The fund that could offer payouts to
Trump allies who accuse the government of mistreatment is not only highly
unusual but also appears to violate the administration’s own policies.
·
The
Trump administration has created a $1.8
billion fund to compensate individuals claiming
mistreatment by the federal government.
·
The
fund is being overseen by Todd Blanche, who defended it as “unusual” but lawful
and comparable to past settlements.
·
Legal
experts and former United States Department of Justice officials have
criticised the fund as potentially violating longstanding Justice Department
standards.
·
Critics
are particularly concerned about a provision granting immunity from certain tax
penalties to:
o Donald Trump,
o Eric Trump,
o Donald Trump Jr.,
o and the Trump Organization.
·
Former
DOJ official Jennifer Ricketts called the immunity provision “blatantly
corrupt” and “a shocking gift to the president”.
·
Legal
experts also questioned why a lawsuit filed by one group could result in
payouts to entirely different categories of people.
·
The
fund may compensate individuals who never sued the government.
·
Potential
beneficiaries could include:
o Eric Adams,
o Kash Patel,
o and other conservatives claiming
“government weaponization”.
·
The
administration has not clearly defined eligibility criteria for receiving
compensation.
·
A
five-member commission appointed by Todd Blanche will decide payout rules.
·
Payments
will reportedly come from the federal government’s:
o “Judgment Fund” managed by the US
Treasury.
·
Blanche
said quarterly expenditure reports would be released, but privacy laws may
prevent disclosure of individual recipients and payout amounts.
·
Legal
experts noted that the Judgment Fund is traditionally used for:
o court judgments,
o or settlements tied to clear litigation
risks against the government.
·
Critics
argue the new fund lacks:
o judicial oversight,
o clear legal claims,
o and transparent calculations supporting
the $1.776 billion figure.
·
Blanche
cited the Obama-era Keepseagle settlement involving
Native American farmers as a precedent.
·
Former
DOJ lawyer Josh Gardner said the comparison was flawed because:
o Keepseagle
involved years of litigation,
o judicial supervision,
o and direct payments to plaintiffs in the
lawsuit.
·
Critics
also said the new fund appears to contradict a directive issued in 2025 by
former Attorney General Pam Bondi.
·
Bondi’s
memo had prohibited most settlement payments to third parties that were not
victims or parties in lawsuits.
·
The
new fund, however, appears designed to distribute money to broader third-party
claimants and entities.
·
Experts
said the symbolic amount of $1.776 billion —
referencing the year of US independence — is highly unusual for a government
legal settlement program.
[ABS News Service/21.05.2026]
The
$1.8 billion fund created by the Trump administration this week to pay people
who claim mistreatment by the federal government appears to violate longstanding
Justice Department standards and practices, as well as a policy directive issued
by the administration last year, legal experts said on Wednesday.
Todd
Blanche, the acting attorney general, defended the fund at a Senate hearing on Tuesday,
calling it “unusual” but insisting it was appropriate and reflective of past settlements.
Justice
Department veterans have been deeply skeptical of those
claims, particularly when it comes to a provision in the deal that offers President
Trump, his sons Eric and Donald Trump Jr., and the Trump Organization immunity from
tax penalties. They have also been critical of the decision to resolve a lawsuit
filed by one group of people in a way that gives more than a billion dollars to
an entirely different category of people.
“I
have never heard of the department ever being willing to grant blanket immunity,”
said Jennifer Ricketts, a former branch director in the department’s civil division.
“That seems blatantly corrupt. It’s a shocking gift to the president.”
Justice
Department veterans also said the new fund appeared to contradict a specific policy
instituted by the Trump administration last year under former Attorney General Pam
Bondi that largely prohibited payments to groups not involved in an underlying lawsuit.
A
Justice Department spokeswoman did not respond to a request for comment.
The
deal struck between the president’s lawyers and his own administration, without
oversight of a judge, could involve major payouts to people who had not sued the
government, as well.
“I’ve
just never seen litigation risk outside the four corners of the complaint being
used as justification for something in a totally unrelated lawsuit,” Ms. Ricketts
added.
Here
is more about how the fund could work.
Who would qualify?
Mr.
Blanche has not placed limits on who can apply for money from the fund. He has suggested
that even President Joseph R. Biden Jr.’s son Hunter, who was prosecuted and convicted
by the Biden administration, could apply. At the same time, officials have not explained
who is likely to receive money, beyond general statements that the fund is for people
victimized by past administrations. Factors that will be considered include legal
fees or time in prison.
The
president’s words suggest that Eric Adams, the former New York City mayor whose
indictment was dropped by the Trump administration last year, would be eligible.
