Image 01 Image 03

Jeff Sessions Ends Holder-era Slush Fund Designed to Funnel Money to Obama Allies

Jeff Sessions Ends Holder-era Slush Fund Designed to Funnel Money to Obama Allies

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.

Fox News reports:

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.


Donations tax deductible
to the full extent allowed by law.


stevewhitemd | June 9, 2017 at 1:26 pm

For all the bloviating in the press, the Dems, the GOPe and the never-trumpers, Mr. Trump and his cabinet sure do seem to be getting a lot done.

This slush fund was one of the skankier things the Obama administration did — funneling LOTS of money to their community activist allies. Good for Mr. Sessions to turn it off.

    “This slush fund was one of the skankier things the Obama administration did…”

    Totally agree, and there was a whole lot of skanky stuff going on there.

    Merlin in reply to stevewhitemd. | June 9, 2017 at 2:56 pm

    I’d be willing to bet some Republicans were hoping to inherit that slush fund for their own use.

    Cleetus in reply to stevewhitemd. | June 10, 2017 at 5:27 am

    Isn’t it amazing how the longer Trump stays in office the more corrupt actions we discover about the Obama administration. Widespread spying on Americans and Obama’s political enemies, more information about Fast and furious, Loretta Lynch pressuring the FBi to alter their description of the Clinton investigation in an effort to alter the election, and now this are only the latest examples that have been added to the litany of those we knew about previously. Imagine if Trump had lost the election and these examples of corruption had never been discovered. Trump is no longer draining the swamp; he is cleaning out the sewer.
    However, I still await the criminal suits and people going to jail for until people start getting jailed. nothing will change.

Humphrey's Executor | June 9, 2017 at 1:26 pm

Is the the same slush fund from which Obama paid $1B to the Iranians (separate from the $400million shrink wrapped and palatalized cash paid on the tarmac for the hostages.) I want to know more please. I wrote my Senator about it and heard back crickets.

    I believe that was assets that had been frozen decades ago (Beirut barracks bombing, etc).

      Humphrey's Executor in reply to Paul. | June 9, 2017 at 3:54 pm

      Yes, one chunk of money was the money that belonged to Iran and was for the purchase of planes. But the the Shah fell and we froze it. But the other chunk, actually the larger one, was to settle the claim for interest on the frozen funds. Where did Obama get the OK to write a check for $1B of taxpayers money to settle a disputed claim for interest? There has to be an appropriation, that’s in the Constitution.

    No, this is not an actual slush fund as such; the money never comes in to the treasury in the first place. It’s a virtual slush fund; prosecutors simply tell extortion victims defendants to pay the money directly to the desired org.

    It couldn’t have been used to pay Iran, because there’d be no way to mask such a payment as a legitimate use of a criminal settlement.

    As for where the interest money came from, presumably it came from the same permanent appropriation for servicing the national debt that all other federal interest comes from. That isn’t subject to annual appropriation, which is why it goes on even during shutdowns. (The kerfuffle a few wasn’t about appropriations, but about the debt limit.)

      Liz in reply to Milhouse. | June 10, 2017 at 1:48 am

      It would be interesting to know the tax treatment. I don’t know,but it seems that a fine is non allowed but a “contribution” is allowed,then it’s even worse!

      So,a major fine could be settled for a smaller amount and treated as a charitable contribution.

      The tax payer definitely got short changed.

        Milhouse in reply to Liz. | June 11, 2017 at 2:44 am

        You’re assuming these people were justly prosecuted, and the money they paid justly belongs to the public. I assume the opposite, that they should never have been prosecuted in the first place, and the money is the proceeds of extortion.

buckeyeminuteman | June 9, 2017 at 1:29 pm

I would absolutely agree with huckabee that people should go to jail. This is banana republic absurdity.

I will ask a simple question : please tell me of any other individual in the history of the U S that WALKED from FELONIES like hillary – then tell me of any other admin that had as many individuals walk from felonies ?

PrincetonAl | June 9, 2017 at 2:18 pm

Pointless win.

This is a policy change that the next Democratic AG can re-institute. So we disarm and agree not to do it and don’t arm our side. Which is OK since it’s a crooked practice.

But Dems will just re-institute it when their turn comes. Because we aren’t doing this via our useless legislature that doesn’t pass real reforms, this is like Trump being successful via EO. It has an expiration date.

We need to build a deeper moat around our successes.

    tom swift in reply to PrincetonAl. | June 9, 2017 at 2:48 pm

    Publicizing—in no uncertain terms—the Obama administration’s chicanery is no bad thing.

