Donald Trump’s $1.776 billion “anti-weaponization fund” now sits at the center of two separate but converging challenges: one from former judges who say the settlement that created it may be a “fraud on the court,” and another from California’s governor, who is trying to tax its payouts out of existence.

On one side, 35 retired federal judges are asking U.S. District Judge Kathleen Williams to reopen Trump’s now-dismissed $10 billion lawsuit against the IRS, arguing that only a reopened case can probe “whether a fraud occurred.”¹ They say the settlement that spawned the fund — and a pledge that the IRS will not pursue certain past Trump-related tax issues — was “a product of collusion and is itself a fraud on the Court,” claiming “the Court was deceived” when it dismissed the case with no settlement on the record.² For these former jurists, the central issue is institutional integrity: whether a sitting president effectively negotiated with his own administration to produce a political slush fund under cover of litigation.

On the other side, the Trump administration and its Justice Department have framed the fund as a remedial tool. Acting Attorney General Todd Blanche described it as a way “to make right the wrongs that were previously done,” with five appointees overseeing payouts to alleged “victims of lawfare and weaponization.”³

California Governor Gavin Newsom rejects that rationale outright, branding the fund a “boondoggle” designed to “divert money to Trump’s allies,” including, critics fear, some involved in the January 6 Capitol attack.³ He has moved to impose a 100% state tax on any payouts to California residents, vowing that “people who assault cops and overthrow democracy don’t deserve a taxpayer-funded payday.”³

The clash exposes a deeper fault line: whether the fund is a good-faith attempt to address government overreach or a politicized mechanism built on an arguably collusive lawsuit — and whether states can, in practice, neutralize it even if federal courts ultimately bless it.