The “Anti-Weaponization Fund” and the Limits of Analogy

The Department of Justice’s announcement of the creation of an “Anti-Weaponization Fund” (Fund) this week has sparked concerns that it violates separation of powers principles because only Congress can appropriate this sort of funding. But little, if anything, has been written about the department’s attempted analogy to previous settlement funds, specifically from the Keepseagle case, to justify the creation of the Anti-Weaponization Fund.

The Anti-Weaponization Fund was established in a settlement agreement of a 2026 lawsuit brought by President Trump against the IRS. The case involves allegations that in 2019, a former IRS contractor illegally obtained and leaked tax return information of Trump, two of his sons, and the Trump Organization, LLC. The settlement provides that in exchange for dismissing the lawsuit with prejudice, the IRS will provide the plaintiffs with a formal apology, but no monetary payment. In addition, the Department of Justice, a non-party to the litigation, agreed to the creation of a $1.776 billion Fund drawn from the Judgment Fund, a perpetual appropriation that is used to pay judgments and settlements against the federal government.

In a May 18, 2026, memorandum from Acting Attorney General Todd Blanche describing some of the features of the Fund, he noted that “[p]revious cases have been settled on similar terms,” and specifically identified Keepseagle v. Vilsack. That lawsuit was settled during the Obama Administration through the establishment of an administrative claims process funded by $680 million paid from the Judgment Fund.

I was lead counsel for the government in Keepseagle. Acting Attorney General Blanche’s comparison is, at best, incomplete. At worst, it risks obscuring fundamental differences in both structure and legal footing. Three points are worth highlighting.

I. Keepseagle Was a Judicially Supervised Settlement of a Heavily Litigated Class Action

The starting point is context.

Keepseagle was a class action lawsuit brought by Native American farmers and ranchers alleging longstanding discrimination in violation of the Equal Credit Opportunity Act (ECOA). The case had been heavily litigated for more than a decade, and involved numerous depositions, expert reports, and significant motions practice. The parties faced meaningful litigation risk, shaped by an extensive factual record and prior judicial rulings.

In recognition of that risk, the parties settled Keepseagle as a class action with the establishment of a $680 million fund that allowed class members—i.e., parties to the lawsuit—to make claims for relief based on proof of alleged violations of ECOA.

The Keepseagle settlement that ultimately resolved the case was therefore not a policy initiative or a free‑standing compensation program, like the Anti-Weaponization Fund appears to be. Rather, it was the negotiated resolution of a specific, long‑pending and hotly contested legal dispute where the claims process was specifically designed to compensate the plaintiffs for the legal violations alleged in that case.

In contrast, in Trump v. IRS, the complaint—which was not a class action complaint—was filed on January 29, 2026, and plaintiffs voluntarily dismissed the complaint with prejudice less than four months later. During the pendency of the case, no substantive motions were filed by the parties and no discovery was taken. And, critically, the Fund is not for the benefit of any of the plaintiffs. Indeed, as noted above, the Department of Justice stated that none of the plaintiffs will be entitled to damages. Instead, the Fund appears designed to provide compensation to non-party victims of alleged “weaponization.”

In short, the beneficiaries of the claims process in Keepseagle (plaintiffs) and Trump v. IRS (non-plaintiffs) could not be more different.

In addition, the fact that Keepseagle was settled as a class action has significant implications. As a class action settlement, Keepseagle was subject to rigorous judicial oversight under Federal Rule of Civil Procedure 23. The district court was required to determine that the settlement was “fair, reasonable, and adequate” to the class. This involved briefing by the parties and a hearing in which those who supported and opposed the settlement terms were heard by the court. No funds could be distributed absent that finding. The court also retained continuing jurisdiction to supervise the claims process and ensure that the settlement was administered fairly and in accordance with its terms.

Those structural features—an underlying case, a defined class, judicial approval, and continued court supervision—are not incidental. They are what give a class settlement its legal legitimacy.

