US President scraps controversial $2.5 billion plan following backlash
Updated ,first published
Washington: Donald Trump has canceled a plan to pay up to $2.5 billion in compensation to victims of “government weaponization” under the Biden administration, following strong backlash from Republicans and Democrats who branded it a “slush fund” for Trump’s MAGA allies.
This marks a significant step back from the US president, who said he “gave up a lot of money” to allow the so-called Proliferation Fund to be implemented.
The US$1.8 billion ($2.5 billion) cat was the product of a legal settlement between Trump, his family and the tax agency after he sued his own government seven years ago over leaked tax records.
But the fund has been widely criticized as a mechanism to funnel money to Jan. 6 rioters and other Trump allies who claim they are victims of the Biden administration’s rule of law.
Acting Attorney General Todd Blanche, formerly one of Trump’s personal lawyers, confirmed that the US government will not resume funding that was halted by the court until June 12.
“We are not making progress on funding,” he told Congress Tuesday afternoon (Washington time). Asked if that meant it would never continue, he said: “True.”
The fund would be administered by five commissioners, all appointed by the attorney general, including one selected in consultation with Congress.
Those reaching out for compensation from the fund include Michael Caputo, a former Trump first-term official, and Enrique Tarrio, the former head of the neo-fascist Proud Boys movement who was convicted of seditious conspiracy for the Jan. 6 riots. Tarrio was released from prison early last year after Trump granted him a pardon.
It was thought that names such as Rudy Giuliani, Steve Bannon and Peter Navarro could also apply.
The Justice Department had said the funding was an appropriate measure to correct a situation in which Trump faces criminal charges and many of his allies are being investigated and prosecuted by officials insisting on arming federal law enforcement under the Biden administration.
The administration had said anyone who felt unfairly persecuted could apply for compensation regardless of political affiliation, but Blanche’s refusal to publicly block the possibility of receiving payments for people convicted of violent crimes on Jan. 6 alarmed lawmakers.
Blanche made clear Tuesday that she stands by the fund’s logic even as she abandons the practice, saying: “This Justice Department has been weaponized against too many Americans. And we’re working every day to fix that. And we’ve made a lot of progress, but we’ve got a lot more to do.”
Merrick Garland, President Joe Biden’s attorney general, rejected allegations of politicization and said his decisions were based on facts, evidence and the law.
The Justice Department’s efforts to move forward with the funding have faced headwinds in the courts after multiple lawsuits filed by Trump’s critics, including a prosecutor fired on Jan. 6 and two police officers who helped defend the Capitol.
Matters have been particularly complicated by the furor in the Senate, where Republicans almost two weeks ago defiantly walked out of town without passing legislation to fund Trump’s immigration enforcement agencies and made clear they would not pass it unless the administration made major changes to its funding plan.
House Speaker Mike Johnson said he told Blanche the funding may have been made with noble intentions, but that it was “a long shot right now” given that Republicans would need to pass the legislation with a narrow majority in Congress.
Brian Fitzpatrick, a Republican congressman, worked with a Democrat to draft legislation that would specifically block the funding. Republican senator Roger Wicker called it “a failure from the start,” while the Senate president pro tempore, Chuck Grassley, also a Republican, said it was necessary for Trump to give up the funding.
Trump, his family and his companies still appear to benefit from another part of the deal; This prevents the Internal Revenue Service from pursuing them indefinitely on pending tax matters.
Previous reporting with New York Times He suggested that Trump could be liable for a tax bill of up to $100 million if he fails an IRS audit.
Blanche told lawmakers Tuesday that the agreement with Trump banning future audits of his tax records would remain in effect.
In January, Trump filed a lawsuit against the government he leads over the leak of his tax records by an IRS contractor years ago. The lawsuit claimed the IRS should have done more to prevent the leak.
Michael Koziol is the North America correspondent for The Age and the Sydney Morning Herald. He is a former Sydney editor, Sun-Herald deputy editor and a federal political correspondent in Canberra.Connect with: X or email.
