President Donald Trump addresses the nation from the East Room of the White House on July 16, 2026 in Washington, D.C. (Photo by Saul Loeb/Pool – Getty Images)
WASHINGTON — A federal judge told the Trump administration Friday a case against the Department of Justice’s $1.8 billion “anti-weaponization” fund is “still alive and kicking.”
The administration sought to dismiss the case brought against President Donald Trump’s negotiated settlement terms to drop his $10 billion lawsuit against the Internal Revenue Service for a years-old grievance over leaked tax returns.
The settlement, brokered by the DOJ and Department of Treasury and met by heated opposition even from Republicans, established a massive taxpayer-funded settlement fund to pay “victims of lawfare.” It also included retroactive relief from tax audits and enforcement for Trump, his sons Don Jr. and Eric, and the Trump Organization.
Critics of the fund asserted the likelihood that violent participants who assaulted police during the Jan. 6, 2021, attack on the U.S. Capitol could reap a reward from the pot of money.
The administration maintains the fund never became operational and that the case is moot, though it refused to provide a sworn statement requested by the court saying as much. Attorney General Todd Blanche testified at his July 15 confirmation hearing that the fund is “dead” and “never started.”
30 days to produce documents
On Friday, Judge Leonie Brinkema at the U.S. District Court in the Eastern District of Virginia overruled the government’s objection to producing evidence and gave DOJ 30 days to produce documents potentially revealing who structured the deal.
The “real concern,” she said is “this concept of taxpayer money being used to promote political viewpoints.”
“I think the fund now is gone, but is there a functional equivalent?” she asked, noting violators of federal laws that the administration opposes, like protections for abortion clinic clients, could be paid from a DOJ judgment fund.
Plaintiffs, including individuals and interest groups, sued the DOJ, Blanche and Treasury officials, including Treasury Secretary Scott Bessent and IRS CEO Frank Bisignano.
Among the numerous plaintiffs are Andrew Floyd, a former assistant U.S. attorney who alleges he was fired for prosecuting Jan. 6 defendants, and the nonprofit National Abortion Federation, which represents abortion providers and advocates for abortion access.
Pooja Boisture, counsel for the plaintiffs, argued Friday the fund is “discriminatory.”
“This fund was designed to reward and give credence to election deniers and violators of the FACE Act,” she said, referring to the 1994 law that penalizes violence or threats from protesters against those entering to abortion clinics.
In response to a request for comment on Friday’s hearing, a DOJ spokesperson said, “The Department is confident that the court lacks jurisdiction over this lawsuit against the (anti-weaponization fund), which never started and isn’t moving forward.”
Constitutional question
The plaintiffs also allege the tax immunity arrangement for Trump, his sons and private conglomerate amounts to an unfair gain or advantage for the president, therefore violating the Constitution’s emoluments clause.
The National Treasury Employees Union is also party to the suit and brought the claim of an emoluments violation, as well as allegations of injury to tax auditors who may have been told to stop any audits of Trump.
“These members have no good options: If they comply with a request to terminate audits, they violate their oath of office; and if they refuse to comply, they will likely face retaliation for insubordination,” the union argued in a court filing.
The plaintiffs allege the president has ongoing audits that will be terminated under the immunity deal.
Lisa Newman, attorney for the legal advocacy group Democracy Forward that is representing the plaintiffs, also told Brinkema, “We do plead that the president was participating in negotiation of the settlement.”
Newman referred to public reporting by The New York Times on May 19 that a loss in an IRS audit of Trump’s previous tax returns could cost him roughly $100 million.
Andrew Block, senior counsel for the Justice Department, told Brinkema he’s “not aware there are or (are) not” audits of the president’s tax returns from that period of time.
“It is speculation to say … that there was an improper request,” he said.
Brinkema shot back that Trump’s underlying $10 billion lawsuit against the IRS is “unique.”
“The plaintiff is absolutely controlling the defendants” who are at risk of being fired by the president on “a whim,” she said.
Settlement ‘castrated’ by judge
Brinkema said the Florida federal judge in Trump’s IRS case “castrated” the settlement in a July 13 order, adding the president’s underlying lawsuit against the nation’s tax enforcement agency is “extraordinarily relevant” to the lawsuit before her.
Judge Kathleen Williams for the U.S. District Court for the Southern District of Florida, where Trump filed his lawsuit, wrote in a 56-page order that “No sitting President has ever sued federal agencies completely subject to his control for monetary benefits, or any benefits that inure to him, his family, and associates.”
“The failure of any attorney in this case to address, on this docket, the relationship of this Article II proscription with the benefits conferred by the ‘settlement’ is a glaring omission that speaks to the control of the Lead Plaintiff,” Williams wrote.