By Hannah Rabinowitz, Tierney Sneed, Casey Gannon, Paula Reid

(CNN) — The Justice Department on Monday announced the creation of a $1.776 billion fund to compensate President Donald Trump’s allies who claim they were unfairly targeted by the previous administration.

It’s an unprecedented move that would allow the president’s administration to pay his supporters from a government agency he controls with taxpayer money.

Its creation comes as Trump dropped his $10 billion lawsuit alleging that the Internal Revenue Service failed to protect Trump and the Trump Organization from an unauthorized leak of their tax returns.

Trump himself will not receive any payments, but will receive a formal apology, the Justice Department said.

The so-called “anti-weaponization” fund, with its symbolic 1776 figure, is likely to face immediate challenges in court from Democrats and watchdog organizations who say the effort amounts to corruption by allowing the president to enrich allies over what critics they say are unfounded claims of political prosecutions by the Biden administration.

“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,” acting Attorney General Todd Blanche, who was previously a member of Trump’s personal defense team, said in a statement Monday. “As part of this settlement, we are setting up a lawful process for victims of lawfare and weaponization to be heard and seek redress.”

A commission, made up by five members who have not yet been announced, will run the fund, the department said. Trump will have the power to fire any of the members.

The Justice Department said there are “no partisan requirements to file a claim.” It will process claims through December 15, 2028 – a month before Trump’s second term as president ends.

In January, Trump, along with his sons Donald Trump Jr. and Eric Trump, sued the IRS and Treasury Department for at least $10 billion. The lawsuit accuses the IRS of an unauthorized leak of their tax returns from his first presidency.

Trump’s lawsuit alleges that the IRS failed to protect confidential tax information and the tax information of the Trump Organization. Charles Littlejohn, a former IRS contractor, was sentenced to five years in prison for leaking Trump’s tax records, along with the records of thousands of others.

Trump sued the IRS in his capacity as a citizen, not as the president.

A spokesperson for Trump’s legal team said in a statement to CNN that the president is “entering into this settlement squarely for the benefit of the American people, and he will continue his fight to hold those who wrong America and Americans accountable.”

Soon after Trump brought the lawsuit, the federal judge presiding over the case in Florida, district Judge Kathleen Williams, expressed skepticism that it was the kind of legitimate legal dispute that belonged in her courthouse.

She asked a group of outside lawyers to brief her on the question. They too raised concerns about the propriety of a president seeking monetary damages for personal reasons against a government agency within his executive branch.

Not the first deal

The deal follows several others reached in lawsuits filed by allies of Trump.

In March, the department settled a lawsuit with Michael Flynn. Flynn sued the government for $50 million, accusing the FBI of trying to entrap him in the first few days of the Trump administration. Flynn was awarded over $1 million in the settlement.

Carter Page, a former Trump campaign adviser, also settled a lawsuit with the Trump administration in April. Page was suing the Justice Department and FBI over flawed government surveillance he faced due to Russian contacts in 2016.

They wrote that, if Trump sought to voluntarily submit the case to facilitate such a settlement, the court should scrutinize that maneuver under a legal rule that would allow the court to sanction the lawyers involved.

Minutes after Trump’s legal team notified the court he’s dropping the case on Monday, nearly 100 House Democrats submitted a “friend-of-the-court” brief accusing Trump of “blatant self-dealing.”

This story is breaking and will be updated.

The-CNN-Wire
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