Thomson Reuters

· Posted: Jun 02, 2026 7:57 PM EDT | Last Updated: 10 hours ago

The Trump administration is scrapping plans to create a $1.8 billion US fund meant to compensate allies of the Republican president, the Justice Department's top official said Tuesday in retreating from a program 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," U.S. Acting Attorney General Todd Blanche said. "Period."

But Blanche also told lawmakers that an agreement with Trump to bar future audits of his or his family's past tax records will remain in place.

The fund emerged from a legal settlement between President Donald Trump and ​the Justice Department to resolve an unprecedented $10 billion Trump lawsuit against the IRS ​over the alleged mishandling of his tax records.

The fund was dropped after furious Republican lawmakers said it might threaten the passage of a $72-billion US bill to fund Trump's immigration crackdown.

Blanche, Trump's former personal attorney, has held the ​top job at the Justice Department since early April, when Trump fired Pam Bondi as attorney general. A person ⁠familiar with the White House's thinking said ⁠Blanche's future hinged on his ability to address the concerns of Republican ‌lawmakers about the fund.

U.S. Acting Attorney General Todd Blanche testifies before a House committee hearing in Washington, D.C., on Tuesday. (Allison Robbert/The Associated Press)

The $1.776-billion US fund was meant to pay people who said they had been the subject of government abuse, and Blanche angered senators last month when he would not commit to excluding people who assaulted police officers during the Jan. 6, 2021 Capitol riot.

White House officials spent much of Monday calling lawmakers to assure them there would be no payouts ⁠after the Republican revolt, said two sources familiar with the matter, speaking on the condition of anonymity.

The White House referred questions to the Justice Department, where a spokesperson said compensating people who have suffered from government abuse is still a priority for the administration.

"The goal of the fund was about continuing ‌the process of fixing the wrongs committed by past administrations, but given the extraordinary misunderstanding of this, the DOJ is not proceeding with the fund," spokesperson Emily Covington said.

'Not committing to doing anything in writing'

At a hearing on Tuesday afternoon, Democratic lawmakers pressed for a definitive promise that the fund was dead, but Blanche said he would not put that in writing.

"Why ​do I need to put something in writing?" Blanche said. "I'm not committing to doing anything in writing."

Democratic Representative Rosa DeLauro said Blanche should not have signed off on the portion ⁠of the agreement that bars future tax audits of Trump and his businesses, noting that he formerly served as Trump's personal attorney.

Rep. Rosa DeLauro, a Democrat from Connecticut, holds up a document during Blanche's testimony on Tuesday. (Allison Robbert/The Associated Press)

"You just ⁠gave the president and his family a tax immunity to the tune of about $100 million," DeLauro said, referring to reports that Trump could ⁠face ⁠that amount in an IRS tax penalty.

"Do you not ​find that there’s any conflict of interest in what you doing here as the acting attorney general of the United States?"

Blanche said the agreement ​did not give Trump "blanket immunity" and rejected DeLauro’s ⁠criticism.

"What are you saying is the conflict?" Blanche responded. "The fact that I used to have a job and I have a current job?"

House Republicans at the hearing did not criticize the fund.

Peter Ticktin, an attorney representing more than 400 Jan. 6 defendants, said he and his clients are not dismayed about the announcement.

"They still expect to get paid," said Ticktin, who has filed claims for 10 defendants requesting up to $3 million US. "They trust Donald Trump."