The Trump administration is moving to drop controversial plans for a $1.8 billion fund to pay victims of alleged government “weaponization,” but will still provide immunity from any probes into the president’s past tax filings under a deal agreed to last month.
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Acting Attorney General Todd Blanche announced the pivot during a congressional hearing on Tuesday. The fund, which was a key pillar of the agreement Trump reached in May with the IRS and Treasury Department over leaks of his tax information during his first term, had morphed into a political lightning rod.
Democrats have derided the planned account as a taxpayer-financed “slush fund” for Trump’s political allies. Meanwhile, some Republican senators had sought a public declaration the fund was dead before they agree to lift a blockade on a Trump-backed immigration enforcement spending package.
During the hearing on Justice Department funding, Blanche, who previously served as Trump’s personal attorney, quickly faced questions about the fund. He appeared to seek to assuage House lawmakers early on by declaring that the fund wouldn’t advance.
“We are not moving forward with the fund. Period,” Blanche said. When pressed later to put that commitment in writing Blanche said he didn’t need to. “I’m telling you we’re dropping it” and that should be enough, he added.
The Trump administration created the fund as part of a deal resolving the president’s lawsuit against the IRS over 2019 and 2020 leaks of tax information to news organizations. 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.”
The fund was unprecedented in many respects. Typically the DOJ defends federal agencies such as the IRS in court against lawsuits. Trump also oversees the government that agreed to the deal.
Meanwhile, under questioning from lawmakers Blanche confirmed another controversial provision still stood. He said that a ban remained in effect on any tax-related probes of Trump, his family members and his companies that were started before the agreement was reached.
Representative Rosa DeLauro, a Connecticut Democrat, blasted that aspect of the agreement. “You just gave the president’s family tax immunity to the tune of about $100 million,” she said.
Blanche shot back, arguing that it was standard practice as part of an Internal Revenue Service settlement. “It’s not blanket immunity,” Blanche told lawmakers.
“It’s not a forward looking document, it’s nothing that gives any sort of immunity in the future to the president or his family or his organizations,” he added.
The president’s own stance has shifted. Earlier he said any money from his lawsuit would go to charity. But the fund appeared 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.
The fund faces multiple lawsuits, including from police officers who responded to the attack on the Capitol. A federal judge in Virginia temporarily barred the administration from taking steps to operate the fund while she weighed a longer-term block.
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