Defunding the Left: The Department of Justice “Settlement Slush Fund”

FedUp PAC StaffDefunding the Left:  The Department of Justice “Settlement Slush Fund”

The Obama administration took second place to no one when it came to shamelessly abusing power to help their friends and harass their enemies. While conservative groups were suffering persecution by the IRS, liberals were being showered with cash.

FedUp PAC has reported on the Obama administration’s funding of various pro-Obama non-profit organizations, sending them millions of dollars of taxpayer funds. Some examples are the Urban Institute ($269 million over eight years), the World Wildlife Fund ($191 million), the National Council of La Raza ($28 million) and the Service Employees International Union (SEIU) ($5 million).

However, the Obama administration was even more creative in discovering ways to channel money to their friends. They found a way to bypass the U.S. Treasury, depriving Congress of any opportunity to use its constitutional “power of the purse” to cut off the funding. Furthermore, some of this money went to groups that are now helping organize protests against President Trump and conservative members of Congress.

This subsidy for the Left was arranged by having Justice Department lawyers negotiate settlements in which the terms required the defendants to make large donations to specified pro-Obama “charities”. There was big money involved in these settlements. A July 2016 report by the House Judiciary Committee documented nearly $900 million for this slush fund during just the previous two years.

The Department of Justice has actually given defendants a strong incentive to make these “donations”, allowing them to reduce the settlement amount by two dollars for every dollar of such donations.

No one is likely to be surprised that Obama’s Justice Department chose to ignore guidance in the U.S. Attorney’s Manual which declares that settlements should not require donations to any organization unless it is a “victim” or is “providing services to redress the harm” done by the defendant. The Manual specifically warns that donations beyond those limits “can create actual or perceived conflicts of interest and/or other ethical issues.”

It also raises serious constitutional issues regarding the separation of powers. The Constitution gives Congress, and only Congress, the authority to appropriate US government funds for expenditure. Yet the Justice Department sometimes used these settlements to funnel money to organizations whose funding had been reduced by Congress.

The House of Representatives tried to end this practice last year, passing the “Stop Settlement Slush Funds Act” (HR 5063) on an almost party-line vote. However, the bill never even had a hearing in the Senate.

It has been reintroduced in the 115th Congress by Rep. Bob Goodlatte, Chairman of the House Judiciary Committee, as HR 732 and by Sen. James Lankford as S. 333. Passage of this legislation is the only way to make sure that a future liberal president cannot once again resort to this tactic.