Restoring Faith in Functioning Government

This episode of Search Engine is brought to you in part by NPR's Planet Money Whether you're an expert or just curious, Planet Money from NPR is the show that makes sense of the economy through stories you'll actually want to hear I still remember their classic Planet Money Makes a T shirt series where they tracked the global supply chain from a cotton farm in Mississippi to a factory in Bangladesh. It turned a massive abstract concept like globalization into something human and intangible. That's their superpower, making the complex feel simple Their hosts go to unusual lengths to explain the world to you They have published their own book, shot a satellite into space to understand the private space industry. They even went inside a live book auction to show how ideas get to market This the kind of show where you learn something, probably laugh, and walkay seeing the world a little differently It's a space where the complex economy somehow makes sense and the dismal science becomes anything but Follow NPR's Planet Money podcast and understand how money shapes the world This episode of Search Engine is brought you in part by Zapppier We cover a lot of trends on this show, and over the last few months, everyone has been talking about AI. But let's face it, talking about trends doesn't help you be more efficient at work. For that, you need the right tools. You need Zappier Zabi is how you break the hype cycle and put AI to work across your company for real Zaapier is truly for everyone, tech expert or not, and teams use it to automate everything from marketing to IT. It's how you actually deliver on your AI strategy with an AI orchestration platform that brings power to any workflow. so you can do more of what matters You can connect top AI models like Chat GBT and Claoud to the tools your team already uses, allowing you to build AI powered workflows or autonomous agents exactly where you need them Teams have already automated over three hundred million AI tasks using Zapier between the millions of businesses transforming how they work with Zapier and AI. Get started for free by visiting Zapier d. com slash search. That's Za eR. com slash search This is search engine. I'm PJ Vote. No question too big you smile Question to taxing. We were not supposed to have an episode this week, and yet, here we are All because of a big national news story that has been developing, a story that we here at the show have not been able to stop talking about President Trump's Anti weaponization Fund The origin story of that fund actually begins years ago with an enormous IRS leak, a leak that let the American public see both Trump's tax returns, as well as the tax information of hundreds of American billionaires It was obvious at the time that this was a huge story. We covered it here at seearch Engine. What was not obvious though, was where it would lead Jesse Eisinger, a journalist at Pro Publica, played a weirdly large role in the chain reaction that's led us to today So we asked him back to search Engine Studios to help us understand what's going on here I kind of want to like return to the story that you told L last time we spoke, but I know not everyone will have listened to that episode. Can you just tell me like Many years ago, you got An anonymous tip, which led to a big reporting project. Can you just like sort of describe what the tip was and what the reporting project was in brief Sure. I was born in a log cabin one day I was looking at my phone and a signal pops up and guy wanted to get in touch with me is a tip like I get many times a week And this one turned out to be the greatest tip I've ever had. Eventually the guy leaked to us the tax information for all of the wealthiest people in America. All the household names that you could imagine, Jeff Bezos, Michael Bloomberg, George Soros, Warren Buffet, Bill Gates, etcetera, etcetera. Elon Musk And then we gathered a huge team at Propublica to report on the tax returns. and Paul Keeel was my partner in this. and we eventually over years published over fifty stories based on these returns about the tax avoidance strategies of the wealthy picture is surprise, surprise, the lay understanding of our tax system is that it's extraordinarily unfair and that people who are extremely wealthy avoid taxes in myriad ways. some of them entirely legal and very simple to do. what we did was very powerful because we named names. So we showed that Jeff Bezos had literally paid zero in taxes for two years when he was a billionaire and Michael Bloomberg paid zero in taxes and Carl Icon paid zero. What we also showed is that they pay just trifling sums of taxes compared to their wealth growth. So they avoid income And by avoiding income, they avoid taxes and their wealth grows and grows. and then often they borrow against their wealth. to fund their lifestyles At the time that you were reading your story, you didn't know the identity of the person who was leaking to you, but later he was He was arrested until you found out his identity. Yes. Yeah, he was a contractor for the IRS working for a consulting firm Booz Allen. He's a guy named Charles Little John and he had actually leaked the ax returns to the New York Times. and provided them with the information to write their blockbuster story on Trump's tax avoidance strategies, huge important public service. And then he realized that the problem of tax avoidance was much bigger than one person and wanted to expose tax avoidance strategies of wealthiest among us and that's when he came to us. He had seen Paul and I had done a series of stories. I like to think of it as the the least red, most boring investigated