[Congressional Record Volume 170, Number 6 (Thursday, January 11, 2024)]
[House]
[Pages H71-H77]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
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STOP SETTLEMENT SLUSH FUNDS ACT OF 2023
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.
The SPEAKER pro tempore (Mr. Newhouse). Pursuant to House Resolution
947, in lieu of the amendment in the nature of a substitute recommended
by the Committee on the Judiciary, printed in the bill, an amendment in
the nature of a substitute consisting of the text of Rules Committee
Print 118-18 is adopted, and the bill, as amended, is considered read.
The text of the bill, as amended, is as follows:
H.R. 788
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Stop Settlement Slush Funds
Act of 2023''.
SEC. 2. LIMITATION ON DONATIONS MADE PURSUANT TO SETTLEMENT
AGREEMENTS TO WHICH THE UNITED STATES IS A
PARTY.
(a) Limitation on Required Donations.--An official or agent
of the Government may not enter into or enforce any
settlement agreement on behalf of the United States directing
or providing for a payment to any person or entity other than
the United States, other than a payment that provides
restitution for or otherwise directly remedies actual harm
(including to the environment) directly and proximately
caused by the party making the payment, or constitutes
payment for services rendered in connection with the case.
(b) Penalty.--Any official or agent of the Government who
violates subsection (a) shall be subject to the same
penalties that would apply in the case of a violation of
section 3302 of title 31, United States Code.
(c) Effective Date.--Subsections (a) and (b) apply only in
the case of a settlement agreement entered on or after the
date of enactment of this Act.
(d) Definition.--The term ``settlement agreement'' means a
settlement agreement resolving a civil action or potential
civil action.
(e) Reports on Settlement Agreements.--
(1) In general.--Not later than at the end of the first
fiscal year that begins after the date of enactment of this
Act, and annually thereafter, the head of each Federal agency
shall submit electronically to the Congressional Budget
Office a report on each settlement agreement entered into by
that agency during that fiscal year that directs or provides
for a payment to a person or entity other than the United
States that is providing restitution for or otherwise
directly remedies actual harm (including to the environment)
directly and proximately caused by the party making the
payment, or that constitutes payment for services rendered in
connection with the case, which shall include the parties to
each settlement agreement, the source of the settlement
funds, and where and how such funds were and will be
distributed.
(2) Prohibition on additional funding.--No additional funds
are authorized to be appropriated to carry out this
subsection.
(3) Sunset.--This subsection shall cease to be effective on
the date that is 7 years after the date of enactment of this
Act.
(f) Annual Audit Requirement.--
(1) In general.--Not later than at the end of the first
fiscal year that begins after the date of enactment of this
Act, and annually thereafter, the Inspector General of each
Federal agency shall submit a report on any settlement
agreement entered into in violation of this section by that
agency to--
(A) the Committee on the Judiciary, the Committee on the
Budget, and the Committee on Appropriations of the Senate;
and
(B) the Committee on the Judiciary, the Committee on the
Budget, and the Committee on Appropriations of the House of
Representatives.
(2) Prohibition on additional funding.--No additional funds
are authorized to be appropriated to carry out this
subsection.
The SPEAKER pro tempore. The bill, as amended, shall be debatable for
1 hour, equally divided and controlled by the chair and ranking
minority member of the Committee on the Judiciary, or their respective
designees.
[[Page H72]]
After 1 hour of debate, it shall be in order to consider the
amendment printed in House Report 118-342, if offered by the Member
designated in the report, which shall be considered read, shall be
separately debatable for the time specified in the report equally
divided and controlled by the proponent and an opponent, and shall not
be subject to a demand for a division of the question.
The gentleman from Texas (Mr. Gooden), and the gentleman from New
York (Mr. Nadler) each will control 30 minutes.
The Chair recognizes the gentleman from Texas.
General Leave
Mr. GOODEN of Texas. Mr. Speaker, I ask unanimous consent that all
Members may have 5 legislative days in which to revise and extend their
remarks and to insert extraneous material on H.R. 788.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Texas?
There was no objection.
Mr. GOODEN of Texas. Mr. Speaker, I yield myself such time as I may
consume.
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, I reserve the balance of my time.
Mr. NADLER. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise in opposition to H.R. 788, the so-called Stop
Settlement Slush Funds Act of 2023.
This harmful legislation would prevent the Justice Department from
negotiating settlements to include payments to third parties, primarily
nonprofits and community-based organizations, that are best positioned
to remedy harms to society at large that were caused by a corporate
wrongdoer's violation of Federal environmental, labor, consumer, and
financial protections.
