Senate Eyes Permanent Ban on Justice Department ‘Slush Fund’ for Political Friends


Legislation to codify the U.S. attorney general’s recent ban on diverting millions in legal settlements to outside groups is now in the Senate’s court, following last week’s House action.

The Justice Department practice, widely criticized as a $1 billion “slush fund” benefiting liberal advocacy groups in the last 30 months of the Obama administration alone, would be outlawed under the House bill.

Sen. James Lankford, R-Okla., is sponsor of the Senate version of legislation to prohibit U.S. government officials from creating and enforcing settlement agreements with corporations and other entities that steer funds in the form of donations to third-party, special-interest groups.

Lankford, who introduced his bill in February, co-sponsored similar legislation last year.

The Obama administration reached settlements agreements with financial institutions at the epicenter of the 2007-2008 financial crisis, when financial agreements known as mortgage-backed securities imploded.

Financial institutions that entered into settlements with the Obama Justice Department included Bank of America Corp., Citigroup Inc., Goldman Sachs Group Inc., and JPMorgan Chase.

A joint investigation by the House Judiciary and Financial Services committees pried loose internal documents on the Justice Department practice during the administrations of Presidents Barack Obama and George W. Bush.

In a June 5 memorandum to every U.S. attorney …read more