series of all time, which was about the gutting of the IRS One person who was very important actually read that, which was Charles Littlejohn, and he unbeknownst to us. We didn't know his identity, as you just said. He gave us the tax returns and then that actually got him caught. If he had just leaked the tax returns of Trump, he wouldn't have gotten caught. He would have gotten away with it. Was it just because now he had accessed more it wasort across the. Yeah, it was much easier to figure out where it came from. And one person's tax returns could have come from so many different areas that the IRS didn't even occur to them to kind of do a search for that kind of query. but the massive queries that Little John had done out, they're very obvious And so the IRS figured it out. They charged him, he pled guilty and is now serving a five year prison sentence, which is the longest sentence for anyone who leaked non classified information in American history for what I consider to be a great public service. So I consider him to be a whistleblower of great importance. And so rememember Trump had been the first presidential candidate in a long time to not voluntarily disclose his tax returns. People had a lot of questions about whether he was paying taxes, like about his money. And so I remember the moment that his tax return was published. I remember the reporting that you guys did about just sort of the way the wealthy were engaging in tax avoidance at the time of like, that reporting. as you're working on it What was your sort of like If you'd stopped and thought, I don't know if you did, but like the best case scenario of Trump Tax return is going to come to late All these other people's tax strategies are going to come to light. Like what was the like hopeful outcome of what all that could mean Yeah, well, I don't really operate with a lot of hope. I I don't wake up in the morning just think. What changes will make American society better today? I can't wait to see them. You know, I think the system should be reformed and can be reformed to make the wealthiest pay more And so you take somebody like Donald Trump And one of the things that was I was shocked by it, and I refuse to not be shocked by these things and I refuse to kind of succumb to cynicism is that he literally did not pay taxes for years and years And it turns out that he's not alone because commercial real estate billionaires can pay zero in taxes. It's because they it's a simple reason is that they get to say that their buildings are losing value It's just an accounting fiction In fact, what's happening is the buildings are appreciating in value. Thatnds to what happens to property owners. Yes especially in New York, right. And so the properties go up in value, but these billionaires sometimes can say to the IRS, I'm personally losing one hundred million dollars a year. You see these people with these ludicrous, absurd statements of you know nine figure losses on income. And so that's the magic of accounting So there are billionaires often who pay zero in federal income tax, but the more important thing was that they pay very little as a fraction of their kind of overall wealth growth And so I think one of the feelings I just as a As I said As a person who wonders about The inner lives of other people, including the present, one of the things I'd wondered about was like Honestly, like, did he care You you know what I mean? I was like, doeses he care? Can you tell me about the news this week Yeah, so I mean, I don't know if he has much of an inner life. The president. didid he care? you mean, was he upset or offended about having his taxes leaked? Yeah He Trump repeatedly acted as if he was violated for this. Now, as you just said, what he was doing was violating a norm of behavior that had lasted for about fifty years for major presidential candidates, they released their tax returns. leak was this extraordinary violation of what we think is a fundamental kind of aspect of transparency when we come to our major political leaders. So what he did was he waited for a while and then he sued the IRS in one of the most extraordinary actions president has taken in American history. So tell me about Why that's extraordinary tell me about the lawsuit, like what was unusual about the lawsuit? Yeah It was so mind bending and weird. and outrageous.'s it's actually pretty hard to kind of understand what happened. But What he did was he in his personal capacity sued the federal government, which he runs for ten billion dollars for having allowed the leak of his tax returns So he, the private citizen, is suing the government. but he's essentially he's on both sides of that lawsuit. Right. There had to be steps that were taken before he could even effectate this lawsuit. And the first step was that he's taken over the executive branch of the federal government, the administrative state of the federal government. Obviously he is the executive. He was legitimately elected. But we had norms of independence for our federal agencies that had grown up really in the post Watergate era, but had been developing for a long time. The idea of an independent civil service had been developed for well over a hundred years. And what Trump said was no, I control everything. There is no such thing as an independent agency. There is no such thing as a nonpartisan civil service, I have control over every agency, including the Department of Justice, which had really acted very independently since Watergate But it turned out it was just a norm. It was just tissue paper. And once you tore it up, there was nothing left standing and the Supreme Court essentially allowed him to act in this way as the