President Trump sued his own administration, settled and will now spend $1.776 billion of taxpayer money to pay people who say the government targeted them politically.
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Why it matters: The "Anti-Weaponization Fund" turns a personal Trump settlement into a new government program, shields decisions on who gets the money from the courts and limits information about what the public knows about where the funds go.
The backstory: Trump sued the IRS and Treasury in January for $10 billion over the 2019 leak of his tax returns. The settlement gives Trump, his sons and the Trump Organization a formal apology but no money, and it bars the IRS from auditing Trump's past tax returns.
- Acting Attorney General Todd Blanche, Trump's former criminal defense lawyer, created the Anti-Weaponization Fund with the Treasury Department's Judgment Fund.
How it works: The attorney general will handpick the five-member commission that decides who will collect money from the fund, which ends in December 2028.
- Those decisions can't be appealed or challenged in court. The settlement does not require public disclosure of payouts.
- The settlement lets the fund spend part of the $1.776 billion on itself, including staff, travel and facilities. The Justice Department and the White House did not answer Axios' question about whether there is any cap on those costs.
Who's eligible: Almost anyone alleging "weaponization" or "lawfare" can apply, Blanche told a Senate Appropriations subcommittee Tuesday.
- Blanche refused to commit that people convicted of assaulting Capitol Police would be excluded: "I'm not one of the commissioners setting up the rules."
- Vice President Vance separately said that even Tina Peters, the former Colorado county clerk convicted of a state crime, and Hunter Biden, the son of former President Biden, could be compensated.
Context: Trump's new fund is possible thanks to a Judgment Fund created by Congress in 1956, so the government could quickly pay off court losses and settlements without voting each time.
- Initially, payouts were limited to $100,000. That cap was lifted in 1978.
- Critics have previously warned that it lets administrations spend huge sums with little oversight. The Obama administration's $1.7 billion Judgment Fund payment to Iran became a major flashpoint in 2016.
Zoom in: Paul Figley, who spent 32 years at the Justice Department and is an expert on the Judgment Fund, tells Axios this use is "certainly not what Congress anticipated when it set the system up."
- "It's bad policy, but it's Congress's fault" for leaving a "huge loophole," Figley said. He expects future administrations of either party to do the same "until Congress stops it."
- Nobody typically has standing to challenge Judgment Fund payouts in court, he said.
Yes, but: Legal challenges over Trump's fund have already begun.
- Two officers who defended the Capitol on Jan. 6, 2021, sued Wednesday to dissolve the fund, calling it "the most brazen act of presidential corruption this century."
- Former Capitol Police Officer Harry Dunn and D.C. Metropolitan Police Officer Daniel Hodges argue the fund will bankroll Proud Boys and Jan. 6 rioters who have threatened their lives.
- The suit invokes the 14th Amendment's bar on the U.S. paying "any debt or obligation incurred in aid of insurrection."
The other side: Blanche and the Justice Department repeatedly pointed to a $760 million Obama-era Keepseagle settlement for Native American farmers alleging Agriculture Department discrimination as precedent for the fund's existence.
- But that settlement was approved by a federal judge after years of litigation.
- Trump's case settled days before the Justice Department was due to respond to a court order asking if the president's lawsuit against agencies he oversees was a real dispute.