Critics denounced the highly unusual plan, which has yet to be finalized or approved, as a vast political slush fund financed by taxpayers.
The Trump administration is considering the establishment of a $1.7 billion fund to compensate the president’s allies and others investigated by the Justice Department under President Joseph R. Biden Jr., creating an ethical and political minefield for Republicans and the department’s leadership.
The unusual plan, which Democrats and former government officials criticized as a vast political slush fund financed by taxpayers, is being fast-tracked, but has yet to be finalized or approved, according to people familiar with the situation who spoke on the condition of anonymity to discuss internal deliberations.
The Justice Department is modeling the program, in part, on a landmark $760 million settlement fund the Obama administration created to compensate Native American farmers and ranchers who were deprived access to federal subsidies for decades, one of those people said. Payments in that settlement came from the Judgment Fund, an uncapped pot of money that does not require congressional approval to make payments and is maintained by the Treasury Department.
The proposal comes in response to various claims President Trump has made against a federal government he himself controls. He has sought compensation for the leak of his tax returns during his first term, as well as the investigations into his handling of classified documents after he left office and into his 2016 campaign’s potential ties to Russia.
The idea of establishing a government fund to pay Mr. Trump’s political allies has gained traction internally as the Justice Department and White House try to resolve a $10 billion lawsuit Mr. Trump filed in January against the Internal Revenue Service. The judge overseeing that case is considering throwing out Mr. Trump’s suit because it is ridden with perceived conflicts of interest and the potential for self-dealing.
It was not immediately clear where the fund would draw money from. But officials with the Treasury Department have been part of internal discussions, one of the people familiar with the matter said.