Trump drops his $1.8B ‘slush fund’ after outrage over paying his allies

Alex Woodward Mon, June 1, 2026 at 8:35 PM UTC

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President Donald Trump is tabling his plans for a nearly $1.8 billion compensation fund designed to pay his allies and alleged “victims” of government “weaponization” after federal judges began firing back at a so-called “settlement” that got him off the hook for tax investigations in exchange for funneling millions of taxpayer dollars to his supporters.

The decision follows a federal court ruling that temporarily blocks the administration from funding or making any payments from what critics have called a “slush fund” to enrich the president’s aggrieved supporters.

The Department of Justice “will abide by the Court’s ruling,” the agency said in a statement Monday.

Last week, a federal judge in Washington, D.C., blocked the administration from “taking any further action pursuant to the creation or operation of the Anti-Weaponization Fund” — including transferring money to it, considering any claims, and mailing any checks while a legal challenge plays out. That order ends June 12, unless the fund is further blocked the courts.

Another federal judge is also investigating the so-called “settlement” agreement between the president and the IRS after Trump sued his own administration for $10 billion. The judge will determine whether Trump filed a “frivolous lawsuit for the sole purpose of forcing a settlement” to create a fund for his political allies while the president, his family and their businesses escape government scrutiny for tax debts over which they have been under investigation for more than a decade.

Donald Trump is tabling his $1.8 billion compensation fund for alleged ‘victims’ of government ‘weaponization’ after bipartisan outrage and massive legal hurdles (AFP/Getty)

But the scheme has come under heavy fire from members of Congress, where lawmakers abruptly abandoned a series of votes before Memorial Day after hitting an impasse over plans to funnel taxpayer dollars into the fund.

The fund derailed Republican plans to pass legislation to continue funding Immigration and Customs Enforcement, blowing up into a heated closed-door briefing with Senate leaders and and Acting Attorney General Todd Blanche, who would oversee the board that controls the payouts.

Democratic members of Congress were also mulling plans to kill the fund through the upcoming budget process by forcing Republicans to go on-record with their vote for the president’s $1.776 billion reserve.

Democrats aren’t convinced that it’s dead without congress passing legislation that would shut it down for good.

Plaintiffs in lawsuits against the administration are also seeking courts’ urgent intervention.

“We have seen time and again the president have to abandon corrupt and unlawful schemes in the face of litigation and public pressure,” according to Skye Perryman, president and CEO of Democracy Foward, among groups representing plaintiffs who are suing to end the fund.

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“If these rumors are true, the administration abandoning its illegal slush fund would be a major victory for people in America,” she added. “Until the administration fully abandons the scheme, it's beyond dispute that it will not recur, and our clients' harm is remedied, we will be in court challenging it.”

“The blatant corruption of a slush fund explicitly for insurrectionists and Trump cronies simply could not be ignored,” according to Lisa Gilbert, co-president of Public Citizen, which is among the plaintiffs suing to block the fund.

“If the Trump administration drops the fund, as is now being reported, it is simply a nod to the realities of how appalling and toxic this fund truly was,” she said. “As important as taking out this disgusting policy is, we must not let it be an excuse to greenlight the massive increases to ICE funding embedded in the reconciliation bill.”

Acting Attorney General Todd Blanche, who is overseeing a five-member panel to determine who gets paid from the $1.776 billion fund, has clashed with Senate Republicans over funding for the measure (Reuters)

Under opaque plans for the fund, the Department of Justice would tap into a long-standing Judgment Fund to settle any claims brought against the government.

A five-member board made up of Blanche’s appointees would then arrange payments from the fund to recipients — whose identities will remain secret.

Blanche has publicly stated that Trump and his family are not eligible, but Blanche has not ruled out payments to the president’s donors and allies, raising questions about the process and who stands to benefit.

Trump fumed on Truth Social last month that he “gave up a lot of money” to create the fund, despite previously saying he would donate whatever he received from his IRS lawsuit to charity organizations.

“I could have settled my case, including the illegal release of my Tax Returns and the equally illegal BREAK IN of Mar-a-Lago, for an absolute fortune. Instead, I am helping others, who were so badly abused by an evil, corrupt, and weaponized Biden Administration, receive, at long last, JUSTICE!” Trump wrote May 22.

Days earlier, he said he wasn’t involved in the settlement.

“I guess they made a settlement of some kind. I wasn’t involved in the settlement, I could have been involved, but I didn't choose to be, so they made a settlement,” he told reporters.

Trump said the victims of “weaponization” under the Obama and Biden administrations — an apparent reference to his allies who were investigated in connection with his 2016 and 2020 campaigns and the attack on the Capitol — were “destroyed, they went to jail, their families were ruined, they committed suicide.”

“We’re reimbursing those people for their legal fees and for their costs, and for anybody involved,” he added. “It was the most violent thing I’ve ever seen in politics.”

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Source: “AOL Breaking”