Attorney General Jeff Sessions is pulling the plug on a Justice Department policy instituted during the Obama years that effectively forced corporations to settle lawsuits by, in part, donating to leftist political organizations, a practice many critics considered a liberal slush fund.
“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,” said Sessions in a statement.
Former Justice Department official Hans von Spakovsky is now with the Heritage Foundation. He is also co-author of “Obama’s Enforcer: Eric Holder’s Justice Department.” He calls the former policy nothing more than the government stealing from the American people.
“It’s pretty clear the Obama administration figured out a way to rob the public and help their political allies,” said von Spakovsky, who adds that we’re talking about a lot of money going to Obama’s political friends.
“We’re not talking about chump change here. My understanding is in the last 30 months before the new administration came in, the Justice Department had funneled about a billion dollars to outside third party groups,” said von Spakovsky.
And who exactly received the money?
“Environmental groups, civil rights groups, ACORN-type groups, that’s who was getting this money,” said von Spakovsky.
He then explained how the process worked.
“When the Justice Department sued defendants such as Volkswagen or the Bank of America claiming they had violated federal law, they entered into settlement agreements with those defendants, in which the defendants agreed to pay a large sum of money to end the litigation,” said von Spakovsky.
“The Obama Justice Department would come in and say, ‘We want you to give a portion of this money to such-and-such organization.’ These were not organizations that had anything to do with the lawsuit. They weren’t parties to the lawsuit. They didn’t have members who were injured by whatever the misbehavior was of the company,” said von Spakovsky.
“These are simply third-party, mostly advocacy organizations who were big political allies of the administration. That, frankly, is really stealing money that is due to the American taxpayer and funneling it to political friends of the government,” added von Spakovsky.
He says this wasn’t just unethical but illegal.
“I actually think it was illegal. There is a federal law called the Miscellaneous Receipts Act, which requires DOJ lawyers to deposit settlement checks into the U.S. Treasury Department. That was not happening, so I think it was illegal. Thanks goodness Attorney General Jeff Sessions has said this is not going to happen anymore,” said von Spakovsky.
However, Sessions appears content to end the program. Von Spakovsky suspects there will be no legal danger for anyone who created or operated this program.
“It sounds like he’s just going to end the practice and move on. There doesn’t appear to be an effort by the Justice Department to apply this [retroactively], in other words to go backwards and go to some of these settlements of lawsuits, open them, and try to get the money back. I don’t think they’re going to do that,” said von Spakovsky.