DOJ ends Holder-era ‘slush fund’ payouts to outside groups

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.

Conservatives have long fought the policy introduced under the Obama administration. Earlier this year, Republican lawmakers introduced legislation that would prohibit the Department of Justice from requiring defendants to donate money to outside groups, after concerns that the settlements bypass congressional appropriations processes.

“This bill is oversight and action. Congress must not tolerate Justice Department political appointees using settlements to funnel money to their liberal friends,” Chairman of the House Judiciary Committee Bob Goodlatte, R-Va., who introduced the bill, said in a statement. “This is also an institutional issue. Once direct victims have been compensated, deciding what to do with additional funds recovered from defendants becomes a policy question properly decided by elected representatives in Congress, not agency bureaucrats or prosecutors.”

Bank of America, for example, was required to pay nonprofit organizations as part of a record $17 billion settlement to resolve an investigation into its role in the sale of mortgage-backed securities before the 2008 financial crisis. The agreement was struck under then-Attorney General Eric Holder’s Justice Department.

The Holderite Re-distribution-Scam!

Holder greasing the wheels of socialism

My only concern is, that they still effect the punishments. The ideal situation, is that people guilty of wrongdoing would repay everyone they stole from, with interest.

The way the previous idea was originally described, was that those would be in addition to fines and other punishments, not replacements for them.

Need more specific details.

Eric Holder needs to be fired ASAP

By the way, referring to lawful penalties and fines as "slush fund" is just a bit on the fake-news, propaganda end of things. Shame on the Republicans who played that game.

I agree. More information would indeed be interesting. One of my many questions is, were those interest groups ones who had actively supported his campaign?

Boo Hoo to those who don;t like the term slush fund...was it a questionable attempt to pad the coffers of special interest groups? That would be a slush fund.

.... What matters is whether the awards were appropriate. They do not seem to be. I read the practice violated appropriations procedures and the special interests groups eventually began to compete with the actual victims for settlement money. The practice apparently had a negative impact on victim settlements. I hope Sessions digs in & makes those interest groups repay to the victims.

Lawful penalties? Were they? Why should money go to parties who are neither victims or party to the cases?

Hii

It's more Chicago strong arm, shake down style politics. It's spreading the wealth to "charities" run by political cronies. BP oil spill was a
good example.