This bill is nothing short of a gift to large corporations that would
leave victims of their misconduct out in the cold.
No credible facts justify H.R. 788. This bill is based on the false
premise that the Justice Department uses these types of settlements as
illegitimate favors for an administration's political allies, with the
bill's supporters describing such settlements as politically motivated
slush funds.
This is an outlandish attack on a perfectly legal and constitutional
type of remedy and is an argument that both the Government
Accountability Office and the Congressional Research Service have
thoroughly debunked.
Yet, House Republicans have spent countless hours and taxpayer
dollars over several Congresses, going back at least a decade, chasing
the conspiracy theory that the Justice Department is attempting to fund
liberal activist groups and causes through negotiated settlements.
This included a multiyear investigation of the settlements that the
Justice Department entered into with several big banks following the
2008 financial crisis, banks whose greedy appetite for mortgage-backed
securities led to predatory lending practices that ultimately left
millions of homeowners facing foreclosure. The big banks turned a blind
eye to these practices, while they packaged mortgages that they knew
were of questionable value as securities and sold them to individual
and institutional investors alike.
Although the big banks' illegal conduct led directly to the 2008
financial crisis, it was difficult, if not impossible, for individual
borrowers or homeowners to hold them legally accountable for the harms
they suffered from the bank's near implosion of the Nation's financial
system.
In response, roughly 1 percent--a tiny fraction--of the settlement
monies in suits brought by the government ultimately went to third-
party organizations specializing in aiding private homeowners to obtain
mortgage relief or other related community services--a perfectly
reasonable way to help remedy the harm caused by these large financial
institutions' irresponsible behavior.
Unsurprisingly, the House Republican investigation into these
settlements produced not one shred of credible evidence to support
their allegations that this represented some sort of improper action--a
common result when it comes to the majority's oversight priorities it
seems.
Nonetheless, the majority seeks to enact H.R. 788, a bill that
purports to address a problem that does not exist while its proposed
solution would create real negative consequences for the American
public.
Were Congress to pass H.R. 788, it would reward corporate lawbreakers
and further victimize the families and communities suffering from the
consequences of corporate misconduct, including injuries from civil
rights violations, environmental justice harms, or harms caused by
fraudulent lending practices.
During the Rules Committee hearing earlier this week, my colleagues
on the other side began to argue that these settlements are, in fact, a
sweet deal for corporate lawbreakers at the expense of the taxpayer.
Nothing could be further from reality.
First, let us not lose sight of the fact that the majority of
settlement funds go to the U.S. Treasury.
Second, these settlements enable Federal agencies to efficiently
resolve enforcement actions. In many of the kinds of cases from which
these types of settlements arise, litigation is complex, expensive, and
time consuming. It could take the government years to hold wrongdoers
accountable if they are unable to reach a settlement.
Justice delayed is justice denied. These settlements save the
taxpayers millions of dollars in litigation costs, boosting the value
of the settlements to the U.S. Treasury beyond the listed dollar
figure, while at the same time providing more immediate relief for
victims of corporate lawbreaking.
H.R. 788 is simply a tired attempt by the majority to paint a
constitutional veneer upon their unpopular antiregulatory agenda, which
includes enacting legislation that will undermine critical financial,
environmental,
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public health, and safety protections for the American public.
This antiregulatory bill is a solution in search of a problem,
designed to serve deep-pocketed corporate interests at the American
people's expense.
It is a shame that House Republicans have chosen this unjustified and
harmful bill as one of their first measures to bring to the floor in
this new year. We could have started the new year by considering
bipartisan legislation to address a real problem. At the same markup
where the Judiciary Committee considered this bill, we also considered
legislation that would have addressed bipartisan concerns about Federal
civil asset forfeiture laws. That bill passed the committee by a 26-0
vote in favor, and I have no doubt we would have enjoyed strong
bipartisan support on the floor.
Be that as it may, here we are, once again, at the precipice of a
possible government shutdown, and House Republicans have chosen instead
to waste time on H.R. 788, recycling an unnecessary bill that has no
chance of passage in the Senate at a time when the House should be
working expeditiously to ensure that the government stays open.
In short, rather than considering ill-conceived and harmful
legislation, we ought to be devoting this first legislative week of the
new year focused on serving the actual needs of the American people,
which is the basic job that we were elected to do.
