Trump creates $1.8B fund

President Donald Trump and the Justice Department on May 18 settled his lawsuit against the Internal Revenue Service by creating a $1.776 billion “Anti-Weaponization Fund,” according to a Justice Department press release. The agreement ends Trump’s $10 billion case over the leak of his tax returns and gives him, Donald Trump Jr., Eric Trump and the Trump Organization a formal apology but no direct monetary award. The fund will instead hear claims from other people who say they were harmed by government “weaponization and lawfare.” The money will come from the federal judgment fund, a permanent appropriation used to pay settlements. ### How did this fund come out of Trump’s IRS lawsuit? The lawsuit grew out of the leak of Trump tax records by former IRS contractor Charles Littlejohn, whose disclosures reached news organizations in 2019 and 2020, according to CNBC and Reuters. Trump sued the Treasury Department and IRS in federal court in South Florida, arguing the government failed to protect his records and seeking $10 billion in damages. Under the settlement announced Monday, Trump dropped that case with prejudice and also withdrew two administrative claims tied to the Mar-a-Lago search and what the Justice Department described as the “Russia-collusion hoax.” (justice.gov) ### Who controls the money, and who can apply? The Justice Department said the fund is meant to provide a “systematic process” to hear claims from people who suffered improper political or ideological targeting. Reuters reported that Acting Attorney General Todd Blanche will appoint four of the five members of the commission that decides claims. The fund can issue formal apologies and monetary relief, and the department said there are “no partisan requirements” to file a claim. (cnbc.com) The Justice Department said the fund will send quarterly reports to the attorney general, may be audited at the attorney general’s direction, and must stop processing claims by December 1, 2028. The department also said any money left over when the fund closes will revert to the federal government. ### Why did the settlement become more controversial a day later? (justice.gov) A one-page addendum posted by the Justice Department on May 19 expanded the settlement beyond the fund itself. CNBC and Politico reported that the addendum bars the federal government from pursuing “any and all claims” the IRS could have brought over tax returns filed before the settlement took effect. The protection extends to Trump, his family members, the Trump Organization, and related trusts, affiliates and subsidiaries, and it appears to cover pending tax audits. (justice.gov) Politico reported that the addendum was signed by Blanche and dated Tuesday, but did not bear the signature of an IRS representative or Trump’s current lawyers. The Justice Department said in a statement to Politico that settlements customarily include waivers of claims that could have been brought and added that the provision applied to existing audits, not future ones. (cnbc.com) ### What are critics pointing to? Sen. Ron Wyden of Oregon, the top Democrat on the Senate Finance Committee, said the addendum violates federal law that bars executive branch interference in IRS audits. Rep. Jamie Raskin of Maryland, the top Democrat on the House Judiciary Committee, called the arrangement “a racket” that would move taxpayer money into “a huge slush fund.” Those criticisms have centered on both the payout mechanism and the audit shield added on May 19. (politico.com) Brian Morrissey, the Treasury Department’s general counsel, resigned on Monday as the fund was being announced, Politico reported. Politico said Morrissey, confirmed by the Senate in October, stepped down from his post as Treasury’s top legal officer the same day the administration unveiled the settlement. Neither the Justice Department release nor the settlement documents publicly linked his departure to the agreement. (cnbc.com) ### What happens next? Todd Blanche defended the fund in Senate testimony on May 19, and CNBC reported he did not rule out payments to people convicted of assaulting police officers during the Jan. 6, 2021, Capitol attack. The next concrete milestones are administrative: Blanche’s appointments to the five-member claims commission, the fund’s quarterly reports to the attorney general, and the December 1, 2028 deadline to stop taking claims. (politico.com) (cnbc.com)