The Trump administration has abandoned one of its most controversial initiatives after bipartisan political backlash, legal challenges and a growing unease within Republican ranks. Acting Attorney General Todd Blanche told Congress on Tuesday that the administration was scrapping its proposed $1.8 billion "Anti-Weaponisation Fund", a programme critics had denounced as a taxpayer-funded reward scheme for President Donald Trump's allies.
Appearing before a House Appropriations subcommittee, Blanche stated unequivocally that the Department of Justice would not move forward with the fund. Yet while the announcement marked a significant retreat for the administration, it did little to quiet broader concerns surrounding the settlement that gave rise to the proposal. Most notably, Blanche confirmed that another provision of the same agreement, one granting Trump, members of his family and affiliated businesses protection from certain ongoing IRS audits, remains fully intact.
The controversy stems from an extraordinary settlement reached in a $10 billion lawsuit Trump filed against the Internal Revenue Service over the disclosure of his tax returns. As part of the agreement, the administration proposed creating the new fund, which was intended to compensate individuals who claimed they had been unfairly targeted by federal law enforcement or government agencies.
The proposal prompted instant backlash. Democrats warned that the fund could become a vehicle for rewarding political allies, while some Republicans questioned both its legality and its optics. Critics described it as a slush fund with few meaningful safeguards. Concerns were raised that recipients could include individuals convicted for their roles in the January 6 Capitol riot or other figures closely aligned with Trump. Former vice-president Mike Pence was among those who publicly criticised the proposal, calling it a bad idea from the outset.
Even before Blanche's announcement, the fund was facing mounting obstacles in the courts. A federal judge in Virginia temporarily blocked the justice department from operating or distributing money from the programme after two men filed a lawsuit alleging discrimination. Meanwhile, a federal judge in Florida reopened the original IRS case itself to examine whether the settlement had been negotiated properly.
Political resistance on Capitol Hill proved equally damaging. The controversy threatened to derail a major Republican legislative priority: a $72 billion immigration enforcement package designed to expand funding for Immigration and Customs Enforcement and Customs and Border Protection. Several Republican senators privately and publicly expressed discomfort with advancing the bill while the controversial fund remained part of the broader political landscape.
Senate Majority Leader John Thune ultimately relied on assurances from Blanche that the programme would be abandoned in order to secure sufficient support within his caucus. To further distance themselves from the controversy, Republican lawmakers reportedly removed roughly $1.5 billion in broader justice department funding from the legislation to eliminate any possibility that the money could later be redirected towards the proposed fund. Senators Thom Tillis, Bill Cassidy and Lisa Murkowski were among those who repeatedly raised concerns.
Despite Blanche's public declaration that "we're not moving forward with the fund, period", scepticism remains widespread. Democrats noted that he declined to put the commitment in writing, raising questions about whether the administration could revive a similar programme in the future.
For many critics, however, the greater issue is not the fund itself but the part of the settlement that survived. Blanche confirmed that provisions protecting Trump, his sons Donald Trump Jr. and Eric Trump, and associated business entities from certain IRS audits remain in force.
The potential financial implications are substantial. The Trump Organisation has reportedly been engaged in discussions with the IRS concerning losses claimed on a Chicago property development, an audit that could potentially have resulted in penalties exceeding $100 million. Tax lawyers and former IRS officials have described the arrangement as highly unusual and possibly unprecedented. While the IRS traditionally conducts annual audits of sitting presidents, blanket protection from past tax disputes is virtually unheard of.
The disclosure has fuelled allegations that Blanche, who previously served as one of Trump's personal lawyers, is failing to maintain the independence traditionally expected of an attorney general. Internal IRS lawyers had reportedly recommended dismissing Trump's lawsuit before Blanche personally approved the settlement on May 19.
Those concerns have intensified following Blanche's recent appearance on a podcast hosted by Fox News presenter Sean Hannity. In a move critics say broke with long-standing justice department practice, Blanche discussed an ongoing investigation into individuals involved in previous investigations of Trump. During the interview, he sharply criticised former special counsels Robert Mueller and Jack Smith, as well as prosecutors Alvin Bragg and Letitia James. He also revealed that two grand juries had been empanelled and identified former FBI director James Comey, former CIA director John Brennan and former director of national intelligence James Clapper as targets of the inquiry.
The collapse of the fund represents a rare instance in which the Trump administration has been forced to retreat under pressure from both the courts and its own party. Yet the broader dispute is far from over. By preserving protections against potentially costly IRS scrutiny, the administration has secured a significant benefit for the president and his business interests while opening itself to fresh accusations of favouritism and abuse of power.
The immediate political battle has now shifted back to immigration. With the controversial fund effectively removed from the equation, Republican leaders hope to revive momentum behind the $72 billion enforcement package using the budget reconciliation process, which allows legislation to pass the Senate with a simple majority. Thune is seeking to bring the measure to the floor as early as tomorrow. Whether the disappearance of the fund is enough to unite Republican lawmakers remains to be seen, but for now, the administration appears to have sacrificed one controversial proposal in order to preserve a much larger legislative objective.
