The Trump administration intends to scrap a controversial $1.8 billion legal fund for victims of alleged government “weaponization,” according to a person familiar with the matter.
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The move came after blowback from Republicans and Democrats, who derided it as a slush fund for President Donald Trump’s political allies. It’s the latest setback for the president, who recently suffered a court defeat over his plans to overhaul the John F. Kennedy Center for the Performing Arts and has struggled to end the war in Iran.
The person spoke on condition of anonymity to discuss the decision before it was announced. They did not provide further details on the administration’s plans, including whether it would affect a provision of the settlement between Trump and the Internal Revenue Service that barred the agency from pursuing any probes into his tax returns.
The fund was already facing legal challenges, including from police officers who responded to the attack on the US Capitol. A federal judge in Virginia last week
The Justice Department
Axios reported earlier on the plans to pull back the fund.
The Trump administration created the fund as part of a settlement resolving the president’s lawsuit against the IRS over the 2019 leak of his tax information to the New York Times. The DOJ said it would be used to compensate those alleging that they were victims of politically motivated investigations or legal action, what Trump and allies have called government “weaponization.”
Several Republican senators recently threatened to hold up an immigration enforcement package and balked at providing taxpayer funds for a White House ballroom Trump is seeking to build.
The fund was unprecedented in many respects; typically the DOJ defends federal agencies such as the IRS in court rather than cut deals with billions at stake without a proper legal fight. The president’s own stance on the settlement has shifted.
Earlier he said any money from his lawsuit would go to charity, but the fund was instead poised to benefit political allies, including potentially some of those who attacked the U.S. Capitol on Jan. 6, 2021, in a failed effort to prevent the certification of the 2020 election, which Trump lost.
Legal headwinds
In addition to the political firestorm that erupted over the fund, Trump’s administration was facing a multi-front legal fight.
In a May 29 order, the Alexandria, Virginia-based federal judge scheduled a hearing for June 12 for further arguments in the case after temporarily barring the Justice Department from working to set it up.
The order was not a final ruling on the lawfulness of the fund plan or even a preliminary ruling on whether the challengers were likely to succeed. The judge made clear that the order was meant to briefly maintain the status quo, writing at the time that she was entering it “to ensure that no funds are irreversibly disbursed.” The Virginia case is one of at least four lawsuits filed challenging the fund.
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