Acting Attorney General Todd Blanche announced the creation of a $1.776 billion fund Monday as part of a settlement agreement in President Trump's withdrawn lawsuit against the Internal Revenue Service, according to the Department of Justice. Trump sued the IRS for $10 billion in January over an agency contractor leaking his tax return information to news outlets.
The DOJ stated the fund will provide payouts and issue "formal apologies" to individuals who pursue settlements arguing the government wronged them. The department cited as precedent Keepseagle v. Vilsack, under which the DOJ during the Obama administration created a $760 million fund to redress claims accusing the Agriculture Department of racism against Native Americans.
Shortly after Blanche created the fund, 93 House Democrats filed an amicus brief in federal court in the Southern District of Florida seeking to block the settlement. The filing argues Article III, Section 2, Clause 1 of the Constitution requires courts to dismiss cases that lack a genuine "case or controversy" between opposing parties.
What the Right Is Saying
The Trump administration has not issued a public response to the Democratic criticism as of publication time. The DOJ pointed to Keepseagle v. Vilsack as precedent for creating funds to address individual claims against federal agencies, suggesting the fund follows established legal frameworks.
Administration officials have not commented publicly on which specific cases or claimants the fund would support. The White House did not respond to requests for comment on the Democratic amicus filing.
What the Left Is Saying
Rep. Jamie Raskin (D-Md.), the ranking member on the House Judiciary Committee, called the settlement "pure fraud and highway robbery" in a Monday release. "No one can be both plaintiff and defendant in the same case," Raskin said. "And no president can concoct a fake case for $10 billion in damages against the government so he can be plaintiff and defendant and then 'settle' his bogus case against himself as a judge."
Raskin argued the DOJ would use the fund to "hand out" money to convicted January 6 rioters with pending suits against the federal government. "This case is nothing but a racket designed to take $1.7 billion of taxpayer dollars out of the Treasury and pour it into a huge slush fund for Trump at DOJ," he added.
Rep. Joe Neguse (D-Colo.), assistant House Democratic leader, called the lawsuit "one of the most brazen examples of corruption we've seen" from the administration in the same release. "The case is unlawful, unethical, and lacks the bare minimum required to file a lawsuit: two opposing parties," Neguse said.
Rep. Richard Neal (D-Mass), ranking member of the House Ways and Means Committee, said Trump suing the IRS was "never about justice." "Now, with the Court poised to weigh in only days from now, Trump is scrambling to cut a backroom deal and solidify his position as the judge, jury, and executioner," Neal stated.
Senate Democratic Leader Chuck Schumer (N.Y.) accused the president of devising "a plan to shake hands with himself in order to fund his insurrectionist army to the tune of billions."
What the Numbers Show
The DOJ anti-weaponization fund totals $1.776 billion, according to the Department of Justice announcement. Trump's original lawsuit against the IRS sought $10 billion in damages over tax return information leaks.
The precedent cited by DOJ, Keepseagle v. Vilsack, involved a $760 million settlement fund created during the Obama administration for Native American farmers alleging discrimination by the Agriculture Department.
Ninety-three House Democrats signed the amicus brief filed Monday in the Southern District of Florida. The filing is 31 pages long and argues the court must dismiss the settlement under Article III's case or controversy requirement.
The Bottom Line
The legal battle over the DOJ fund is expected to move quickly, with a federal court weighing whether to block the settlement in coming days. Democrats are urging courts to reject what they call an unconstitutional arrangement allowing Trump to effectively sue and settle with his own government.
Republicans have not publicly defended the specific mechanics of the settlement but pointed to past precedent for creating compensation funds related to government wrongdoing claims. The administration has not detailed which pending cases might qualify for payouts under the new fund.
What happens next: Courts will determine whether the settlement violates Article III standing requirements. If blocked, the $1.776 billion fund would not be established as structured. Legal experts say the unusual nature of a president suing his own government makes this case without direct precedent.