Mr. Speaker, I urge my colleagues to vote ``no'' on H.R. 788, and I
reserve the balance of my time.
Mr. GOODEN of Texas. Mr. Speaker, I yield myself such time as I may
consume.
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.
Mr. Speaker, I yield 3 minutes to the gentlewoman from Wyoming (Ms.
Hageman).
Ms. HAGEMAN. Mr. Speaker, it should come as no surprise that this
administration, known for its reckless spending and misuse of
congressionally appropriated money, has resumed the Obama-era practice
of redirecting settlement funds away from the American people and to
activist groups championing the radical left's projects.
{time} 1430
Instead of going to those harmed by a defendant or placing such funds
into the U.S. Treasury to serve the American people, vast sums of
money, literally millions and tens of millions of dollars, are instead
being directed to Democratic Party-aligned groups by Federal agencies,
placing these newly acquired Federal funds outside of Congress' purview
while also funding radical progressive agendas to boot.
These groups are then free to spend dollars on partisan priorities
expressly denied by Congress or to fund their own sue-and-settle
tactics against the Federal Government.
Simply put, these funds are weaponized against the American people
and are yet another way Democrats are abusing their power. Twice, the
Trump administration limited this practice, only to have each attempt
reversed by Joe Biden.
Clearly, this is not a partisan abuse. It is coming from only one
side. As a Member of Congress, such actions are a blatant affront to
our power of the purse and an effort to sidestep congressional
oversight.
These slush fund activities deprive victims of the proper restitution
our justice system promises.
H.R. 788 will end this unconstitutional, fraudulent, and immoral
practice and provide Americans greater transparency in Federal
settlement practices.
Mr. Speaker, I urge my colleagues to vote in favor of this bill.
Mr. NADLER. Mr. Speaker, the gentleman from Texas and the gentlewoman
from Wyoming are simply wrong as they describe the situation.
In all of these settlements, the Federal Government is given money,
the bulk of the money. It doesn't go to a third-party group. A small
fraction then goes to a small group to help make the victims of the
fraud or the malfeasance somewhat whole, but the Federal Government
gets the bulk of the funds in the first place.
It is a two-part payout. The Federal Government gets most of the
funds, and then a third party helps some of the victims get a little
part of the funds.
Mr. Speaker, I yield 3 minutes to the gentlewoman from North Carolina
(Mrs. Foushee).
Mrs. FOUSHEE. Mr. Speaker, I rise to oppose this bill that undermines
our ability to hold corporate wrongdoers accountable for unlawful
conduct. This bill will prevent Federal agencies from entering into
settlements that set aside funds for third parties, such as legal aid,
housing, or financial counseling groups, or community assistance,
settlements that provide some relief for victims of corporate
misconduct.
For this reason, at the appropriate time, I will offer a motion to
recommit this bill back to committee. If the House rules permitted, I
would have offered the motion with an important amendment to this bill.
My amendment would have provided for exceptions in the case that a
settlement agreement pertains to the abuse of opioids, and that
includes allegations of false claims against the United States related
to a healthcare benefit program.
Mr. Speaker, I hope my colleagues join me in voting for this motion
to recommit.
Mr. Speaker, I ask unanimous consent to insert the text of this
amendment into the Record immediately prior to the motion to recommit.
The SPEAKER pro tempore. Is there objection to the request of the
gentlewoman from North Carolina?
There was no objection.
Mr. GOODEN of Texas. Mr. Speaker, I yield 3 minutes to the gentleman
from Texas (Mr. Moran).
Mr. MORAN. Mr. Speaker, I rise today in support of H.R. 788, the Stop
Settlement Slush Funds Act of 2023.
This act is one step in the reform process to return spending power
back
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to the hands of Congress and ensure the proper use of every dollar that
comes into the Treasury.
This bill would help to ensure the damages owed to victims of
wrongdoing actually reach them rather than being used to support
organizations that are friends of the executive branch, regardless of
the party.
For those who don't know, settlement slush funds result when
defendants settle with government agencies and, based on the terms of
that settlement, direct the settlement proceeds to politically favored
third parties instead of victims or the U.S. Treasury for use in
correcting the actual wrongdoing.
In these cases, the victims often have little to no say in how the
settlement will be structured and certainly have no redress when the
government directs these monetary settlements elsewhere.
In the past, these types of settlements have been used to support the
pet projects of prior administrations or the friends of prior
administrations, and this is simply unacceptable.
