The Trump administration announced Monday the creation of a $1.8 billion fund to compensate those who claim they were unfairly arrested after attempting to violently install the president for a second term, forging a pipeline to funnel taxpayer money directly to his allies who smashed their way through the Capitol.

The highly unusual “thanks for trying” fund was denounced by critics as a slush fund and as a brazen misuse of a once-independent Justice Department to carry out the president’s personal and political agendas. The announcement provided few details of how the disbursement would work or who would be eligible. But the arrangement raised the possibility that American taxpayers might end up writing checks to those prosecuted for beating Capitol Police officers with flagpoles on Jan. 6, 2021.

“This is one of the single most corrupt acts in American history,” said Donald K. Sherman, president of Citizens for Responsibility and Ethics in Washington.

The fund was announced shortly after Mr. Trump withdrew his lawsuit against the Internal Revenue Service demanding at least $10 billion in damages. Administration officials said Mr. Trump, his sons and family business would receive an apology but no direct payout from the new fund.

“The machinery of government should never be used to prosecute our friends, and it is this department’s intention to make right the wrongs that were previously done by holding them accountable while ensuring this never happens again,” Todd Blanche, the acting attorney general, said in a statement. Mr. Blanche, who as Mr. Trump’s personal lawyer defended him during multiple prosecutions, added that the fund would cover legal fees, lost wages, and “other things they had to suffer” while trying to overturn the election.

The cash value of the fund was set at $1.776 billion, an apparent nod to the nation’s founding. A group of five people selected by Mr. Blanche will oversee operations, though Mr. Trump can fire its members at will. It will stop processing claims on Dec. 15, 2028, weeks before Mr. Trump leaves office.

Potential recipients were thrilled. Mark McCloskey, best known for brandishing an AR-15 at racial justice protesters, said he expected more Jan. 6 rioters to come forward asking for payouts. “I’m really excited to see what they come up with,” he said.

Stacey Young, founder of Justice Connection, said the fund fit a larger pattern of corruption that is eroding the D.O.J.’s integrity and Americans’ faith in the rule of law.