DOJ announces $1.7B 'Anti-Weaponization Fund' as part of Trump IRS lawsuit settlement

The Justice Department announced Monday that as part of the settlement agreement in President Donald Trump's $10 billion lawsuit against the Internal Revenue Service, the attorney general is establishing an $1.776 billion "Anti-Weaponization Fund" to compensate those who allege they were wrongly targeted under the Biden administration.

The announcement came after attorneys representing Trump informed a federal judge in a court filing earlier Monday that the president was dropping his suit against the IRS.

President Trump would not be eligible to receive money from the compensation fund, according to the settlement terms, and he agreed to drop his $10 billion lawsuit against the IRS as well as two civil claims for $230 million related to the Russia collusion investigation he faced during his first term in office and the 2022 search of his Mar-a-Lago estate.

Trump sued the IRS after a government contractor pleaded guilty in 2023 to stealing the tax information of Trump and other wealthy Americans and leaking it to media outlets in 2019 and 2020.

As ABC News previously reported, the fund will be led by a five-person commission appointed by the attorney general, though Trump would have the right to remove any member. The DOJ plans to pull money for the fund from the federal compensation fund, which is a perpetual appropriation normally used to pay court judgments and settlements.

The attorney general is set to receive quarterly updates about how much money has been awarded, and the fund itself can be audited, according to the DOJ.

According to the DOJ's announcement, the fund itself is modeled after a $760 million settlement reached by the Obama administration to compensate Native American farmers who were discriminated through the USDA's farm loan programs.

The fund itself will cease operations on December 15, 2028, according to the DOJ, and any leftover funds will be turned over to the federal government.

A group of 93 House Democrats filed an amicus brief Monday in Trump's lawsuit case to criticize the settlement, calling it "collusive litigation to force the American people to put ... money into his pockets, and the pockets of his family and friends."

In the brief, House Democrats argued the lawsuit and settlement is blatantly unlawful and "raises the specter of corruption unparalleled in American history."

"Filing a collusive lawsuit only to immediately dismiss it in order to produce a collusive settlement that is illegal multiple times over would not only be legally barred; it would also raise serious questions about whether the parties have manipulated the court system to achieve illicit ends," the lawmakers wrote in their filing.

Rather than a legitimate lawsuit, the lawmakers argued the litigation and settlement are a scheme to "siphon billions of taxpayer dollars into the pockets of the President, his family, and his allies." They said the settlement would violate the separation of powers, Domestic Emoluments Clause, and the two-year statute of limitations for the civil claims.

News of the settlement fund prompted backlash from Democrats and some Republicans who described it as an illegal "political slush fund" for Trump and his allies.

"Only Congress has the power to appropriate money, and Congress never voted on creating this $1.7 billion political slush fund at the Department of Justice, and Congress would never pass that," said Rep. Jamie Raskin, the House Judiciary Committee's ranking member, in an interview with ABC News' "This Week" anchor George Stephanopoulos on Sunday.

The judge overseeing the case had also raised concerns about the legality of the lawsuit, which effectively pits President Trump in his private capacity against the very government he controls. Last month she ordered the lawyers for both sides to file papers justifying that the parties were adversarial enough -- a basic legal principle for a lawsuit to proceed.

"Although President Trump avers that he is bringing this lawsuit in his personal capacity, he is the sitting president and his named adversaries are entities whose decisions are subject to his direction," U.S. District Judge Kathleen Williams wrote.

She also appointed a group of seasoned attorneys to weigh in on the ethics and legality of the lawsuit. In a filing last week, those independent attorneys raised concerns about the amount of control that the president has over the defendants in the case and noted that the "circumstances raise the specter that Defendants and their attorneys may instead be operating at the President's direction."

"Since taking office, President Trump has significantly expanded the President's oversight and control over the Attorney General and DOJ, including in ways that blur the line between fidelity to the President's policy priorities and fidelity to the President himself," the filing said.