Settlement funds should go to the victims and to remedy the actual
harm created by these wrongdoers, not to help and support friends of
the current administration--again, regardless of which party is in
power.
Reform is needed to end this practice, and Congress should enact H.R.
788, the Stop Settlement Slush Funds Act of 2023, immediately because
not only do we see that these funds are redirected in inappropriate
ways but these settlements amount to a form of executive branch
spending that has not been approved or even reviewed by Congress.
Accordingly, these settlement slush funds undermine congressional
oversight, agency accountability, and the power of the purse. The
responsibility of the power of the purse falls solely on Congress, and
we should have the authority to direct the funding of these settlement
agreements, not the executive branch's special interests.
Moreover, money from settlements with companies and individuals
should benefit the harmed and remedy the underlying actual wrongdoing.
Those funds should not be redirected to nonprofits supporting the
political agendas of the administration.
Let's stop this practice today. We can do it if we pass this bill.
Let us pass the Stop Settlement Slush Funds Act of 2023.
Mr. NADLER. Mr. Speaker, I yield 3 minutes to the distinguished
gentlewoman from Texas (Ms. Jackson Lee).
Ms. JACKSON LEE. Mr. Speaker, I thank the ranking member of the full
committee and the manager of this presentation on the floor for dealing
with H.R. 788.
Mr. Speaker, I rise to save lives. This baffles me when good work is
being done and has been done over the years. No one has complained
about misconduct of the recipients of the settlement funds helping
people who have been impacted negatively, sometimes with irreparable
harm. They are assisted by a number of organizations making a
difference.
Rather, we want to go forward with the corporate unaccountability
act, making this an unreasonable attempt and unconstitutional attempt
by Members on the other side to stop protecting victims and protect
wrongdoers, which is a continuation of the dangerous behavior that has
brought about this settlement.
What do Americans look to their Federal Government for? They look to
the government to be their rock, their anchor in times of natural
disasters, man-made and otherwise. They look to their government in
times of war and peace for us to defend this Nation. They certainly
look to make sure that in the normal comings and goings of their work
with their families, their communities, that someone is looking out for
them. That is what the settlement opportunities give to our various
agencies.
This would allow the continued work, rather than the taking away of
these dollars from legitimate groups that are helping to make life
better. This weakens the Federal Government's ability to settle these
issues. It takes away the idea of legal aid and legal aid organizations
being able to help individuals without access to legal assistance. It
helps develop community banking, financial institutions. It gives
housing opportunities to those who have been taken advantage of.
We know that we are in a condition of toxic air and toxic
contamination in our neighborhoods, and what does the ability to settle
the disaster that has been created do? It tells those offenders this is
how they make the community whole. This is how they save lives.
I know it well in Fifth Ward, Texas, and the surrounding areas. For a
long time, a corporate offender contaminated the soil. They were
growing plants and flowers, so whole neighborhoods had an epidemic of
cancer. There were whole generations that lived around this particular
toxic site, but it was only the Federal Government--the EPA, in
particular--under the Biden administration that came in and got a
handle on this and insisted that the health needs of these individuals,
the cleanup needs of these individuals, was going to be taken care of.
The SPEAKER pro tempore. The time of the gentlewoman has expired.
Mr. NADLER. Mr. Speaker, I yield an additional 1 minute to the
gentlewoman from Texas.
Ms. JACKSON LEE. Mr. Speaker, I thank the gentleman from New York,
the ranking member, for yielding additional time.
This is not that s-word. I don't even want to say it because it means
that it is something wrong. This is a good settlement opportunity that
will help the public in fighting against bad actors. It will work on
improving the criminal justice system, bankruptcies, the environment,
civil rights laws, the Fair Housing Act, and the Servicemembers Civil
Relief Act.
This is a pathway to disaster. That is what H.R. 788 is. Don't be
fooled, Mr. Speaker. What we want to do is help the American people and
eliminate H.R. 788, which is going to take away the tools to be able to
help them.
Mr. Speaker, I started out by saying we want to save lives, and that
is what we want to continue to do in these dastardly conditions that
have happened all over the Nation. We want the Federal Government to be
standing next to Americans and to be able to help them.
Mr. Speaker, I include in the Record a letter from several
organizations that oppose H.R. 788.
January 8, 2024.
Re Oppose H.R. 788--The Prevention of Community Restoration
Act.
Dear Representative: We urge you to oppose H.R. 788, the
so-called ``Stop Settlement Slush Funds Act of 2023''. The
bill prohibits settlement agreements where the United States
is a party from including certain ``donations'' to non-
federal actors, primarily non-profits, educational, and
community-based organizations.
