The United States Department of Justice has introduced a new “anti-weaponization fund” as part of a settlement tied to President Donald Trump’s lawsuit against the Internal Revenue Service, prompting criticism from Democratic lawmakers and legal experts who argue the initiative could be used to compensate Trump allies and bypass congressional oversight.
The fund, announced this week, will receive nearly $1.8bn from a federal judgment account traditionally used to pay legal settlements and court rulings.
The settlement stems from Trump’s lawsuit against the IRS and the Department of the Treasury after his tax information was leaked between 2018 and 2020.
Former IRS contractor Charles Edward Littlejohn pleaded guilty to disclosing the records and was sentenced in 2024 to five years in prison.
Trump had initially sought $10bn in damages, accusing federal agencies of failing to prevent the disclosure of his confidential tax information.
The “anti-weaponization fund” emerged from negotiations resolving Trump’s lawsuit against the federal government over the leaked tax records.
According to the Justice Department, the fund is intended to provide compensation to individuals who believe they were unfairly targeted by federal legal action.
Acting Attorney General Todd Blanche said the government “should never be weaponized against any American” and described the initiative as a lawful process for alleged victims of “lawfare and weaponization” to seek redress.
The programme will operate until December 1, 2028, and claims will be reviewed by a five-member panel appointed by the attorney general, with one member selected in consultation with congressional leaders.
The fund is expected to issue reports every three months detailing who receives payments or other forms of relief.
The Justice Department has also said any unused money remaining after the programme ends would be returned to the federal government.
Additional settlement terms released this week intensified scrutiny surrounding the agreement.
The updated settlement states the government is “FOREVER BARRED and PRECLUDED” from bringing certain claims tied to Trump, his family and his businesses over past tax matters up to the date of the settlement.
Justice Department officials argued the provisions were directly related to resolving the unauthorized disclosure of Trump’s tax returns and would not prevent future investigations after the settlement date.
Critics argue the scale and structure of the programme push the limits of executive authority and could allow the administration to reward political supporters using taxpayer funds.
More than 90 Democrats in the House of Representatives filed objections seeking to block the fund, arguing it could ultimately benefit people connected to the January 6, 2021 Capitol riot who were later pardoned or had their sentences commuted by Trump.
Representative Seth Moulton described the initiative as a taxpayer-funded pool intended to compensate individuals claiming persecution under the previous administration.
Senator Elizabeth Warren called the programme a “$1.7 BILLION slush fund” in a social media post, while Senator Ron Wyden warned it could become “the most brazen theft of taxpayer dollars by any president in history.”
Legal experts have also questioned the limited oversight surrounding the programme.
The settlement grants broad authority to the attorney general over appointments and removals tied to the fund, while limiting judicial review of decisions made by its administrators.
The Cato Institute described the arrangement as another example of the administration creating a major spending mechanism without congressional authorization.
Supporters of the programme, however, argue it resembles past federal settlement structures, including the 2011 Keepseagle compensation fund established during former President Barack Obama’s administration.
But attorneys involved in that case rejected the comparison, arguing the Trump settlement lacks the judicial oversight and class-action framework that existed in Keepseagle.
The dispute has intensified debate in Washington over executive power, government accountability and the political implications of compensating individuals who claim they were unfairly targeted by federal investigations.