Jan. 6 debanking probe once floated as way to pad anti-weaponization fund

(CNN) — A Justice Department probe examining whether some of the nation’s biggest banks closed accounts of defendants charged in the 2021 Capitol riot and others for political reasons had been raised to the Trump administration as a way to support it’s efforts to compensate people the president claims were victims of weaponization, according to people briefed on the matter.

Some of the president’s allies in recent months have suggested to administration officials that any possible settlements from the debanking probe could be used to compensate Trump supporters who the president believes suffered financial harm because of their involvement in the January 6 attack, the people familiar with the matter said.

The idea was among other funding mechanisms discussed, according to people familiar with the matter.

Acting Attorney General Todd Blanche earlier this month backed off plans to set up a nearly $1.8 billion fund as part of an agreement under which President Donald Trump withdrew a lawsuit against the IRS over a 2019 leak of his tax records. Despite bipartisan backlash against the fund — which was initially supposed to be backed by the US Treasury — Trump has said he hasn’t abandoned the idea of finding a way to compensate his supporters who he claims were unfairly targeted by the government.

The next iteration of a funding mechanism to compensate people who believe they were harmed by the Justice Department may not be called the “anti-weaponization fund” — or be bankrolled by the government itself — but the goal remains the same, according to people familiar.

Even before the concept of a formal fund, people who believe they have been wrongly prosecuted by the government have the ability to sue the government and receive compensation in the form of settlements.

As many as 10 banks, including Bank of America, Wells Fargo and JPMorgan Chase, are the subject of an ongoing probe since last year that has focused on so-called debanking of Trump supporters and conservatives, the people briefed on the matter said.

The president last August issued an executive order targeting banks that he said engaged “in unacceptable practices to restrict law-abiding individuals’ and businesses’ access to financial services on the basis of political or religious beliefs or lawful business activities.”

Subpoenas issued in recent months by prosecutors in District of Columbia US Attorney Jeanine Pirro’s office are the latest indicator of the administration’s interest in finding a way to punish banks for closing accounts, including those belonging to the president and the Trump Organization.

The probe is focused on whether banks discriminated against conservatives and industries disfavored by the Biden administration, including people who were involved in the Jan. 6 attack on the US Capitol, the people familiar with the probe said.

Pirro said that her investigation has nothing to do with the “anti-weaponization fund.”

“Bringing justice to those who have been previously debanked has absolutely nothing to do with anything else,” she told CNN in a statement. “The American people deserve financial institutions that won’t cancel them for their political or religious views. The absurdity of this question is reflected in the fact our subpoenas were issued nine months before the weaponization fund was even discussed.”

The Wall Street Journal earlier reported the subpoenas issued by Pirro’s office.

“This shouldn’t happen to Republicans, it shouldn’t happen to Democrats – it shouldn’t have happened to anyone,” Pirro’s statement added. “And I’m going to get to the bottom of it.”

Trump and his company have separately filed lawsuits against some banks who ended banking relationships after January 6, 2021.

Bank of America, JP Morgan Chase and Wells Fargo have declined to comment for this story.

Prosecutors are examining whether the banks’ conduct violated a number of laws including the Financial Institutions Reform, Recovery, and Enforcement Act, which allows financial penalties for fraud and other violations, according to one person briefed on the matter.

US banking regulators in recent months have issued new guidelines removing the use of “reputation risk,” which Trump administration critics say were used to debank the president’s supporters, as a factor in assessing banking practices.

In court this week, Justice Department lawyers assured a federal judge that the government was no longer pursuing the program announced last month. Federal Judge Richard Leon rejected requests from a watchdog group to intervene in the matter, saying “This case appears to be moot,” though he warned the government: “Don’t play possum with this court.”

The banks previously were also scrutinized by the Office of the Comptroller of the Currency, which in December issued a preliminary finding that nine major banks “made inappropriate distinctions among customers in the provision of financial services on the basis of their lawful business activities.”

The OCC review followed Trump’s executive order which said that “some financial institutions participated in Government-directed surveillance programs targeting persons participating in activities and causes commonly associated with conservatism and the political right following the events that occurred at or near the United States Capitol on January 6, 2021.”

The OCC has said that its review is ongoing, which is separate from the probe led by Pirro’s office. A spokeswoman for the OCC didn’t immediately respond to a request for comment.

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