The administration of US President Donald Trump has created a nearly $1.8 billion fund to compensate alleged victims of political “weaponisation”, following a settlement linked to a lawsuit Trump brought against his own government over the handling of his tax records.
The agreement resolves an unusual legal action in which Trump sued the Internal Revenue Service (IRS), seeking $10 billion in damages over claims that the agency failed to prevent a former contractor from leaking his tax returns to the media.
Under the settlement, Trump will not receive any financial payment, but will be issued an official apology. Instead, the US Justice Department will establish a pool of $1.776 billion—referencing the year of the Declaration of Independence—which will be used to compensate individuals who claim to have suffered “weaponisation or lawfare” by the US government.
The fund will be overseen within the executive branch and is expected to be administered by individuals aligned with Trump’s political network. The administration says there are no partisan requirements for applicants.
“It is this Department’s intention to make right the wrongs that were previously done while ensuring this never happens again,” said Todd Blanche, who previously served as Trump’s defence lawyer in three criminal cases.
However, the arrangement has triggered sharp political backlash, with critics describing it as an extraordinary use of public funds.
“This case is nothing but a racket designed to take $1.7 billion of taxpayer dollars out of the Treasury and pour it into a huge slush fund,” said Jamie Raskin, the top Democrat on the House Judiciary Committee.
Legal experts have also questioned the structure of the deal, noting that compensation schemes of this scale are typically authorised by Congress or supervised by the courts.
“This is completely unprecedented for a variety of reasons,” said Rupa Bhattacharyya, who previously oversaw a federal compensation fund for victims of the September 11 attacks. “For taxpayer money to be given to the executive branch to dole out in a way with such little restriction just lends itself to abuse and corruption.”
The Justice Department has defended the arrangement, insisting the fund is designed to be non-partisan and open to any eligible claimant.
Speaking at a White House event, Trump himself denied direct involvement in the creation of the fund, although the settlement was signed by his personal legal team.
“These were people that were weaponized and really treated brutally by a system that was so corrupt,” said Donald Trump, referring to those who may be eligible for compensation.
The settlement also includes Trump dropping separate administrative claims against the government, including challenges related to the FBI’s 2022 search of his Mar-a-Lago estate and investigations into alleged ties between his 2016 campaign and Russia.
The original lawsuit stemmed from the actions of former IRS contractor Charles Littlejohn, who leaked Trump’s tax returns to media organisations including The New York Times and ProPublica in 2019 and 2020. Littlejohn was later convicted and sentenced to five years in prison.
The leaked tax information reported that Trump had paid little or no federal income tax in several years.
The case itself raised unusual legal questions, including whether a sitting or former president can sue federal agencies that operate within his own administration.
US District Judge Kathleen Williams, who oversaw the case in Miami, previously questioned whether the parties were “truly antagonistic to each other.” She granted Trump’s request to dismiss the lawsuit on Monday, formally bringing the case to a close.
Boluwatife Enome
