The Justice Department on Monday announced it will create a $1.776 billion Anti-Weaponization Fund to compensate people who say they were unjustly investigated and prosecuted for political purposes, as part of a settlement intended to end President Donald Trump’s lawsuit against the IRS over a leak of his tax returns.
Acting Attorney General Todd Blanche said in a statement that the department’s goal was to establish what he called “a lawful process for victims of lawfare and weaponization to be heard and seek redress,” adding that “The machinery of government should never be weaponized against any American.” Blanche is expected to face questions Tuesday during congressional testimony on the department’s budget.
The settlement ties the fund to Trump’s earlier claims that he was “weaponized” against during the Biden administration, an argument Democrats and government watchdogs criticized as unconstitutional. In the department’s account, people who believe they were unfairly persecuted can apply for payouts, and an apology is also part of what the government described in its settlement framework.
The fund announcement immediately drew sharp political backlash. Nearly 100 Democrats in the House of Representatives signed onto a legal brief urging a judge to block what they described as an “unprecedented resolution” that they said would unjustly enrich people close to the president with taxpayer dollars and invite meritless claims of political persecution. Donald Sherman of Citizens for Responsibility and Ethics in Washington said the plan was “one of the single most corrupt acts in American history.”
The lawsuit itself was prompted by what Trump said was reputational harm from the leak of his confidential tax records. According to the Justice Department settlement structure described by the court filings and briefing in the case, Trump’s lawsuit followed the leak, and his sons Donald Trump Jr. and Eric Trump also joined the suit. In 2024, former IRS contractor Charles Edward Littlejohn was sentenced to five years in prison after pleading guilty to leaking tax information about Trump and others to news outlets between 2018 and 2020.
The case also unfolded alongside broader concerns about oversight and fairness in how the settlement deal would be handled. The judge overseeing the matter, Kathleen Williams, dismissed the case Monday and admonished government agencies, including the Justice Department, for not being transparent about the settlement documents. In her filing, Williams said no agency “submitted any settlement documents nor filed any documents ensuring that settlement was appropriate where there was an outstanding question as to whether an actual case or controversy existed.”
As part of that same sequence, Williams said she had previously assigned a group of attorneys to determine whether there was a conflict because, as sitting president, Trump was suing entities whose decisions are subject to his direction. The lawyers group later wrote to the court expressing concerns about whether the Justice Department was properly insulated from Trump’s control of the case.
While Trump’s attorneys had asked a judge last month to pause the case for 90 days while the two sides worked toward a resolution, the Monday dismissal ended the lawsuit in federal court. Trump has maintained that the leak was part of “weaponization,” and Monday the White House confronted questions about whether people tied to violence on Jan. 6, 2021, could benefit from the fund. Trump responded that “It’ll all be dependent on a committee,” and he added, “I didn’t do this deal. It was told to me yesterday,” and said the fund was dedicated to “reimbursing people who were horribly treated.”
In defending the settlement, the Justice Department said there were no “partisan requirements” for applicants and that its process would allow people to seek compensation and an apology if they believe they were treated unfairly. The department said a five-member commission appointed by Blanche will oversee the fund, which sets the stage for how claims will be evaluated and how any disputes may be handled outside of the underlying IRS lawsuit.