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. attorney’s 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.
“Unfortunately, in recent years the Department of Justice has sometimes requires or encouraged defendants to make these payments to third parties as a condition of settlement,” Sessions added. “With this directive, we are ending this practice and ensuring that settlement funds are only used to compensate victims, redress harm, and punish and deter unlawful conduct.”
Officials told Fox News the third-party settlement changes were an issue of “good governance.”
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 receiving groups included organizations that provide housing counseling, foreclosure prevention and community redevelopment assistance.
Gibson Guitar Corp. also had to contribute to the National Fish and Wildlife Foundation to resolve a criminal investigation into allegations it illegally imported exotic wood.
It's hard to say what kind of cases could be impacted by the change and how. The new policy allows only for restitution to victims or payment that "directly remedies the harm that is sought to be addressed."
http://www.foxnews.com/politics/201...era-slush-fund-payouts-to-outside-groups.html
In a memo sent to 94 U.S. attorney’s 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.
“Unfortunately, in recent years the Department of Justice has sometimes requires or encouraged defendants to make these payments to third parties as a condition of settlement,” Sessions added. “With this directive, we are ending this practice and ensuring that settlement funds are only used to compensate victims, redress harm, and punish and deter unlawful conduct.”
Officials told Fox News the third-party settlement changes were an issue of “good governance.”
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 receiving groups included organizations that provide housing counseling, foreclosure prevention and community redevelopment assistance.
Gibson Guitar Corp. also had to contribute to the National Fish and Wildlife Foundation to resolve a criminal investigation into allegations it illegally imported exotic wood.
It's hard to say what kind of cases could be impacted by the change and how. The new policy allows only for restitution to victims or payment that "directly remedies the harm that is sought to be addressed."
http://www.foxnews.com/politics/201...era-slush-fund-payouts-to-outside-groups.html