Under existing laws, settlements from federal enforcement
actions can include payments to third parties to advance
programs that assist with recovery, benefits, and relief for
communities harmed by lawbreakers, to the extent such
payments further the objectives of the enforcement action.
H.R. 788 would cut off any payments to third parties other
than individualized restitution and other forms of direct
payment for ``actual harm.'' That restriction would handcuff
federal enforcement officials by limiting the ability of
federal enforcement officials to negotiate real relief for
harms caused to the public by illegal conduct that is the
subject of federal enforcement actions.
This bill would be a gift to lawbreakers at the expense of
families and communities suffering from injuries that cannot
be addressed by direct restitution because the bill would
prevent federal agencies from negotiating forms of relief
that would address injuries to the public that may be either
non-quantifiable or indeterminate. These forms of relief are
crucial when harm is difficult to monetize, such as damage to
the environment, the collateral consequences to communities
resulting from predatory lending by financial institutions,
or unknown health outcomes to individuals resulting from
chemical exposures in the workplace.
Under current law, the legitimacy and utility of federal
enforcement settlements that include payments to third
parties is clear, as long as such payments bear a nexus to
the prosecutorial objectives of the agency. This bill would
supplant the wisdom of officials at DOJ and federal agencies
to craft appropriate remedies.
This bill is also just another example of Congressional
overreach into executive branch decision-making. Not only
does it disregard the needs of future Administrations, but
the bill is sloppily crafted, failing to provide even a basic
definition of the ``donations'' or payments in question.
Further, the bill assumes that the government is always
going to be the party seeking to enforce the law, but this is
a fallacy. Laws are often enforced against the government,
and the government sometimes pays restitution to litigants.
There is a role for third parties to ensure that settlements
involving the government are followed and enforced.
[[Page H75]]
Third parties that receive third-party payments include
nonprofits, community organizations, or trusts or foundations
that provide vital services in their communities. Members of
Congress should applaud the good work of these organizations
that serve the public good rather than vilify them.
We urge you to oppose H.R. 788.
Sincerely,
Yosef Robele & Brielle Green, Earthjustice, American
Association of Justice, American Federation of State, County
and Municipal Employees (AFSCME), American Federation of
Teachers, Center for Biological Diversity, Center for Justice
& Democracy, Center for Progressive Reform, Clean Water
Action, Earthjustice, Environmental Defense Fund,
Environmental Law & Policy Center, Environmental Working
Group, Government Information Watch, Impact Fund, League of
Conservation Voters, National Association of Consumer
Advocates, National Consumers League, NRDC, Nuclear
Information and Resource Service, Public Justice, Union of
Concerned Scientists, Waterkeeper Alliance.
Ms. JACKSON LEE. Mr. Speaker, I urge my colleagues to vote against
H.R. 788. Don't take that tool away. Help the American people.
Mr. Speaker, I rise today in strong opposition to H.R. 788, the Stop
Settlement Slush Funds Act of 2023.
This bill would undermine our ability to hold corporate wrongdoers
accountable for unlawful conduct.
H.R. 788, which otherwise could be called the ``Corporate
Unaccountability Act,'' is another unconscionable attempt by some
extreme members on the other side of the aisle to protect corporate
wrongdoers at the expense of their victims and a continuation of this
majority's dangerous quest to prevent federal agencies from enforcing
key protections.
H.R. 788 is yet another in a series of harmful bills that pose a
direct threat to a broad range of critical protections Americans rely
on in their daily lives by making it harder for federal agencies to
implement, execute and enforce the laws passed by Congress.
These bills are part of the extreme MAGA Republican agenda, which
seeks to render the federal government ineffective by any means
necessary.
First, they proposed defunding and abolishing agencies that do not
suit their radical views.
Then, they broadened their scope and put forward their Default on
America Act, and later their extreme CR, which would have massively
underfunded the federal government, hurting its ability to address our
nation's most important priorities.
This week, the sabotage continues with legislation that puts
corporate interests over communities by making it harder for agencies
to hold corporations accountable for unlawful conduct and depriving
victims of meaningful relief.
H.R. 788 would prohibit federal agencies from entering or enforcing
legal settlement agreements that include payments to third parties in
cases of corporate misconduct.
These third-party payments are important when the conduct at issue
results in generalized harm, such as violations of public health,
environmental or consumer protections.
