Is the New “Weaponization” Compensation Fund Lawful?

David Super

     President Trump, his older sons, and his business have filed several claims against the United States Government that he controls.  On May 18, 2026, the Department of Justice announced that plaintiffs’ lawyers, whom President Trump controls, and defendants’ lawyers, whom he also controls, have settled some claims.  Under this agreement, the Government would establish a fund to pay compensation to individuals who allege they were victims of improper “weaponization” of the federal government during President Biden’s administration.  Although widely reported to be for persons who were tried and convicted for crimes relating to the January 6, 2021, assault on Congress, the settlement agreement does not specifically mention that attack and allows anyone who feels they were victimized to file a claim.  The agreement does not designate any amount of money to go to this fund, although Acting Attorney General Todd Blanche’s announcement says it will receive $1.776 billion.  (The settlement also, unconvincingly, tries to shield the payments it makes from taxation.)  The Administration has made clear it does not intend to seek approval or an appropriation from Congress.  This post examines the legality of this arrangement.

     One simple answer is that section 4 of the Fourteenth Amendment declares that “neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States … but all such debts, obligations and claims shall be held illegal and void.”  The unprecedented attack on Congress on January 6 was an “insurrection or rebellion against the United States”.  Any purported debts perpetrators might file likely were incurred in aid of that insurrection and therefore that are “illegal and void”.  To be sure, the purported debts are not for the costs of the insurrection itself but rather to compensate for the lawful punishment the insurrectionists subsequently suffered for their acts.  The sequence, however, should not matter:  the law long has recognized liability for acts assisting perpetrators of crimes occurring entirely after the crimes were committed. 

     To be sure, some people who did not participate in the January 6 insurrection may claim to have been victims of other federal abuses.  Section 4 would not bar relief for them.  Nonetheless, they – as well as the January 6 claimants – would be barred from receiving money from this fund for other reasons. 

     Article I, section 9, clause 7 of the U.S. Constitution provides that “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law”.  Similarly, the Anti-Deficiency Act provides that “Except as specified in this subchapter or any other provision of law, an officer or employee of the United States Government or of the District of Columbia government may not…make or authorize an expenditure or obligation exceeding an amount available in an appropriation or fund for the expenditure or obligation”.  Violations of the Anti-Deficiency Act carry criminal penalties.  Therefore, Justice Department officials involved in creating or administering the proposed fund would face serious personal jeopardy if they cannot identify a congressional appropriation permitting these expenditures or feel confident they will be included in a future pardon. 

     Acting Attorney General Blanche’s statement declares that the Administration will make these payments under the Judgment Fund, a permanent uncapped appropriation for paying judgments against the United States Government.  The drafting of the settlement agreement, however, may preclude that.  Section IV.A directs Acting Attorney General Blanche to issue an order within 30 days of the agreement that “shall establish funding” for the program.  Section VII then states that the settlement agreement and the accompanying orders of the Attorney General “constitute[] the entire agreement of the Parties, and no prior statement, representation, agreement, or understanding, oral or written, that is not contained herein, will have any force or effect.”  Thus, the settlement agreement does not require any particular level of funding and any side agreement on the $1.776 billion figure has no legal effect.  Acting Attorney General Blanche could have fully complied with the settlement agreement by designating one dollar for the fund.  His voluntary choice to provide more than was obligated was not necessary to settle these cases and hence is not covered by the Judgment Fund. 

     Yet even without these technical blunders, the Administration’s broader theory cannot withstand scrutiny.  It is arguing, in essence, that the mere act of filing a lawsuit against the Government allows President Trump to fully circumvent the Appropriations Clause and the Anti-Deficiency Act by “settling” for any spending he desires.  He thus could file a meritless lawsuit against the Government he controls and then “settle” for taxpayers’ dollars to build his ornate ballroom, to fund his grand “Arc d’Trump”, or even to pay for foreign wars that Congress declines to fund. 

     As in the case of other Administration legal theories that purport to confer transformative powers onto the President, we should ask ourselves whether the Framers, or Congress, or the courts, have really left such a spectacular loophole in our system of checks and balances.  In some instances, the answer may be that our forebears failed to imagine presidential power being exercised with such blatant dishonesty and bad faith.  But often close examination of the controlling legal materials shows that the purported sweeping powers are a phantom. 

