A nearly $1.8 billion fund established by the Trump administration to compensate individuals who claim they were wrongly targeted by previous administrations is facing its second legal challenge, as a coalition of critics filed suit Friday seeking to block all payouts from the controversial program.
The lawsuit, filed in Alexandria, Virginia, names as plaintiffs former Assistant U.S. Attorney Andrew Floyd, who prosecuted Capitol riot cases before being fired last year by then-Attorney General Pam Bondi, and California State University Channel Islands professor Jonathan Caravello, who was acquitted of assault charges after being accused of throwing a tear gas canister at federal agents during a 2025 protest. Additional plaintiffs include government watchdog Common Cause, the city of New Haven, Connecticut, and the National Abortion Federation.
The Fund's Origins and Structure
The fund was announced five days ago and emerged from a settlement between the Trump administration and President Donald Trump, one of his adult sons, and the Trump Organization in a lawsuit over the unauthorized disclosure of Trump's tax information years ago. The program will be administered by five commissioners selected by the attorney general, who will review claims from individuals alleging unfair targeting by previous administrations. The money is being drawn from the Justice Department's Judgment Fund, taxpayer money set aside by Congress for monetary settlements the government reaches.
The suit names as defendants the Justice and Treasury departments, acting Attorney General Todd Blanche, and Treasury Secretary Scott Bessent. Spokespeople for the departments did not immediately respond to requests for comment.
Constitutional and Legal Objections
The plaintiffs argue the fund violates multiple constitutional principles and federal laws. They contend the Trump administration's decision to draw from the Judgment Fund is unlawful because the underlying legal case was "meritless" given the president's unique role as both a plaintiff and the head of the executive branch agencies named as defendants. The lawsuit also alleges the fund usurps Congress' constitutional authority over federal spending.
Skye Perryman, president and CEO of Democracy Forward and one of the attorneys who filed the lawsuit, said, "This latest attempt by the Trump-Vance administration to make grift great again is profoundly unlawful and will not withstand judicial scrutiny. This lawsuit is about protecting the rule of law and preventing a dangerous abuse of government power, and we will keep showing up in court to hold this administration accountable."
Political Fallout and Capitol Riot Concerns
The fund has drawn criticism from Democrats and some members of Trump's own party. Senate Republicans said they were blindsided by the fund's creation and remain divided over how to address it. During a private meeting with acting Attorney General Todd Blanche on Thursday, several senators warned that the party's major immigration enforcement bill could be derailed with the issue hanging over them, and hardly any members spoke up to defend the fund.
During a congressional hearing on Tuesday, Blanche would not rule out the possibility that rioters who assaulted police during the Jan. 6, 2021, Capitol attack could be eligible for fund payouts. Two police officers who helped defend the Capitol during the fifth year of the Jan. 6 aftermath also sued this week to prevent anyone, including Capitol rioters, from receiving payments.
The Capitol riot investigation was the largest in Justice Department history. Trump ended it with mass pardons, erasing hundreds of Jan. 6 convictions. Nearly 1,600 people were charged with Capitol riot-related federal crimes, and over 1,200 were convicted and sentenced before Trump handed out mass pardons, commuted prison sentences, and ordered the dismissal of every pending Jan. 6 criminal case. Beneficiaries of Trump's clemency included supporters who assaulted officers at the Capitol and far-right extremist group members imprisoned for plotting to attack the Capitol to keep Trump in office after he lost the 2020 presidential election to Democrat Joe Biden.
After Trump returned to the White House last year, he appointed conservative activist Ed Martin as interim U.S. Attorney for the District of Columbia. Martin, a leading advocate for Jan. 6 defendants, fired or demoted some prosecutors who worked on Capitol riot cases.
Why This Matters:
The legal challenges to the $1.8 billion fund raise fundamental questions about separation of powers and fiscal accountability. The use of taxpayer money from the Judgment Fund—intended for legitimate government settlements—to compensate political allies without congressional appropriation represents a significant departure from established budgetary procedures. The fund's structure, with commissioners selected by the attorney general rather than through a transparent legislative process, concentrates discretionary spending authority within the executive branch. The possibility that individuals convicted of assaulting law enforcement officers during the Capitol riot could receive taxpayer compensation undermines the rule of law and creates perverse incentives. The bipartisan concern in the Senate, where even members of the president's party expressed alarm, suggests the fund may exceed constitutional boundaries governing federal spending authority.