Acting Attorney General Todd Blanche announced Tuesday that the Justice Department is permanently shelving the controversial $1.8 billion fund created as part of a settlement with President Donald Trump. "We're not moving forward with the fund, period," Blanche declared during a House Appropriations subcommittee hearing, making clear the decision would hold regardless of a federal court's temporary pause on the program.
The fund stemmed from a settlement negotiated last month in which Trump agreed to drop a $10 billion lawsuit against the IRS over the disclosure of his tax returns. In exchange, the government committed to creating the fund to compensate individuals claiming they were unfairly targeted by federal agencies. The agreement also involved Trump's two sons, Donald Trump Jr. and Eric Trump, along with the Trump Organization.
The announcement followed a DOJ decision Monday to comply with a court order that had temporarily blocked the fund's implementation. That legal action reflected mounting pressure from both Republicans and Democrats who viewed the program as problematic. Senate Republicans, particularly, worried the fund threatened their budget reconciliation efforts needed to secure appropriations for ICE and Customs and Border Protection.
Word of the fund's cancellation came as no surprise. Senate Majority Leader John Thune told reporters before Blanche's testimony that he expected exactly this outcome, calling it necessary to get the reconciliation process back on track.
The fund had attracted immediate scrutiny and pledges from various figures. Pardoned January 6 defendants and Trump's former lawyer Michael Cohen indicated they would file claims. Such prospects only intensified criticism across the political spectrum and raised questions about what the settlement actually meant for oversight of Trump's finances.
That last question touched on another contentious element of the agreement: a provision permanently prohibiting the IRS from auditing Trump, his family, or his business interests. During Tuesday's hearing, Rep. Rosa DeLaura, D-Conn., pressed Blanche on whether that section would remain in place now that the fund was dead.
Blanche confirmed that only the fund's creation would be abandoned. The rest of the settlement, including the audit bar, would stand as negotiated.
Author Sarah Mitchell: "Killing the fund solves an immediate headache for Republicans trying to manage their budget agenda, but the underlying settlement still shields Trump from IRS scrutiny indefinitely."
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