Recipients are often nonprofit, educational and community-based
organizations.
For example, the Department of Justice has reached settlement
agreements in connection with the mortgage lending practices of major
banks that required payments to legal aid organizations, community
development financial institutions and housing counseling groups.
Eliminating this practice, as H.R. 788 threatens to do, would
materially weaken the federal government's ability to hold bad actors
accountable for their unlawful conduct in a way that effectively
addresses the societal injuries they have caused.
This extreme and misguided legislation has earned opposition from
both the Biden Administration and a broad coalition of groups, has zero
Democratic cosponsors and only advanced out of the House Judiciary
Committee by a party-line vote.
According to President Biden's Statement of Administration Policy,
H.R. 788 is unnecessary and ``would have adverse effects on the Federal
government's ability to enforce key laws protecting the public,
including criminal, bankruptcy, environmental and civil rights laws
such as the Fair Housing Act and the Servicemembers' Civil Relief
Act.''
It should also be noted that the following groups who have come out
in opposition of this irresponsible and dangerous bill:
American Association for Justice; American Federation of State,
County and Municipal Employees; American Federation of Teachers; Center
for Biological Diversity; Center for Justice & Democracy; Center for
Progressive Reform; Clean Water Action; Coalition for Sensible
Safeguards; Earthjustice; Environmental Defense Fund; Environmental Law
& Policy Center; Environmental Working Group; Government Information
Watch; Impact Fund; League of Conservation Voters; National Association
of Consumer Advocates; National Consumers League; NRDC; Nuclear
Information and Resource Service; Public Justice; Union of Concerned
Scientists; and Waterkeeper Alliance.
Let me also highlight the fact that the Administration strongly
opposes the House passage of H.R. 788, the Stop Settlement Slush Funds
Act of 2023, because the legislation is unnecessary and would harm the
public interest.
H.R. 788 would prohibit the Federal government from entering into
settlement agreements that include payments directed to appropriate
parties.
This legislation seeks to address a problem that does not exist--the
Federal government does not create or use ``slush funds.''
When the Federal government settles a case with those who violate the
law, it seeks to hold bad actors accountable, to appropriately remedy
the harm they have caused, and to prevent the recurrence of those
harms.
H.R. 788 would have adverse effects on the Federal government's
ability to enforce key laws protecting the public, including criminal,
bankruptcy, environmental, and civil rights laws such as the Fair
Housing Act and the Servicemembers' Civil Relief Act.
This bill would needlessly prohibit a widely respected and effective
enforcement tool.
Specifically, it would block many agencies from including certain
terms providing for payment to third parties in settlement agreements
to which the United States is a party.
In the past, agencies have sometimes opted to work with entities that
have violated regulatory requirements to agree to alternative forms of
remediation.
These efforts have resulted in settlement agreements that include
payments by those entities to third parties to advance programs that
assist with recovery, benefits, or relief for communities harmed by the
wrongdoing addressed in the enforcement action.
In this way, H.R. 788 would thwart federal enforcement officials'
ability to negotiate appropriate relief for harm caused to the public
by parties that are the subject of the enforcement action.
The criticisms of third-party settlements are misplaced: they do not
unduly undermine congressional appropriation power, and they must
satisfy basic requirements to be used.
The Congressional Research Service has found settlement payments to
non-federal actors are permissible remedies to the extent they bear a
nexus to the prosecutorial objectives of the agency.
Moreover, developing guidelines on appropriate scope, purpose, and
use of third-party payments appropriately lie with the executing
agency, which has the benefit of expertise and experience.
In sum, this bill is counterproductive and would undermine law
enforcement goals by reducing the availability of effective remedies to
address injuries to individuals and communities caused by illegal
conduct. We therefore urge you to oppose H.R. 788, the Stop Settlement
Slush Funds Act of 2023.
Mr. GOODEN of Texas. Mr. Speaker, I yield 5 minutes to the gentleman
from Montana (Mr. Zinke).
Mr. ZINKE. Mr. Speaker, I rise in strong support of H.R. 788.
First of all, we should ask what good governance looks like. I know
that in the House of Representatives today, perhaps we are not
reflective of good governance, but good governance, I would say, should
include transparency. It should also include, I think, fairness, rule
of law, and defending the Constitution, to which we all have sworn an
oath.
Article I, Section 9 in the Constitution says what? No money should
be removed from the Treasury unless by consequence of appropriations by
law. It is in the Constitution.
