The Constitution grants Congress exclusive control over federal spending—an essential check on the executive branch. But a recent wave of settlement agreements between the Trump administration and major law firms marks the latest in a growing pattern of executive maneuvers that erode this safeguard. By redirecting valuable resources toward White House-aligned initiatives without congressional approval, the administration has effectively created a shadow appropriation. This controversy began in February 2025, when President Donald Trump issued a series of executive orders targeting major U.S. law firms that the administration perceived as hostile. These orders revoked security clearances, terminated federal contracts, and imposed other sanctions. Firms responded in two ways: some challenged the orders in court on constitutional grounds (and have thus far prevailed), while others negotiated settlements committing, in the aggregate, nearly $1 billion in pro bono legal services to administration-approved causes. While the executive orders themselves have raised a host of constitutional questions and ethical problems (and may have also violated federal corruption laws), the resulting settlements pose a distinct and unexamined legal problem: they likely violate the Miscellaneous Receipts Act, a statute requiring that funds received by the government be deposited into the Treasury and thus managed by the congressional appropriations process. Even more striking, the Trump administration’s own Justice Department recently reaffirmed this legal restriction—only for the administration to ignore it in these very agreements.
Trump’s Law Firm Settlements Circumvent Congress & Violate Federal Laws
