Lawsuit over Trump DOJ 'anti-weaponization fund' survives mootness bid — $1.776 billion settlement challenged

The legal battle over the Trump administration's $1.776 billion 'anti-weaponization fund' is far from over. On June 25, 2026, a federal judge ruled that the challenge in Trump v. IRS can proceed, rejecting the DOJ's claim that the case became moot when Acting Attorney General Todd Blanche testified before a House subcommittee on June 2 that the fund was 'not moving forward.' The DOJ, however, has refused to provide a signed, sworn declaration from Blanche attesting that the fund is truly dead—leaving the door open for it to be revived. The fund was created as part of a settlement in Trump v. IRS, a lawsuit President Trump filed personally against the IRS over the leak of his tax returns. The $1.776 billion was drawn from the federal Judgment Fund, a permanent, perpetual appropriation that Congress established to pay court judgments and settlements against the United States. The legal dispute is not whether any appropriation exists—the Judgment Fund is indeed an existing appropriation—but whether the fund can lawfully be used this way without a new, specific congressional appropriation or explicit congressional authorization for this purpose.

This matters because the fund bypassed the normal appropriations process, giving the DOJ control over a massive spending program with no direct congressional oversight. Critics, including House Judiciary Democrats, have argued that this violates Article I of the Constitution by usurping Congress's exclusive power to appropriate federal dollars. The Lawfare article notes that the fund was 'drawn entirely from the federal Judgment Fund' but was designed to dispense taxpayer money to individuals who claimed harm from purported Democratic 'weaponization' of government—a purpose far afield from the Judgment Fund's intended use for paying court-ordered judgments and settlements. The judge's decision to keep the lawsuit alive means the settlement itself could potentially be voided as ultra vires or a fraud on the court, which would not only kill the slush fund but also establish a precedent that the DOJ cannot use litigation settlements to create off-budget spending programs without congressional approval. The case exposes a deeper strategy of using the DOJ as a personal legal and financial tool for the president, bypassing Congress and the appropriations process, and threatening the constitutional separation of powers by weakening Congress's power of the purse.