By C. Ryan Barber, Richard Rubin and Sadie Gurman
WASHINGTON -- The Trump administration created an unusual settlement fund valued at nearly $1.8 billion to compensate people who claim they were victimized previously by the Justice Department, a move announced in tandem with President Trump's decision to withdraw a lawsuit he had filed that sought billions of dollars from the Internal Revenue Service.
Trump is also dropping two other claims against the government, which he filed to seek damages for the search of his Mar-a-Lago estate and the investigation into Russian interference in the 2016 election, which loomed over much of his first term.
The president, along with his namesake company and two sons, will receive a formal apology but no monetary payment or damages as part of the settlement, the Justice Department said.
Acting Attorney General Todd Blanche will appoint a five-person commission to administer the "Anti-Weaponization Fund," which will last through Dec. 15, 2028, and have the power to issue apologies and pay people who submit claims. Trump will be able to fire commission members.
The fund will receive $1.776 billion, which will come from the government's judgment fund -- an uncapped pot of money that allows the Justice Department to settle cases and pay people without congressional approval of individual payments.
The Justice Department offered little information about who would qualify for a payout.
"The machinery of government should never be weaponized against any American, and it is this Department's intention to make right the wrongs that were previously done while ensuring this never happens again," Blanche said.
Monday's actions are sure to inflame ethics concerns that surrounded the lawsuit Trump filed in late January against the federal government he runs, in which his personal lawyers demanded at least $10 billion in damages over the past disclosure of his tax records.
Trump has recognized what he called the "strange position" created by the lawsuit, and the federal judge presiding over the legal proceedings questioned whether the two sides were sufficiently adverse for the case to exist. U.S. District Judge Kathleen Williams had scheduled a hearing for next week on that question.
By dropping the lawsuit, Trump's personal lawyers and his administration appear to have headed off that hearing without the government ever challenging any of the president's claims or responding to the lawsuit. In the motion to dismiss the case, Trump's legal team said ending the suit means that "no judicial analysis is appropriate."
Trump brought the suit under a tax code section that allows people to seek damages from the government for illegal disclosures of private tax information. Trump's tax records were disclosed by Charles Littlejohn, an IRS contractor who provided them to news organizations and was convicted of a crime. Littlejohn is in federal prison in Illinois, with his release scheduled for next year, according to the Bureau of Prisons.
The president's path to legal success was uncertain.
The tax code only allows lawsuits against the government when a federal employee is responsible for the disclosure. In a case brought by billionaire Ken Griffin, the U.S. argued that it wasn't liable because Littlejohn was a contractor. The government settled that case, apologizing to Griffin without a resolution of that legal question. During the Trump administration, the Justice Department reiterated its position that Littlejohn wasn't a federal employee.
Write to C. Ryan Barber at ryan.barber@wsj.com, Richard Rubin at richard.rubin@wsj.com and Sadie Gurman at sadie.gurman@wsj.com
(END) Dow Jones Newswires
May 18, 2026 12:02 ET (16:02 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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