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Grassley Lauds End to Settlement Agreements Requiring Payments to Parties Unrelated to Dispute

Obama Admin. settlements ordered payments to third parties without oversight or congressional approval

WASHINGTON – Senate Judiciary Committee Chairman Chuck Grassley today made the following statement regarding Attorney General Jeff Sessions’ announcement to end a practice by the Obama Administration that required portions of some settlement agreements to be paid to hand-picked third parties not involved in the dispute.
“Today’s decision by the Attorney General to end the Justice Department’s use of settlement agreements to fund politically favored organizations is a win for the victims in such disputes and for checks and balances in government. Under the Constitution, Congress holds the purse strings. The laws Congress passes dictate how funds collected by the government should be used. Often, it’s to support the victims in such disputes. But under the Obama administration, the Justice Department disregarded this separation of powers by repeatedly directing defendants to ‘donate’ hundreds of millions of dollars to the administration’s friends and allies, including those that Congress took deliberate steps to defund. These practices usurped Congress’s spending authority and opened wide the door for misuse of government funds—all without any oversight mechanisms.
“Since 2010, I’ve been working to shine a light on these misdeeds and to get answers from the Department. Today’s announcement is welcomed news for those of us who respect the rule of law and demand a more accountable government.”
Grassley has expressed concern about the Justice Department’s past practice of requiring payments to third party organizations not involved in the underlying lawsuit as a condition of reaching a settlement agreement. Such agreements funneled money from penalties to non-governmental organizations that were selected by the Justice Department without any oversight mechanism. These recoveries should be either sent to the U.S. Treasury’s General Fund, where they are subject to appropriate oversight, or dispersed pursuant to existing statutory obligations, such as providing for crime victim restitution.