Stop Settlement Slush Funds Act of 2016
Floor Speech
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Mr. JOHNSON of Georgia. Mr. Chairman, I yield myself such time as I may consume.
Mr. Chair, the Stop Settlement Slush Funds Act of 2016, H.R. 5063, would remove an important civil enforcement tool available to agencies to hold corporations accountable for the general harm caused by unlawful conduct.
H.R. 5063 would have potentially disastrous, unintended consequences on the remediation of generalized harms in civil enforcement actions like the one that the chairman just noted at the very beginning of his speech. He talked about mortgage lending settlements that the Department of Justice had obtained after filing suit in court against Wall Street bankers who took billions of dollars in equity, home equity, from Americans throughout the country by way of predatory lending instruments, which blew up in their faces; caused the Wall Street meltdown. Wall Street got bailed out.
The American people who had these mortgages that then were underwater lost their homes, so the Department of Justice sued, and this is what this legislation seeks to get at.
My friends on the other side of the aisle don't want the common people of this country to have the protection of government. They want a government that is hands off; let the private sector, let the free market work its will. No rules. Whatever will be will be. The bottom line is the rich get richer and the poor get poorer; and this legislation would work to enforce that economic philosophy that is held so dear by my friends on the other side of the aisle.
So these mortgage lending settlements, the DOJ sued the big banks. The big banks came to the table and decided to settle. As a result of the settlement, there were directives that were agreed to by the Wall Street banks, that they would give money to certified HUD counseling agencies.
Those agencies have done a good job of helping people who have not lost their homes continue to stay in their homes, to get their mortgages refinanced, to get their situation in order, to give them the ability to hold on to their homes after they had lost their jobs and were unable to pay the mortgage for a number of months. These housing counseling agencies were able to be effective at keeping people in their homes, but my friends on the other side of the aisle, they don't want to have any part of that because it is costing their friends on Wall Street money.
This same settlement that the chairman excoriated in his presentation just a minute ago, it gave money to State-based legal aid firms that were about helping people to avoid foreclosure, helping the very people that these banks stole from and hurt. So this is what they want to stop, and they cloak it in the--they say that Congress should be the one to appropriate money, and that is true.
There is nothing about Article I, the legislative branch, Congress, that is a part of the lawsuit that the Justice Department, an Article II body, would file in a Federal court, an Article III court, that results in a settlement. There is no legislative implication in that whatsoever. There is no appropriations from the legislature.
What it is is a court-enforced transfer of the very wealth that was stolen from the people, back to the people, by way of these agencies, which my colleague refers to as activist, third-party entities. Well, these are third-party entities that are acting on behalf of the very people who have been harmed.
What this legislation seeks to do is to take away the ability of the Justice Department to obtain a settlement to help people who have been harmed, and then would force the money to come into the hands of the legislative branch so that the legislative branch could then appropriate it. And we know that this legislative branch controlled by the other side of the aisle is not interested in helping people who lost their homes due to Wall Street fraud.
So that is what this legislation is all about, and it comes at a time when we have people who are afflicted with the Zika virus. We can't even pass legislation in this Chamber that would get at that public health emergency, which is right here on our doorstep where it is in the House now.
This is an emergency. We have almost 2,000 babies born having been afflicted with the Zika virus. It's going to take $10 million for the remainder of their lives, average, to take care of them. That is $2 billion right there.
The President has come to us, months ago, requesting $1.9 billion-- less than the $2 billion--to fund operations to get at this Zika virus, to prevent it from taking hold, and we can't even pass it in this Congress because we are too busy passing bills to help Wall Street.
That is not what the American people want. That is not what the American people need. I ask my colleagues to vote against this legislation.