Let me share a story about when I was Secretary. It is called sue,
settle, and seal. I am sure that my good friend, the gentleman from New
York, is aware of it.
Let's say an administration writes a rule that is somewhat flawed.
Let's say the administration invites a lawsuit from, let's say, the
Center for Biological Diversity or other nonprofits. Let's say that
department then decides to settle. On what conditions? Those conditions
are met by the Department of Justice and not the Department of the
Interior in this example. They are settled, and then the final act is
that they seal them.
In one case, I asked the President of the United States, which would
be President Trump, I said: Mr. President, I have serious concerns
about the conditions of this settlement. I would like you to ask the
Attorney General to allow the Secretary of the Interior to view those.
The President's answer was: I don't have the authority.
Then, I asked Congress: Mr. Speaker, you have the power of the purse
by the
[[Page H76]]
Constitution. I would like you, sir, to tell me the conditions of the
settlement. Follow the money. Where did the money go?
His answer was: I don't have the authority.
When neither the President of the United States, the executive, nor
the House of Representatives, which controls the purse, have the
authority to look at sue, settle, and seal, something is wrong. That is
what is called corruption.
All of this should attain to the same thing--transparency.
Furthermore, whose money is it? I have heard today it is the Federal
Government's money. It is not. The government does not have the money.
It is the taxpayers'. It is the citizens of this great Nation whose
money we allocate and, by Constitution, we appropriate.
Mr. Speaker, I stand in strong support of this bill, and I thank the
great gentleman from Texas for bringing it forward.
{time} 1445
Mr. NADLER. Mr. Speaker, I yield myself such time as I may consume.
My Republican friends seem to be under a misconception about the
bill. They keep saying that it unconstitutionally removes money from
the Treasury without appropriation. It does no such thing. It removes
not a dime from the Treasury. None of this money is the government's
money to start with.
The government sues some group or company for malefaction, for
damaging people. A settlement is reached. Under the terms of that
settlement, the bulk of the money goes to the Treasury, and there it
stays. A small proportion of that money goes to an organization that
attempts to make somewhat whole the victims of the corporate
malfeasance that caused the lawsuit in the first place, but no money is
removed from the Treasury. On the contrary, money is placed into the
Treasury, money from the corporate malefactor. Some money from the
corporate malefactor, a small proportion, goes to an organization that
tries to help make not whole but a little better the victims of the
malefaction by the corporation in the first place.
Mr. Speaker, I reserve the balance of my time.
Mr. GOODEN of Texas. Mr. Speaker, I yield myself such time as I may
consume.
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.
Mr. Speaker, I yield 2 minutes to the gentleman from South Carolina
(Mr. Norman).
Mr. NORMAN. Mr. Speaker, I rise in strong support of H.R. 788, the
Stop Settlement Slush Funds Act of 2023.
To be honest with you, I am amazed we are even debating this. The
other side always takes the position they are for the little man. We
are talking about giving money to people who have been harmed instead
of letting the Federal Government keep it.
I also heard my colleague from Texas cite how government is the gold
standard, how government provides clean air, clean water, clean
streets. The very State that she and Representative Gooden are from,
Texas, is being overrun by illegals. Where is the government? Where is
the government in stopping this illegal invasion on the border? It is
for pure power. It is for reelection purposes. They are putting the
American people at severe risk.
Let me give Congressman Gooden some other examples of money that did
not go to the victim. It went to a slush fund that was not revealed
until people were asking about it. It is the example of the Obama-era
EPA settlement with Volkswagen, where billions were diverted to
projects Congress explicitly chose not to fund. It went to projects
Congress didn't even fund.
We have to restore accountability and order. This bill will correct a
horrible trend that is developing in government, and the people who
support government now is less than 5 percent. They have lost trust in
government.
Mr. Speaker, I appreciate Mr. Gooden bringing this bill up. It is a
great bill, and I hope we can get it passed.
Mr. NADLER. Mr. Speaker, I have no further speakers, and I reserve
the balance of my time.
Mr. GOODEN of Texas. Mr. Speaker, I yield myself such time as I may
consume.
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
[[Page H77]]
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.
Mr. Speaker, I reserve the balance of my time.
Mr. NADLER. Mr. Speaker, I yield myself the balance of my time to
close.
I reiterate that H.R. 788 is a solution in search of a problem that
if enacted would seriously hamstring the ability of Federal agencies to
hold corporate wrongdoers accountable to the American public.
