In advance of the Biden administration’s decision to finalize a rule that would revive the Obama-era policy of directing corporate settlement funds to third-party organizations, U.S. Senator Tommy Tuberville and Congressman Lance Gooden are reintroducing their Stop Settlement Slush Funds Act. The bill would prohibit the Department of Justice (DOJ) from allowing defendants to enter quid-pro-quo agreements that entail donations to third-party groups in exchange for reduced fines and tax deductions. This legislation would ensure that any settlements go only to the actual victims, injured parties in the dispute, or the U.S. Treasury.
“The practice of funneling settlement dollars to political activists is an unacceptable abuse of the system,” said Sen. Tuberville in a statement. “If money is owed following a settlement agreement, every cent of that payout should go to those directly impacted by the defendants, or back to the Treasury. Public servants should not be allowed to use their influence to line the pockets of individuals who share the political views of the current administration.”
Tuberville wrote on Twitter, “The Biden admin shouldn’t use the justice system to bankroll their partisan agenda. I introduced the Stop Settlement Slush Funds Act to stop DOJ from directing corporate settlement dollars to third-party, left-wing organizations instead of victims or @USTreasury.”
Tuberville introduced this legislation in the last Congress.
“Directing legal settlements to third-party groups is nothing short of legal extortion to fund the Biden Administration’s partisan agenda,” said Rep. Gooden. “Congress can no longer allow the Executive Branch to circumvent our Constitutional power of the purse to fund their activist pet projects and must pass my legislation to end this corrupt practice.”
The Stop Settlement Slush Funds Act is endorsed by the National Taxpayers Union, Americans for Tax Reform, FreedomWorks, and Americans for Prosperity.
Grover Norquist is the President of Americans for Tax Reform.
“For too long, the Department of Justice has been misallocating settlement funds from civil suits to provide cash injections to political allies,” said Norquist. “This gross politicization of a government agency should be put to a stop immediately. I am proud to support Rep. Gooden’s bill to codify protections against the DOJ or any government official abusing their power to benefit special interest groups.”
Adam Brandon, President of FreedomWorks, applauded the legislation.
“The Stop Settlement Slush Funds Act would ensure that settlement dollars go to victims’ funds or to the general fund of the Treasury to be appropriated by Congress, which, as Article I of the Constitution requires, holds the power of the purse over funds spent by the federal government,” said Brandon. “It’s critical that Congress reins in the executive branch and assert its Article I powers, the Stop Settlement Slush Funds Act is a crucial part of this effort.”
Alex Milliken, Policy and Government Affairs Manager at the National Taxpayers Union, thanked Gooden and Tuberville.
“NTU supports the Stop Settlement Slush Funds Act and applauds Congressman Gooden and Senator Tuberville for working together to protect taxpayers,” said Milliken. “The practice of diverting billions of settlement dollars out of the hands of victims and toward third-party groups is a dubious practice. Congress should act quickly to put a stop to this agency behavior and prevent the misuse of resources to promote partisan agendas.”
The Stop Settlement Slush Funds Act would prohibit settling parties in a federal dispute from reducing their punishments by making “donations” to outside organizations.
This was a common practice under President Barack Obama’s presidency. The Obama Justice Department almost routinely required settling parties to pay a portion of their settlement obligations, under the guise of “donations,” to outside groups of the Department’s choosing. Republicans claimed that most of those groups pushed a partisan agenda. Tuberville and Republicans claim that this practice turned federal settlements into “liberal slush funds.”
President Donald Trump halted the practice when he was President. Proponents of this legislation argue that without it, the Biden DOJ is expected to finalize a rule allowing the practice to continue to bolster a progressive policy agenda.
Original cosponsors in the U.S. Senate include Senators Thom Tillis (R-North Carolina), Tom Cotton (R-Arkansas), Rick Scott (R-Florida), and Cynthia Lummis (R-Wyoming).
Congressman Gary Palmer is an original cosponsor of this legislation in the U.S. House of Representatives. Other Congress members cosponsoring this include Reps. Scott DesJarlais (R-Tennessee), Tom Tiffany (R-Wisconsin), John Moolenaar (R-Michigan), Blaine Luetkemeyer (R-Missouri), Scott Perry (R-Pennsylvania), Darrell Issa (R-California), Randy Weber (R-Texas), Andy Biggs (R-Arizona), Claudia Tenney (R-New York), Jake Ellzey (R-Texas), and Ben Cline (R-Virginia).
Tuberville is in his first term in the Senate, having been elected in a landslide in 2020, unseating incumbent Sen. Doug Jones. Tuberville is a native of Arkansas who spent forty years teaching, coaching, and sports broadcasting. He and his wife live in Auburn.
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