President Donald Trump is backing away from a controversial $1.8 billion compensation program critics described as a taxpayer-funded “slush fund” for political allies, after mounting legal and political pressure forced a retreat in court.
The Department of Justice confirmed Monday it will comply with a federal judge’s order blocking the so-called “Anti-Weaponization Fund,” halting any payments or new claims while litigation continues.
The reversal comes after federal judges in Washington, D.C., temporarily barred the administration from operating or funding the program, which critics say was designed to funnel taxpayer money to individuals the president has described as victims of government “weaponization.”
A Justice Department statement said the agency “will abide by the Court’s ruling.”
At the center of the controversy was a proposed system that would have directed nearly $1.8 billion in federal funds to individuals tied to claims of political or governmental targeting, using money routed through long-standing federal settlement mechanisms.
A federal judge last week blocked the government from taking any further steps to implement the program, including processing claims or transferring funds, while legal challenges proceed.
Another federal judge is separately reviewing whether the underlying agreement that created the fund was improperly structured after Trump filed a lawsuit against his own administration seeking $10 billion in damages tied to IRS investigations. That case has raised questions about whether the lawsuit was used to force a settlement that ultimately created a payout mechanism benefiting political allies.
Lawmakers have also clashed over the fund, with tensions spilling into Congress ahead of Memorial Day when negotiations over unrelated spending bills stalled amid disputes over the program’s funding structure.
The controversy disrupted Republican efforts to advance legislation to fund Immigration and Customs Enforcement and triggered closed-door meetings involving Senate leaders and Acting Attorney General Todd Blanche, who would have overseen the board responsible for approving payouts.
Democrats have signaled they may attempt to eliminate the fund through the budget process if courts do not permanently block it, arguing that any continuation would require explicit congressional authorization.
Outside groups involved in ongoing litigation say the administration’s retreat reflects the impact of legal pressure and public scrutiny.
“We have seen time and again the president have to abandon corrupt and unlawful schemes in the face of litigation and public pressure,” said Skye Perryman, president and CEO of Democracy Forward.
“If these rumors are true, the administration abandoning its illegal slush fund would be a major victory for people in America,” she added, warning that litigation would continue until the program is fully terminated.
Lisa Gilbert of Public Citizen, another plaintiff in the case, called the fund “blatant corruption,” saying it was designed to reward political allies under the guise of compensation for government misconduct.
“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,” Gilbert said.
Under the proposed structure, payments would have been administered through a federal judgment mechanism overseen by a five-member board appointed by Blanche. The identities of recipients were not expected to be made public.
While administration officials have said Trump and his family would not be eligible for payments, critics pointed to the lack of clarity around eligibility and oversight.
Trump himself had previously defended the effort on social media, arguing he had sacrificed personal financial gain to support individuals he described as victims of politically motivated investigations.
In public remarks, Trump has repeatedly claimed that supporters were unfairly targeted during investigations tied to his campaigns and the January 6 Capitol attack, though those characterizations remain disputed.
