The Trump administration intends to abandon a controversial $1.8 billion legal fund created for alleged victims of the “weaponization” of government, according to a person familiar with the matter.
The decision comes after criticism from both Republicans and Democrats, who described the fund as a “shadow fund” for President Donald Trump’s political allies. It marks another setback for the president after a recent court defeat over his plans to reform the John F. Kennedy Center for the Performing Arts and amid difficulties in ending the war in Iran.
The person spoke on condition of anonymity because the decision had not yet been officially announced. He did not specify how exactly the administration intends to proceed or whether this will affect a provision of the settlement between Trump and the Internal Revenue Service that barred the agency from conducting any audits of his tax returns.
The fund had already faced legal challenges, including from police officers who responded to the attack on the U.S. Capitol. Last week, a federal judge in Virginia temporarily barred the administration from taking steps to launch the fund while she considers whether to impose a longer-term injunction.
The Justice Department said on Monday that it “strongly disagrees” with the decision but “will comply with the court’s order.”
The Trump administration created the fund as part of a settlement in the president’s lawsuit against the IRS over the leak of his tax information to The New York Times in 2019. The Justice Department said the money was intended to compensate those who say they were victims of politically motivated investigations or legal actions—what Trump and his allies call the “weaponization” of government.
In recent weeks, several Republican senators have threatened to block an immigration-enforcement package and opposed the use of taxpayer funds to build the White House ballroom Trump has been seeking.
The fund was unprecedented in several respects: normally, the Justice Department defends federal agencies, including the IRS, in court rather than entering into multibillion-dollar settlements without a full legal dispute. The president’s own position on the settlement has also shifted.
Trump had previously said that any money from his lawsuit would go to charity. But the fund could have benefited his political allies, including, potentially, some participants in the January 6, 2021, attack on the U.S. Capitol, when an unsuccessful attempt was made to prevent certification of the 2020 election results.