Attorney General Jeff Sessions has ended an Obama-era program allowing prosecutors to force companies to make payouts to political groups as part of settlement agreements, a program lambasted by Republicans as a slush fund for far-left groups.
In a memo addressed to 94 United States Attorneys’ offices, Sessions indicated he was ending the practice allowing companies to meet the terms of settlement agreements by donating money to organizations that were neither victims nor parties to the case, arguing the money should be donated to the victims in the case or the U.S. Treasury instead.
“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.
“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,” he 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.”
Judicial Watch president Tom Fitton argued the program, first revealed through an investigation by the House Judiciary Committee, amounted to politically-motivated extortion of businesses by the federal government.
“Advocates for big government and progressive power are using the Justice Department to extort money from corporations,” Fitton said during an interview on Fox News. “It’s a shakedown. It’s corrupt, pure and simple.”
Bank of America was ordered to pay numerous nonprofit organizations as part of a $17 billion settlement reached with the Justice Department under then-Attorney General Eric Holder to resolve an investigation into its role in the 2008 financial crisis.
Among the left-wing organizations that received money from businesses through settlement agreements reached with the DOJ included the National Council of La Raza, the National Urban League, and the National Community Reinvestment Coalition.