Trump administration unveils $1.7bn fund to compensate his allies as he drops tax lawsuit

May 18, 2026

The US Justice Department has established a $1. 7 billion compensation fund for Trump allies who claim they faced politically motivated investigations during the Biden administration, announcing this arrangement as President Trump agreed to drop his $10 billion lawsuit against the IRS over leaked tax returns. The fund, managed by a five-member commission, will allow pardoned Capitol riot participants and others alleging targeting by federal investigators to file claims for compensation, though Trump and his family will receive only an apology without monetary payment.

Who is affected

President Donald Trump, his elder sons, and the Trump Organization (lawsuit plaintiffs receiving apologies)
Participants in the January 6, 2021 Capitol riot who were pardoned by Trump
Individuals claiming they were targeted by partisan federal investigators during the Biden administration
American taxpayers (funding the $1.7 billion settlement)
Democrats in Congress (over 90 House Democrats opposing the settlement)
Charles Littlejohn (former IRS contractor serving five years in prison for the leak)

What action is being taken

The Justice Department is establishing the "Anti-Weaponization Fund" with $1.776 billion
A five-member commission (four appointed by the Attorney General) is being created to manage the fund
The commission will receive and process claims from eligible individuals
Over 90 House Democrats have filed a motion to block the settlement
Reports on payment recipients will be sent to the Attorney General

Why it matters

This settlement represents a significant precedent where a sitting president has resolved a personal lawsuit against a federal agency he controls, raising serious questions about separation of powers and conflicts of interest. The creation of a nearly $2 billion taxpayer-funded compensation program for political allies and pardoned Capitol riot participants fundamentally challenges traditional boundaries between personal legal interests and government authority. Legal experts have called the situation "unprecedented," and critics argue it establishes a dangerous mechanism for using federal resources to reward political supporters, potentially undermining institutional independence and accountability within the justice system.

What's next

No explicit next steps stated in the article beyond the ongoing processes of the commission receiving claims and sending reports to the Attorney General, and the Democratic motion to block the settlement.

Read full article from source: BBC