FOLLOW US

In a legal maneuver without precedent in American history, the Trump administration announced Monday that it had established a $1.76 billion fund — drawn from the US Treasury — to settle a lawsuit that President Donald Trump had filed against his own government. The arrangement resolves a case in which Trump sought $10 billion from the Internal Revenue Service over the alleged mishandling of his tax records, and it does so by creating a standing pool of money that his allies will control and distribute to individuals who claim they were victims of government "weaponization."

Trump himself will receive no financial payment. What he will receive is an apology.

The rest of the money — $1.76 billion in taxpayer funds — will flow into what the Justice Department is calling the "Anti-Weaponization Fund," a claims commission whose five-member adjudication panel will include four members appointed directly by Acting Attorney General Todd Blanche, the man who previously served as Trump's personal defense attorney in three separate criminal cases.

The Lawsuit Behind the Settlement

The case that produced this extraordinary arrangement began in January, when Trump, his adult sons Donald Trump Jr. and Eric Trump, and the Trump Organization sued the IRS, arguing the agency failed to prevent former contractor Charles Littlejohn from leaking the president's tax returns to media outlets during Trump's first term. Littlejohn provided the records to the New York Times and ProPublica in 2019 and 2020 — disclosures that revealed Trump had paid little or no federal income tax across multiple years. Littlejohn was subsequently convicted and sentenced to five years in prison.

Trump's lawsuit demanded $10 billion in damages, a figure that legal analysts widely characterized as untethered from conventional legal standards. The settlement does not deliver that sum — or any sum — to Trump personally. Instead, it transmutes the personal lawsuit into a government-funded mechanism that can pay out claims from anyone who believes the federal government has targeted them through what Trump and his political movement have labeled "lawfare."

As part of the deal, Trump also agreed to drop two additional administrative claims against the government: one arising from the FBI's 2022 search of his Mar-a-Lago resort for classified documents, and another related to the investigation into alleged ties between his 2016 presidential campaign and Russia.

Todd Blanche: From Defense Attorney to Settlement Architect

The figure at the center of Monday's announcement is impossible to examine without confronting its inherent conflicts of interest. Todd Blanche, now serving as acting attorney general of the United States, is the same lawyer who represented Trump as a private defense attorney in three criminal prosecutions — including the federal classified documents case and the federal January 6-related case. He will now appoint four of the five members of the commission that will decide who receives payouts from the Anti-Weaponization Fund.

"It is this Department's intention to make right the wrongs that were previously done while ensuring this never happens again," Blanche said in a statement Monday.

The Justice Department released few details about how the commission will evaluate claims, what evidentiary standards will apply, or what oversight mechanisms, if any, will govern how the $1.76 billion is disbursed.