Updated ,first published
Washington: Donald Trump has scrapped a plan to award up to $2.5 billion in damages to victims of “government weaponisation” under the Biden administration following a potent backlash from Republicans, as well as Democrats who branded it a “slush fund” for Trump’s MAGA allies.
It amounts to a significant backdown from the US president, who said he “gave up a lot of money” to allow the so-called Anti-Weaponisation Fund to go ahead.
The $US1.8 billion ($2.5 billion) kitty was the product of a legal settlement between Trump, his family and the tax office, after he sued his own government over a leak of his tax records that occurred seven years ago.
But the fund was widely criticised as a mechanism to funnel money to January 6 rioters and other Trump allies who claimed to be victims of lawfare by the Biden administration.
Acting Attorney-General Todd Blanche – who used to be one of Trump’s personal lawyers – confirmed the US government would not proceed with the fund, which had been paused by a court until June 12.
“We’re not moving forward with the fund, period,” he told Congress on Tuesday afternoon (Washington time). Asked whether that meant it would not proceed ever, he said: “Correct.”
The fund was to have been administered by five commissioners, all of whom would have been appointed by the attorney-general, including one selected in consultation with Congress.
People who had already put their hands up for compensation from the fund include Michael Caputo, a former official from Trump’s first term, and Enrique Tarrio, the former head of the neo-fascist Proud Boys movement, who was convicted of seditious conspiracy over the January 6 riots. Tarrio was released from prison early last year after Trump granted him clemency.
It was speculated that figures such as Rudy Giuliani, Steve Bannon and Peter Navarro could have also applied.
The Justice Department had said the fund was an appropriate measure to correct what officials have insisted was the weaponisation of federal law enforcement under the Biden administration, when Trump faced criminal charges and several of his allies were investigated and prosecuted.
The administration had said that anyone who felt unfairly persecuted could apply for compensation regardless of political affiliation, but Blanche’s refusal to publicly foreclose the possibility that people convicted of crimes of violence over January 6 could get payouts alarmed lawmakers.
Blanche made it clear on Tuesday that he stood behind the rationale for the fund even as he was abandoning its implementation, saying: “This Department of Justice was weaponized against many, many Americans. And we’re trying every day to to fix it. And we’ve made a lot of progress, but we have a lot more to do.”
Merrick Garland, the attorney general under president Joe Biden, has denied allegations of politicisation and said his decisions followed the facts, the evidence and the law.
The Justice Department’s efforts to move forward with the fund also faced headwinds in the courts after several lawsuits filed by Trump critics, including a fired January 6 prosecutor and two police officers who helped defend the Capitol.
The furore especially complicated matters in the Senate, where Republicans defiantly left town nearly two weeks ago without passing legislation to fund Trump’s immigration enforcement agencies and made clear they would not pass it at all unless the administration made major changes to the fund plan.
House Speaker Mike Johnson said he had told Blanche that the fund may have been of noble intent, but it was a “difficult prospect right now” given the Republicans needed to pass legislation with slim majorities in Congress.
One Republican congressman, Brian Fitzpatrick, teamed up with a Democrat to author legislation that would have specifically blocked the fund. Republican senator Roger Wicker called it a “nonstarter from the get-go”, while the Senate’s president pro tempore, Chuck Grassley, also a Republican, said it was necessary for Trump to dump the fund.
Trump, his family and his companies are still likely to benefit from another part of the settlement, which precludes the Internal Revenue Service from pursuing them over any pending tax matters forever.
Previous reporting by The New York Times suggested Trump could be liable for a tax bill of up to $US100 million if he failed an IRS audit.
Blanche told lawmakers on Tuesday that the agreement with Trump to bar future audits into their tax records would remain in place.
In January, Trump lodged the lawsuit against the government he runs, pertaining to a leak of his tax records many years ago by an IRS contractor. The suit alleged the IRS should have done more to prevent the leak.
Michael Koziol is the North America correspondent for The Age and Sydney Morning Herald. He is a former Sydney editor, Sun-Herald deputy editor and a federal political reporter in Canberra.Connect via X or email.