Washington — The Justice Department’s new $1.776 billion fund to provide payouts to people alleging the legal system was “weaponized” against them was met with immediate scrutiny and questions surrounding its legality, enforcement and implementation.
The Justice Department has said that there are no “partisan requirements” to seek compensation, but if its past settlements and actions and statements from lawyers and communications professionals are any indication, it’s likely that President Trump’s highest-profile supporters and allies may stand to benefit.
The fund was established as part of a settlement agreement between Mr. Trump and the Internal Revenue Service to end a civil lawsuit he and his sons filed in January over the leak of his tax returns by an independent contractor. Dubbed the anti-weaponization fund, the program aims to “provide a systematic process to hear and redress claims of others who suffered weaponization and lawfare.”
The “anti-weaponization” program is set to receive nearly $1.8 billion from the Judgment Fund, which was set up by Congress in 1956 to pay court judgments and settlements of lawsuits against the government. When the Judgment Fund was first created, it was limited to judgments for claims of up to $100,000, but in the mid-1970s, Congress removed the cap.
Neither the Justice Department nor the White House has specified the criteria for who would be eligible for an award from the new fund or whether there would be a cap on payouts. The terms of the settlement agreement between Mr. Trump and his administration state that the fund is to be composed of five members, with four members appointed by Acting Attorney General Todd Blanche and one chosen in consultation with congressional leadership.
Blanche said at a Senate hearing Tuesday that the five-member commission overseeing the fund’s board would supply information on who can receive relief and how much.
The fund drew swift condemnation from ethics groups and lawmakers on Capitol Hill. Citizens for Responsibility and Ethics in Washington, a government accountability group, said in a statement that Mr. Trump’s settlement with his administration amounted to the “most brazen act of self-dealing in the history of the presidency,” and argued it likely violated the Constitution’s Domestic Emoluments Clause.
A pair of U.S. Capitol Police officers filed a lawsuit Wednesday seeking to block the fund. They claimed that as a result of potential payouts to people involved in the Jan. 6, 2021, Capitol attack, the officers faced an increased risk of “vigilante violence” against them and continued harassment and death threats.
But the officers, as well as others who may want to challenge the fund in court, face a key hurdle that could derail any lawsuit in its early stages: proving they have the legal right to sue, a concept known as standing.
Generally, litigants cannot rely on their status as federal taxpayers to establish standing to challenge how government dollars are spent. In a 1923 decision, the Supreme Court said that a taxpayer’s interest in money from the Treasury “is shared with millions of others” and is “comparatively minute and indeterminable.”
“If we have an intersection collision with a postal truck and a settlement is negotiated to give $5 million to a family, does anybody have standing to come in and say, ‘the government paid too much in that settlement?'” said Paul Figley, a law professor at American University. “No court is going to allow that. And that’s what you’re looking at.”
“The real problem is having seen the Trump administration do this, you can be pretty sure that the next Democratic administration is going to find a group that it feels should get the same kind of a special deal,” Figley said.
Figley, who has written about the Judgment Fund and its potential for misuse by the executive branch, said the Trump administration’s new program appears to be legal, but he doesn’t believe it’s “good policy” for the executive to create the initiative without Congress explicitly designating the money for it and mechanisms for how it will work.
Under the Constitution, the executive branch does not have the power to make spending decisions. But Congress gave it the authority to pay judgments and settlements without legislative involvement when it created the Judgment Fund.
“It’s not part of our scheme to have the executive branch set up programs and fund them. That is just contrary to the scheme,” Figley said. “Now is it possible and is it legal? Well Congress set it up. Congress has turned a blind eye to it, and unless they get together and see that the real battle on this is institutional, not political party, then it’ll happen again.”
The federal government has overseen other settlement programs that seek to serve as an alternative to litigation, like the 9/11 Victim Compensation Fund, the National Vaccine Injury Compensation Program and the Radiation Exposure Compensation Act program. But those initiatives were created by Congress and include rigorous safeguards.
“What is incredibly unusual is that taxpayer money would be paid out under circumstances like this without any criteria having been established for how that’s going to be — how that’s going to happen or how much people might get. It lends itself to abuse and corruption,” said Rupa Bhattacharyya, legal director for the Institute for Constitutional Advocacy and Protection at Georgetown Law School.
