The Department of Justice is finalizing a plan to establish a “Truth and Justice Commission” and a $1.776 billion compensation fund to resolve claims by people who say they were harmed by government “weaponization,” sources told ABC News. The proposal is part of a deal that would require President Donald Trump to drop his ongoing lawsuit against the Internal Revenue Service.
According to sources, the proposal emerged after months of discussions between the White House and DOJ officials. Critics, most prominently Democrats, have already labeled the proposal a “slush fund” that would benefit the president’s allies, and legal experts say it could face significant judicial and political challenges.
DOJ lawyers initially explored allowing the lawsuit to proceed with Trump as a private plaintiff while he remained president, citing the long-established legal doctrine known as the “rule of necessity.” Those lawyers privately argued there was no viable alternative because Trump could sue as a private citizen while also exercising authority over the agencies named in the suit, the sources said.
But that approach drew scrutiny from the judge overseeing the case, U.S. District Judge Kathleen Williams, who raised questions about whether both sides in the lawsuit could be sufficiently adverse if the president effectively controlled the defendants. In a recent order, Judge Williams directed the parties to file briefs addressing whether the case should proceed under those circumstances.
With the judge pressing those issues, DOJ officials pivoted to the compensation-fund proposal. The $1.776 billion figure was described by sources as a symbolic nod to the nation’s founding. Terms of the arrangement, they added, could change before any agreement is finalized.
Judge Williams has also appointed a panel of prominent attorneys, including a former solicitor general and a federal judge, to assess the dispute and provide guidance to the court.
In filings this week, attorneys raised concerns about the lawsuit, arguing that the president exercises “extraordinary” control over the defendants and that there is a risk the departments and their lawyers could be acting at the president’s direction. The filings also say President Trump has expanded presidential oversight of the Justice Department in ways that blur the line between policy priorities and personal loyalty.
Trump filed the suit after a government contractor pleaded guilty in 2023 to stealing and leaking tax data belonging to Trump and other wealthy individuals in 2019 and 2020. That breach prompted the IRS lawsuit at the center of these negotiations.
Under the reported DOJ proposal, the compensation fund would be created on the condition that Trump drops the IRS lawsuit and abandons two other civil claims totaling $230 million linked to the Russia-collusion investigation from his first term and the 2022 search of his Mar-a-Lago estate. Sources said Trump himself would not be eligible to receive payments from the fund, though entities associated with him could file claims.
Sources outlined that the “President Donald J. Trump Truth and Justice Commission” would have five commissioners, four appointed by the attorney general. Trump would reportedly retain the power to remove commissioners without cause. The commission would not be required to disclose its award processes, according to the description provided to ABC News.
It was not yet clear how Judge Williams would react to any settlement that is negotiated but not disclosed to the court. DOJ lawyers told aides they believe a settlement of this kind would not require the court’s approval.
Democratic lawmakers quickly criticized the reported plan and urged Congress to bar taxpayer money from funding such a compensation mechanism. Representative Alexandria Ocasio-Cortez called the proposal “outright corruption,” saying it resembled a “slush fund” for the president’s associates. Republican Representative Brian Fitzpatrick said the proposal raises constitutional questions and suggested the issue could ultimately be decided by the Supreme Court.
The proposal, if pursued, is likely to trigger further legal challenges and intense political debate as details are finalized and any formal agreement is presented to the court or Congress.