The Trump administration has dropped President Trump’s proposed USD 1.8 billion “weaponisation” fund, Acting Attorney General Todd Blanche told lawmakers on Tuesday, following an unusual wave of criticism from Republican senators.
“We are not moving forward with the fund. Period,” Blanche said.
However, he also told lawmakers that an agreement preventing future audits of Trump’s or his family’s past tax records would remain unchanged.
The fund originated from a legal settlement between President Donald Trump and the Justice Department aimed at resolving Trump’s unprecedented USD 10 billion lawsuit against the IRS over the alleged mishandling of his tax records.
The proposal was withdrawn after strong opposition from Republican lawmakers, who argued it could jeopardise the passage of a USD 72 billion bill intended to finance Trump’s immigration crackdown.
Blanche, who previously served as Trump’s personal attorney, has been leading the Justice Department since early April after Trump removed Pam Bondi from the attorney general’s post. According to a source familiar with the White House’s thinking, Blanche’s future in the role depended on how effectively he addressed Republican concerns over the fund.
The USD 1.776 billion fund was intended to compensate individuals who claimed they had faced government abuse. Blanche drew criticism from senators last month after declining to confirm whether people convicted of assaulting police officers during the January 6, 2021, Capitol riot would be excluded from receiving payments.
White House officials reportedly spent much of Monday contacting lawmakers to reassure them that no payouts would be made following the backlash from Republican lawmakers, according to two sources familiar with the matter who spoke on condition of anonymity.
The White House redirected questions to the Justice Department, where a spokesperson said compensating individuals who suffered from government abuse remains a priority for the administration.
“The purpose of the fund was to continue addressing wrongs committed by previous administrations, but due to the significant misunderstanding surrounding it, the DOJ will not move forward with the fund,” spokesperson Emily Covington said.
Blanche Says He Won’t Provide Written Assurance
During a hearing on Tuesday afternoon, Democratic lawmakers sought a clear assurance that the fund had been permanently scrapped, but Blanche said he would not provide that commitment in writing.
“Why do I need to put something in writing?” Blanche said. “I’m not committing to doing anything in writing.”
Democratic Representative Rosa DeLauro argued that Blanche should not have approved the section of the agreement preventing future tax audits of Trump and his businesses, pointing to his previous role as Trump’s personal attorney.
“You just gave the president and his family tax immunity worth nearly $100 million,” DeLauro said, referring to reports suggesting Trump could face IRS penalties of that amount. “Do you not see any conflict of interest in what you are doing as the acting attorney general of the United States?”
Blanche said the agreement did not provide Trump with “blanket immunity” and pushed back against DeLauro’s criticism.
“What conflict are you referring to?” Blanche responded. “The fact that I had a previous job and now have a current one?”
House Republicans present at the hearing did not voice criticism of the fund.
Meanwhile, Peter Ticktin, an attorney representing more than 400 defendants linked to the January 6 cases, said neither he nor his clients were disappointed by the announcement.
“They still expect compensation,” Ticktin said, adding that he has filed claims on behalf of 10 defendants seeking up to USD 3 million. “They trust Donald Trump.”