Justice Department creates $1.8B fund

The Justice Department said on May 18 that it had created a $1.776 billion “Anti-Weaponization Fund” as part of a settlement ending President Donald Trump’s lawsuit against the Internal Revenue Service over the leak of his tax returns. The department said the fund would create “a systematic process” to hear claims from other people who say they suffered “weaponization and lawfare,” while Trump, Donald Trump Jr., Eric Trump and the Trump Organization would receive a formal apology but no damages. (justice.gov) Acting Attorney General Todd Blanche said the arrangement was meant to “make right the wrongs” done in prior years. Democrats, public-interest groups and some former officials said the deal would steer taxpayer money toward Trump allies. ### How did Trump’s IRS lawsuit end up creating a compensation fund? The settlement grew out of Trump v. Internal Revenue Service, a case filed in the Southern District of Florida after Trump and his co-plaintiffs accused the Treasury Department and IRS of failing to protect their confidential tax information. The suit sought $10 billion in damages after tax-return information was leaked in 2019 and 2020 by a government contractor who later pleaded guilty. On May 18, lawyers for Trump told the court they were dismissing the case with prejudice, and Judge Kathleen Williams later closed it. ABC News reported that Williams said she was “stripped of jurisdiction” because no settlement agreement had been docketed in the case, leaving no settlement of record for her to review. (justice.gov) ### Who can seek money or relief from the new fund? The Justice Department said the fund is not limited by party affiliation and that filing a claim is voluntary. The department said the fund can issue formal apologies as well as monetary relief to people who claim they were targeted by government action for “improper and unlawful political, personal, or ideological reasons.” (justice.gov) Trump himself is not eligible for payment from the fund under the settlement terms, ABC News reported. The settlement also covers the withdrawal of two administrative claims tied to the Mar-a-Lago search and what the DOJ release called the “Russia-collusion hoax.” (abcnews.com) ### Where does the $1.776 billion come from? The money will come from the federal Judgment Fund, a permanent appropriation that the government uses to pay certain settlements and judgments, the Justice Department said. The department said any money left over when the fund ends will revert to the federal government. (justice.gov) ABC News reported that the claims program will be led by a five-person commission appointed by the attorney general, and the department said the fund will send quarterly reports to the attorney general and can be audited at the attorney general’s direction. The DOJ also said the fund must take steps to protect private information and prevent fraud. (justice.gov) ### Why did critics call it a payout for Trump allies? CNN reported that the announcement immediately drew objections from Democrats, public-interest groups and former government officials who said Trump was using the government he controls to create a large pool of money for supporters who claim they were unfairly investigated. (justice.gov) Retired U.S. District Judge William Smith told CNN the arrangement appeared to be “a fairly thinly veiled attempt” to funnel federal money to people sympathetic to Trump. Joseph J. Thorndike, a contributing editor at Tax Notes, told CNN he was unaware of another president suing the IRS in this way, and Stacey Young, a former longtime Justice Department attorney who leads Justice Connection, said that when a president sues the executive branch, “he is in effect suing himself.” Those criticisms focused on the structure of the settlement rather than on the underlying tax-return leak, which the government contractor’s prosecution had already established. (justice.gov) ### What did the Justice Department say this was modeled on? The Justice Department pointed to the Keepseagle case, a $760 million fund created during the Obama administration to resolve claims by Native American farmers who alleged discrimination by the federal government. (ktvz.com) DOJ officials said the comparison showed there was precedent for using a dedicated fund to process large numbers of claims. The next formal milestones are administrative. The department said the fund must provide quarterly reports to Blanche and stop processing claims no later than December 1, 2028, while any unpaid balance returns to the Treasury. (justice.gov) (ktvz.com)