US sets $1.776-billion fund for people who can prove they were targeted for political reasons

WASHINGTON — The administration of U.S. President Donald Trump on Monday established a nearly $1.8 billion fund intended to compensate individuals alleging political “weaponization,” following a settlement tied to a lawsuit Trump filed against the federal government over the handling of his tax records.

The agreement resolves a high-profile and unusual legal case in which Trump sought $10 billion in damages from the Internal Revenue Service (IRS). The lawsuit argued that the agency failed to prevent the leak of his tax returns by a former government contractor to news organizations.

Under the terms of the settlement, Trump will receive an official apology but no financial compensation.

Instead, the U.S. Department of Justice will create a fund that will be overseen by officials aligned with Trump’s administration. The pool, valued at approximately $1.776 billion, will be available for claims from individuals who say they were harmed by what they describe as “weaponization or lawfare” by the federal government. The figure references the year 1776, when the U.S. Declaration of Independence was signed.

The Justice Department stated that the program does not impose partisan requirements for eligibility. Officials said the fund is intended to compensate individuals who can demonstrate they were targeted for political, personal, or ideological reasons.

Todd Blanche, the acting attorney general and a former defense lawyer for Trump, said the initiative aims to address past misconduct and prevent similar actions in the future.

“This Department’s intention is to make right the wrongs that were previously done while ensuring this never happens again,” Blanche said.

Blanche is expected to appoint four of the five members of the commission that will evaluate claims and determine eligibility for compensation.

The settlement outlines that payments may be granted to individuals who can show they were subject to improper or unlawful targeting. Examples referenced include enforcement actions taken during the Biden administration that conservatives have criticized, such as prosecutions related to obstruction at abortion clinics.

Critics, however, sharply questioned the legality and intent of the arrangement.

Representative Jamie Raskin of Maryland, the top Democrat on the House Judiciary Committee, called the fund “a racket designed to take $1.7 billion of taxpayer dollars out of the Treasury and pour it into a slush fund.”

Legal experts also described the structure as highly unusual, noting that large-scale victim compensation funds are typically established through congressional legislation or court oversight rather than executive agreement.

“This is completely unprecedented for a variety of reasons,” said Rupa Bhattacharyya, a former Justice Department official who previously administered a federal victim compensation program. She warned that broad executive control over public funds could raise concerns about oversight and potential misuse.

The Justice Department maintained that the funds will come from a separate account previously authorized by Congress for settlement and legal claims against the federal government. However, the arrangement is expected to face legal scrutiny over whether it infringes on Congress’s constitutional authority over federal spending.

As part of the settlement, Trump will also withdraw administrative claims related to the FBI’s 2022 search of his Mar-a-Lago residence in Florida and investigations connected to alleged ties between his 2016 presidential campaign and Russia.

The IRS-related lawsuit originated from the unauthorized disclosure of Trump’s tax records by former IRS contractor Charles Littlejohn, who released the documents to multiple media outlets in 2019 and 2020. Littlejohn was later convicted and sentenced to five years in prison.

Reports based on the leaked returns indicated that Trump paid little or no federal income taxes in several years, according to prior reporting by the New York Times.

The case had raised complex legal questions, including whether a sitting president can pursue litigation against federal agencies under his own administration and how such claims should be adjudicated.

A federal judge in Miami overseeing the case previously noted uncertainty over whether the opposing parties in the lawsuit were “truly antagonistic.” The court on Monday granted the request to dismiss the case following the settlement agreement. -Reporting by Andrew Goudsward, Susan Heavey, Katharine Jackson and Jan Wolfe in Washington, D.C.; Additional reporting by Steve Holland; Editing by Andy Sullivan, Chizu Nomiyama, Bill Berkrot and Cynthia Osterman/Reuters