A rare revolt from Republican senators has forced the Trump administration to shelve President Donald Trump’s proposed $1.8 billion “weaponisation” fund, US Acting Attorney General Todd Blanche told lawmakers.
“We are not moving forward with the fund,” Mr Blanche said. “Period.”
Even as he declared the initiative off the table, Mr Blanche said another central piece of the administration’s legal arrangement with Mr Trump will remain intact: an agreement that blocks future audits of the president’s or his family’s past tax records.
The fund was born out of a legal settlement between President Trump and the Justice Department, reached to resolve Mr Trump’s unprecedented $10bn lawsuit against the IRS over what he alleged was mishandling of his tax records.
Lawmakers dropped the $1.776bn plan after outraged Republican politicians warned it could jeopardise passage of a $72bn bill designed to finance Mr Trump’s immigration crackdown.
Mr Blanche, who previously served as President Trump’s personal attorney, has been leading the Justice Department since early April, after Mr Trump fired Pam Bondi as attorney general.
The abandoned fund was intended to compensate people who said they were victims of government abuse. But it sparked anger on Capitol Hill last month when Mr Blanche declined to promise senators the payouts would exclude people who assaulted police officers during the 6 January 2021 assault on the US Capitol.
Two sources familiar with the matter, speaking on condition of anonymity, said White House officials spent much of Monday phoning lawmakers to reassure them there would be no payouts after the Republican backlash.
The White House directed questions to the Justice Department. A DOJ spokesperson said the administration still considers compensation for people who have suffered government abuse an important goal.
“The goal of the fund was about continuing the process of fixing the wrongs committed by past administrations, but given the extraordinary misunderstanding of this, the DOJ is not proceeding with the fund,” spokesperson Emily Covington said.
Blanche says he would not put it in writing
During a hearing yesterday afternoon, Democratic lawmakers pressed Mr Blanche to offer a definitive, written assurance that the fund was finished. Mr Blanche refused.
“Why do I need to put something in writing?” Mr Blanche said. “I’m not committing to doing anything in writing.”
Democratic Representative Rosa DeLauro argued Mr Blanche should never have approved the settlement provision that bars future tax audits of Mr Trump and his businesses, pointing to Mr Blanche’s earlier role as the president’s personal attorney.
“You just gave the president and his family a tax immunity to the tune of about $100m,” Ms DeLauro said, citing reports that President Trump could face an IRS tax penalty of that size.
“Do you not find that there’s any conflict of interest in what you are doing here as the acting attorney general of the United States?,” she added.
Mr Blanche pushed back, saying the agreement does not grant the president “blanket immunity,” and he dismissed Ms DeLauro’s concerns.
“What are you saying is the conflict?” Mr Blanche responded. “The fact that I used to have a job and I have a current job?”
House Republicans at the hearing did not criticise the fund.
Peter Ticktin, an attorney who represents more than 400 6 January defendants, said the decision to drop the fund has not discouraged him or his clients.
“They still expect to get paid,” said Mr Ticktin, who has filed claims for ten defendants seeking up to $3m. “They trust Donald Trump.”
