Trump Abandons $1.776 Billion 'Anti-Weaponization Fund' Amid Backlash

US President Donald Trump has abandoned plans for a $US1.776 billion ($2.51 billion) fund for ‌victims of alleged government "weaponization", according to Acting Attorney-General Todd Blanche.

His retreat is a nod to several legal setbacks and internal pushback the fund has encountered since it was announced two weeks ago.

Here's what you need to know about the fund that sparked backlash from all sides of politics.

What was the 'Anti-Weaponization Fund'?

The fund was announced to compensate victims of "political weaponization" with taxpayer money.

It emerged from a lawsuit Mr Trump brought against his own government over the alleged mishandling of his tax records.

The president had sought $US10 billion from the Internal Revenue Service (IRS), arguing the body should have done more to prevent a former contractor from leaking his tax returns to the media.

As part of a settlement, it was agreed the Department of Justice (DOJ) would set up a pool of taxpayer money controlled by his allies, from which they could dole out payments to those who said they had suffered "weaponization or lawfare" by the US government.

Those terms have frequently been used by Mr Trump and his allies to describe criminal cases against them, including those arising from the attack on the US Capitol on January 6, 2021.

Who would have been eligible for payouts?

The government said anyone would be able to make a claim, regardless of their political allegiances, but a panel of five hand-picked commissioners would oversee each claim.

Early indications suggested the likely recipients would include Trump allies who were prosecuted or investigated over alleged election interference.

At a press conference, US Vice-President JD Vance pointed to the example of Tina Peters, a Colorado county clerk who was jailed for tampering with election equipment to try to prove Mr Trump's baseless election theft claims in 2020.

"This innocent grandmother was going to spend 10 years in prison, completely disproportionate to any misdemeanour trespassing that I've ever seen," Mr Vance said.

The settlement agreement said other "well-known examples" of lawfare and weaponisation included:

the prosecution of people under a law banning harassment and blockades outside abortion clinics

the IRS's "targeting" of groups based on ideology

the "Biden administration's wrongful labelling of certain parents as domestic terrorists", a likely reference to a dispute over protests against school boards.

Why was the fund so controversial?

There were a few reasons, but they all tie into an overarching theme of alleged corruption.

First, the fund was widely received as Mr Trump creating a way to pay off whoever he wanted with taxpayer money.

"This case is nothing but a racket designed to take $US1.7 billion of taxpayer dollars out of the Treasury and pour it into a huge slush fund," Representative Jamie Raskin, the top Democrat on the House Judiciary Committee, said in a statement in May.

Second, funds of this scale are typically either created by an act of Congress or supervised by a court.

"For taxpayer money to be given to the executive branch to dole out in a way with such little restriction just lends itself to abuse and corruption," said Rupa Bhattacharyya, a former Justice Department lawyer who oversaw a fund for victims of the September 11, 2001, attacks.

Third, the legitimacy of the lawsuit itself raised many novel legal questions.

In this case, Mr Trump was not only the plaintiff, but the defendant (having been president at the time of the leak).

US District Court Judge Kathleen Williams, who was overseeing the lawsuit before it settled out of court, wrote in April that it was unclear whether the parties were "truly antagonistic to each other".

"You can't just sue yourself," US lawyer Devin Stone explained on his YouTube channel.

"You can't collude with a friend to sue over something and get a payout when there's no real controversy, and there's no adversity, and the judge correctly realised that."

In one of several lawsuits that have sought a court order to halt the fund's implementation, advocacy group Citizens for Responsibility and Ethics in Washington (CREW) referred to the fund as a "jaw-dropping act of presidential corruption".

How did Republicans push back?

The announcement of the Anti-Weaponization Fund was met with backlash from Democrats and Republicans alike.

Congressional outrage came to a head at a closed-door meeting between senators and Mr Blanche last month, which Republican senator Ted Cruz later described as "one of the roughest meetings I've seen in my entire time in the Senate".

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In the wake of the meeting, Republican senators sought to pressure Mr Trump into putting guardrails on the fund by holding hostage a separate bill to fund immigration enforcement.

After defiantly skipping town without voting on the bill on May 21, those who returned the following Monday said the bill wouldn't have the votes until the White House worked with them to place parameters on the fund.

So, is the fund going ahead?

No.

Mr Blanche told a House committee on Tuesday, local time, that the Trump administration was not moving forward with the fund.

Sources familiar with the matter told Reuters and the Associated Press on Monday that amid the backlash, Mr Trump had been reconsidering whether to move forward with it.

The attorney-general's comment follows a court order issued on Friday, which required the DOJ to temporarily halt implementation of the fund while a lawsuit plays out in Virginia.

The department said in a statement it strongly disagrees with the ruling but that it would comply with it.

"This Fund was open to anybody who was so weaponized, targeted, or persecuted, whether they were Democrat, Republican, Conservative, Independent, or otherwise," the statement said.

"The Department will abide by the Court's ruling."

Separately, Justice Williams ordered Mr Trump's lawyers to respond to "grievous allegations" made by settlement critics that the president abandoned his case to avoid the court's scrutiny of an illegal deal.

She gave them until June 12 to respond in writing to allegations of collusion and whether the case should be reopened because the court was the "victim of a fraud".