Blanche says Trump administration is scrapping $1.8B fund meant to compensate president’s allies

WASHINGTON (AP) — Acting Attorney General Todd Blanche said Tuesday that the Trump administration was scrapping plans to create a $1.8 billion fund meant to compensate allies of the Republican president after widespread political backlash and setbacks in the courts.

“We are not moving forward with the fund, period,” Blanche said in response to questions at a House hearing on the Justice Department budget.

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

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 insist was weaponized law enforcement during President Joe Biden’s Democratic administration. Since then, though, the idea has faced mounting pressure from Republicans who demanded reassurances that plans for the fund were off the table before they would move forward with legislation funding President Donald Trump’s immigration enforcement agencies.

Blanche said the Justice Department was not abandoning an element of a settlement with the IRS that gave Trump and his family immunity from tax audits.

The hearing before a House Appropriations subcommittee was scheduled for discussion of the Justice Department’s budget, but lawmakers quickly focused their questioning on the creation of a fund that has provoked outrage over the mere possibility that violent pro-Trump rioters who stormed the U.S. Capitol on Jan. 6, 2021, could be eligible for payouts.

Signs for the retreat surfaced Monday when a person familiar with the matter said the Republican president was now reconsidering whether to move forward with the fund established to resolve his lawsuit against the Internal Revenue Service over the leak of his tax returns. The Justice Department also said Monday it would comply with a Virginia court temporarily blocking the administration’s “Anti-Weaponization 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.

The Trump administration has defended the fund as an appropriate measure to make up for what officials insist was a weaponized Justice Department during President Joe Biden’s Democratic administration, a claim the Biden administration strongly denied. Though some Trump supporters, including participants in the Capitol riot, have celebrated the announcement, the reaction among Republicans in Congress has been decidedly more hostile, forcing Blanche to try to assuage a GOP constituency that generally operates in close alignment with the administration.

The furor has especially complicated matters in the Senate, where Republicans defiantly left town 10 days ago without passing legislation to fund Trump’s immigration enforcement agencies. Republicans who returned to Washington on Monday said they won’t have the votes to pass the Homeland Security spending bill until the White House works with them to place parameters on the fund. Many have pushed the administration to impose limits or scrap the idea altogether.

At a Senate budget hearing last month, Blanche refused to rule out the possibility that those who carried out violence on Jan. 6 could be eligible for payouts and has repeatedly said in interviews that anyone who feels persecuted by the criminal justice system is free to apply. Payouts will be decided by a five-member commission appointed by Blanche.

But he has apparently struck a more conciliatory tone in private when confronted by Republican anger.

Blanche encountered a groundswell of opposition last month at a tense private meeting with GOP senators, with more than half raising concerns, including by shouting at the Justice Department’s top official, Republican Sen. Ted Cruz of Texas said in a recent episode of his podcast.

“There were fireworks at an epic level — and I’ve got to say, it’s one of the roughest meetings I’ve seen in my entire time in the Senate,” Cruz said.

Behind closed doors, Blanche was “adamant” that no one who assaulted police at the Capitol would receive compensation, according to Cruz.

“He said not just ‘no,’ but ‘hell no,’” the senator recalled.