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Stopping the special interest slush funds

September 7, 2016

Today the House passed a bill to stop the Department of Justice from funneling settlement funds away from victims and towards special interest groups.

Need for this legislation became apparent after a 20-month House Judiciary Committee investigation found that DOJ had engaged in a “pattern or practice” of systematically subverting Congress’s spending power by using settlements from financial institutions to funnel money to left-wing activist groups. This bill would end this practice and restore accountability to the appropriations process.

H.R. 5063, the “Stop Settlement Slush Funds Act of 2016”

The DOJ is systematically subverting Congress’s budget authority by requiring settling defendants to donate money to activist groups. • Mortgage settlement dollars have gone to groups such as La Raza, NeighborWorks, the National Urban League, and other left-leaning community organizations.

  • The House Judiciary Committee’s investigation has discovered about half-a-billion dollars has been allocated in just the last 20 months.
  • Settlements from major financial institutions (JP Morgan Chase, Citigroup, Goldman Sachs and Bank of America) are not going to deserving victims, but to groups that align with the Obama Administration’s policies.
  • In some cases, DOJ is using mandatory donations to restore funding that Congress specifically cut.
  • These payments occur entirely outside of the Congressional appropriations and oversight processes.
  • A twenty-month long House Judiciary Committee investigation revealed that activist groups, which stood to gain from mandatory donation provisions, were involved in placing those provisions in the settlements.

The “Stop Settlements Slush Funds Act” holds the Executive Branch accountable for its practices, and ensures the money recovered by the government gets back in the hands of the American people.

  • The bill ensures that settlement money goes either directly to victims or to the Treasury for elected representatives to decide how it is spent.
  • This action is about preserving Congress’s appropriations authority.
  • Additional language was proposed to the 2016 omnibus legislation, but was pulled during the eleventh hour of negotiations.
  • A similar provision was also passed as an amendment to the 2016 CJS Approps Bill (H.R. 2578).
  • The House Judiciary Committee will continue its investigation, and use its power of the purse to check the DOJ’s practices on mortgage settlements.

It is critical that we continue to act to check the DOJ’s practices.

  • DOJ is ignoring congress’s concerns -- increasing the use of third-party payments, even as we object.
  • The purpose of DOJ enforcement actions is punishment, and redress to actual victims.
  • Carrying that concept to communities at large or activist community groups, however worthy, is a matter for the legislative branch and is not to be conducted at the unilateral discretion of the Executive.