Given its potentially broad impact, H.R. 788 is opposed by a wide
range of environmental, civil justice, labor, and consumer advocacy
groups, including the American Federation of State, County, and
Municipal Employees, the American Federation of Teachers, Earthjustice,
the Environmental Defense Fund, the League of Conservation Voters, the
American Association for Justice, the National Association of Consumer
Advocates, and the National Consumers League.
If the underlying practice, as my friends on the other side of the
aisle say, were really such a gift to corporations, why has the Chamber
of Commerce come out in favor of this bill?
Mr. Speaker, I urge my colleagues to vote ``no'' on H.R. 788, and I
yield back the balance of my time.
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.
The SPEAKER pro tempore. All time for debate on the bill has expired.
Amendment No. 1 Offered by Mr. McCormick
The SPEAKER pro tempore. It is now in order to consider amendment No.
1 printed in House Report 118-342.
Mr. McCORMICK. Mr. Speaker, I have an amendment at the desk.
The SPEAKER pro tempore. The Clerk will designate the amendment.
The text of the amendment is as follows:
Page 3, line 13, after ``submit'' insert ``, and make
available on a publicly accessible website,''.
The SPEAKER pro tempore. Pursuant to House Resolution 947, the
gentleman from Georgia (Mr. McCormick) and a Member opposed each will
control 5 minutes.
The Chair recognizes the gentleman from Georgia.
Mr. McCORMICK. Mr. Speaker, I rise to offer an amendment to H.R. 788.
I thank Representative Gooden and the Judiciary Committee for
crafting this crucial piece of legislation that will further our
mission of holding the executive branch accountable.
The underlying bill is trying to fix an important issue. The Biden
administration, or any administration for that matter, should not be
directing settlement funds to support their radical social agendas by
financing politically favored third-party entities or programs,
sometimes completely unrelated to the original litigation. This
practice is just wrong.
My amendment is simple. It creates transparency by requiring the
annual violation audits conducted by the inspector generals in section
2(f) of this bill to be made publicly available on an accessible
website. The American people deserve to know what their government is
doing. If a government agency, in violation of law, is directing these
settlement payments to support political agendas, the public should
know.
Mr. Speaker, I reserve the balance of my time.
Mr. NADLER. Mr. Speaker, I claim the time in opposition, though I am
not opposed.
The SPEAKER pro tempore. Without objection, the gentleman from New
York is recognized for 5 minutes.
There was no objection.
Mr. NADLER. Mr. Speaker, I will not take 5 minutes.
Mr. Speaker, for all the reasons I have stated here, this is a
terrible bill. This amendment makes it no worse. Therefore, I don't
oppose it.
Mr. Speaker, I yield back the balance of my time.
Mr. McCORMICK. Mr. Speaker, in closing, I am glad he does not oppose
it because it is transparency on a bill that is meant to create
transparency. I hope nobody opposes that.
Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore. Pursuant to the rule, the previous question
is ordered on the amendment offered by the gentleman from Georgia (Mr.
McCormick).
The question is on the amendment.
The amendment was agreed to.
The SPEAKER pro tempore. The question is on the engrossment and third
reading of the bill.
The bill was ordered to be engrossed and read a third time, and was
read the third time.
Motion to Recommit
Mrs. FOUSHEE. Mr. Speaker, I have a motion to recommit at the desk.
The SPEAKER pro tempore. The Clerk will report the motion to
recommit.
The Clerk read as follows:
Mrs. Foushee of North Carolina moves to recommit the bill
H.R. 788 to the Committee on the Judiciary.
The material previously referred to by Mrs. Foushee is as follows:
Mrs. Foushee moves to recommit the bill H.R. 788 to the
Committee on the Judiciary with instructions to report the
same back to the House forthwith with the following
amendment:
Page 2, line 7, insert after ``settlement agreement'' the
following: ``(except as provided in subsection (g))''.
Add at the end of the bill the following:
(g) Exception.--The provisions of this Act do not apply in
the case of a settlement agreement that pertains to the abuse
and diversion of prescription and synthetic opioids,
including fentanyl, and that includes allegations of false
claims against the United States related to a health care
benefit program (as such term is defined in section 24 of
title 18, United States Code).
The SPEAKER pro tempore. Pursuant to clause 2(b) of rule XIX, the
previous question is ordered on the motion to recommit.
The question is on the motion to recommit.
The question was taken; and the Speaker pro tempore announced that
the noes appeared to have it.
Mrs. FOUSHEE. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further
proceedings on this question are postponed.
____________________