DOJ settlements should not “bankroll third-party special interest groups or the political friends of whoever is in power”
Under Eric Holder, the DOJ established a scheme by which the Executive could bypass Congress’ power of the purse and funnel money to Obama’s political allies. Companies targeted by the DOJ would agree to settlements, and part of the financial settlement was then ordered to be paid to left-wing interest groups such as La Raza. Attorney General Jeff Sessions has a put a stop to this “slush fund.”
Writing in 2015, the Wall Street Journal explained the slush fund scheme.
Republicans talk often about using the “power of the purse” to rein in a lawless Obama administration. If they mean it, they ought to use their year-end spending bill to stop a textbook case of outrageous executive overreach.
This scandal comes courtesy of the Justice Department, which for 16 months has engaged in a scheme to undermine Congress’s spending authority by independently transferring dollars to President Obama’s political allies. The department is in the process of funneling more than half-a-billion dollars to liberal activist groups, at least some of which will actively support Democrats in the coming election.
It works likes this: The Justice Department prosecutes cases against supposed corporate bad actors. Those companies agree to settlements that include financial penalties. Then Justice mandates that at least some of that penalty money be paid in the form of “donations” to nonprofits that supposedly aid consumers and bolster neighborhoods.
The Justice Department maintains a list of government-approved nonprofit beneficiaries. And surprise, surprise: Many of them are liberal activist groups. The National Council of La Raza. The National Urban League. The National Community Reinvestment Coalition. NeighborWorks America (which awards grants to left-leaning community organization groups, and has been compared with Acorn).
Former Arkansas Governor Mike Huckabee stated that the slush fund scheme was so egregious that “someone should go to jail.”
Sessions, like many Congressional Republicans, was outraged by this end-run around Congress, and this week, he announced that the practice would stop.
The Justice Department announced Wednesday it will no longer allow prosecutors to strike settlement agreements with big companies directing them to make payouts to outside groups, ending an Obama-era practice that Republicans decried as a “slush fund” that padded the accounts of liberal interest groups.
In a memo sent to 94 U.S. attorneys’ offices early Wednesday, Attorney General Jeff Sessions said he would end the practice that allowed companies to meet settlement burdens by giving money to groups that were neither victims nor parties to the case.
Sessions said the money should, instead, go to the Treasury Department or victims.
“When the federal government settles a case against a corporate wrongdoer, any settlement funds should go first to the victims and then to the American people—not to bankroll third-party special interest groups or the political friends of whoever is in power,” Sessions said in a statement.
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