The US Justice Department announced on Monday that it is creating a $1.776bn fund to compensate allies of Donald Trump as part of an agreement in which the president and his sons dropped a $10bn lawsuit against the Internal Revenue Service (IRS).
The fund will be overseen by five commissioners, four of whom will be appointed by the attorney general and can be removed by Trump. The fifth will be appointed in consultation with congressional leadership. It has the power to issue formal apologies and will send a confidential quarterly report to the attorney general, with no requirement to make its work public.
According to a memo from acting attorney general Todd Blanche, the US government will have no liability for safeguarding the funds once deposited, even in cases of bank failure or fraudulent transfers. Claims will be assessed on factors including the strength of the claim, time spent in prison, attorney’s fees, and “other factors” deemed just and appropriate. Trump and his sons will not receive monetary compensation but will receive a formal apology. Any money left at the end of Trump’s term will be returned to the federal government.
The agreement was signed by associate attorney general Stanley Woodward, who represented January 6 defendants and Trump allies in various investigations. The deal also sees Trump drop claims for damages over the Mar-a-Lago raid and the investigation into Russian interference in the 2016 election. The filing came just before a 20 May court deadline, with Trump’s lawyers stating that “no judicial analysis is appropriate”.
The original lawsuit sought damages after an IRS contractor leaked Trump’s tax returns to media outlets. Democrats have condemned the settlement as a slush fund for the president’s political allies. Ninety-three congressional Democrats, including House minority leader Hakeem Jeffries, filed an amicus brief, while Andrew Warren of the Democracy Defenders Fund said the deal was “corruption in plain sight”.
