A federal judge has indefinitely blocked President Donald Trump's proposed $1.8 billion payout fund, after the Trump administration confirmed it has scrapped the plan entirely. At a hearing in Virginia federal court, US District Judge Leonie M. Brinkema issued a preliminary injunction blocking the fund, citing Trump's conflicting statements about the fund's viability. The judge gave the government one week to enter a 'clear, unambiguous' declaration that the fund is permanently abandoned, at which time she will consider dismissing the case.
President Donald Trump has denied claims that he filed a 'collusive' lawsuit against the Internal Revenue Service to orchestrate the creation of a $1.8 billion fund for alleged victims of political 'weaponization.' According to reports from Business Standard, Trump's lawyers argued in a Friday filing that the $10 billion suit against the IRS was not a fraud on the court and that Justice Department officials had broad authority to enter into the agreement that led to the now-scrapped fund.
US District Judge Kathleen Williams in Miami is considering reopening the case to investigate whether Trump and the Justice Department defrauded the court. As reported by Business Standard, the investigation stems from grievous allegations by a group of 35 former federal judges who claimed in a filing last month that Trump and the Justice Department used the case as legal cover to create the fund. The ex-judges argued that Trump effectively controlled both sides of the case and there was never a legitimate legal dispute for the courts to decide.
The fund quickly drew bipartisan opposition from lawmakers who characterized it as a 'slush fund' aimed at delivering payouts to Trump's allies and supporters, including people who attacked the Capitol on January 6, 2021. Sens. Bill Cassidy (R-La.) and Cory Booker (D-N.J.) filed a briefing urging the court to continue investigating the fund's legality, calling it a 'threat to constitutional democracy' and an 'improper and unconstitutional transfer of taxpayer dollars' to insurrection participants. Judge Brinkema found the senators' arguments compelling, stating there was 'very strong public interest' in preventing the fund from moving forward.
In the latest court proceedings, Judge Brinkema cited Trump's conflicting statements as core reasons for the preliminary injunction. The president told NBC's 'Meet the Press' that 'the weaponization fund is a great idea' and would be 'disappointed' if Republicans didn't approve it. Brinkema also noted Trump's statement that he dropped the fund because 'a radical-left judge ruled against it.' The judge questioned whether the parties were 'sufficiently adverse' because Trump was both a plaintiff in his personal capacity and overseeing the agencies he was suing. If Williams reopens the case, she could order testimony from individuals involved and issue hefty financial and professional penalties.
Trump sued in January over the unauthorized disclosure of his tax returns to the press in 2019 by an IRS contractor, who pleaded guilty and went to prison. The settlement also drew court challenges including cases in California, Florida, and D.C., with some judges declining to bar the administration from pursuing the fund. A judge in Virginia overseeing a suit challenging the fund entered an order blocking officials from taking action while the case moves ahead, rebuffing the government's arguments that Blanche's public statements about dropping the plan were sufficient confirmation.
