On January 29, 2026, a sitting U.S. president filed a $10 billion lawsuit against his own government. Not against a foreign adversary. Not against a political rival. Against the Internal Revenue Service and the Treasury Department – two agencies he directly oversees. No president in American history had ever done that before.
The lawsuit, filed personally by Donald Trump alongside his sons Donald Trump Jr. and Eric Trump, accused the IRS of failing to protect the family’s confidential tax records, which were leaked during his first term by a government contractor. That contractor, Charles E. Littlejohn, was sentenced to five years in prison for leaking tax data to The New York Times and ProPublica. The practical implication was extraordinary: if the case resulted in a payout, Trump’s own administration would be writing a check to Trump and his family, drawn from public funds. The presiding judge raised the “unique dynamic” of a sitting president suing agencies “subject to his direction.” Ethics watchdogs and Democrats in Congress sought to intervene in what is the first known instance of a president suing the government he leads. That fact alone forms the backdrop for a label that one prominent American journalist gave Trump in June 2026. The phrase was two words, and it required almost no explanation.
Trump’s New Title
New York Times columnist Thomas Friedman, writing on June 2, 2026, argued that Trump behaves more like America’s “commander in thief” than its commander in chief. In that column, Friedman characterized Trump’s conduct as a “brazen, in-your-face attempted heist of the U.S. Treasury to benefit himself, his family and his political allies.” The column wasn’t casual opinion-page wordplay. It was a structured argument, walking through a series of financial and political maneuvers that, taken together, paint a portrait of a presidency unlike any in modern memory.
Friedman also accused Trump of having “conspired with his own Justice Department, headed by his former personal lawyer, to use taxpayer money to create a $1.776 billion political slush fund.” The reference is to a fund connected to the resolution of the IRS lawsuit. Trump and his family ultimately dropped the $10 billion IRS lawsuit in exchange for the Department of Justice creating a $1.776 billion fund to settle claims by people who allege they are victims of so-called lawfare. Lawmakers in both parties raised concerns that applicants could include January 6 rioters who had been convicted of violent crimes and later pardoned by Trump.
In a statement, Senator Mitch McConnell called the fund “utterly stupid, morally wrong, take your pick.” For McConnell, a Republican and long-serving Senate leader, to rebuke a sitting president of his own party in those terms was a rare moment of bipartisan alarm at the direction a presidency was heading.
The settlement created a five-member commission authorized to distribute more than $1.7 billion in taxpayer dollars to purported victims of “lawfare and weaponization,” with potential recipients including nearly 1,600 people charged in connection with the January 6 Capitol attack – and President Trump retaining the power to fire commission members at will. A federal judge later ordered Trump to address fraud allegations connected to the deal. Friedman also expressed alarm at how Trump’s actions toward America’s allies had forced them to engage in deterrence – not just against Russia, but against America itself.
A Business Empire Running Alongside the Presidency
The IRS lawsuit and the slush fund are striking partly because they sit alongside a much broader pattern of financial activity during Trump’s second term. The scope of the Trump family’s business operations while holding the presidency has no modern parallel.
Trump and his family earned more than $1 billion last year through cryptocurrency ventures and other businesses, according to a 927-page financial disclosure report. More than $500 million came from the cryptocurrency venture World Liberty Financial, which was co-founded by Trump family members, while Trump-branded meme coin sales generated more than $600 million. Crypto entrepreneur Justin Sun – whom the SEC sued in 2023 for fraudulent market manipulation – announced a $30 million initial investment in World Liberty Financial in late November 2024. Shortly thereafter, the SEC quietly halted its case against him, raising concerns about whether Trump’s financial interests influenced the agency’s decision-making. The Trump family also sold a substantial stake in the same platform: the Trump family sold nearly half of World Liberty Financial to a UAE government-linked entity for $500 million in the days before Trump’s inauguration.
The Trump Organization’s physical properties have also generated enormous revenue during the presidency. The Trump family pooled $77.4 million from the Mar-a-Lago property and $121.8 million from the Doral golf course. Meanwhile, Eric Trump and Donald Trump Jr., as executive vice presidents of the Trump Organization, have been actively expanding the family’s global real estate footprint, including major developments in India, Vietnam, Saudi Arabia, and the UAE.