“We
were persecuted, Eric. I was persecuted, and so are you,” Mr. Trump told the mayor
at a 2024 charity event.
Another
possible recipient is Kash Patel, the F.B.I. director, who has long claimed to be
a victim of weaponization. At a congressional hearing last year, Mr. Patel said:
“You want to know who was targeted by a weaponized F.B.I.? Me.”
The
president and his supporters have used the term “weaponization” to broadly define
perceived government mistreatment of and misconduct toward them. If the fund’s five
commissioners, who will be appointed by Mr. Blanche, adopt that same expansive definition,
those eligible for payments could include people such as Jim Hoft, the owner of
the right wing site The Gateway Pundit, who sued the government over what he claimed
was censorship as a result of federal agencies pressuring social media companies
on topics like the 2020 election and the coronavirus pandemic.
Mr.
Blanche has said it will take time to appoint commissioners who will craft rules
for payouts from the fund, which involves taxpayer money in a Treasury Department
account known as the Judgment Fund.
How will the public know
who gets the money?
At
a congressional hearing this week, Mr. Blanche said quarterly reports about the
fund expenditures would be made public in order to provide “full transparency.”
He added an important caveat — that the department would still have to follow federal
privacy laws when releasing the reports.
That
means there may not be a public list of people who received specific amounts from
the fund, because the Privacy Act of 1974 generally prohibits an agency from disclosing
a government record unless the person in question gives written consent before the
disclosure. The rule, however, has about a dozen exceptions to it, and it is not
clear if administration officials believe one or more of those exceptions apply
to recipients of money from the fund.
How payouts have worked in
the past
Treasury
Department officials normally authorize payouts from the Judgment Fund when a court
ruling is entered against the federal government, or when Justice Department lawyers
provide an assessment of the litigation risk posed by a lawsuit or claim. In essence,
Justice Department lawyers must explain their rationale to the Treasury Department
for why settling a case for a certain amount is in the government’s interest.
The
early version of the Judgment Fund was created in 1956 to authorize payments of
court judgments below a certain limit without requiring congressional action. The
scope of the fund expanded in 1961 to include settlements reached before a court
judgment.
In
justifying the new fund for what the administration claims are victims of weaponized
government, Mr. Blanche cited the Obama-era resolution of a case called Keepseagle, a class-action lawsuit over discrimination against
Native American farmers.
Josh
Gardner, a former Justice Department lawyer who worked on the Keepseagle case, said there were stark differences between that
arrangement and the new fund.
“When
you’re going to tap the judgment fund, you need to justify why taxpayer dollars
are being expended, and you have to justify that by explaining why there is litigation
risk,” Mr. Gardner said. “How can you do that when you don’t even know who is a
potential member of this claims process?”
The
Keepseagle discrimination settlement was overseen by a
federal judge after years of litigation and analysis of the claims and evidence.
After the members of the class-action suit were given payments, the remaining money
was given to organizations concerned with Native American farming and ranching.
By
contrast, Mr. Gardner said, the new initiative “is decidedly not a fund for the
plaintiffs.”
The fund seems to
contradict a Trump administration policy
On
Pam Bondi’s first day as attorney general in February 2025, she signed a directive
that appeared to prohibit an arrangement like the $1.8 billion fund. The memo, titled
“Reinstating the Prohibitions on Improper Third Party Settlements,”
revived a Justice Department policy that the Trump administration adopted in 2017
and the Biden administration subsequently canceled.
The
memo said that except in “limited circumstances,” the department should not use
settlements “to require payments to nongovernmental, third-party organizations that
were neither victims nor parties to the lawsuits.”
The
new fund, however, appears to be structured to steer a large pot of money to third-party
claimants, most of whom have not filed suits and may never file suits now that there
is a fund.
The
purpose of the Bondi memo was to bar the kinds of arrangements sometimes made during
the Obama administration, particularly with large financial institutions, that directed
money to nongovernmental organizations. To conservatives, the Obama administration
too often used the money to advance ideological goals, and the Bondi memo was designed
to prevent that.
A
year after issuing that memo, the Trump administration plans to give out money to
an unspecified number of people for the general purpose of paying “victims” of purported
governmental weaponization. The exact size of the fund — $1.776 billion — is intended
to convey patriotic symbolism, a highly unusual choice for such a program.
Normally,
proposed figures are calculated based on the legal claims lodged against the government,
and a risk calculation by Justice Department lawyers about how much juries may ultimately
award in the cases. For Mr. Trump’s “anti-weaponization fund,” it is unclear what
set of cases or claims formed the basis of a calculation that landed on the $1.776
billion figure.
The
paperwork establishing the fund says it can be used to pay “entities,” which seems
to trample on the purpose of the Bondi memo.