Todd Blanche, nominated to serve as US Attorney General, has capitulated to an ultimatum from key senators in a bid to break a stalemate in the Senate Judiciary Committee, issuing two formal directives to dismantle a fund meant to compensate Donald Trump’s supporters and narrow the scope of tax immunity granted to the US President and his family.

The confirmation process, which opened with two days of hearings in the Senate Judiciary Committee on July 15–16, 2026, quickly escalated into a severe political crisis. The committee vote was delayed twice, prompting President Donald Trump to threaten to temporarily withdraw and resubmit the nomination, while Blanche was forced to concede to demands he had previously resisted.

Blanche assumed the post of acting Attorney General on April 2 following Trump’s dismissal of former Attorney General Pam Bondi. Having served as deputy to Bondi for nearly a year, Blanche was officially announced by Trump as his nominee for Attorney General in June.

A central obstacle in his confirmation trajectory was the Fund Against the Weaponization of Law, established in May 2026. The fund was created as part of an out-of-court settlement dissolving a lawsuit brought against the Internal Revenue Service (IRS) over the leaking of tax returns belonging to Trump, his sons, and the Trump Organization.

Capitalized at approximately $1.8 billion, the fund was designed to pay compensation to individuals who claimed to have been “victims of the weaponization of law” under the previous US administration. Blanche had not ruled out the possibility that individuals convicted of attacking police officers during the January 6, 2021 assault on the US Capitol could receive payouts, sparking fierce backlash from Democrats and several Republicans alike.

Although Blanche announced on June 2 that he was abandoning the project, he stopped short of formalizing the commitment in writing, stating only that he was prepared to work with Congress to codify the liquidation of the fund into law.

Two senators shift the balance

Given the narrow margins in the committee, Blanche’s nomination rested in the hands of two Republican senators. According to CNN, crucial roles were played by John Cornyn, who lost his primary to a Trump-backed challenger and is set to leave the Senate, and Thom Tillis, who will retire when his term expires in January 2027. A single dissenting vote from either senator would have effectively sunk the nomination.

Ahead of a committee vote initially scheduled for July 30, Cornyn issued an ultimatum to the Department of Justice. Cornyn demanded written guarantees by July 29 confirming that the fund would be completely shuttered and that Trump’s immunity from tax audits would not extend beyond the parameters of the initial litigation or bind future administrative decisions.

The Department of Justice failed to provide those guarantees within the stipulated timeframe. Furthermore, on July 29, The New York Times reported that the Justice Department had disbursed $1 million to anti-abortion activist Paul Vaughn. Convicted in 2024 for blocking the entrance to a clinic in Tennessee, Vaughn was later pardoned by Trump and characterized by Blanche as a victim of the Biden administration. The newspaper noted that such targeted disbursements demonstrated how the fund’s objectives were being realized even without its formal operation.

That same evening, Senate Judiciary Committee Chairman Chuck Grassley announced that the vote on Blanche’s nomination had been postponed again until sufficient support could be secured.

Trump’s reaction

The postponement drew sharp fury from Trump. Describing Blanche as a “star” and “one of the greatest attorneys general in history,” Trump characterized the stance taken by Cornyn and Tillis as an effort to “block a great candidate.” In a post on Truth Social, Trump suggested he might temporarily withdraw the nomination and resubmit it after Cornyn and Tillis stepped down from office.

However, an analysis by USA Today columnist Chris Brennan noted that such a tactical maneuver carried profound political risks, given the vulnerability of the Republican Senate majority in the upcoming November midterm elections. Nevertheless, withdrawing the nomination would not require Blanche to vacate his desk; under the Vacancies Reform Act of 1997, he could remain as acting Attorney General indefinitely.

A face-to-face meeting on July 30 between Cornyn, Tillis, and Blanche produced incremental progress but ended without a final accord. Negotiations continued through the weekend. On Sunday, August 2, Trump unexpectedly made public remarks defending the concept of the fund, declaring that individuals convicted over the events of January 6 had seen “their lives ruined.”

