Anti-Weaponization Fund: 11th Circuit Affirms the Collusion Finding Behind the $1.776B Fund — While the Fund Itself Stays Dead and the E.D. Va. Challenge Stays Alive
UPDATE (Sept. 29–30, 2026): The Eleventh Circuit has affirmed the collusion and bad-faith findings that Judge Kathleen Williams (S.D. Fla.) made against the lawsuit that served as the hook for the $1.776 billion "anti-weaponization" fund. A three-judge panel ruled Tuesday that "the appellants did not submit or offer any evidence to explain their litigation conduct or demonstrate that the lawsuit and the settlement were not collusive" and that the appellants "have not made a strong showing that the district court committed clear error in its collusion and bad faith findings." The panel also upheld Williams's sanctions against two Trump attorneys, rejecting their First Amendment challenge to the speech-related sanction.
The underlying saga: President Trump sued his own administration in January 2026 for $10 billion over the leak of his tax returns, then struck an agreement with the IRS in late May to dismiss the case — outside any judicial approval — with DOJ simultaneously creating the "anti-weaponization" fund to compensate those claiming persecution by the government. Williams found in July that there "was never adverseness between the Parties; there was never a case or controversy; and there was never a question as to who would prevail," that the suit was "brought to manipulate the judicial process" and was "brought for an improper purpose — to gain the imprimatur of judicial legitimacy for a 'settlement' that had no viable basis in law or fact." She barred the administration from calling it a "settlement" and sanctioned the lawyers.
Context on the fund itself: AG Todd Blanche said in August he had rescinded his May order authorizing the fund — "No, the fund is dead or whatever word you want to use... It never started" — a concession made in exchange for Senate support of his nomination; Senate Democrats warned of "loopholes" to resurrect it. Separately, in E.D. Va., Judge Leonie Brinkema on Sept. 18 declined to dismiss Democracy Forward's challenge to the fund, saying "The issues that underlie this case are still alive and kicking" — her merits ruling remains pending (tracked in the prior revision of this note and its associated watch).
What it means
The appellate affirmance locks in the judicial finding that the executive branch manufactured a lawsuit against itself to launder a settlement and a $1.776 billion payout vehicle — an extraordinary episode of the administration using the courts as cover. With the fund "dead" but the collusion findings now affirmed and sanctions upheld, the remaining live questions are Brinkema's ruling on the E.D. Va. challenge and whether the administration seeks further review of the 11th Circuit's decision.