      PrincetonAl in reply to tom swift. | June 9, 2017 at 8:13 pm

      Fair point. Ephemeral maybe is the better word than pointless. It’s a victory against corruption that expires the day the corrupt take office.

      Saying and doing better than our foes counts for something. I am hungry for much more. We could drown in noble EOs and the like on the way to totalitarianism.

      Let’s see if our elected Rs have the guts to push these things through and make real change or they all just die in the Senate.

    I read somewhere else that they are looking to get Congress to pass a law so that the next (Dem) AG can’t do what you said.

      Paul in reply to BKC. | June 9, 2017 at 3:15 pm

      If they do so I hope that the law includes provisions for personal claw-backs. Because Obama showed us that the Dims are happy to simply ignore the law and do what they want. If they do so, INDIVIDUALS involved should spend time in prison and be bankrupted and have the cushy federal pensions taken away from them.

      PrincetonAl in reply to Liz. | June 9, 2017 at 8:25 pm

      Very nice. This is where Sessions background as a Senator is helpful too.

      I will call. And write. Thanks for pointing this out, Helpful!

      This is not a small issue for 2 reasons.

      1- This is funding for political war. When institutions dedicated to destroying our liberties and our republican government receive billions in funding, be it the successor to ACORN or the SEIU, it’s the money that funds the figurative noose for our own necks. And it let’s them dedicate an army of foot soldiers and lobbyists and campaign donations while we fight while having to hold a real job.

      This is as big a funding issue as right-to-work is for the left.

      2- Preet Bharara has a reputation as some clean anti-corrupt US attorney on the left for going after corrupt politicians of all stripes.

      The reality is he is working the angles same as everyone else by sending no one from Wall Street to jail while delivering big settlements to fund his side and creating a halo and image of do-goodery.

      If you thought Bharara was a good prosecutor because he went after corrupt Democrats too, he fooled you. Like 3-card Monte he got the prize – billions – while distracting you.

      And that’s why the imagery of “we are cleaner” sometimes seems pointless. Because the dirtiest players in this rat game have a clean image for the Democrats. (Had many R friends tell me what a good guy he was. Nope.)

        I’ve signed up for Sen Lankford’s and Rep Russell’s newsletters to track what they are doing. Go to your reps .gov website and sign-up for them. It keeps you informed.

        I also write down issues,come up with talking points and call in to the DC offices. Be pleasant when you talk to the office staff. An organized list is good.

Eric Holder is one of the more evil men that has ever served as AG. He knows what he has done to try and destroy America and he is completely unapologetic and remorseless.

Treat the Democrats like the Taliban…cut off their funding.

theduchessofkitty | June 9, 2017 at 4:44 pm


Now, let’s get rid of that abominable Johnson Amendment…

I’ve heard the EPA doing similar stuff. Only EPA also funds groups to use over regulations. Then a court order implements regulations the EPA couldn’t get through the normal process.

    Liz in reply to Milwaukee. | June 9, 2017 at 7:32 pm

    I have heard this about the EPA – if they were having a problem with a regulation getting through, then they would encourage a group filing a lawsuit and then the EPA would cave for a settlement. Of course, the funds went to other green organizations.

    But the EPA refuses to make good on their own eco-damage like the Animas River spill.

    But with Pruitt as EPA Administrator, I think he would stop this very fast.

      randian in reply to Liz. | June 9, 2017 at 11:34 pm

      Even if Pruitt does stop it, the damage has been done. The existing settlements have to be honored no matter how corrupt their genesis.

        Milhouse in reply to randian. | June 11, 2017 at 2:47 am

        They shouldn’t be. Pruitt should inform the relevant courts that the EPA no longer consents to these decrees, does not recognize them as binding, and will no longer honor them.

Humphrey's Executor | June 9, 2017 at 6:02 pm

If I were Trump’s attorney I would be dead from ulcers.

Should have used that money to pay for the wall

If we can’t reclaim these funds we need to do something similar to are our side. How about the victims of Tyrant Obama the Liar’s IRS sue for 100’s of billions and Trump settled these claims paying 10’s of billions?

There should have been a big press conference about this, then hearings in Congress.

But then, we still have those two rino a-holes ryan and granny mcconnell to get rid of.

In each case, where the third-party special interest groups got funds from the settlement, there was a judge that had to approve it.
These sick, demented judges must be driven from the system.