executive with power over the agencies. So that was step one.. Step two was to take control of the Republican partarty so much Congress was supineed. and has been throughout the second So he had to have those two things in place. And then once he had that in place, what he could do was sue the federal government. so the Department of Justice was responding to his suit on behalf of the Treasury Department and the IRS. And then they were in a position where they were purportedly adversarial And it went to a judge and the judge said, explain to me how this is an adversarial process. Because like in theory, if I were like, N got in over my head on my like buying designer button up shirts on EVay Habit. and I was like in trouble and I like sued search engine. business that I co run, And then went to court, a judge would be like, this doesn't you can't be in a fight with search engine. It's like if you want to take money from search engine, take make money from search enine, but you can't say that you' fighting with search engine and the court has to provide relief because obviously you don't have an adversarial relationship to search engine. I think that was a pretty good analogy, but like not even didn't even get to mean It's so it's so circular, it's so weird. You know, you can imagine that you're engaged in an adversarial process with your employer. This is like It's like suing yourself over having bought too many shirts. is not terrible ide. Yeah. Eactly. Some kind of personal constraint. You know, The analogies, the analogies are hard. A we out past the land of analogies because we're in a place that is too strange It's it's completely mind boggling and strange and really impossible to understand like how it could happen because then what happened was they got into settlement negotiations with themselves actually joked about it. He said, I'm negotiating with myself over the settlement because the judge in this said, there is no adversarial relationship. You don't have a case, you don't have a controversy. So there's nothing for me to adjudicate here, or I think there's nothing here. So you're going to have to brief me on why this is. And they said, oK, we're going to withdraw the lawsuit and then we're just going to negotiate a settlement with ourselves. And so Todd Blanche, the acting attorney general who was the for personal lawyer for Trump was negotiating with Trump over, you know, I thought it was like, well, how blank would the check that we can you know, write to you be, where can we make it more blank so you can fill in whatever number you can, he sued for ten billion dollars, which was a ludicrous number, but why not twenty or a hundred billion dollars? Yeah But then there was this twist where they decided not to just hand Trump money they had this new strategy which is to create this fund. So one possibility is they would have just like wired it to his chase account. Tell me before you get to the analysis about the fund, what is the fund Okay, so What happened was they reached a settlement And the settlement is the anti weaponization fund And the thing I know that this is bad, but it's so comical. It's funny. It's great content. Yeah, I feel like this is the kind of thing where people have said, you know, Trump's funny. you know, he's been amusing. I'm s no longer amused you know. It's the idea that somehow this is ending in kind of reparations for Jan Sixers is just literally, yeah, literally reparations. reparations. He calls it anti weaponization know, what I thought that was funny was that it first was reported as a one point seven billion dollars fund. I was like, that's such a weird random number. why whyy not two? Why not have a round number changed to one point eight. I was like, well, why did they go from one point seven to one point eight? And the reason was that it was never one point seven to one point eight. It was one point seven seven six seventeen seventy six because they're just rolling us Yes. And so I thought like, I was just so annoyed by the trolling. you know, you can imagine that they're going to do all the Instagram posts celebrating their anti weaponization fund checks. Yeah ye. So the fund is purportedly going to go to anyone who is able to show that they were victims of Biden administration's, you know, quote unquote weaponization Yeah, which really just means law enforcement and they haven't really defined it It's going to be a very secretive slush fund that they can dole out esssentially at the president's whim. And it's not clear that they will have to say who they've given the money to. L that is one of the things that there's question marks around. Yeah, well, they might not be able to because you're not allowed to disclose who government money went to without the consent of the recipient So there's going to be all sorts of questions about transparency and process here. So what happens is they built this one point. seeven, we're going to round up to one point eight billion dollars fund. and coming out of an existing amount, pot that Congress allocated in the nineteen fifties. And what was the pot one of the questions I just had is Wh? likeike Almost two billion dollars Obviously, like the founding fathers were not like, there should be a fund for the president to pay his friends and punish his enemies. Like whyy was this money going there? Yeah, right. So what happened was The government occasionally gets sued and there's some wrongs, and then the government will pay out funds. And what Congress did was say, look, we're not going to authorize this in each individual case. So we're going to give the treasury, this is happened in the fifties and sixties, and we're going to give the