Back in March, I wrote about the Department of Justice’s Slush Fund.
The Working Group was created within the Justice Department by Eric Holder in 2012 as a means of prosecution and punishment for those perceived to be responsible for the financial crisis of 2008.
At its formation Mr. Holder made the following statement:
Over the past three years, we have been aggressively investigating the causes of the financial crisis. And we have learned that much of the conduct that led to the crisis was unethical, and, in many instances, extremely reckless. We also have learned that behavior that is unethical or reckless may not necessarily be criminal. When we find evidence of criminal wrongdoing, we bring criminal prosecutions. When we don’t, we endeavor to use other tools available to us.
With the full weight of the Department of Justice behind it, the Working Group reached multi-billion settlements with virtually every major bank in America. In total, $110 billion was collected in fines.
According to a Congressional Committee Report – Stop Settlement Slush Funds Act of 2016:
A year-long Committee investigation has revealed that the DOJ is pushing and even requiring settling defendants to donate money to non-victim third-parties. Donations can earn up to double credit against defendants’ overall payment obligations, while credit for direct relief to consumers is merely dollar-for-dollar. What is more, documents show that groups that stood to gain from these mandatory donations lobbied DOJ to include them in settlements. DOJ has funneled third-party groups as much as $880 million dollars in just the last 2 years. These payments occur entirely outside of the Congressional appropriations and grant oversight process. What is worse, in some cases, DOJ-mandated donations restore funding that Congress specifically cut.
Committee Chairman Bob Goodlatte and Subcommittee Chairman Tom Marino both accused the Justice Department of using “settlements to funnel money to activist groups instead of consumers.”
The Committee also noted the Justice Department’s stonewalling tactics:
DOJ is ignoring Congress’ concerns–increasing the use of third-party payments, even as Congress objects. Just last month, DOJ included such terms in its settlement with Goldman Sachs.
Committee Chair Goodlatte sent a letter to Attorney General Loretta Lynch. In it he noted several items:
A Judiciary Committee investigation has revealed that, in just the last two years, DOJ has directed nearly $1 billion to activist groups, entirely outside of Congress’s spending and oversight authority.
DOJ has used the [$2 billion Volkswagen] settlement to fund the [Obama’s] Administration’s electric vehicle initiative after Congress has twice refused to pay for it.
The Judgement Fund’s use to pay the interest in a recent settlement with Iran has also raised concerns.
The Wall Street Journal provided a listing of some of the activist groups. They include:
The National Council of La Raza, The National Urban League, The National Community Reinvestment Coalition and NeighborWorks America (which awards grants to left-leaning community organization groups, and has been compared with Acorn).
These groups do not provide assistance to homeowners hurt in the financial crisis. Nor are they non-partisan groups.
Loretta Lynch and DOJ were able to successfully stonewall Congress during the Obama Administration.
On June 7, 2017, Jeff Sessions formally stopped the practice of Third Party Settlements.
On October 25, 2017, the House of Representatives passed the Stop Settlement Slush Funds Act of 2017 – permanently barring federal agencies from requiring defendants to donate money to outside groups as part of settlement agreements.
Importantly, the bill requires that settlement money goes either directly to victims or to the Treasury.
The bill passed along party lines with most Democrat House members opposed. It now goes before the Senate.
An Obama DOJ Official, Geoffrey Graber, testified to Congress that the DOJ did not select certain groups as recipients of Third Party Settlements, stating:
“The department did not want to be in the business of picking and choosing which organization may or may not receive any funding under the agreement.”
Emails obtained by the House Judiciary Committee appear to contradict Graber’s testimony.
Committee Chairman Bob Goodlatte made the following comment on Tuesday:
It is not every day in congressional investigations that we find a smoking gun. Here, we have it. Internal DOJ documents show that contrary to Graber’s sworn testimony, the donation provisions were structured to aid the Obama administration’s political friends and exclude conservative groups.
Some comments from the obtained emails:
“We keep tinkering with the settlement agreement and I want to make sure we are doing it right. Can you explain to Tony [West – Associate Attorney General] the best way to allocate some money to an organization of our choosing?” – Principal Deputy Associate Attorney General Elizabeth Taylor
“Concerns include: a) not allowing Citi to pick a statewide intermediary like the Pacific Legal Foundation (does conservative property-rights legal services). We are more likely to get the right result from a state bar association affiliated entity.” – DOJ Official – Name Redacted
West, “by all accounts was the one person most responsible” for the Interest on Lawyers Trust Accounts group receiving money. – Charles R. Dunlap, Executive Director of the Indiana Bar
“Now that it has been more than 24 hours for us all to try and digest the Bank of America settlement, I would like to discuss ways we might want to recognize and show appreciation for the Department of Justice and specifically Associate Attorney General Tony West.” – Charles R. Dunlap, Executive Director of the Indiana Bar
“Frankly, I would be willing to have us build a statue [of West] and then we could bow down to this statue each day after we get our $200,000.” – Bob LeClair – responding to Dunlap
Settlement provisions require the banks to “make donations to categories of entities we have specified (as opposed to what the bank might normally choose to donate to).” – DOJ Official – Name Redacted
The DOJ should begin “negotiating with JP Morgan Chase to consider including in any settlement significant equity capital or grant funds to promote and capitalize a Prince William County Restoration Fund. JP Morgan Chase could be given enhanced credit towards its resettlement requirements for this type of grant or investment.” – Unknown Employee at The Leadership Conference on Civil And Human Rights
Every Settlement Dollar that made its way to one of these Leftist Special Interest Groups was a Settlement Dollar diverted away from actual victims or taxpayers.
Donations can earn up to double credit against defendants’ overall payment obligations, while credit for direct relief to consumers is merely dollar-for-dollar. What is more, documents show that groups that stood to gain from these mandatory donations lobbied DOJ to include them in settlements. – Congressional Committee Report
Under Eric Holder, the Department of Justice was taking money that belonged to actual victims or taxpayers and diverting it to Left-wing causes of their choosing.
This was theft for the purpose of making political payments.
This shameful practice – one the Obama DOJ lied about – has thankfully come to an end.
older post The Clinton Dossier Disclosures