Trump administration scrapping 1.8 billion-dollar compensation fund – Blanche

The Trump administration is scrapping plans to create a 1.8 billion US dollars fund (£1.3 billion) meant to compensate allies of the Republican president, the justice department’s top official has said.

The news represents a retreat from a programme that faced setbacks in the courts and a fierce political backlash that had threatened to stall key elements of the White House agenda.

“We are not moving forward with the fund, period,” US acting attorney general Todd Blanche said in response to questions at a house hearing on the justice department budget.

“Not moving forward, ever?” representative Grace Meng, a New York Democrat, asked.

“Correct,” Mr Blanche answered.

The blunt declaration marked an extraordinary turnabout for a Trump justice department that just two weeks ago had pronounced the fund as essential to make up for what officials say was weaponised law enforcement during former President Joe Biden’s Democratic administration, a claim the Biden administration strongly denied.

The fund has since been paused by a judge and lambasted by both Democrats and Republicans alike who said they were troubled by a lack of oversight as well as the potential for payouts to participants in the violent January 6 2021 riot at the US capitol.

Republicans had demanded reassurances that plans for the fund were off the table before they would move forward with legislation funding US President Donald Trump’s immigration enforcement agencies.

This administration has engaged in what are perhaps the most brazen acts of flagrant corruption I’ve ever seen. And you are at the centre of many of them, Mr Blanche

When word of the settlement broke, the senate was already navigating tricky passage of the immigration legislation with an added one billion dollars in White House security costs — including for Mr Trump’s ballroom project.

Furious, senate Republicans jettisoned the White House security money from the bill and made clear they would not pass the legislation at all unless the White House made major changes to the settlement.

The 1.776 billion dollars “anti-weaponisation fund” was established to resolve Mr Trump’s lawsuit against the Internal Revenue Service (IRS) over the leak of his tax returns. As part of that deal, the IRS agreed to drop all pending investigations of Mr Trump over whether he had paid his fair share of taxes.

Pressed over whether it was also abandoning that part of the deal, Mr Blanche said “nothing has changed with that”, and said the administration was only abandoning plans to create the 1.8 billion dollars fund.

The hearing on Tuesday before a house appropriations subcommittee was scheduled for discussion of the justice department’s budget, but members quickly focused their questioning on the fund.

“This administration has engaged in what are perhaps the most brazen acts of flagrant corruption I’ve ever seen,” representative Rosa DeLauro, a Democrat from Connecticut, said.

“And you are at the centre of many of them, Mr Blanche.”

Signs of the retreat surfaced on Monday when a person familiar with the matter said the Republican president was reconsidering whether to move forward with the fund.

The justice department also said on Monday it would comply with a Virginia court temporarily blocking the administration’s fund, effectively agreeing to pause the plan for at least two weeks.

Another judge in Florida raised the prospect of reopening the IRS lawsuit because of “grievous allegations” of improper dealing made against the administration by settlement critics.