The United States Justice Department announced on Monday the creation of a $1.776 billion fund — the dollar amount a deliberate echo of the year of American independence — to compensate individuals who claim they were wrongly investigated or prosecuted by previous administrations. The announcement came as part of a deal in which President Donald Trump and his sons dropped a $10 billion lawsuit they had filed against the Internal Revenue Service (IRS) over the leak of Trump's confidential tax returns. Acting Attorney General Todd Blanche described the fund as "a lawful process for victims of lawfare and weaponization to be heard and seek redress."
The fund will be overseen by a five-member commission, four of whom will be appointed by the attorney general and removable by Trump, with a fifth appointed in consultation with congressional leadership. There are no clearly defined partisan requirements for claimants, though eligibility criteria remain vague — claims will be assessed on the strength of evidence, time served in prison, legal fees incurred, and other factors the commission deems appropriate. Crucially, there is no requirement for the fund's operations to be made public, and a government memo states that once money is deposited, the United States bears no liability for its protection against fraud or misuse. Trump himself will not receive monetary compensation but will receive a formal apology; any unspent funds at the end of his term are to be returned to the federal government.
The lawsuit at the root of this settlement stemmed from the 2018–2020 leaking of Trump's tax returns to The New York Times and ProPublica by Charles Littlejohn, a contractor for the IRS who is currently serving a five-year prison sentence. The 2020 Times report revealed Trump paid just $750 in federal income tax in the year he first entered the White House. Trump's suit, filed earlier this year in Florida federal court and also naming his sons Donald Trump Jr. and Eric Trump as plaintiffs, sought $10 billion in damages for reputational and financial harm.
The announcement has drawn swift and fierce criticism from Democrats and government watchdog groups, who are calling the fund an unconstitutional slush fund that would direct taxpayer money to the president's political allies. Ninety-three House Democrats, including minority leader Hakeem Jeffries, filed an amicus brief challenging the arrangement, while Senator Elizabeth Warren described it as "corruption on steroids." Representative Jamie Raskin called it "a racket designed to take $1.7 billion of taxpayer dollars out of the Treasury." Watchdog groups including Citizens for Responsibility and Ethics in Washington (CREW) and Democracy Forward have pledged legal challenges, arguing the arrangement may violate the Constitution's domestic emoluments clause.
The deal was struck just before a court deadline that could have exposed the lawsuit to an adverse ruling. The presiding judge, US District Judge Kathleen Williams, dismissed the case after Trump's lawyers filed a notice stripping her of jurisdiction, though she noted the agreement did not constitute a formal court settlement. The creation of the fund is the latest in a broader pattern: Trump's Justice Department has already made payments to former officials entangled in the Trump-Russia investigation and, on his first day back in office, Trump pardoned hundreds of supporters convicted in connection with the January 6, 2021 storming of the US Capitol.