How to Appropriate $1.776 Billion Without Congress: Sue Yourself, Then Settle

There is a specific silence that falls over a room when a judge asks a simple question and everyone present suddenly remembers they have to be somewhere.

On September 4, a federal judge ordered Trump administration officials to disclose who actually set up the $1.776 billion “Anti-Weaponization Fund” — the taxpayer-funded pot of money the Justice Department created earlier this year as part of settling a lawsuit that the President of the United States filed against the Internal Revenue Service, which is an agency of the executive branch, which he runs.

A judge had to issue an order to find out which officials invented a $1.776 billion federal program. Not whether it was legal. Not who would get the money. Who made it — the most basic question there is. The Justice Department has spent months benefiting from the arrangement while declining to explain it, and is now resisting a court order to put the names on paper.

Underneath a genuinely stupid story is a genuinely dangerous trick, and it’s the reason judges in Virginia and Miami are both squinting at this: how to spend money Congress never voted for, by suing yourself and losing on purpose.

The part where there was an actual crime

Here’s what makes this harder to wave off than it looks: it starts with a real wrong.

Charles Littlejohn was an IRS contractor. He leaked the confidential tax data of thousands of Americans to news organizations — The New York Times and ProPublica — including the tax records of Donald Trump. He is serving a five-year federal prison sentence for it. The underlying grievance here is real.

Unauthorized disclosure of taxpayer information is a federal crime for extremely good reasons. The entire American tax system runs on a bargain: you tell the government everything about your money, and the government keeps its mouth shut. Break that and the whole thing starts to wobble. If you’re a Trump who got leaked, you have a legitimate grievance. So do the thousands of other Americans who got leaked and whose names you have never heard.

On January 29, 2026, Trump, his two eldest sons, and the Trump Organization sued the IRS and Treasury in Miami federal court, seeking at least $10 billion in damages over the disclosure.

Ten billion dollars is not a damages estimate. It’s an opening position with a press release attached — a figure you name when the number is the message, not the expected payout. Plaintiffs ask high and settle low; that part is ordinary.

The problem isn’t the number. The problem is who was sitting on the other side of the table.

Article III, or: you cannot fight yourself in a bar

American courts don’t exist to answer interesting questions. They exist to resolve actual disputes between actual opposed parties. This is the “case or controversy” requirement in Article III of the Constitution, and it’s the load-bearing wall of the entire judicial branch. No real fight, no jurisdiction, go home.

Which brings us to the structural comedy at the center of this case. The plaintiff was the President. The defendants were federal agencies under the President. The lawyers defending those agencies work for the Department of Justice, which is run by an Attorney General who serves at the pleasure of — you guessed it — the plaintiff.

There is no opposing party here in any meaningful sense. There is the President on one side and the President’s own employees on the other, jointly asking a court to treat the result as the product of a genuine dispute.

U.S. District Judge Kathleen Williams noticed. When the parties started resolving things without telling anyone what they’d agreed to, she pressed DOJ on why the settlement terms weren’t being shared publicly — and wrote that she couldn’t tell whether the two sides were adverse enough to give her a real case or controversy under Article III.

In plain terms: she was no longer sure there was an actual lawsuit in front of her.

The settlement, in which nobody loses except you

On May 18, 2026, Trump moved to withdraw the $10 billion lawsuit. This followed reports that his administration was preparing to create a fund to compensate some of his allies.

The Justice Department announced that as part of the settlement, the Attorney General would establish a $1.776 billion “Anti-Weaponization Fund” to compensate people who say they were wrongly targeted under the Biden administration. Trump also agreed to drop two other civil claims totaling $230 million, related to the Russia investigation and the 2022 search of Mar-a-Lago.

Let’s do the arithmetic on this trade.

Trump gave up: a $10 billion claim of uncertain merit, plus $230 million in other claims, all of which he was pursuing against a defendant he controls, before a judge who was already asking out loud whether the case was fake.

Trump got: a $1.776 billion federal fund, paid for by taxpayers, to compensate people who say they were politically persecuted by his predecessor.

And before you ask — no, he can’t take money out of it. Under the settlement terms, Trump himself would not be eligible to receive a dime from the fund. Which sounds like restraint until you notice it’s the same restraint as not stealing anything from a bank you’ve just been handed the keys to.

Also, the number is $1.776 billion. Not $1.7 billion. Not $1.8 billion. One-point-seven-seven-six. Somebody rounded a nine-figure taxpayer expenditure to the nearest Founding Father. Serious appropriations do not have Easter eggs in them; this one is telling on itself.

Where the money came from, which is the actually alarming part

Here’s the part to tell your friends about, because it outlives this specific scandal.

Congress has the power of the purse. Article I. Money leaves the Treasury when Congress votes to let it leave. That’s not a technicality, that’s most of the reason we bothered having a revolution — the guy in charge shouldn’t get to spend the nation’s money on his own say-so.

But there’s a practical wrinkle: the United States gets sued constantly, it loses sometimes, and it would be insane to make Congress pass a bill every single time a court orders the government to pay somebody $40,000. So Congress created a standing, permanent appropriation — commonly called the Judgment Fund — a perpetual pot used to pay court judgments and settlements against the United States. No fresh vote required. It just sits there, refilling, waiting for the next lost case.

Think of it as the “oops” account. It exists so that when the government screws up and a court says pay the man, somebody can pay the man without convening the legislature.

DOJ planned to pull the $1.776 billion for the Anti-Weaponization Fund out of that account.

The Judgment Fund is a checkbook for losing lawsuits. So if you want money without asking Congress, you don’t need to pass a bill. You need to lose a lawsuit. And if you’re the president, you can arrange to lose a lawsuit to yourself, on terms you write, for a figure you pick, with the proceeds routed to a program of your own design.

