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Trump’s Compensation Fund Is Dead. Could He Find Other Ways to Pay Allies?

September 18, 2026
in News
Trump’s Compensation Fund Is Dead. Could He Find Other Ways to Pay Allies?

Even though the Justice Department has repeatedly vowed that it has scrapped its plans to create a $1.8 billion fund to compensate people who believe they have been politically prosecuted, questions have lingered about whether President Trump might find another way to funnel taxpayer money to his allies.

Could Mr. Trump simply create a different fund that would do something similar? Or could he use other legal avenues to award financial damages to his supporters — including the hundreds of rioters charged in connection with the attack on the Capitol on Jan. 6, 2021?

Those same issues were raised at a court hearing on Friday by a federal judge who has already barred the fund from moving forward. She said she remained concerned that the Trump administration might use novel means to make payments to people who share its political viewpoint.

“I think the anti-weaponization fund — that entity — is gone,” the judge, Leonie M. Brinkema, said during the hearing. “But is there a functional equivalent of that going on now?”

The judge quickly added, “The issues underlying this case are alive and kicking.”

The case she was referring to is a lawsuit filed in Federal District Court in Alexandria, Va., that has challenged the legality of both the compensation fund and a separate measure granting Mr. Trump, his family and his businesses expansive protections from all past tax investigations.

The two provisions emerged from a backroom deal reached this spring between Justice Department officials and Mr. Trump’s personal lawyers to end a different lawsuit that the president had filed accusing the Internal Revenue Service of allowing some of his tax returns to be leaked to reporters.

That suit was denounced in July by a federal judge in Florida who described it as an improper exercise in self-dealing given that Mr. Trump had sought money from a government agency that he effectively controls. The Florida judge, Kathleen M. Williams, also accused the president and top officials at the Justice Department — including Attorney General Todd Blanche — of seeking to manipulate the court system to lend a veneer of validity to the secret negotiations that ended the suit and led to the creation of the fund and tax protections.

At the hearing in Virginia, the task that Judge Brinkema faced was to consider a request by the government to dismiss the suit that has challenged both those measures.

The Justice Department has argued that the claims against the fund are moot because Mr. Blanche has said several times that it is dead. The department has also asserted that the claims against the tax provision should be tossed out because the plaintiff that raised them — the union representing I.R.S. workers — lacks the legal standing to make the challenge.

Judge Brinkema, a Clinton appointee, seemed open to the Justice Department’s assertions, recognizing that the fund that the suit set out to destroy effectively no longer exists. She also appeared to buy into the government’s argument concerning standing, saying that no evidence existed that I.R.S. workers had actually been asked to stop an audit of Mr. Trump’s taxes.

Still, while the judge held off for now on ruling on the motion to dismiss the suit, she was unable to let go of the basic principles that motivated it in the first place.

She noted, for example, that after the compensation fund was set aside, several Jan. 6 rioters filed lawsuits against the government, claiming they were wrongly prosecuted and asking for financial damages. While the judge acknowledged that the Justice Department was, for the moment, “properly opposing” those suits, she raised the possibility that officials might at some point change their mind and quietly seek to settle them.

The Trump administration in fact has a history of settling lawsuits filed by its allies.

In March, it agreed to pay Michael T. Flynn, Mr. Trump’s former national security adviser, $1.25 million to settle claims that he was wrongfully prosecuted for making false statements to federal agents investigating ties between Russia and Mr. Trump’s 2016 presidential campaign.

Around the same time, the administration offered a similar sum to settle a lawsuit brought by Carter Page, an adviser to the 2016 Trump campaign who was wiretapped during the Russia investigation.

Judge Brinkema had similar qualms about the measure granting tax protections to the president and his family. She noted that while Judge Williams’s ruling in Florida did not kill the provision outright, it effectively “castrated” it and could make it difficult to enforce in the future.

Moreover, she pointed to a statute that forbids the president from directly or indirectly ordering a tax audit from being opened or closed. And while she conceded that the statute usually allows the attorney general to start or end audits, she wondered whether the exception was valid if the attorney general had no independence from the president.

“You have the president able to control the very people who are supposed to be independent actors here,” Judge Brinkema said, adding that was “very problematic.”

The post Trump’s Compensation Fund Is Dead. Could He Find Other Ways to Pay Allies? appeared first on New York Times.

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