No Taxpayer-Funded Settlement Slush Funds Act of 2026
- Sponsor
- Rep. Raskin, Jamie [D-MD-8]
- Committees
- Judiciary Committee (primary)
- Last action
- May 20, 2026
Bottom line
This bill aims to prevent federal funds from being used for certain legal settlements involving high-level executive officials and specific politically charged events, enhancing transparency and accountability in the Judgment Fund.
What it actually does
This bill amends 31 U.S.C. 1304 to prohibit the use of federal funds from the Judgment Fund for compromise settlements or awards to certain high-ranking executive officials, their families, or presidentially-owned entities. It also restricts payments for claims related to the January 6th Capitol attack, 2016 election interference, or previously dismissed civil actions. Furthermore, it establishes reporting requirements for large settlements and allows for civil action to recover improperly paid funds, with retroactive application to January 20, 2025.
Proponents argue
Proponents argue the bill prevents potential abuses of taxpayer funds by ensuring that high-ranking officials and their associates cannot benefit from settlements paid out of the Judgment Fund, particularly for claims arising from their official conduct or politically sensitive events. They emphasize transparency and protecting taxpayer money from being used as 'slush funds.'
Opponents contend
Opponents might argue that the bill could be overly broad, potentially denying legitimate claims to individuals based on their association with the executive branch, thereby undermining the principle of equal access to justice. They might also contend that it could politicize the settlement process by singling out specific events or individuals, and that its retroactive application raises significant legal and constitutional concerns.
The bill is relatively short and its core provisions are straightforward, making it accessible for an informed reader to evaluate within a reasonable timeframe.
Section 2
Specific Prohibition on Trump v. IRS Settlement
This section explicitly prohibits the use of any federal funds to create or make payments to the compensation fund established by the May 18, 2026, settlement agreement in the case of Trump, et al. v. IRS, et al., Civil Action No. 1:26-cv-20609-KMW, before the U.S. District Court for the Southern District of Florida.
Supporters argue
Supporters argue this provision directly addresses a perceived abuse or inappropriate use of federal funds in a high-profile case, ensuring taxpayer money is not used for settlements involving specific political figures.
Critics contend
Opponents might argue this is a politically motivated provision that interferes with judicial settlements and could be seen as an ex post facto law or bill of attainder, potentially undermining the separation of powers.
Tradeoffs
Balances congressional oversight of federal spending with potential concerns about legislative interference in judicial outcomes and the rights of litigants.
Section 3, adding subsection (e) to 31 U.S.C. 1304
Prohibition on Payments to Executive Branch Personnel and Affiliates
This provision prohibits compromise settlements or awards from being paid from the Judgment Fund to the President, Vice President, their immediate family members (parent, spouse, child, spouse of a child), presidentially-owned entities, Cabinet members, high-level Executive Office of the President employees (GS-15 equivalent or higher), political appointees, and individuals who served in these positions during the appointing President's term.
Section 3, adding subsection (f) to 31 U.S.C. 1304
Prohibition on Payments for Specific Politically Charged Claims
This provision prohibits payments from the Judgment Fund for claims alleging harm from investigations, prosecutions, or convictions related to the January 6, 2021, Capitol attack, foreign interference in the 2016 presidential election, or claims based on facts identical to a civil action against the U.S. that was dismissed with prejudice.
Section 3, adding subsection (g) to 31 U.S.C. 1304
Enhanced Reporting and Congressional Notification for Settlements
This provision mandates that the Secretary of the Treasury report to the House and Senate Judiciary Committees within 30 days for any Judgment Fund payment over $100,000, including details like the plaintiff's name, judgment type, attorneys, agencies involved, and a description of the facts. It also requires prior notice to these committees for payments over $250,000 or those based on imminent litigation, imposing a 120-day waiting period after notice before such payments can be made.
Section 3, adding subsection (h) to 31 U.S.C. 1304
Enforcement Mechanism for Prohibited Payments
This provision authorizes the Attorney General to bring a civil action in an appropriate district court for injunctive relief and repayment against any plaintiff or awardee who received a settlement or award in violation of the prohibitions outlined in subsections (e) or (f).
Section 3, adding subsection (j) to 31 U.S.C. 1304
Retroactive Application of Restrictions
This provision states that the requirements of subsections (e) through (h) (prohibitions on payments, reporting, and civil action) apply to any settlement or award made on or after January 20, 2025, including those entered into prior to the bill's enactment date.
Section 3, adding subsection (k) to 31 U.S.C. 1304
Prohibition on Establishing Compensation Funds
This provision prohibits the Secretary of the Treasury from establishing or approving payments to a compensation fund if it is pursuant to a compromise settlement with the President or if such a payment would violate subsections (e) or (f) if made from the Judgment Fund.
Defines 'presidentially-owned entity' as a corporation, association, partnership, LLC, LLP, or sole proprietorship in which the President or Vice President has an ownership stake, with specific exceptions for widely held public companies (more than 100 owners, President/VP holds no more than 5% beneficial stake, and securities registered with SEC or certain investment companies/unit investment trusts).
Section 3(l)(1)
Why it matters:Standard legislative practice to place definitions at the end of a bill, but its specific details are crucial for understanding the bill's practical reach.
Case for: Supporters would argue this precise definition prevents the bill from inadvertently affecting legitimate, widely-held investments while still targeting entities where the President or VP has significant control or financial interest.
Case against: Critics might argue the exceptions are too broad, potentially allowing certain entities with presidential ties to still receive funds, or too narrow, impacting legitimate business interests.
Estimated impact: Clarifies which entities are covered by the payment prohibitions, potentially excluding many publicly traded companies from the restrictions.
This provision clarifies that nothing in the bill prohibits Congress from specifically appropriating funds for a payment that would otherwise be prohibited by the bill, provided it is done on an individual per-claim basis.
Section 3, adding subsection (i) to 31 U.S.C. 1304
Why it matters:It's a legislative 'safety valve' or clarification of existing congressional authority, often placed near the end of a section to ensure it doesn't override the main intent without explicit action.
Case for: Proponents might argue this provision maintains congressional prerogative and flexibility, allowing for specific, justified exceptions to the general prohibitions when deemed necessary by the legislative body.
Case against: No specific opposition is typically raised against this type of clarification of congressional authority, as it preserves the power of the purse.
Estimated impact: Preserves Congress's ability to make specific exceptions to the bill's prohibitions, potentially allowing for payments in unique circumstances if explicitly authorized.