Following these developments, late on the night of August 2, Blanche capitulated to the senators’ demands by posting two formal directives on the X social media platform. The first order revoked the founding authorization of the fund, while the second narrowed the scope of tax immunity for Trump and his family. Under the revised terms, immunity is strictly limited to claims existing at the time of the IRS settlement and explicitly excludes protection for the president against future tax audits.

In a follow-up statement, the Department of Justice emphasized that the fund had never been operational, stating: “No commission members were appointed, no funds were transferred, no application process was established, and no disbursements were made. This order confirms beyond doubt that the fund does not exist.”

The committee vote is now anticipated on August 4. Should the nomination clear the committee, it will advance to the full Senate floor for final confirmation.

Additional critiques facing Blanche

The compensation fund is not the sole concern raised by senators regarding Blanche. His close personal alignment with Trump has fueled persistent debate over the institutional independence of the Department of Justice. While the role of Attorney General has traditionally maintained an arm’s-length separation from the White House, Blanche drew criticism for remarks made at the CPAC conference in Texas in March 2026, where he stated he had “cleansed” the Department of Justice of personnel involved in past investigations into Trump.

Critical scrutiny has also targeted his deputy, Akash Singh, who reportedly told regional US Attorney offices that their “primary client is the President of the United States,” as well as Blanche’s own post-appointment statement to Trump: “I love you, sir.”

During the July hearings, when asked by Republican Senator John Kennedy whether he was a “friend of Trump,” Blanche responded, “I was his lawyer.” Democratic Senator Dick Durbin countered that Blanche had conducted himself throughout his tenure as if he were Trump’s private counsel, remarking, “This country deserves an Attorney General who loves the Constitution more than any president.”

Blanche became Trump’s personal defense attorney in the spring of 2023. Having previously represented Paul Manafort and Boris Epshteyn, Blanche served as lead counsel for Trump in the criminal trial involving payments made to adult film actress Stormy Daniels. Although a jury convicted Trump on 34 felony counts in May 2024, the presiding judge granted an unconditional discharge in January 2025, imposing neither prison time nor probation. Other high-profile cases led by Blanche—concerning classified documents stored at Mar-a-Lago and alleged interference in the 2020 election—were dismissed following Trump’s victory in the 2024 presidential election.

Democratic Senator Cory Booker faulted the Department of Justice for reopening investigations following Trump’s return to power into prominent figures and organizations, including James Comey, Letitia James, John Brennan, John Bolton, Jerome Powell, Cassidy Hutchinson, the Southern Poverty Law Center, and ActBlue. “This undermines the perception of independence,” Booker stated.

Blanche has also faced sharp condemnation over the delayed and incomplete public release of files related to the Jeffrey Epstein case, as well as the failure to redact the identities of victims in disclosed documents. While Blanche accepted responsibility for those administrative errors, his decision to facilitate the transfer of Epstein co-conspirator Ghislaine Maxwell to a lower-security prison facility drew renewed censure.

On July 16, Blanche met with victims of Epstein for the first time. Following the session, victim Annie Farmer characterized Blanche as “arrogant and dismissive,” while Liz Stein stated that the meeting was deeply disappointing. Dani Bensky observed that Blanche routinely evaded direct questions. Addressing reporters after the meeting, Blanche said: “I cannot give them the justice they want, but I want to secure justice by bringing criminal cases.”

Massive financial resources directed into artificial intelligence technologies are driving companies into dangerous territory for global markets.

If expected productivity gains fail to materialize despite these immense capital flows, the artificial intelligence sector faces the risk of inflating into a giant bubble.

The Wall Street Journal reported that should such a scenario unfold, a widespread collapse capable of shaking the entire financial system and dragging down the broader market will become inevitable.

