Stop Settlement Slush Funds Act of 2023

Floor Speech

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Mr. GOODEN of Texas. Mr. Speaker, pursuant to House Resolution 947, I call up the bill (H.R. 788) to limit donations made pursuant to settlement agreements to which the United States is a party, and for other purposes, and ask for its immediate consideration in the House.

The Clerk read the title of the bill.

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Mr. GOODEN of Texas. 788.

Mr. Speaker, today I rise in support of H.R. 788, the Stop Settlement Slush Funds Act. This legislation seeks to repair a loophole that has been exploited by the executive branch agencies to redirect funds from Federal law enforcement settlements to outside, nongovernment entities.

Under this third-party settlement policy, agencies reach a settlement and include mandatory donation terms to externally divert these funds to third parties instead of either depositing them with the Treasury or exclusively using them to provide restitution to the victims.

Instead of depositing these settlements with the Treasury or compensating the victims, which should be the only appropriate use of these funds, agencies give sizable chunks to third parties diluting the share of the victims and even cutting out the Treasury completely.

Let me summarize this. Currently, when the Department of Justice reaches a settlement, oftentimes we don't know where it goes. More often than not, they give favorable terms to whoever they are settling with and say, if you divert XYZ dollars--in many cases millions--to a charity of our choosing, then we will call this quits, we will let you off, and you will get out of here.

What is happening, though, is, one, the people don't know where these settlements are going; two, Congress has no oversight of where this money is going and how it is spent; and, three, executive branch is going around Congress and spending dollars without going through the appropriations process. That is wrong.

Mr. Speaker, what you will hear from the other side today is that this is an essential tool. I would like to go back and forth and give you examples of failures of this policy, Mr. Speaker.

To be fair, this is not just something that the Biden administration is guilty of. This has happened in prior Presidential administrations. Fortunately, under President Trump's administration, this policy was stopped temporarily. Unfortunately, Congress did not end it because it was stopped.

What we should have done when President Trump was President is ended this policy then. Unfortunately, here we are. The Biden administration has reactivated it, and millions of dollars that could have gone to victims or could have gone to the U.S. Treasury for this Congress to then appropriate are now going to special groups, often liberal groups that are pet projects of this administration. It is my goal to end this policy once and for all. It is bad business for the American people, it is wrong, and it needs to be stopped no matter who the President is.

Mr. Speaker, let me read this to you. This is from Bob LeClair, head of the Hawaii Legal Aid Foundation and executive director of the Hawaii Justice Foundation: ``I would be willing to have us build a statue [to Obama DOJ Associate Attorney General Tony West] and then we could bow down to this statue each day after we get our $200,000.''

Now, what is that about?

That is about one of these liberal groups getting money from the Justice Department in backroom settlements, and this is just one little quote that we found in an email that we were privy to, because at the end of the day, we don't even know about all these settlements.

I want to show you all this. Let's assume that everything my colleague said was true about these settlements and how great they are. Let's just assume for a second that we all agree that all these groups that are getting settlements are good groups and that this is a worthy cause and a worthy use of settlement.

Everything he just told you only relates to the 1.4 percent of where these settlements have gone because the rest of the 99 percent of settlement funds, we have no idea where they went. We don't even know what groups got them because the DOJ is making these backroom deals.

One of the problems that I have with my friends across the aisle is saying that this is a gift to big business.

Mr. Speaker, what they are going for is to preserve the status quo. The status quo is giving breaks to big businesses.

Mr. Speaker, let me give you an example. Bank of America settled with the government in exchange for getting to walk away from these charges. They were allowed to pay some money to some of these liberal groups to help with banking needs, et cetera. If they are not forced to admit guilt and write a check to the U.S. Treasury and say we are guilty, then we are letting them get away. That is what Democrats want to do.

Democrats want a corporate violator to be able to come forward and say, hey, I made this big donation to this great group, and don't tell anyone that we actually pled, and we didn't have to admit guilt.

So the shreds of evidence are actually much greater than just shreds. We have so many instances of waste and corruption within this process, but, unfortunately, everything I am telling you and everything the gentleman is telling you only relates to 1.4 percent of it. We don't even know how bad the other 99 percent of it is.

