Trump administration drops $1.8 billion anti-weaponisation fund

The Trump administration is abandoning plans for a nearly $1.8 billion fund to compensate people who said they were targeted by government abuses, Acting Attorney General Todd Blanche told lawmakers Tuesday, retreating after bipartisan criticism and court setbacks.

“We are not moving forward with the fund,” Blanche said during a House appropriations subcommittee hearing. “Period.”

The decision ends, for now, an effort to create what officials had called an “anti-weaponisation” fund. But Blanche said the Justice Department will keep in place a separate agreement that bars future Internal Revenue Service audits of President Donald Trump, his family and related entities involving past tax records.

The fund and the audit provision were part of a settlement meant to resolve Trump’s $10 billion lawsuit against the IRS over the leak and alleged mishandling of his tax returns. The proposed fund totaled $1.776 billion and would have paid people who claimed they were victims of government abuse. Democrats and Republicans had objected to what The Guardian described as a loosely controlled fund that could have been awarded with no restrictions to allies of the president.

Blanche defended the rationale behind the proposal even as he said the administration would drop it.

“The reasons for the fund is something that President Trump talked about for a long time, which is the fact that there were a lot of people in this country who had their government weaponized against them,” he said. “The reasons for the fund, I think, remain as important as they were before, but we are not moving forward with the fund.”

Al Jazeera reported that the reversal followed a rare and intense backlash from Republican senators, as well as criticism from Democrats. Senators had been at an impasse with Trump over a $72 billion bill to fund Immigration and Customs Enforcement and Border Patrol operations, and congressional leaders questioned whether the bill could pass unless the fund was killed, according to Al Jazeera.

The fund had also run into legal obstacles. A federal judge in the Eastern District of Virginia blocked the administration from taking action on it for the next few weeks while motions are pending. A federal judge in Florida overseeing the lawsuit that produced the settlement also reopened the case to examine whether there had been wrongdoing, an unusual step, The Guardian reported.

One point of contention was whether people convicted in connection with the Jan. 6, 2021, Capitol riot could receive money. Blanche angered senators last month when he would not commit to barring payments to people who assaulted police officers during the attack, Al Jazeera reported. White House officials spent much of Monday calling lawmakers to assure them there would be no payouts, according to two people familiar with the matter cited by Al Jazeera.

The Justice Department’s decision to retain the anti-audit provision drew separate scrutiny. Blanche said such an agreement was normal, but former IRS officials told NPR they were not aware of a similar case.

“Whether you are the president or Joe the Plumber, people expect the same tax rules and enforcement framework to apply to everybody,” Daniel Werfel, a former IRS commissioner, told NPR.

The Guardian reported that others have said the arrangement may run afoul of the Constitution’s emoluments clause, which bars the president from receiving a personal financial benefit from office, because discharging potential tax liability could amount to a financial benefit.

Even without the fund, individual claimants may still pursue compensation by filing administrative claims for damages against the government. The Justice Department has broad discretion in settling such cases. Enrique Tarrio, the former Proud Boys leader convicted of seditious conspiracy, told PBS NewsHour that such claims could remain a possible path for Jan. 6 defendants seeking compensation.