Department of Justice Implements Senator Lankford’s Slush Fund Reform

WASHINGTON, DC – The Department of Justice today issued a memo that would implement a “slush fund” reform that Senator James Lankford (R-OK) has advocated for several years. This morning, Attorney General Jeff Sessions issued an executive memorandum to prohibit Department of Justice (DOJ) officials and all United States Attorneys Offices from awarding a litigation settlement agreement as a donation to preferred third-party nonprofits or persons selected by federal employees.

This policy mirrors Senator Lankford’s Stop Settlement Slush Fund Act (S.333), which has been introduced during the last two sessions of Congress. House Judiciary Chairman Bob Goodlatte introduced the House companion bill. Today’s DOJ executive action is intended to prevent taxpayer-funded settlements from being awarded to partisan special interest groups. In 2015, The Wall Street Journal reported that the DOJ, under the Obama administration, kept a list of approved nonprofits that benefit from settlements. In 2011, the DOJ directed $30 million from a banking settlement to left-leaning nonprofit groups, like the National Community Reinvestment Coalition and NeighborWorks America.

“No President or agency should be able to force citizens and businesses to pay settlements that benefit outside special interest groups,” said Lankford. “Previous Department of Justice leadership exerted its authority to require settling defendants to donate money to third parties as a way to avoid Congressional spending authority and funnel money to pet projects and favorite groups. Congress should direct spending authority, not federal bureaucrats. This executive action will provide more transparency and stop the Department of Justice from abusing its authority. This is a very positive change for this administration, but my bill should still pass Congress so that this commonsense policy will continue no matter who is in a future White House.”

Specifically, the Attorney General’s executive action today would prohibit Justice Department officials and US Attorneys from entering into any agreement on behalf of the United States in settlement of federal claims or charges, including agreements settling civil litigation, accepting plea agreements, or deferring or declining prosecution in a criminal matter, that directs or provides for a payment or loan to any non-governmental person or entity that is not a party to the dispute.

Bringing more transparency to government settlements has been a priority to Lankford. He listed this reform in his 2016 government waste report entitled, “Federal Fumbles: 100 ways the government dropped the ball” on page 42. And on May 22, Lankford and Senator Elizabeth Warren (D-MA) reintroduced The Truth in Settlements Act, bipartisan legislation to increase transparency for major settlements reached by federal agencies. Specifically, the bill will require more accessible and detailed disclosures about settlement agreements so that the public can better understand the agreements the federal government is making on their behalf.