Goodlatte Statement at Markup of H.R. 5063, the “Stop Settlement Slush Funds Act of 2016”

Chairman Goodlatte: Eighteen months ago, this Committee commenced a “pattern or practice” investigation into the Justice Department’s mortgage lending settlements. We found that DOJ is systematically subverting Congress’s spending power by requiring settling parties to donate money to activist groups. In just the last two years, DOJ has directed nearly a billion dollars to third-parties entirely outside of Congress’s spending and oversight authority.  Of that, over half-a-billion has already been disbursed or is committed to being disbursed. In some cases, these mandatory donation provisions reinstate funding Congress specifically cut. The Spending Power is Congress’s most effective tool in reining in the Executive Branch. This is true no matter which party is in the White House.  A Democrat led Congress passed the Cooper-Church Amendment to end the Vietnam War. More recently, bipartisan funding restrictions blocked lavish salary and conference spending by federal agencies and grantees. This policy control is lost if the Executive gains authority over spending. Serious people on both sides of the aisle understand this. A former deputy Assistant Attorney General for the Office of Legal Counsel in the Clinton Administration warned in 2009, that DOJ “has the ability to use settlements to circumvent the appropriations authority of Congress.”  In 2008, a top Republican DOJ official restricted mandatory donation provisions, because they “can create actual or perceived conflicts of interest and/or other ethical issues.” Any objections to this bill would be unfounded. Whether the beneficiaries of these donations are worthy entities is entirely beside the point.  The Constitution grants Congress the power to decide how money is spent, not DOJ. This is not some esoteric point. It goes to the heart of the Separation of Powers theory and Congress’s ability to rein in the Executive in practice. Nor does the bill restrict prosecutorial discretion. That discretion pertains to the decision to prosecute. Setting penalties and remedial policy is the proper purview of Congress. Opponents’ central concern is that there may be cases of “generalized harm” to communities that cannot be addressed by restitution. But this misses the fundamental point.  DOJ has authority to obtain redress for victims. Federal law defines victims to be those “directly and proximately harmed” by a defendant’s acts. Once those victims have been compensated, deciding what to do with additional funds extracted from defendants becomes a policy question properly decided by elected representatives in Congress, not agency bureaucrats or prosecutors. It is not that DOJ officials are necessarily funding bad projects, it is that, outside of compensating actual victims, it is not their decision to make. Rather than suspend the practice of mandatory donations in response to these concerns, DOJ has doubled down. Just last month, a major DOJ bank settlement required $240 million in “[f]inancing and/or donations” toward affordable housing. It is time for Congress to end this abuse. The Stop Settlement Slush Funds Act of 2016 bars mandatory donation terms in DOJ settlements. It is a bipartisan bill. It makes clear that payments to provide restitution for actual harm, directly caused, are permitted. It explicitly references the environmental context where the injury to the environment may be diffuse and there may be no identifiable victims. The bill deals with this by explicitly permitting payments to remediate environmental damage. If direct remediation of the harm is impossible or impractical, the violator is not let off the hook. The full penalty is paid, but into the Treasury. This bill addresses an institutional issue. That is one reason similar language passed the House last year by voice vote. I thank all of the bill’s cosponsors and I urge its passage. Click here to learn more about today’s markup. ###