treasury a fund Where if there's a serious legal process where there's real parties who are adversarial, overseen by a judge, where there's a presentation of evidence and a gathering of facts and some determination of real victims, then they'll be able to pay this fund out and Congress doesn't have to authorize it in each individual case. So So there's an existing pot of money for when the government makes mistakes. Yeah, it's not supposed to go this direction from this person is's supposed to be Trump's pay bank. Right. I mean, this is this innovation and you kind of have to hand it to him because they're groundbreaking in their imagination and brazenness about how to use the levers of presidential power. and one of them is to you locate this fund and understand its capacity transfer the money for this kind of purpose, which is a really corrupt because it was never used to benefit political patrons or allies of the president So it was not the slush fund for the personal use of the president for his funds. I mean, this is what the constitutional crisis is about And this is a constitutional crisis. It is a usurpation of congressional authority over the power of the purse, and this is an utter abuse of power from the executive in a way that's almost worse than having him personally profit from this. This is what the crisis is. So it's in the dark to be subverted for American taxpayer dollars, you know my dollars and your dollars are going to go into this fund and then without any process of transparency or any ex ante criteria, You know, so somebody anybody can petition the government and then this is actually a secret board. We don't know who's going to be appointed to it. Five people appointed by Todd Blanche, the president's former personal attorney, acting attorney general is going to oversee these five people, but they serve at the pleasure of the president so the president could fire them at any time. And as we've seen, he will fire people at any time. and then they will decide in private who gets this money. It's crazy. It's crazy. it's Cray. It's crazy that it's happening But I do feel like this may be breaking through to some extent because it's so brazen One piece of evidence for Jesse's theory that the story is so unusually brazen that it even breaks through to the people who don't spend much of their time being outraged, Is that it broke through to me My nervous system rejects outrage. I only really like stories that invite lots of feelings, not knowing, complexity The Pident uses taxpayer money to make personal slush fund is not a normal search engine story But it's where we are this week because it genuinely did grab my attention genuinely force me to feel things that I try not to feel Because I think if you feel them too often, they do something bad to your brain I'm sure our next episode will be more normal. But this week I feel like I've hoouffed a can of MSNBC I solemnly apologize Jesse is different from me. He routinely reports on stories that outrage him. He tries to bring outrages to light on behalf of the public interest But even for him This is a story where when he imagines its next act His imagination offers some particularly blank outcomes. Jesse, the possibility that Trump just pays his friends about two billion dollars of taxpayer money, so it'll somehow end up back in his pocket would actually be not as bad as another outcome The worst one he can imagine is this Trump has about two billion dollars now and he fulfills his promise to pay the january sixth insrreionist And now He has something that looks a little bit like a paramilitary group People who do violence at his command, who he then gets out of jail and pays What does he do with them next Is America flirting with something darker here than we flirted with before I don't know what to make of that You can make the mistake of driving yourself crazy imagining terrible futures You can make the mistake of summoning terrible futures by telling yourself they'll never arrive. But the facts that we know are that the president has nearly two billion dollars at his discretion, and he won't have to tell us who he pays it to And Jesie points out This fund also contains language that's meant to inoculate Trump his family and his family organization from IRS audits past audits and possibly future audits, depending on how a court interprets the language here All of this, of course, will be challenged in court To some degree, what happens next has to do with judges and politicians in the next election but it also has a lot to do with us With what we decide is worth our sustained attention We're going to take a short break When we return, we will go Back in a way, the beginning This whole story started weirdly because a lot of very wealthy people wanted to avoid paying their taxes. And some journalists thought if they could get more people talking about this, that might be a good thing People are talking about it Has it been a good thing Honestly, the answer will surprise you. It'll surprise you after these ads This episode of Search Engine is brought to you in part by NPR's Planet Money Whether you're an expert or just curious, Planet Money from NPR is the show that makes sense of the economy through stories you'll actually want to hear I still remember their classic Planet Money Makes a T shirt series where they tracked the global supply chain from a cotton farm in Mississippi to a factory in Bangladesh. It turned a massive abstract concept like globalization into something human and intangible That's their superpower, making the complex feel simple. Their hosts go to unusual lengths to explain the world to you They have published their own book, shot a