Bhattacharyya, a former Justice Department official, served as special master for the fund for victims of the 9/11 terror attacks and worked to distribute money from other congressionally-approved settlement funds.
It is “insane for taxpayer-appropriated funding” to be used in this way without strict criteria set by the Justice Department or Congress, she said.
In its announcement, the Justice Department said there was legal precedent for such a program and cited a 2011 settlement of a class-action lawsuit brought by Native American farmers and ranchers who argued they were denied equal access to credit by the Department of Agriculture.
As part of the $760 million settlement, reached with the Obama administration more than a decade after the suit was first filed, the Agriculture Department agreed to pay $680 million in damages to Native Americans. But only roughly $300 million was paid from the fund, leaving more than $380 million undisbursed after the claims process.
The leftover money kicked off years of negotiations, and in 2016, the U.S. District Court in Washington, D.C., approved a modified settlement under which claimants were given an additional award: $38 million was set aside for nonprofit organizations serving Native American farmers and ranchers, and roughly $266 million went to the creation of a trust called the Native American Agriculture Fund.
While the Trump administration has likened its anti-weaponization fund to the Obama administration’s settlement with Native American farmers and ranchers, there is a crucial distinction between the two, noted Joseph Sellers, who served as lead counsel for the plaintiffs: the involvement and oversight by the trial court in Washington.
“The court was controlling the disbursement of these funds to ensure they’re being paid out in a manner consistent with the requirements of the law and the interests advanced by the litigation being settled,” he told CBS News.
The court, Sellers said, set up and approved the claims process, and then approved how the unspent settlement money would be used, including the terms of the Native American Agriculture Fund trust.
“You have to serve the people and the communities that originally brought the case,” he said.
Sellers said he is unaware of other instances where the parties involved in a case against the government negotiated a process for disbursing funds “with no transparency or judicial oversight.”
As part of its efforts to address allegations of discrimination by the Agriculture Department, the Obama administration also agreed to provide at least $1.3 billion to female and Hispanic farmers and ranchers out of the Judgment Fund, including those who were not involved in litigation.
“That’s very similar to what I understand this new program is doing,” Figley said. “Now, is that good policy? No, it’s not good policy. But it’s been done before. The Obama administration manipulated the Judgment Fund to do that and the Trump administration is taking that lesson and is doing the same thing.”
Republican and Democratic members of Congress have expressed concern about the Trump administration’s fund. Senate Majority Leader John Thune told reporters Tuesday that he was “not a big fan” of the program and said, “I don’t see a purpose.” The South Dakota Republican also said he expects there will be a “full vetting” of the fund during the appropriations process.
Maine Republican Sen. Susan Collins told reporters that the fund “raises a lot of important questions that need to be answered.”
“It is highly irregular, and this is not something that should be put in place without a lot more scrutiny,” Collins, who chairs the Senate Appropriations Committee, said.
Congressional action may be the only means of controlling the Justice Department’s new fund, Bhattacharyya said.
“This is an extraordinary intrusion into their powers to decide where the government’s funds get spent,” she said. “While the payment from the Judgment Fund may not be technically illegal, it certainly violates the purposes for which the Judgment Fund was created.”
Still, even if the GOP-led House and Senate approved legislation to set guardrails, Mr. Trump could veto any bill that crosses his desk.
In an effort to learn more about the fund, Maryland Rep. Jamie Raskin, a Democrat who served on the House select committee that investigated the Jan. 6 attack, unsuccessfully attempted to subpoena top Justice Department and Treasury officials about “this brazen and corrupt transaction.” He also introduced legislation that would amend the Judgment Fund statute to prohibit payments tied to certain claims, including those arising from cases related to the Jan. 6 attack and foreign interference in the 2016 presidential election.
Maryland Sen. Chris Van Hollen, a Democrat, also announced that he would be introducing an amendment to the funding bill Republicans are moving forward with in Congress to bar violent criminals — including those convicted of assaulting law enforcement officers, and child molesters — from accessing the funds.
