Trump DOJ agrees to new Michael Flynn payout as allies make bank without 'slush fund'

President Donald Trump's administration found a new way to pay off an ally after abandoning plans for an "anti-weaponization" fund — quietly settling a second lawsuit with retired Lt. Gen. Michael Flynn.

The Army had withheld about $38,557 from Flynn's retirement pay over a 2015 speaking fee from Russia Today, the Russian state-owned media company now known as RT. The new settlement is below $75,000, Bloomberg reported.

The dispute traces back to a 2022 letter. The Pentagon's pay agency, the Defense Finance and Accounting Service, notified Flynn that he was "found to be in violation of the Emoluments Clause because [he] received compensation for a speaking engagement in December 2015 from a foreign government without seeking the required approval," according to his lawsuit.

Flynn fought the debt for years. Now the government has agreed to pay him instead.

"We appreciate the Department of War and the Department of Justice for righting this extraordinary wrong done by the Biden administration," attorney Jesse Binnall said in a statement.

Flynn's first settlement, reached in March, was far larger. The Justice Department paid him $1.25 million to resolve claims that he was the victim of a politically motivated prosecution — even though Flynn had pleaded guilty in 2017 to lying to the FBI about his contacts with a Russian diplomat, then backtracked. Trump ultimately pardoned him.

He is not the only one. The family of Ashli Babbitt, who Capitol Police killed as she participated in the Jan. 6 Capitol riot, was awarded $4.975 million in a settlement reached in 2025. Former Trump campaign adviser Carter Page received $1.25 million in April over claims related to FBI surveillance.

The Trump administration had sought to formalize the pattern with a proposed $1.8 billion fund — created from a settlement of Trump's personal IRS lawsuit — that would pay allies who said the government had been "weaponized" against them.

"If Trump and Republicans are truly abandoning this corrupt scheme," Senate Minority Leader Chuck Schumer (D-NY) wrote on X of the fund critics called a "slush fund," "they should have zero problem banning it in law." Trump's word, he added, was "nowhere near enough."

Republicans and Democrats alike revolted, and a federal judge blocked the fund. The Justice Department said it would abide by the ruling — but as Flynn's settlement shows, the payouts did not stop.

Flynn's case is not over. In it, the parties must file another status report by July 27, 2026, or drop the suit, according to the court filing.