California Gov. Gavin Newsom is now threatening to seize every dollar California residents might receive from President Donald Trump’s new anti-weaponization settlement fund — and he says the state is prepared to do it through a 100 percent tax.
Speaking during a May 27 press conference, Newsom blasted the fund as a “slush fund” and vowed California would move aggressively against any payouts received by people living in the state.
“Anyone from California that receives any of those funds, we want to tax 100 percent,” Newsom said. “And that’s an action the state of California can take, and it’s an action we look forward to taking.”
What Newsom did not explain, however, is what legal authority California would actually have to confiscate private settlement money in its entirety through taxation. Critics immediately questioned whether such a move would survive constitutional scrutiny, especially if the tax appeared politically motivated or selectively targeted at one group of people.
Trump’s $1.776 billion “Anti-Weaponization Fund” was established earlier this month as part of a settlement resolving his $10 billion lawsuit against the IRS over the leak of his tax returns. Trump and his allies have long argued that federal agencies were weaponized against conservatives and members of his administration, particularly during and after the 2016 election.
According to acting Attorney General Todd Blanche, the purpose of the fund is to create a process for alleged victims of political targeting and government abuse to seek compensation.
“As part of this settlement, we are setting up a lawful process for victims of lawfare and weaponization to be heard and seek redress,” Blanche said in a statement announcing the program.
The fund is already facing multiple legal challenges.
Left-leaning legal advocacy group Democracy Forward has filed suit seeking to block the administration from distributing any payments at all. Another organization, Citizens for Responsibility and Ethics in Washington, also sued, arguing the fund is unconstitutional and violates federal law.
At the same time, two law enforcement officers connected to the Jan. 6 Capitol breach — retired U.S. Capitol Police Officer Harry Dunn and Metropolitan Police Officer Daniel Hodges — filed their own lawsuit attempting to prevent payouts from reaching individuals connected to the Capitol protests.
Their attorney, Brendan Ballou, previously worked as a special counsel at the Department of Justice and spent years prosecuting Jan. 6-related cases before leaving after Trump began issuing pardons.
Meanwhile, former Trump campaign aide Michael Caputo announced he plans to become one of the first individuals to file a claim through the DOJ fund, seeking $2.7 million in damages.
Caputo said his family endured years of financial and emotional devastation after becoming entangled in the FBI’s Crossfire Hurricane investigation into alleged Trump-Russia collusion.
“The machinery of government was clearly politically weaponized against my family from July 2016 to December 2025,” Caputo wrote on X. “They found nothing; we lost everything.”
Caputo has spoken publicly for years about the toll the investigation took on his family, including being forced to sell their home in New York and relocate to Florida after prolonged legal and financial pressure.
The Crossfire Hurricane probe ultimately became one of the most politically contentious investigations in modern American politics, especially after years of investigations failed to establish a criminal conspiracy between the Trump campaign and the Russian government.
