by a court.

Second, there does not seem to have been a settlement in any legally recognisable form.

To adapt a famous techie saying: bizarre in, bizarre out.

In reality the whole exercise is brazen corruption. Everyone knows this, though many do not seem to care. It is the sort of thing that should (but will not) lead to Trump’s immediate impeachment and removal from office.

But, this being a law and policy blog, let us go though the motions of looking at this racket from a legal perspective. If anything, it will show what an odd thing is going on.

As this blog has already set out (as well as at this Prospect piece), the law suit was a rum affair.

That is not to say there was not an underlying legal wrong: the leaking of the president’s tax returns (even if in the public interest) was an unlawful act and indeed the leaker has been prosecuted under the criminal law.

And generally (if not universally) speaking where there is a criminal offence there is usually a civil wrong – what lawyers call a tort.

The records of Trump were leaked by a government contractor and so, in principle, there is both blame and a claim.

But on this basis, Trump and his co-plaintiffs constructed a demand for an extortionate amount – far above what would be the level of damages for such a wrong – and brought the claim at a time when Trump was in effect the head of the defendants. Trump thereby would have effective control of both sides of the case.

The plaintiffs, however, encountered a problem. The court was not convinced it could hear a claim where one person controlled both sides. And if there is not an actual dispute between parties in disagreement, then the court would not have jurisdiction to hear the claim.

At this point the judge could have simply stuck out the suit for want of jurisdiction (though that probably would have been appealed). Instead, the judge invited the parties to make submissions on the jurisdiction point – and she also appointed independent lawyers as “friends of the court” to make submissions which the parties may selfishly not wish to make.

The deadline for those submissions was last week. But the plaintiffs did not make submissions. They pulled the case instead. The claim was dropped.

 

We will never now get to know how the court would determine the issue.

And if you looked at the court record – the online docket is publicly available here – that is the end of the story.

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But the story does not end there.

There is a supposed “settlement” – click here.

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This is not a settlement agreement which the parties put before the court to be endorsed. It is thereby not an agreement that has been recognised by the court, still less are its terms enforceable by the court before which the relevant litigation was brought.

It is instead a private agreement between parties to, among other things, bring the litigation to an end.

Such private side agreements are possible, though the parties lose any benefit of the relevant court recognising and enforcing the terms of the agreement.

The remarkable thing about the supposed settlement agreement is not that it ends the law suit – it is what the agreement purports to do as well.

In essence: a private settlement agreement is being used as a basis for legislating for a lucrative fund for the benefit of third parties and immunity from criminal prosecution for the plaintiffs.

Contracts – including settlement agreements – can be used for many complex and imaginative things, but this goes beyond the extremes for what any contract can properly be used for.

This is instead the sort of stuff that legislation is for, passed by Congress – not a settlement agreement which has not even been placed before a court for endorsement.

The settlement agreement even purports to provide for the tax status of this fund, a fund which is intended to benefit those allies of the president who have been accused of and convicted of crimes against public officials.

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We are in strange times and so nobody can say with any certainty that this slush fund will be held to be unlawful if not unconstitutional.

The scheme should, of course, be quashed on the spot.

The cynical audacity of the proposal, and the means by which it has been contrived, warrant gasps – though not of admiration.

Over at Prospect – click here – this week’s Weekly Constitutional post is about this example of sheer charlatanism.

And that post concludes by saying that if this sort of thing can be imagined by Trump and his cronies, whatever will he and his cronies try to get away with next.