Washington, D.C.— House Judiciary Committee Chairman Bob Goodlatte (R-Va.) and Regulatory Reform, Commercial and Antitrust Law Subcommittee Chairman Tom Marino (R-Pa.) today praised the House Judiciary Committee’s approval of the Stop Settlement Slush Funds Act of 2016 (H.R. 5063) by a vote of 18-6.
Introduced by Chairman Goodlatte, this bill bars the Department of Justice (DOJ), and all other government agencies, from requiring defendants to donate money to outside groups as part of their settlement agreements with the federal government.
Need for this legislation arose after a 20-month House Judiciary Committee investigation found that DOJ had engaged in a “pattern or practice” of systematically subverting Congress’s budget authority 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.
House Judiciary Committee Chairman Bob Goodlatte (R-Va.) and Regulatory Reform, Commercial and Antitrust Law Subcommittee Chairman Tom Marino (R-Pa.) released the following statements after committee approval of the bill.
Chairman Goodlatte: “When DOJ recovers money from parties who have broken the law, those funds should be going to victims, or to the Treasury so that Congress can ensure accountability for how the funds are spent. These funds should not be funneled to the president’s pet liberal groups.
“Damages recovered by DOJ officials from settlements with major financial institutions in the wake of the 2008 financial crisis should not be going into the pockets of left-wing special interest groups, while Congress is working to help hardworking Americans recover.”
Subcommittee Chairman Marino: “Common sense and reason would suggest executive agencies should not divert funds intended for taxpayers and the U.S. Treasury to fund political agendas. This is particularly true when those funds are meant to repair damage done by illegal conduct. Yet the DOJ has been rerouting settlement money to promote leftist special interest groups rather than returning it to its rightful owners.
“Our Constitution ensures separation of powers by giving Congress power of the purse. By advancing this bill, we have exerted our constitutional right to institute meaningful oversight of the executive branch.
“Circumventing Congress and our system of checks and balances has become the new normal for this administration. But I, along with my colleagues in Congress, will continue to rein in executive overreach and preserve our constitution.”
Background:
- The Stop Settlement Slush Funds Act of 2016prohibits settlement terms that require donations to third-parties. It states explicitly that payments to provide restitution for actual harm directly caused, including harm to the environment, are not donations.
- An investigation by the House Judiciary and Financial Services Committees reveals that, in just the last two years, DOJ has used mandatory donations to direct as much as $880 million dollars to activist groups.
- These payments occur entirely outside of the Congressional appropriations and oversight process.
- The House Judiciary Committee held two hearings in February 2015 and May 2015 to question DOJ officials regarding these troubling settlement practices.
- The Committees also sent multiple oversight letters (November 2014 and May 2015) to the Attorney General seeking documents and answers.
- DOJ continues to resist the information requests, but what information has been provided confirms that activist groups which stood to gain from mandatory donation provisions were involved in placing those provisions in the settlements.
- This bill is modeled after Chairman Goodlatte’s 2015 amendment to the Commerce, Justice, Science, and Related Agencies Appropriations Act, 2016 (H.R. 2578), which passed the House by a voice vote.
- A legislative hearing on the bill was held on May 28, 2016 within the Subcommittee on Regulatory Reform, Commercial and Antitrust Law.
- The investigation is ongoing.
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