It is Congress' job to appropriate funds; it is the Department of Justice's job to carry out justice, and that is that.

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It is really not always the case that the government gets a cut of these settlements. Let me give one example. A recent and shocking example involves the Epstein scandal. JPMorgan Chase entered into a $75 million settlement for its role facilitating Mr. Epstein's heinous practices.

It has been reported--of course, we don't know all the details here-- that of the $75 million settlement that they had in the Virgin Islands, $30 million went to charity--we don't know which ones--$25 million went to enhance Virgin Islands infrastructure--I am sure that was all appropriately spent--and $20 million went to attorneys' fees. None of it went to the U.S. Treasury. We now have reports of another settlement that they are working on with the Justice Department. We don't know where that went.

Again, I will bring you back to this graphic I have. Of all the settlement funds, no one in this Chamber, no one in this building, no Member of Congress knows where 98.6 percent of that money went.

Whatever you are hearing about how great these settlement slush funds are by the other side, they are only talking about what they think they know of the 1.4 percent, and what they think they know is what they are told because there is no accountability for these funds.

Unlike Federal funds, which Congress should be appropriating, where we hold organizations accountable--if an entity is receiving Federal dollars, they have to account for it--when these settlement slush funds go out to whatever organization they go to, we don't have any idea how they are being spent. No Member of Congress has any control over that money.

Mr. Nadler is right, it doesn't belong to the Federal Government, but when it is deposited into the Treasury instead of given to some aid group or whatever alleged great cause that the Justice Department is telling us exists, when it is deposited into the Treasury, then Congress gets to appropriate it because it is the people's money to handle as they see fit.

First of all, victims should be given restitution, not some slush fund that claims to do right by victims. Secondly, after the victims, the money, if we want to do right, if we want to go enhance the soils after a disaster in Congresswoman Jackson's district, that is something that the executive branch should oversee with Federal dollars that this body appropriates. That is not something that we should outsource to some group at the direction of the executive branch.

I share my colleague's concerns about victims. I am disappointed that the other side would stand up for these big businesses that are actually getting great deals, unfair deals where they get to write some slush fund check to some group that we have no way of showing any kind of accountability over. These big businesses are walking away. It is shocking to me that the other side is standing up for a process that actually lets big offenders walk away with a sweet deal and a good little PR press release. It is a shame.

Mr. Speaker, I urge my colleagues to support this bill and oppose this practice.

Before I close, I will be nice and give my friends across the aisle a little gift. I realize they think all these are great, so for the sake of being bipartisan, I am going to give an example of a bad actor that was a Republican with respect to these slush funds.

Back in 2005, then-United States Attorney Chris Christie required the pharmaceutical company Bristol Myers Squibb to donate to his law school alma mater, Seton Hall University. In exchange for not charging the drug-making giant with securities fraud, Christie's office would require it to fund a professorship at Seton Hall University Law School, Christie's alma mater.

Do we really think that is good policy?

It doesn't matter who is in the White House, what party is controlling the executive branch, this is a wrong policy. I hope this bill passes.

My colleague did say it is dead in the Senate. Let's just assume it is dead in the Senate. I pledge here before this entire body that if we have a Republican President someday, I will carry this bill forward, and I am willing to bet that someone across the aisle will join me because they won't like the conservative, far-right groups that a Republican Justice Department is diverting slush funds to.

I hope that my colleagues will get on board now. If this bill should not make it to the President's desk, I will be right back here in a year, God willing, if a Republican is President, and I hope my colleagues will join me then.

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Mr. GOODEN of Texas. Mr. Speaker, this is really bad business for the American people. These settlement slush funds are wrong no matter who is in power and, frankly, victims are being overlooked. Victims should be made whole, and any other kind of settlement the government wants to work out with wrongdoers should be a fine to the United States Treasury because whatever good cause we may agree or disagree about for restitution for larger groups of victims, perhaps, that is something this Congress should decide through the appropriations process.

I encourage my colleagues to join me in stopping this practice. We have seen abuses all the way from the Bush administration to the present, and it needs to stop.

Mr. Speaker, I urge my colleagues to support H.R. 788, and I yield back the balance of my time.

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