A $1.8bn settlement fund created by the Trump administration has sparked widespread criticism, with opponents labelling it a 'slush fund' for political allies. The fund, established as part of an out-of-court agreement in a lawsuit against the Internal Revenue Service (IRS), allows the administration to distribute money at its discretion.
Critics argue the deal stinks of cronyism and corruption, effectively rewarding Trump's friends while indirectly benefiting his family. The backlash has even come from within Trump's own party, with more than a dozen Republican senators reportedly urging a change of course. YouGov polling shows a majority of both Democrats and Republicans oppose the fund.
The settlement stems from a 2024 case where an IRS contractor leaked tax returns of high-net-worth individuals, revealing Trump paid just $750 in federal income tax in 2016 and 2017. Trump sued the IRS for $10bn over the leak. Under the agreement, the IRS is 'forever barred' from auditing Trump's past tax returns, and the $1.8bn fund was created to compensate victims of 'weaponised lawfare'.
However, the fund's administration has raised concerns. A five-member commission, appointed by acting Attorney General Todd Blanche—Trump's former personal lawyer—will decide on payouts. Four commissioners are selected by Blanche, and the fifth in consultation with congressional leaders. All can be fired at any time by Trump, leading to scepticism about the fund's impartiality.
On Friday, a federal judge reopened the case after a bipartisan group of judges filed a lawsuit arguing the settlement was 'a product of collusion and is itself a fraud on the court'. The controversy highlights what some see as an increasingly uninhibited leadership style, raising questions about its impact on American democracy.