     The Judgment Fund provides an appropriation to pay a “judgment, award, or settlement” under any of ten specified federal laws or a decision of a board of contract appeals.  Six of the enumerated statutes are obviously inapplicable to this situation.  Section 2677 allows settlement of claims under section 1346(b), but the latter strictly limits recoveries to “injury or loss of property, or personal injury or death”, a much narrower set of harms than the settlement agreement contemplates, and further limits recoveries by persons incarcerated after felony convictions.  Section 2672 is similarly limited to claims for “injury or loss of property or personal injury or death”.  Section 2517 is limited to judgments of the Court of Federal Claims, not settlements. 

     That leaves section 2414.  That section, too, primarily addresses court judgments.  It does, however, provide that “[e]xcept as otherwise provided by law, compromise settlements of claims referred to the Attorney General for defense of imminent litigation or suits against the United States, or against its agencies or officials upon obligations or liabilities of the United States, made by the Attorney General or any person authorized by him, shall be settled and paid in a manner similar to judgments in like causes and appropriations or funds available for the payment of such judgments are hereby made available for the payment of such compromise settlements.”  This is the only possible basis for accessing the Judgment Fund here. 

     Section 2414’s permission to pay settlements of claims, however, is subject to limits in other laws.  One such federal statute is section 1359 of Title 28, which provides that “[a] district court shall not have jurisdiction of a civil action in which any party, by assignment or otherwise, has been improperly or collusively made or joined to invoke the jurisdiction of such court.”  President Trump suing the U.S. Government, which he completely controls under the Unified Executive Theory he has tirelessly invoked, would strike many as a collusive attempt to invoke the jurisdiction of the federal court to facilitate a settlement of his liking.  President Trump acknowledged that this litigation appears to be brought against himself.

     Another such statute is section 530B(a) of Title 28, which provides that “An attorney for the Government shall be subject to State laws and rules, and local Federal court rules, governing attorneys in each State where such attorney engages in that attorney's duties, to the same extent and in the same manner as other attorneys in that State.”

     Florida Bar Rule 4-3.1 prohibits meritless or frivolous litigation; Rule 4-3.3 requires candor toward the tribunal.  District of Columbia Rules 3.1 and 3.3 are similar.  Litigation in which the same individual controls both sides is inherently misleading to the court and does not call for the adversarial resolution of any questions of fact or law. 

     As the U.S. Supreme Court has said, litigation in which the same person controls both sides “is not in any real sense adversary. It does not assume the ‘honest and actual antagonistic assertion of rights’ to be adjudicated – a safeguard essential to the integrity of the judicial process”.  The Supreme Court of Florida has cautioned against “connivance in [the] defeat” of a party, which certainly occurs when the plaintiff has full control over the defense.  It warned that “[t]he fairness of the system is undermined when the alignment of interests in the litigation is not what it appears to be.”

     Acting Attorney General Blanche’s press release cites a settlement the Obama Administration made with Native Americans as precedent for its actions here.  That case, and many others, did settle litigation against the federal government with moneys from the Judgment Fund.  That settlement, however, did not result from litigation where the same individual controlled both sides of the litigation.  And that settlement was approved by a judge while the settlement of President Trump’s litigation was hustled through this week to save the parties from having to file briefs the court sought on whether they have sufficient adversity to secure federal jurisdiction.

     A series of memoranda from the Justice Department’s Office of Legal Counsel make clear that the Judgment Fund is not available to pay collusive settlements.  As summarized in a 2023 memorandum from the Associate Attorney General (with citations omitted):

A settlement must conform to any applicable statutory limitations and serve the "best interests" of the United States.  The President's constitutional obligation to take care that the laws be faithfully executed "necessarily serves to limit the exercise of the Attorney General's settlement authority so that it does not become a dispensing power." OLC has therefore concluded that the Department may compromise claims only if the Department makes a "good faith assessment" that a court could find the government liable. Further, the Judgment Fund is available for the payment of a settlement only if "the cause ofaction that gave rise to the settlement could have resulted in a final money judgment." And, relatedly, the Judgment Fund may not be used to pay for the settlement of claims that, if they resulted in a judgment against the government, would "impose costs on the government, but [would] not require the United States to make specific cash disbursements" to certain parties, such as a "judgment[] that required the United States to furnish subsidized housing, or that required the United States to correct structural defects in housing." These strictures ensure that the potential use of the Judgment Fund does not "encourage settlements that would not otherwise be in the interest of the United States."

OLC has cautioned that we should “not lightly attribute to Congress an intent to create a structure that might encourage settlements that would not be in the interest of the United States.”  Tapping the Judgment Fund to pay for settlements of non-adversarial litigation does that with a vengeance.

     When extravagant legal theories that defy logic and the Constitution seem too good to be true, they often are.

     @DavidASuper1 @DavidASuper.bsky.social