WASHINGTON — In advance of the Biden administration’s decision to finalize a rule that would revive the Obama-era policy of directing corporate settlement funds to third-party organizations, U.S. Senator Tommy Tuberville (R-AL) and U.S. Representative Lance Gooden (R-TX-05) are reintroducing their Stop Settlement Slush Funds Act. The bill would prohibit the Department of Justice (DOJ) from allowing defendants to enter quid-pro-quo agreements that entail donations to left-wing entities in exchange for reduced fines and tax deductions. This legislation ensures settlement funds go only to the victims, injured parties in the dispute, or the Treasury.
“The practice of funneling settlement dollars to political activists is an unacceptable abuse of the system,” said Senator Tuberville. “If money is owed following a settlement agreement, every cent of that payout should go to those directly impacted by the defendants, or back to the Treasury. Public servants should not be allowed to use their influence to line the pockets of individuals who share the political views of the current administration.”
“Directing legal settlements to third-party groups is nothing short of legal extortion to fund the Biden Administration’s partisan agenda,” said Representative Gooden. “Congress can no longer allow the Executive Branch to circumvent our Constitutional power of the purse to fund their activist pet projects and must pass my legislation to end this corrupt practice.”
The Stop Settlement Slush Funds Act is endorsed by theNational Taxpayers Union, Americans for Tax Reform, FreedomWorks, and Americans for Prosperity.
“For too long the Department of Justice has been misallocating settlement funds from civil suits to provide cash injections to political allies,” said Grover Norquist, President of Americans for Tax Reform. “This gross politicization of a government agency should be put to a stop immediately. I am proud to support Rep. Gooden’s bill to codify protections against the DOJ or any government official abusing their power to benefit special interest groups.”
“The Stop Settlement Slush Funds Act would ensure that settlement dollars go to victims’ funds or to the general fund of the Treasury to be appropriated by Congress, which, as Article I of the Constitution requires, holds the power of the purse over funds spent by the federal government,” said Adam Brandon, President, FreedomWorks.“It’s critical that Congress reins in the executive branch and assert its Article I powers, the Stop Settlement Slush Funds Act is a crucial part of this effort.”
“NTU supports the Stop Settlement Slush Funds Act, and applauds Congressman Gooden and Senator Tuberville for working together to protect taxpayers,” said Alex Milliken, Policy and Government Affairs Manager at the National Taxpayers Union. “The practice of diverting billions of settlement dollars out of the hands of victims and toward third party groups is a dubious practice. Congress should act quickly to put a stop to this agency behavior and prevent the misuse of resources to promote partisan agendas.”
The Stop Settlement Slush Funds Act would prohibit settling parties in a federal dispute from reducing their punishments by making “donations” to outside organizations. This bill would end the executive overreach of picking special interest groups to benefit from a settlement. For example, under President Obama’s Department of Justice (DOJ), settling parties were forced to pay a portion of their settlement obligations, under the guise of “donations,” to outside groups of the Department’s choosing that overwhelmingly pushed a partisan agenda. This practice turned federal settlements into liberal slush funds. This practice was halted under President Trump’s Department of Justice, but without legislative action, the Biden DOJ is expected to finalize a rule that allows the practice to continue in order to bolster a progressive policy agenda.
Last summer, Senator Tuberville and Representative Gooden led a bicameral letter to Attorney General Merrick Garland stating opposition to the DOJ’s return to the Obama-era practice of directing legal settlements to partisan, non-victim organizations. The letter was signed by dozens of members of Congress.
Original cosponsors in the U.S. Senate include Senators Thom Tillis (R-NC), Tom Cotton (R-AR), Rick Scott (R-FL), Ron Johnson (R-WI), Cynthia Lummis (R-WY), and Ted Budd (R-NC).
Original cosponsors in the U.S. House of Representatives include Representatives Scott DesJarlais (R-TN-04), Tom Tiffany (R-WI-07), John Moolenaar (R-MI-02), Blaine Luetkemeyer (R-MO-03), Scott Perry (R-PA-10), Darrell Issa (R-CA-48), Randy Weber (R-TX-14), Andy Biggs (R-AZ-05), Claudia Tenney (R-NY-24), Jake Ellzey (R-TX-06), Gary Palmer (R-AL-06), and Ben Cline (R-VA-06).