The oops account isn’t supposed to fund initiatives. It’s supposed to make people whole after a court says so. Turning it into a discretionary grant program run out of the Attorney General’s office is expensing a Vegas weekend as “damages.”

Rep. Jamie Raskin put it about as plainly as it can be put: Congress never voted for this slush fund, and Congress never would have.

That second half is the part that matters. This wasn’t a workaround for a slow Congress. It was a workaround for a Congress that would have said no.

The independent commission, which is neither

The fund was to be administered by a five-person commission appointed by the Attorney General. Independence, oversight, process — the whole vocabulary.

Except Trump would have the right to remove any member.

So: a panel chosen by the President’s appointee, serving at the President’s pleasure, deciding who gets a slice of $1.776 billion of your money for the offense of having been mean to the President’s allies. Calling that independent is a stretch. It is oversight staffed entirely by people the President can remove the moment they disagree with him.

Who was going to get paid

Remember how this started? With a leak that exposed the tax data of thousands of Americans?

The fund was not for them.

It was for people who say they were wrongly targeted under the Biden administration. A subsequent lawsuit — brought by a group that includes a fired federal prosecutor and several civic organizations — alleges the fund violates the Constitution and the Administrative Procedure Act, in part because eligibility was written around who did the targeting: harms inflicted by Democratic elected officials and federal employees. Which is to say, your claim turned on the political identity of whoever wronged you. Investigated by the wrong party, you collect. Investigated by the right party, that’s just law enforcement.

That’s the constitutional problem in a sentence. The government can compensate people it wronged. It cannot open a claims window where the qualifying injury is having been on the correct team. That’s viewpoint discrimination with a payment portal.

And “wrongly targeted” is doing a lot of load-bearing work here. Reporting noted the fund could potentially have extended to January 6 rioters convicted of violent crimes and later pardoned by Trump. A pardon wipes the legal consequence. It does not retroactively make you a victim of persecution. But if the standard is “you say the last administration came after you unfairly,” and the panel deciding is removable at will by the guy who pardoned you, you can see how the math works out.

The actual prize was never the money

Here’s where this stops being funny.

Separately from the fund, the settlement purports to drop claims — including IRS audits — against Trump and his affiliates, effectively shielding the family from further tax enforcement.

Sit with that. In exchange for withdrawing a lawsuit about the illegal disclosure of his tax returns, the President’s Justice Department appears to have delivered relief from examination of those returns.

A settlement is supposed to resolve the claim you brought. This one reached past that claim and resolved a different one — the government’s ability to audit the plaintiff — that had never been part of the case.

And we know it was the real prize because of what happened next. In June, a federal judge in Virginia temporarily blocked the fund. Todd Blanche, the No. 2 official at the Justice Department, then testified that DOJ would not pursue the $1.776 billion fund — while the audit-immunity provisions shielding Trump and his family would stay.

The billion-dollar slush fund was the decoy. Loud, tacky, numerologically branded, guaranteed to draw fire. When the fire came, DOJ dropped it and kept the quiet thing: the part where the IRS stops looking at the boss’s returns.

Watchdogs argue those assurances have no binding force — that the executive branch can’t contractually promise never to enforce the tax laws against a specific family, because that’s not how tax law works. Probably right! But “probably unenforceable” is not the same as “not happening.” IRS enforcement is discretionary. Audits get opened by people who work for the government. If those people have been told in writing, in a court filing, that this family is off the table, the practical effect arrives long before any judge rules on whether it was legal.

Meanwhile the fund itself has entered a bizarre limbo. DOJ has sent mixed signals — at one point telling a court the fund is dead, then resisting a judge’s order to formally attest to that in writing. Which is a genuinely strange thing to fight about. If it’s dead, sign the death certificate. Unless you’d rather keep it in a medically induced coma somewhere, in case the room clears out.

Hence September 4: a judge ordering officials to disclose who set the thing up. By all accounts, the fund never distributed a dollar or seated a single commissioner. It is a scandal that scandaled itself into nonexistence — a $1.776 billion program whose entire measurable output is court filings about whether it exists.

Why you should care about a fund that never paid anybody

Because the fund isn’t the point. The technique is the point, and the technique still works.

Three things got established here, and none of them got un-established when DOJ said never mind.

One: the power of the purse has a side door. The Judgment Fund is a permanent appropriation designed to pay judgments. If a president can generate a judgment by suing his own government and settling with himself, then the ceiling on unilateral executive spending isn’t what Congress appropriates — it’s whatever the president can get his own DOJ to stipulate to. Every future president now knows this. Whatever you think of the next one, ask whether you want them holding that key.

Two: tax enforcement is now negotiable if you’re the right person. You cannot settle your way out of an audit. You don’t have the leverage, and more importantly, you don’t own the agency. The rest of us live under a system where the IRS’s discretion is supposed to be exercised without regard to who you are. A written assurance that one family is exempt from examination — even a legally shaky one — makes the tax code a two-tier document. And two-tier tax codes are how you get a country where compliance is for suckers.

Three: “victim of weaponization” is being built into a legal category with a payout attached, and the eligibility criteria are partisan. Not “the government violated your rights” — that’s a real, non-partisan standard courts already handle. But “you were targeted by the other party.” Build that category once, fund it once, and you’ve created a permanent incentive for every administration to compensate its friends out of the Treasury and call it justice.

The comedy here is real and I’m not going to pretend otherwise. A president sued himself, settled with himself, priced the settlement at the nearest patriotic holiday, staffed the oversight body with people he could fire, and then spent four months in federal court arguing about whether the whole thing exists. That’s funny. That’s extremely funny.

But a judge just had to compel the United States Department of Justice to name the people who created a $1.776 billion federal program. That’s not a punchline. That’s a smoke detector.