Biden DOJ Brings Back Obama-Era Slush FundsMerrick Garland has revoked a Trump-era rule prohibiting the redirection of corporate settlement money to third-party organizations.
MAY 30, 2022
KEVIN STOCKLIN
President Biden’s Department of Justice appears to be rebuilding a dubious money chain known as “settlement slush funds.” The Obama DOJ used these funds to channel cash from corporate settlements to bankroll private progressive organizations, circumventing the budget and oversight authority of Congress.
On May 5, Attorney General Merrick Garland revoked a Trump-era rule that specifically prohibited the DOJ from directing funds from corporate settlements to finance third-party organizations and causes. The use of these so-called settlement slush funds became so rampant under the Obama administration that the House passed the Stop Settlement Slush Funds Act in 2017 in an attempt to end it. A similar bill was introduced in the Senate but failed to pass.
Under the Obama Justice Department, corporate fines were directed to organizations including the Sierra Club, the National Community Reinvestment Coalition, and the National Council of La Raza. Through arrangements known as Supplemental Environmental Projects (SEPs) and third-party payments, corporations could have their fines reduced if they paid money to organizations that, although not victims in the DOJ suit, were nonetheless approved as beneficiaries.
In addition to reducing fines, these arrangements also gave penalized companies a tax deduction for their charitable contributions, which bought corporate support for the practice and prevented legal challenges. There were hundreds of such arrangements under the Obama administration.
The most notable cases include Volkswagen’s settlement of its emissions cheating scandal, which included a requirement that VW spend $2 billion to build electric filling stations. The Obama administration had twice requested these funds from Congress and been denied, so it used the VW settlement to fund the project instead. Of the $2 billion that VW paid, $800 million went to the state of California.
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Source:
https://www.theamericanconservative.com/articles/biden-doj-brings-back-obama-era-slush-funds/