An Office of Government Ethics form certified in May 2026, covering more than 3,600 trades executed in the first quarter of the year, carries its own notation that the filer paid late fees, and every transaction listed on the form is flagged as having been reported more than 30 days after notification was received. Trump disclosed that his trust has been actively trading individual stocks – a practice described as unprecedented for a sitting U.S. president in the modern era, raising concerns about how his actions and public statements could benefit his financial holdings.
The Ethics Problem No Law Can Fix
Richard Painter, who served as chief White House ethics lawyer under President George W. Bush, told NPR’s Morning Edition that federal conflict-of-interest laws would prohibit other executive branch officials from taking similar actions, and that Trump “stands alone in having such substantial financial conflicts of interest” as president. The problem, as he has noted in that NPR interview, is that the federal conflict-of-interest statute that applies to every other executive branch official does not apply to the president. Painter has stated plainly that if, through his official actions, a president can change the price of a stock he owns, that is a financial conflict of interest that would be prohibited for anyone else in the executive branch – but the law carves out an explicit exemption for the presidency itself.
Every president since Ronald Reagan has either put their assets in a blind trust managed by independent trustees or sold off their stocks to eliminate conflicts of interest. Trump transferred his assets into a trust, but Painter says the arrangement changes little in practice. The trust allows Trump’s children to make decisions about the assets on a day-to-day basis – but those assets are still owned by Donald Trump, so all the potential conflicts and all the money that comes with them still rolls back to him.
The practical consequences of that arrangement are visible in the market data. When a president can move markets with a social media post, announce a tariff pause that sends stocks up 9.5% in a single session, and simultaneously hold an active personal trading portfolio, the line between governing and profiting becomes very difficult to draw.
Allies, Optics, and the Costs Abroad
You can browse The Hearty Soul’s coverage of Trump’s second-term actions and find a consistent thread running through many of them: the financial and the political are rarely separate. Friedman’s column drew that thread forward into 2026, connecting the domestic financial picture to something with wider implications.
Friedman noted that the nation is at war, with tens of thousands of troops deployed near Iran – and argued that generally, when the nation has been at war, the commander in chief’s top domestic priority is to keep the country united. Trump has not built that unity. He has not sought Democratic support for military operations, and divisions at home have deepened alongside operations abroad.
The cost to American credibility among allies has been measurable. Trump’s threats to annex Greenland and pressure Canada drew alarm from NATO partners, with the UK, France, Denmark, and Germany reaching a point where they regarded the U.S. military posture as something to plan around, not rely on. European business executives, Friedman wrote after traveling to Portugal, described having “lost faith in American institutions and in America as the guarantor of global legal norms” – “literally disorienting for them, like hikers who have lost their compass.”
Friedman wrote that having a president who “behaves like a commander in thief – not a commander in chief – is costing us dearly at home and abroad,” adding that “this perversion of the American presidency is undermining the very alliance structure that won two world wars and the Cold War and generated one of history’s longest ages of peace and prosperity.”
None of this is abstract. The $10 billion IRS lawsuit, had it produced a settlement, would have been paid with taxpayer money. The $1.776 billion “anti-weaponization” fund was drawn from the same source. Every other president and major-party nominee for the past 50 years voluntarily disclosed their personal tax information to the public to provide transparency about potential conflicts of interest – and Trump and his sons sued for roughly two-thirds of the IRS’ total annual budget.
The pattern Friedman documented is a presidency in which the machinery of government – the Justice Department, the IRS, foreign policy leverage, the power to move financial markets – operates alongside, and sometimes in service of, private financial interests at a scale that the American system was not designed to accommodate. Federal law, by design, exempts the president from the conflict-of-interest statutes that bind every other executive branch official. The Trump new title – “commander in thief” – is sharp enough to sting precisely because the facts it rests on are, at this point, public and documented.
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AI Disclaimer: This article was created with the assistance of AI tools and reviewed by a human editor.
