Trump doesn’t grasp how much 'blow back' DOJ’s 'slush fund' will get: White House insiders

The Justice Department announced that it would set up a fund for people claim they have been "wronged" by former President Joe Biden's administration. The fund comes as President Donald Trump dropped his $10 billion lawsuit against the IRS after a contractor leaked his tax records showing he wasn't as successful as he claimed in 2016.

On Monday, Trump announced he would drop the case and the DOJ would set up a new $1.776 billion fund. Currently, there is a fund set up for those who win certain lawsuits against the U.S. government, but in those cases, the petitioners won a lawsuit. In this case, a fund is being set up for those who haven't taken their cases to court.

The order to open the fund was signed by acting Attorney General Todd Blanche, who previously represented Trump in his lawsuits that he has claimed were a result of "weaponization."

Reporting on the matter on Monday, CNN legal reporter Paula Reid noted that the DOJ says there's no "partisan requirement" to get money from the fund, "but it's clear who the target audience is."

She pointed out that it's an effort to "enrich their allies."

"But I also don't think they really understand how little the average person cares and how much blow back they are going to face now that they are using taxpayer money to enrich the president and his allies," said Reid.

"Have we ever seen anything like this in the history of our country?" CNN host Dana Bash asked.

"No. I want to know, first of all, that the people at the negotiating table were President Trump's personal lawyers and lawyers from the White House, the Justice Department, and the IRS, all part of his administration. There was no outside voice," Reid said. "Now, the president's team — they continue to point to what they say is a similar fund that was established under the Obama administration. This was the Keepseagle fund."

The fund in that case, she explained, was smaller and stems from the case Keepseagle v. Vilsack, in which farmers and ranchers from across the U.S. joined a class-action lawsuit alleging the Department of Agriculture discriminated against Native American farmers in the farm loan programs between 1981 and 1999.

In 2011, a settlement was agreed upon in which "Track A" victims got up to $50,000 and "Track B" victims were given up to $250,000 for documented discrimination cases. Leftover funds were then used to create the Native American Agriculture Fund (NAAF), a trust that would help with Native American agricultural education.

In 2018, during Trump's term, the U.S. Supreme Court refused to hear an appeal by two objectors to review the settlement. The U.S. District Court of Appeals for the District of Columbia Circuit approved the distribution plan in 2016. It was 17 years after the lawsuit was filed.

Reid predicted that Trump's fund was likely to have a "lot of litigation" around it.