In contrast, in Trump v. IRS, the parties settled the case without court approval and the claims administration process will not be subject to judicial oversight. Rather, the Fund will be overseen by volunteers who will be appointed by the Department of Justice, and who can be removed, apparently at will, by the President (one of the plaintiffs in the case).

The analogy to Keepseagle, therefore, starts from very different ground.

II. The Cy Pres Component in Keepseagle Was Limited, Residual, and Court‑Approved

A second point concerns the role of so‑called “cy pres” distributions. A cy pres distribution typically occurs in class action lawsuits when there are funds left over from a settlement fund after all valid claims have been paid out. Those leftover funds typically are distributed to organizations that have some relationship to the underlying litigation.

In Keepseagle, the primary purpose of the settlement was straightforward: to compensate class members for alleged discrimination by USDA in the provision of farming and ranching loans. The overwhelming majority of the settlement fund was structured around a claims process designed to deliver payments directly to those individuals.

Only later—and only because a significant portion of the fund remained unclaimed—did cy pres considerations arise. The parties had anticipated that contingency and included provisions addressing the disposition of residual funds in the settlement agreement. Those provisions were subsequently revisited and implemented through further proceedings before the district court.

Three characteristics of that process are worth emphasizing.

First, the cy pres component was residual, not primary. It addressed funds that could not practicably be distributed to class members after the claims process had run its course.

Second, it was tethered to the underlying claims. The ultimate disposition of those funds—to organizations supporting Native American agriculture—was designed to bear a close relationship to the class and the injuries alleged in the case.

Third, it was judicially approved and supervised. The district court considered objections, heard from interested parties, and approved the final distribution plan.

Taken together, those features make clear that the cy pres component in Keepseagle was not a freestanding funding mechanism. It was a court‑approved solution to a specific, post‑litigation problem: what to do with unclaimed settlement proceeds.

By contrast, the reported structure of the proposed Anti-Weaponization Fund appears to contemplate a forward‑looking compensation mechanism untethered to the Trump v. IRS litigation or to the distribution of residual funds. Recall that in Trump v. IRS, President Trump claimed that a contractor for the IRS improperly accessed and disclosed his tax returns. But the proposed Anti-Weaponization Fund does not appear to focus on claims of improper access or disclosure by the IRS, and instead appears to cover any claim involving “weaponization” by any federal agency. In short, unlike in Keepseagle, where the cy pres focused on the claims raised in the litigation, in Trump v. IRS, the Anti-Weaponization Fund bears little, if any, relationship to the claims raised in that lawsuit.

III. The Proposed Fund Raises Questions Under Current DOJ Policy

A third—and separate—consideration is how the Fund fits within the department’s own stated policies governing settlements.

In 2017, the department adopted a policy focused on limiting the use of settlement agreements to direct payments to non‑governmental third parties. The core principle was that settlement funds should be used to compensate victims, redress harm, or punish and deter unlawful conduct.

The current guidance, most recently articulated in the February 5, 2025, memorandum issued by then-Attorney General Pam Bondi, reaffirms that basic premise. That memorandum provides that, except in limited circumstances, settlements should not be used to require payments to non‑governmental, third‑party organizations that were neither victims nor parties to the lawsuits.

The relationship between that policy and the proposed fund is not yet fully clear. But at a minimum, the comparison raises questions.

If the Fund is framed as part of a settlement of claims against the IRS and the Department of the Treasury, it is not obvious how a broadly administered compensation program that only contemplates non-parties to the litigation fits within the department’s articulated limits on the use of settlement authority. This raises questions about whether the department is following its own policies in facilitating this settlement.

Conclusion

Keepseagle was the settlement of a specific, litigated class action lawsuit, subject to judicial approval and ongoing supervision, designed primarily to compensate a defined class of plaintiffs. Its limited cy pres component arose only after the claims process was complete, was itself subject to court approval, and was tied to the claims in the lawsuit.

The proposed Anti-Weaponization Fund, as currently described, appears to operate along different lines. Whatever its ultimate merits, the department’s analogy to Keepseagle is inapt, and does not support its justification for the settlement.