Trump slush fund 'dead for now' as humiliations stack up

U.S. President Donald Trump speaks during the announcement of new fuel economy standards, in the Oval Office at the White House in Washington, D.C., U.S., December 3, 2025. REUTERS/Brian Snyder

President Donald Trump is reportedly planning on abandoning his planned $1.8 billion slush fund.

"The Trump administration plans to drop its controversial $1.8 billion 'weaponization' fund the president sought to compensate alleged victims of prosecutorial conduct under his predecessor," reported Axios' Marc Caputo on Monday based on comments from two anonymous administration officials.

Caputo added that one source told him, "It's dead for now." He added that the story matters because the $1.8 billion allocation was "bashed as a political slush fund that could be tapped by those convicted in the Jan. 6, 2021, assault on the Capitol, Trump's proposal has drawn bipartisan pushback in the GOP-led House and Senate."

The $1.8 billion slush fund was created by Trump earlier this month as a rushed settlement to his lawsuit against the IRS for a contractor there leaking his tax returns during his first term. The slush fund was controversial because it involved Trump suing an agency he controls (the IRS) and controlling the agency intended to defend it (the Department of Justice), creating a clear conflict of interest; for the fact that the basis of his lawsuit was a crime that had never before led to any kind of monetary compensation;p and for the fact that he planned on allegedly self-dealing (through agencies connected to his businesses, and with which he remains linked) as well as allegedly giving money to Jan. 6th insurrectionists and other criminals.

When the judge in charge of the case, Judge Kathleen M. Williams, ordered the parties involved to appear before her court on May 20th to prove that the litigation and any possible settlement were legal, the administration rushed to finalize a settlement before the May 20th deadline.

At the time of the settlement, one legal expert speculated it could be an impeachable offense.

"I assumed we would never see the 'settlement agreement,' or whatever you want to call it, but evidently, DOJ went ahead and posted it on its website,” New Mexico civil litigator Owen Barcala posted on Bluesky. “A couple things are interesting if you can steel your mind for the outrage and horror of its general nature.”

He later added that it "must be nice to have figured out the One Neat Trick to avoid Congressional appropriations. Just sue yourself, direct yourself to settle for billions, and agree with yourself that you can put that money wherever you want.”

The reversal comes amid intense congressional scrutiny and legal challenges questioning whether Trump had constitutional authority to unilaterally create the fund without Congressional approval. Republican lawmakers, concerned about political blowback heading into the midterm elections, reportedly urged the administration to abandon the plan.

Legal scholars argued the settlement violated separation of powers principles by allowing Trump to effectively circumvent standard appropriations processes. The decision also reflects growing concerns about potential criminal liability for administration officials involved in what critics characterized as an unlawful self-dealing scheme designed to reward political allies.

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