Trump's acting AG kills $1.8 billion victim fund to win over Republican rebels ahead of Tuesday committee vote

The fund that blocked a nomination

Acting US Attorney General Todd Blanche published a written order on Sunday evening formally revoking a $1.8 billion compensation fund for people who claimed to be victims of politically motivated prosecution. The fund, first announced in a May 18 order, had been designed to pay supporters of President Donald Trump, including individuals convicted for their role in the January 2021 Capitol attack. Blanche wrote on X that the fund "is revoked and has no legal force or effect."

My team and I have met with committee members and senators over the past weeks and have resolved all concerns and clarified all open questions.

Two Republican senators on the Judiciary Committee, John Cornyn of Texas and Thom Tillis of North Carolina, had blocked Blanche's nomination until the administration provided a written guarantee that the fund would be permanently scrapped. The Trump administration had already signalled in early June that it would drop the fund, but the senators insisted on a formal document. Cornyn's spokesperson confirmed the senator had reached an agreement with the Justice Department on the "permanent cessation" of the fund.

A deal born from Trump's own lawsuit

The fund originated from an unusual legal settlement. In January, Trump sued the government as a private citizen, seeking billions in damages. The lawsuit alleged that an Internal Revenue Service employee had improperly accessed tax records of the Trump Organization during Trump's first term (2017-2021) and leaked them to what the suit called "left-wing media." The IRS, which sits under the Treasury Department controlled by Trump's own administration, settled the case.

The settlement contained two controversial elements: the now-cancelled $1.8 billion victim fund and a separate provision shielding Trump and his family from retroactive audits of their tax filings. Blanche addressed the latter in a separate statement, clarifying that the May arrangement applies "only retroactively" and does not cover future tax claims against the president.

The YOLO caucus flexes its muscle

Cornyn and Tillis are both lame-duck senators. Trump backed a primary challenger who defeated Cornyn in the Texas Republican primary earlier this summer. Tillis, facing a similar threat in North Carolina, chose not to seek re-election in the November 3 midterms. Both men now belong to what Washington calls the "You only live once" or YOLO faction, lawmakers freed from electoral pressure who are willing to defy the president.

Their resistance forced Blanche to put the concessions in writing, a move the Frankfurter Allgemeine Zeitung described as a visible defeat for Trump even as it noted the president retains enormous leverage over the Justice Department. Trump had told supporters just one day before Blanche's order that the compensation fund would proceed.

What happens next

The Judiciary Committee is scheduled to vote on Blanche's nomination on Tuesday. With Cornyn and Tillis now supporting him, the committee hurdle appears cleared. The nomination then moves to the full Senate, where Republicans hold a narrow majority. Additional Republican defectors could still emerge, but Blanche's path has widened considerably.

Democratic senators remain opposed. During Blanche's confirmation hearing they argued he would serve the president's personal interests rather than those of the American public, pointing to his role as Trump's former criminal defense attorney and his handling of files related to the late financier Jeffrey Epstein. Trump nominated Blanche in June after firing Attorney General Pam Bondi in the spring. Blanche had been Bondi's deputy and has served as acting attorney general since her dismissal.