The US federal government has abandoned a $1.8 billion fund designed to compensate allies of former President Donald Trump, Acting Attorney General Todd Blanche announced on June 2, 2026. "We are not moving forward with the fund, period," Blanche said, confirming the decision to halt the controversial effort [1, 2].
The fund was created as part of a secretive settlement linked to Trump's lawsuit against the IRS over leaked tax returns. Critics described it as a "slush" fund used to provide financial relief to Trump's supporters facing investigations or legal disputes related to tax matters before the settlement [1, 2].
Prior to Blanche's announcement, US District Judge Leonie Brinkema had temporarily blocked the fund from being established, pending her consideration of a longer injunction. The judge's order delayed the fund amid ongoing legal challenges [2].
Concerns about the fund ran deep in Washington, drawing criticism from Democrats, legal experts, and some Republicans. Opposition centered on its secretive nature and the perception it rewarded political allies while shielding them from accountability [2].
Despite abandoning the compensation fund, the government confirmed it will maintain a separate agreement that protects Trump, his family, and related entities from IRS audits on any tax matters predating the settlement. This provision remains in effect as part of the resolved tax dispute [1, 2].
The formal cancellation of the fund ends a contentious episode during Trump's second term and removes a significant source of controversy around the use of taxpayer funds in politically sensitive settlements. The government offered no indication of new financial arrangements for Trump's allies.
With the fund off the table, the immediate next step will be any further court proceedings related to Brinkema's injunction or other related legal challenges addressing the broader settlement and its terms [2].
