Washington, D.C. – Today, House Judiciary Committee Chairman Bob Goodlatte (R-Va.) spoke on the House Floor regarding his bill, the Stop Settlement Slush Fund Act of 2017 (H.R. 732). This bill, a product of the House Judiciary Committee, bans all federal agencies from funneling money to non-victim third parties.

Chairman Goodlatte: “Last Congress, the House Judiciary Committee commenced an investigation into the Obama Justice Department’s “pattern or practice” of requiring settling defendants to donate money to third-party groups.  In its final two years, the Obama DOJ directed nearly a billion dollars to third-parties entirely outside of Congress’s spending and oversight authority.

All along, the Obama Justice Department strained to deny the obvious problem: that mandatory donation provisions create opportunities to play favorites. Deputy Associate Attorney General Geoffrey Graber testified that the Department was not “in the business of picking and choosing which organization may or may not receive any funding under the agreement.”

But internal DOJ documents tell a different story.  They show that contrary to Graber’s sworn testimony, the donation provisions were structured to aid the Obama Administration’s political friends and exclude conservative groups.

From the outset, Graber’s boss, Associate Attorney General Tony West, was keenly interested in choosing the organizations that would receive settlement money.

In the lead-up to the first troubling settlement, West’s deputy emailed the Office of Legal Counsel asking, “[c]an you explain to Tony the best way to allocate some money toward an organization of our choosing.”

Explaining the final settlement to the press team, West’s deputy wrote that the donation provisions require banks to “[m]ake donations to categories of entities we have specified (as opposed to what the bank might normally choose to donate to).”

Sure enough, Congress received testimony in 2016 that the donation beneficiaries were Obama Administration allies.  These include the Neighborhood Assistance Corporation of America, whose director calls himself a “bank terrorist.”

But aiding their political allies was only the half of it.  The evidence of the Obama DOJ’s abuse of power shows that Tony West’s team went out of its way to exclude conservative groups.

On July 8, 2014, six days before DOJ finalized its settlement with Citi, Tony West’s top deputy, circulated a draft of the agreement’s mandatory donation terms.  A senior official from the Office of Access to Justice, who had been working closely with Tony West to direct settlement money to legal aid organizations, responded requesting a word change.

She explained that the rewording would achieve the aim of “not allowing Citi to pick a statewide intermediary like the Pacific Legal Foundation [PLF]” which she explained “does conservative property-rights free legal services.”  The change was made.

It is not every day in Congressional investigations that we find a smoking gun.  Here, we have it.

Unfortunately, the chief architect of this outrage was lauded, not punished.  The recipients of the donations, from which PLF was excluded, circulated an email seeking ways to recognize “Tony West who by all accounts was the one person most responsible for including the [donation] provisions.”  One organization replied, “[f]rankly, I would be willing to have us build a [Tony West] statue and then we could bow down to this statue each day after we get our $200,000+.”

Mr. West’s abuse of power stands in stark contrast to the reassertion of integrity by the current Attorney General, Jeff Sessions.  AG Sessions shut down the use of mandatory donations to benefit outside groups, barring the practice through a policy directive issued earlier this year.

This legislation, however, remains necessary because history shows that we cannot rely on the current DOJ policy remaining in place.  In point of fact, in 2009, the incoming Obama Administration reversed course from previous DOJ guidance that had started imposing limits on settlement payments to non-victims.  This reversal led to the abuses I highlighted.

H.R. 732 is a bipartisan bill that would make the ban on settlement payments to non-victim third-parties binding on future Administrations.

The bill makes clear that payments to provide restitution for actual harm, directly caused—including harm to the environment—are permitted.

It was obvious from the outset that mandatory donation provisions create opportunities for abuse. That such abuses actually occurred is now proven.

I call on my colleagues from both sides of the aisle to support this good governance measure, and I reserve the balance of my time.”