Trump drops controversial plan for $1.8bn fund to compensate cronies

Todd Blanche, the US acting attorney general, said on Tuesday the government was withdrawing a proposal to create a $1.8 billion fund to compensate people claiming to be victims of unfair prosecution, amid a revolt among Republicans who saw it as an ethical and political disaster.

“We’re not moving forward with the fund, period,” Mr. Blanche told members of a House Appropriations subcommittee. He repeated himself to make clear that he meant the fund proposal would be permanently withdrawn.

His statement could break an impasse with Senate Republicans, who had demanded the fund be scrapped as a precondition for passing a major immigration enforcement bill. Opponents had described the proposal as a slush fund for allies of President Trump.

But Mr. Blanche said he would leave in place an order he signed last month that would, in effect, block the I.R.S. from investigating Mr. Trump, his family and his businesses for existing tax violations.
“Nothing has changed with that,” said Mr. Blanche, who added that the tax order would not shield Mr. Trump and his associates from future investigations.

Outraged Democrats accused Mr. Blanche, the president’s former defense lawyer, of cutting a sweetheart deal that would let the president and his family avoid a potential $100 million penalty.

“So the blanket immunity is, is not something that you’re going to move back on?” asked Representative Rosa DeLauro, Democrat of Connecticut who accused Mr. Blanche of prioritizing the president’s financial interests over the public good.

“You do not belong in this job,” she added.

While Mr. Blanche has now taken the fund off the table, much political damage has already been done. In addition, the unusually favorable tax deal provides Democrats with a potentially potent line of attack in the midterm elections — that Republicans support shielding a billionaire president from tax penalties at a time when many Americans are struggling financially.