US Justice Department establishes $1.8bn compensation fund amid legal controversy
The fund, overseen by a panel appointed by the Attorney General, will operate until December 2028, but critics argue it serves as a slush fund for political allies and exceeds established legal precedents.
The United States Department of Justice has established an “anti-weaponisation fund” valued at just under $1.8 billion as part of a settlement agreement in a lawsuit filed by President Donald Trump against the Internal Revenue Service. The initiative was announced on Monday by Acting Attorney General Todd Blanche, who described the measure as a necessary mechanism to provide redress for individuals claiming they have been unfairly targeted by the federal government. The settlement arises from Trump’s 2023 litigation, in which he accused the IRS and the Department of the Treasury of failing to prevent the leak of his tax returns to The New York Times between 2018 and 2020.
The fund will be administered by a five-person panel appointed by the Attorney General, with one member selected in consultation with congressional leaders. It will draw from a separate “judgement fund,” a standing government account used for legal settlements that does not require fresh congressional approval for each disbursement. The programme is scheduled to cease accepting new claims on December 1, 2028, with any remaining capital to be redirected back to the federal government. Blanche defended the structure during a Senate appropriations subcommittee hearing, citing the 2011 Keepseagle settlement regarding Native American farmers as a precedent, although he acknowledged the current measure is unusual in its scale.
The establishment of the fund has triggered immediate opposition from Democratic lawmakers and legal analysts, who argue that the creation of such a large compensation scheme via executive settlement pushes the boundaries of presidential authority. Critics contend that the fund is designed to compensate individuals pardoned by Trump, including those convicted in connection with the January 6, 2021, Capitol riot. More than 90 Democrats in the House of Representatives filed a legal document attempting to block the fund, with Congressman Seth Moulton stating the pool is intended to compensate those who claim persecution by the previous administration.
Senator Elizabeth Warren characterised the fund as a “slush fund for Trump’s hand-picked stooges,” asserting it would facilitate payouts to January 6 insurrectionists and political allies. Senator Ron Wyden similarly condemned the move, describing it as a brazen theft of taxpayer dollars designed to subsidise right-wing political violence. The Washington, DC-based Cato Institute also published an analysis arguing that the fund represents an attempt to bypass congressional authorisation for spending, fitting a pattern of improvising executive power.
Legal experts have disputed the administration’s comparison to the Keepseagle case, noting significant structural differences. Joseph Sellers, lead attorney for the Native American plaintiffs in the 2011 settlement, told PBS News that the analogy is inaccurate because the Trump v IRS case was not a class-action lawsuit. Furthermore, experts highlight that the new fund will operate with minimal judicial oversight compared to previous settlements, raising concerns about transparency and the potential for misuse of public funds.
