Strange! Trump Threatens to Sue His Own Government, and Distributes a Massive Payout

Strange! Trump Threatens to Sue His Own Government, Distributes a Massive Payout

Jakarta, CNBC Indonesia - The United States President Donald Trump briefly threatened to sue his own government and seek substantial damages. However, the suit was eventually withdrawn after his administration agreed to establish a compensation fund of US$1.8 billion, about Rp31.78 trillion (assuming an exchange rate of Rp17,655 per US$1).

The fund is said to be paid to victims of ‘lawfare’ – the use of legal processes as a political tool.

In the context of Trump and the Make America Great Again (MAGA) movement, the term often refers to allies and supporters who felt they had been targeted by legal processes from the Democratic side.

Quoting The Economist, the scheme has attracted criticism for being unusual. Trump did not take the money for himself. However, the fund would still come from taxpayers and could flow to his political supporters.

Those who stand to receive compensation include Capitol rioters on January 6, anti-abortion activists, and other parties aligned with Trump’s political camp.

Origin from Trump’s Tax Data Leak

The case began with a leak of Trump’s tax data for 2018–2020.

At that time, a contractor at the Internal Revenue Service (IRS) named Charles Littlejohn leaked Trump’s tax data illegally to two media outlets, The New York Times and ProPublica.

Littlejohn was subsequently prosecuted and sentenced to five years in prison.

Not only Trump had his data leaked. Several other billionaires were also affected, including Ken Griffin, hedge fund magnate. Griffin and Trump then sued the IRS alike.

However, their claims were very different.

Griffin sought only an apology, and he got it. Meanwhile, Trump sought damages of up to US$10 billion.

The problem was that Trump had already returned to the presidency. In other words, he was suing a government under his own control. This situation made judges question the positions of the parties in the case.

In legal proceedings, the parties usually have to be in genuinely opposing positions. Yet in this case, the position was complicated because Trump was suing the government he leads.

Rather than answering the judge’s question, on 18 May 2026 Trump withdrew his lawsuit. Instead, his administration pledged to establish a compensation fund of US$1.8 billion for those described as victims of the government’s ‘lawfare.’

Reasonableness of the Compensation

In a data privacy breach case, standard compensation is typically around US$1,000 per breach.

If someone seeks higher compensation, they must prove extraordinary losses. In theory, compensation should reflect the actual losses arising from the data leak.

Yet in this case, Trump did not need to publicly explain how the US$10 billion figure was calculated.

Another point of concern is the position of Todd Blanche, acting Attorney General who represented the government in the case. Blanche formerly served as Trump’s personal lawyer.

To critics, this shows the blurring line between state enforcement and the president’s personal interests.

As part of the settlement, the IRS also agreed to halt ongoing audits into Trump, his family, and his companies.

The structure of the US$1.8 billion fund also raises many questions.

The US Department of Justice (DOJ) says anyone who believes they have been victims of ‘weaponisation’ and ‘lawfare’ for political reasons can file a claim. Payments can also be kept confidential.

But critics say the fund risks becoming a kind of bank fund for certain political groups.

Maria Glover of Georgetown University described the fund as taxpayers’ money for people who do not actually have clear legal losses. She also noted that the fund was never approved by Congress or the courts.

The problem is, the fund was formed through a private settlement. In this way, the Trump administration could bypass Congress. After all, under the US Constitution, Congress has the power of the purse.

This also makes the issue of government money usage more sensitive. The fund did not arise from a normal budgeting process but emerged from a private agreement after Trump withdrew the lawsuit against his own government.

Open, yet Pointing to MAGA Supporters

Officially, the DOJ says there are no partisan conditions for obtaining the compensation fund.

In practice, however, the beneficiaries most likely to be MAGA groups or Trump loyalists.

This year, the Trump administration has already paid more than US$1 million each to settle claims by Michael Flynn and Carter Page, two Trump allies.

The Capitol rioters on January 6 are also expected to be among the first to claim. On his first day back in office, Trump granted pardons to nearly all of the roughly 1,600 people involved.

Cynthia Hughes, a MAGA activist, called the pardons ‘a beginning, not the end’. Even before the fund was announced, several defendants in the January 6 case had filed civil lawsuits seeking damages.

Some argued that the January 6 actions were merely political protests. They compared it to the Freedom Riders movement in the 1960s or the Women’s March.

But the comparison is seen as ignoring important facts. On 6 January 2021, the mob stormed and damaged the Capitol Building. The event was later described as one of the largest political violence incidents in the US in this century.

Anti-Abortion activists to Police Could Also File Claims

Other groups that