DOJ Scraps $1.8B Anti-Weaponization Fund But Trump Keeps Tax Shield

CNBC reported Tuesday that the Justice Department has permanently abandoned its planned $1.8 billion anti-weaponization fund. Acting Attorney General Todd Blanche made the declaration before a House appropriations panel. However, President Donald Trump and his family retain existing protections from tax enforcement activity tied to returns filed before last month’s settlement.

Blanche Draws a Hard Line on the Fund

Blanche testified before the House Appropriations Subcommittee on Commerce, Justice, Science. He told lawmakers the department would not proceed with the fund under any circumstances. His statement came one day after the DOJ announced it would halt the fund to comply with a federal court’s temporary restraining order. Three separate lawsuits have challenged the fund’s legality. Blanche said the outcome of those cases would not change the department’s position. He declined, however, to commit that promise to writing despite repeated requests from subcommittee members.

What the Fund Was — and Why Critics Objected

The compensation mechanism was created as part of a broader out-of-court settlement resolving a lawsuit Trump had brought against the Internal Revenue Service. Critics argued strongly that the fund lacked adequate congressional oversight. A particular flashpoint was the possibility that it could pay individuals convicted of offenses stemming from the January 6, 2021 Capitol riot. Opposition was bipartisan, with several Republican senators expressing deep reservations about the structure and scope of the arrangement.

Tax Protections Remain In Force Despite Fund’s Collapse

Even with the fund scrapped, Trump, his family members, and affiliated business entities still benefit from the terms of a May 19 addendum Blanche personally signed. That addendum bars the IRS from pursuing audits or enforcement actions against the president and his relatives linked to previously filed returns. Rep. Rosa DeLauro of Connecticut sharply challenged Blanche over the arrangement, characterising it as roughly $100 million worth of tax immunity. Blanche pushed back on that framing. He said the protections are consistent with standard settlement practice and carry no forward-looking immunity. Sen. Bill Cassidy of Louisiana, speaking separately at a CNBC event while testimony was underway, said he was not fully convinced the fund was finished for good.

Background: A Settlement That Raised Questions

Blanche previously served as Trump’s personal criminal defense lawyer before taking the acting attorney general role. His direct involvement in signing the May settlement addendum drew scrutiny from lawmakers on both sides of the aisle. The broader IRS lawsuit settlement, announced May 18, resolved allegations that the agency had improperly subjected Trump and his businesses to heightened scrutiny.

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