A new bill introduced by leading Senate Democrats would bar any current or future president from personally profiting off lawsuits filed against the federal government while in office. The push follows President Donald Trump’s multibillion-dollar legal action against the Internal Revenue Service (IRS) and the Treasury Department.
Sen. Ron Wyden of Oregon, the top Democrat on the Senate Finance Committee, and Senate Minority Leader Chuck Schumer of New York unveiled the Stop Presidential Embezzlement Act on Tuesday, after Trump filed a $10 billion lawsuit tied to a past leak of his tax records.
The proposal would eliminate any personal financial gain from such cases by placing a 100 percent tax on settlements or awards paid by the federal government to a sitting president, vice president, Cabinet member, or member of Congress.
Why It Matters
The legislation arrives as Trump, his sons Donald Trump Jr. and Eric Trump, and the Trump Organization seek damages from the IRS and Treasury over a major disclosure of confidential tax information that was later published by news organizations.
Although the lawsuit focuses on alleged harm to Trump and his business interests, the lawmakers backing the bill argue it highlights a broader issue: the risk of conflicts of interest when a sitting president can potentially benefit financially from actions involving their own administration.
The Lawsuit
In announcing the bill, Wyden and Schumer accused Trump of leveraging his position for personal benefit.
Wyden said in a statement that the conflict created by Trump suing the federal government while leading the executive branch goes far beyond typical ethical concerns.
Trump’s lawsuit claims the government failed to safeguard his tax returns, which prosecutors say were unlawfully taken by Charles “Chaz” Littlejohn, an IRS contractor at the time. Court filings allege Littlejohn obtained the records and provided them to major outlets, including The New York Times and ProPublica. He pleaded guilty in 2023 and received a five-year prison sentence in 2024.
The leaks occurred between 2018 and 2020. One report published in 2020 found Trump paid $750 in federal income tax in 2016. Trump’s lawsuit argues the disclosures caused serious reputational and financial damage.
In the court filing, the plaintiffs said the defendants caused “reputational and financial harm,” public embarrassment, and damage to business reputations, while negatively affecting Trump and the other plaintiffs’ public standing.
A spokesperson for Trump’s legal team argued the leak was politically motivated and said Trump intends to hold responsible parties accountable.
Conflict-of-Interest Concerns
Critics say the case places Trump in an unusual position: he is both a plaintiff and, as president, the head of the executive branch expected to defend the government in court. Former federal officials, in a friend-of-the-court brief filed last week, warned this could undermine the fairness of the proceedings.
They argued that a president could exert influence over litigation decisions and that “collusive litigation” could threaten the integrity of the judicial process, raising doubts about whether the Department of Justice would defend the public interest as aggressively as it would in other cases.
Trump has acknowledged the unusual dynamic. In comments on February 2—while discussing a separate matter involving his administration—he noted the oddity of effectively negotiating with himself and suggested any money could be directed to charity.
Wyden responded by questioning the sincerity of that pledge, saying it would be a misuse of office for a president to put themselves in position to receive billions in taxpayer funds. He also argued Congress should act quickly to prevent any sitting official from personally benefiting from such claims.
