President Joe Biden‘s team said the new administration will ask the Attorney General to review an end-of-Trump-era rule that prohibits prosecutors from directing violators to pay restitution to third-party organizations, such as liberal interest groups, rather than to victims or the government through settlement agreements with companies that violate the law.
The Biden team on Wednesday (Dec. 20) issued a “list of non-exclusive agency actions to be reviewed by relevant agency heads” under the executive order “Protecting Public health and the Environment and Restoring Science to Address the Climate Crisis. The team said the Justice Department may soon be led by Biden’s nominee, federal appeals court Judge Merrick Garland, who will be directed to review the Slush Fund ban.
The ban, which was issued June 7, 2017, by former Attorney General Jeff Sessions to 94 prosecutors across the U.S., prohibits settlement payments to nongovernmental third parties, and states that U.S. businesses that violated the statute, which used to allow them to pay settlements to third-party organizations other than victims and interested parties, will now be terminated, and that these settlements should be donated to victims or to the Treasury Department to ensure that the amounts are used only to compensate victims, repair harm and punish and deter illegal conduct.
When the federal government reaches a settlement with a company that engaged in wrongdoing, any compensation should go first to the victims and then to the American people, not to fund third-party special interest groups, or any political friends of those in power,” Sessions said in the statement. …… Unfortunately, in recent years, the Justice Department has sometimes required or encouraged defendants to pay restitution to third parties through settlement agreements.”
However, the rule allows limited exceptions for lawful payments or loans to victims for compensation or restitution, such as when a trusted third party is required to deliver funds in light of concerns about foreign corruption, fees for legal or other professional services related to a case, or other payments “expressly authorized” by the relevant statute or regulation.
Sessions issued the directive in the DOJ manual in early 2018, and the final version of the rule goes into effect in December 2020. Biden’s executive order appears to be designed to review and possibly modify it.
The practice of “bribe funds” actually came from an Obama administration regulation that Republicans have opposed in the past as politically motivated bribery, but the Stop Settlement of Loot Act of 2017, which they supported, was not voted into law, but was banned by Sessions’ directive.
The Justice Department had reached a multibillion-dollar plea deal with Citigroup and Bank of America in 2014, as part of which the banks were directed to donate tens of millions of dollars to housing-related charities and other nonprofits, some of which had left-wing leanings and were not even victims of the case.
Eligible charities that benefited included groups such as Habitat for Humanity and Catholic Charities, but leftist groups such as the National Urban League and the National Council of La Raza also received funds, according to the HUD list.
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