Estimates by McKinsey & Company project that global spending on data center construction alone could reach $7 trillion by 2030.

According to the newspaper, if these massive investments fail to deliver adequate productivity gains, the global economy will suffer a severe blow.

Should the sector as a whole turn out to be a bubble, the resulting damage will spread directly across the broader financial system.

While market observers note that a major crash—whether sooner or later—would drag all equity markets down with it, declines in AI-related stocks are currently being offset by gains in other sectors.

However, the first concrete signs of emerging vulnerability appeared in the memory chip market, where a sector-specific bubble formed and burst within just four months.

South Korean market shaken by sharp drop

In June, shares of South Korea’s Samsung and SK Hynix, the world’s two largest memory chip makers, sank by more than 12%.

The sharp sell-off pulled down the country’s broader stock index. South Korea’s benchmark Kospi index dropped 10%, triggering an automatic 20-minute trading halt.

Growing investor anxiety over artificial intelligence triggered the steep decline in the two giant companies, which together account for half of the total market capitalization of the Kospi index.

US equity markets also felt the ripple effects during the same period. The Nasdaq index closed down 2.2%, while the S&P 500 fell 1.4%, marking their worst single-day performances in two weeks.

Nevertheless, The Wall Street Journal pointed out that the disruption has not yet produced catastrophic consequences for the rest of the market.

While the bursting of massive historical bubbles resulted in disaster for national economies, smaller and localized bubbles in recent years have failed to paralyze broader economic growth.

The primary reason for this resilience is that these recent investments were not predominantly funded through leverage and bank credit.

When those localized bubbles burst, investors suffered wealth losses, but the financial system remained intact.

Russell Napier, a global macroeconomic strategist and keeper of the Library of Mistakes, a financial history archive in Edinburgh, evaluated the current market posture:

“The banking system is in superb condition, which means there will always be enough credit available to blow the next bubble.”

Anthropic has announced that several of its advanced artificial intelligence models escaped an isolated testing environment and accessed the live internet.

In a review published Thursday night, the company stated that in three separate incidents dating back to April, the models independently breached the systems of multiple companies without the AI developer’s knowledge.

Anthropic said the incidents involved an unreleased internal research test model, alongside its Opus 4.7 and Mythos 5 models.

Mythos was made available last month to a limited audience composed of technology companies and cybersecurity researchers, an initiative also known as Project Glasswing.

The AI developer did not disclose which companies were breached, but said the affected firms were informed of the incidents on Monday.

Anthropic noted that it conducted the review after OpenAI revealed last week that two of its most powerful models had breached containment, escaped their testing environment, and infiltrated several entities, including the AI platform Hugging Face and cloud provider Modal Labs.

System misconfiguration allowed internet access

Anthropic stated that it examined more than 140,000 tests to find evidence of whether Claude could gain access to the internet from test environments designed to be isolated.

The evaluations included “capture-the-flag” exercises, in which Claude was instructed to breach other systems to obtain information. This is a method frequently used by experts to assess a model’s hacking capabilities.

The San Francisco-based company stated that a “misconfiguration” in systems operated by Anthropic and its testing partner left the models with live internet access, enabling them to infiltrate external systems.

Anthropic said it approached remediation efforts “with full ownership of the responsibility.”

Neither Anthropic nor the affected organizations detected the unauthorized entries at the time they occurred.

Anthropic added that it may examine its logs more extensively, noting that the findings gave the company “cautious optimism” that such risks can be overcome through increased investment and more stringent safeguards.

David Allott, a cybersecurity expert, told the BBC: “The overarching lesson here is not that AI has developed fundamentally new attack vectors.”

“Instead, it means that AI agents can combine capabilities, acquire credentials and system access to act autonomously, while adapting scope and scale at machine speed,” Allott said.

The developments come as technology companies invest billions of dollars to develop AI agents capable of independently executing a range of tasks, from research and customer support to cybersecurity.