satellite into space to understand the private space industry. They even went inside a live book auction to show how ideas get to market If the kind of show where you learn something, probably laugh, and walk away seeing the world a little differently It's a space where the complex economy somehow makes sense and the dismal science becomes anything but Follow NPR's Plet Money podcast and understand how money shapes the world. This episode of Search Engine is brought to you in part by Zapier. We cover a lot of trends on this show, and over the last few months, everyone has been talking about AI. But let's face it, talking about trends doesn't help you be more efficient at work For that, you need the right tools. You need Zappier Zabi is how you break the hype cycle and put AI to work across your company for real Zaapier is truly for everyone, tech expert or not, and teams use it to automate everything from marketing to IT. It's how you actually deliver on your AI strategy with an AI orchestration platform that brings power to any workflow. so you can do more of what matters You can connect top AI models like Chat, GPT and Clodd tools your team already uses, allowing you to build AI powered workflows or autonomous agents exactly where you need them Teams have already automated over three hundred million AI tasks using Zapier betweensween the millions of businesses transforming how they work with Zapier and AI. Get started for free by visiting Zapier d. com slash search. That's Zap ER d. com slash search Welcome back to the show Here's something I think about sometimes When there's an unsolved problem in American life, whether it's immigration policy, whether it's taxes Sometimes the problem benefits from more attention accring to it But just as often the heat of public attention can actually make things worse Politicians begin to politic, sober voices leave the field I'm describing something that I don't think I need to describe because you live here too. Jessse cared about tax policy before it was, and I used this term very loosely T. Or as nerds would put it, before it was more highly salient One feature of that newfound salience is Trump's fund Another though, is lots more conversation and policy ideas aimed at changing American tax policy Jesse is famously not an optimist, not an optimist, just a grouch who works all day trying to make an impossible world better But I wanted to know what Jesse sees when he looks out now at the current landscape of American tax policy. We're in a race between The oligarchs and Democracy So people are very angry about billionaires. on the left and the right. and feel like American society is fundamentally not working. and they blame the wealthy for absorbing too many of the resources and profiting unfairly and you know, having all of these benefits accue to them and they're still struggling. And I sort of think that critique is fundamentally true in American life And then there's a lot of ferment about taxing the wealthy Now which I think we contributed to that conversation Um, you know Bernie Sanders and Elizabeth Warren ran on wealth taxes Occupy Wall Street brought this kind of to the fore with the kind of ninety nine percent and one percent language. So I think it's been building since the financial crisis really, which was a collapse in the American order up toil then. And we've been struggling to kind of replace it. And people have thought that banks, bankers Wall Street, the wealthy have been screwing us for a long time So it's been building and building, and now there's a lot of good policy thinking about how to properly tax the wealthy. But the wealthy have gotten so much richer in the time that this has been building and they've consolidated so much more power. and are spending so much more on our elections that uh, you know, the I would say the forces of democracy continue to be losing this they haven't lost Do you feel like like I've just been surprised I feel conflicted. about how to think about what's happening right now in America, where I feel like when I look at the conversations around taxes I see like attempts to tax the wealthy more competently, which they seem to like evade very easily And I see a general feeling where the reaction almost seems to be like, wellll just like rather than The wealthy should pay more billionaires should pay more. I feel like where I'm actually seeing energy is, well, maybe nobody should pay taxes. Yeah. And like I'm not saying like I enjoy tax dayay, but it's a place where I feel like civic. and I've been I feel like what I see like no tax on tips or whatever. it feels like It's just like we're just sort of starting to arrange carve out after carve out after carve out, rather like the feeling is like, Almost a kind of like nihilism. That's what I feel like I pick up when I read what I say. Yeah, I completely agree with you. and I wish that I think you are in a category of about seven people in America who are sort of happy about paying taxes in the way that you just described, which is admirable and correct, which is that it is a civic dy, it's a responsibility and should be a point of prize U if we could get back to that we would be in a much better place. And I think that of the idea of taxing the wealthy is not to strip them of their wealth, which the taxes wouldn't do, but to require them to contribute to our shared prosperity. And the project of American shared prosperity has completely collapsed and been destroyed over the last sort of fifty years, I think Yes, I think you're right that becauseuzz of people's cynicism And because of this kind of collapse in the faith in any institution in American society to make things better, including