Treasury's top lawyer resigns following controversial $1.7 billion 'Anti-Weaponization' fund: Report

The Treasury Department's chief legal officer, Brian Morrissey, quit his post after the Justice Department announced the creation of a $1.77 billion “anti-weaponization fund” in exchange for President Donald Trump dropping his lawsuit against the Internal Revenue Service (IRS), according to a report in The New York Times.

Morrissey did not offer any reason behind his sudden departure but expressed his gratitude toward Trump and Treasury Secretary Scott Bessent in his resignation letter, the report added. The Treasury's general counsel had been confirmed by the Senate only seven months ago. However, reports indicate that his purported discomfiture may stem from the fact that the Treasury Department will be responsible for distributing payments to individuals claiming redress from the commission tasked with managing the fund.

The abrupt resignation of a top legal official delivers a major blow to the administration's narrative, and critics are likely to leverage Morrissey's resignation, which came merely hours after the fund's announcement, to contend that the initiative exceeds serious legal and ethical boundaries. Morissey previously served as the Principal Deputy General Counsel at the Treasury Department for two years during Trump's first term. He was responsible for advising the Treasury Secretary and other senior officials on "high-profile regulatory, litigation, congressional oversight, and legal policy issues."

Meanwhile, the Justice Department appears unfazed by the controversy. It announced the creation of an anti-weaponization fund with a $1.776 billion budget, a five-member board, and the power to issue formal apologies and monetary relief. In the DOJ's view, the fund will compensate those who were wrongly investigated or prosecuted by the Biden administration. This also includes people convicted or charged with the January 6 attack on the Capitol.

The fund was conceived as part of a settlement with Trump, his two sons, and the Trump organization to drop their suit against the IRS. They filed the suit seeking $10 billion in January this year over the leak of his tax returns. In fact, they expanded the settlement's terms to include a provision preventing the IRS from auditing or prosecuting Trump's tax records, including those of his businesses, before the settlement.

This has led many, including Democrats, to denounce the move as an attempt to create a "slush fund" to reward political allies. House Democrats have filed a motion to block the settlement, arguing that "filing a collusive lawsuit only to immediately dismiss it to produce a collusive settlement" would be legally untenable. They urged the court to exercise its "sua sponte authority" to examine any voluntary dismissal entered to advance such a scheme.