The Justice Department order terminated the fund before it became operational. No commissioners had been appointed, no claims had been processed and no money had been transferred. Blanche also clarified that a separate agreement limiting tax audits of President Donald Trump and associated individuals applied only to specified past tax periods, not to future filings.
The concessions followed negotiations with Republican senators John Cornyn of Texas and Thom Tillis of North Carolina. Both lawmakers had demanded written and permanent changes to the arrangement rather than verbal assurances that the fund would not proceed.
Their opposition had already forced the committee to postpone an earlier vote on Blanche’s nomination. With Democratic members expected to oppose him, the defection of even one Republican on the narrowly divided panel could prevent the nomination from advancing to the full Senate.
Blanche said the Justice Department had reached an agreement addressing the senators’ concerns. The cancellation order is intended to make clear that the fund cannot distribute compensation under the framework announced in May.
The fund was created as part of a settlement linked to Trump’s $10 billion lawsuit against the Internal Revenue Service over the unlawful disclosure of his tax information. The case arose after an IRS contractor leaked confidential tax records belonging to Trump and thousands of other wealthy individuals.
The proposed mechanism was designed to compensate people who claimed they had been unfairly targeted by federal investigations or prosecutions. Supporters presented it as a remedy for politically motivated government action. Critics argued that its broad eligibility rules and limited congressional supervision could allow payments to Trump allies, political donors or defendants prosecuted over the January 6, 2021, attack on the US Capitol.
The original Justice Department announcement said the fund would receive $1.776 billion from the federal Judgment Fund, a permanent appropriation used to pay legal settlements and court awards. A five-member commission was to assess claims and decide who qualified for relief, with processing scheduled to end by December 2028.
Its structure quickly drew resistance from lawmakers in both parties. Questions centred on how recipients would be selected, whether the commission would operate independently and why such a large compensation programme had been established through a settlement rather than legislation approved by Congress.
Blanche initially described the proposal as a legitimate response to abuses of federal power. During his confirmation hearing in July, however, he told senators the fund was effectively dead, while acknowledging that the underlying language had not been formally withdrawn.
That distinction became central to the confirmation dispute. Cornyn and Tillis argued that the administration, Trump’s lawyers or future Justice Department officials could seek to revive the programme unless the original order was expressly rescinded.
Trump complicated the negotiations by publicly defending the fund and suggesting it could be restored. He also threatened to keep Blanche in the acting position if the Senate refused to confirm him, increasing pressure on Republican senators to resolve the standoff before Congress left Washington for its summer break.
The cancellation marks a rare instance in which Republican lawmakers have forced a significant policy reversal from the administration by withholding support for a senior nominee. It also highlights growing concern within Congress about executive settlements that commit large sums of public money without a conventional appropriations process.
Blanche’s nomination has attracted wider scrutiny because of his previous role as Trump’s personal criminal defence lawyer. Before joining the Justice Department, he represented Trump in the New York case that produced felony convictions involving falsified business records and worked on other federal proceedings involving the president.
He later served as deputy attorney general before becoming acting attorney general following a leadership change at the department. His supporters have emphasised his prosecutorial experience and management of federal law-enforcement agencies, while opponents have questioned whether he can maintain the department’s independence in matters involving Trump or his associates.
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