the government, even Democrats have said, well, we want to start to exempting other people, whole classes of people from paying taxes. And so you see from Senator Cory Booker and Chris Van Holland efforts to exempt greater numbers of people who make less money from paying federal income tax. And that's a s really a terrible move in my view U It's totally wrong we should all pay taxes and we should all pay taxes in proportion to our income and we should define our income correctly. And then we can actually tax the wealthy and draw more from the wealthy as a higher percentage than from the poor. But yes, the direction of sort of starting to piecemeal exempt everyone else from Texas will destroy us. I mean, a functioning society has to collect taxes well and equitably And before you have a democracy, you have to have a functioning society and the functioning society is based on equitable tax collection. And if you don't have that, you collapse.'s the lesson of history. Yeah, I think what is strange about this era is like for the people who support Trump, but also for the people who resist him or dislike him or just don't vote for him The way where everyone seems to be continuously mirroring each other is to say like the system's rig The institutions are crumbling Let's make it worse. And that's like I don't know what you do with that. I just notice it it worries me. Look at Mam Dani. Mamani is running on the idea of government And he's saying government is good and we have to make government good. Yeah, We can't deliver If we don't deliver on our promises, we erode people's confidence. And so it's a principle about the project of creating a society and having a governing body over that and having the governing body actually work for people Yeah, and you see them kind of trying to build L like if right now so much of politics is what can you make legible on social media on the internet, The thing that I see him trying to make legible is functioning government. Like the thing I see him doing pretty often is to be like Here are city workers fixing potholes. Here is what happens when it snows. like Even like the police department in New York City the other day ahead like confiscated a bunch of illeal, dangerous street bikes and they were running them over with a bulldozer. But I was like, okay, they're trying to show in some way the message seems to be, I mean, this is not how they would put it, but it's a message you can read in it and I can read in it. Like your tax dollars are going to something. keep paying your taxes. Basically. Yeah. I don't know. but I think he's saying, you know, we can't We can't make all these promises and then not only not deliver on them, but not show people. We need to show people what we do for a living. You know, where the money's going How it's working. I think it's a purposeful strategy. I think it's well thought out. And Democrats have been kind of conceding this idea that government was ineffective, inefficient and sort of the wrong idea since Clinton really. You Clinton sort of said the era of big government is over. I think they've been running away from government And you know one idea would be to embrace the idea of government and try to make it work for people ' Jesse Einger. He's an assistant managing editor at Pro Publica and Asantro Puba If you liked what you heard here, I have fantastic news for you. Jesse's oututfit Pro Publica just launched a podcast called Paper Trail. It's ambitious work. They're doing real reported stories, the kind of thing you don't always get to hear on audio podcasts these days. They just launched. If you're curious, just stick around after this break, you can hear a trailer of their new show This episode of Search Engine is brought to you in part by NPR's Planet Money Whether you're an expert or just curious, Planet Money from NPR is the show that makes sense of the economy through stories you'll actually want to hear. I still remember their classic Planet Money makes a T shirt series, where they tracked the global supply chain from a cotton farm in Mississippi to a factory in Bangladesh It turned a massive abstract concept like globalization into something human and tangible. That's their superpower, making the complex feel simple. Their hosts go to unusual lengths to explain the world to you They have published their own book, shot a satellite into space to understand the private space industry. They even went inside a live book auction to show how ideas get to market This the kind of show where you learn something, probably laugh, and walk away seeing the world a little differently. It's a space where the complex economy somehow makes sense, and the dismal science becomes anything but Follow NPR's Plet Money podcast and understand how money shapes the world This episode of seearch Engine is brought to in part by Zapier We cover a lot of trends on this show, and over the last few months, everyone has been talking about AI. But let's face it, talking about trends doesn't help you be more efficient at work. For that, you need the right tools. You need Zappier Zabier is how you break the hype cycle and put AI to work across your company for real. Zappier is truly for everyone, tech expert or not, and teams use it to automate everything from marketing to IT. It's how you actually deliver on your AI strategy with an AI orchestration platform that brings power to any workflow. so you can do more of what matters You can connect top AI models like Chat GBT and Cloud tools your team already uses, allowing you to build AI powered workflows or autonomous agents exactly where you need them teeam have already automated over three hundred million AI tasks using Zapier.