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Mr. JOHNSON of Georgia. Mr. Chairman, the last speaker spoke about how the banks, Wall Street banks, are able to get a break from the executive branch when they pay out these settlements, but those are matters of legislative action that has been passed by this Congress which coddles the banks and puts them in a position where they just simply can't lose. When it comes to these fines, as they call it, these are not fines. These are settlement amounts that are going to help the victims. They are not going to play politics anywhere. These are funds that are directed to entities which help the victims of the Wall Street excesses. So I want to make that clear.
Mr. Chairman, I yield 3 minutes to the gentleman from New York (Mr. Nadler).
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Mr. JOHNSON of Georgia. Mr. Chairman, I just can't believe what I heard the gentleman from Virginia say about the big banks being coddled by the Justice Department, being given a break. So he is complaining that the big banks are being given a break, but then the purpose of this legislation is to take the big banks off of the hook. It is ironic.
Mr. Chairman, I yield 5 minutes to the gentlewoman from Texas (Ms. Jackson Lee).
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Mr. JOHNSON of Georgia. Mr. Chairman, I yield the gentlewoman an additional 1 minute.
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Mr. JOHNSON of Georgia. Mr. Chairman, I yield myself such time as I may consume.
Even though the Senate may take up this ill-fated measure, the President has promised to veto it. So what we are doing here today is another messaging bill that distracts the American people perhaps from the more important issues of the day, such as the spreading of this public health crisis, the Zika virus, which is afflicting almost 17,000 Americans infected by mosquitos carrying the Zika virus--17,000 people--200 babies born, 1,600 infected women.
This is a crisis that is going to cost the American people from a public health perspective. It is going to cost the lives of the unborn whose mothers are afflicted with this virus, giving birth to them, and they have the virus and suffer from microcephaly, a shrunken head and brain which renders them severely developmentally impacted as they make it through life and add a severe burden to the taxpayers. Instead of dealing with this issue, we took a 7-week vacation and refused to come back to work to deal with the Zika virus.
At the same time as we have got the Zika virus, a public health issue afflicting the Nation, we are also seeing more and more and more people dying from opioid abuse in this country. This Congress has been insufficient in dealing with this, applying the resources to deal with that issue.
We have got the issue of Flint, Michigan, where lead was found in the water. This Congress has done absolutely nothing to address the financial implications of that and what we can do to help remediate it and to keep it from happening.
Now we get East Chicago, Indiana, with people living atop a lead dump, basically, thousands of people impacted, and this Congress will do nothing.
That is not to mention anything about the other public health problem that afflicts the Nation, and that is the ongoing gun violence issue, which this Congress will do nothing about other than to hold a hearing on this coming Friday to censure those of us who had the gall to sit in the well of this House Chamber to demand that this body take some action. What did the body do back then? It adjourned for 7 weeks.
This is a spectacle that the American people are looking at. You can't help but to see it. You can't help but to understand it. The American people are being adversely impacted by the policies of my friends on the other side of the aisle. They have caught a bad case of the Trump syndrome, the Trump syndrome which causes people to forget about the truth, forget about reality, start seeing things the way that they want to see them, and they don't care what impact it has on the American people. All they want to do is be able to retain their positions, although they say that they hate government, they want to be here so that they can shrink government, make it smaller, leave everything to the private sector, and leave the American people fending for themselves.
We have had that happening for much too long. That is what the American people are so angry about on both sides of the aisle. That is why the mainstream portion of the other side of the aisle has completely lost control of their apparatus. We have the Trump syndrome that has taken hold, and this body is sick because it is being led by folks who have fallen victim to the Trump syndrome. Enough is enough. The American people are sick and tired of it.
With respect to Congress appropriating funds, this Congress still has to pass a budget. But you are talking about dealing with what is called a slush fund, the Stop Settlement Slush Funds Act of 2016. They say that Congress should be the one to allocate resources; it shouldn't come out of a settlement. Well, the fact is that there are no public dollars coming to fruition in a settlement between a big bank and the Justice Department. Those are all privately held funds that are being disgorged from the wrongdoer and placed back in the service of the very people that were harmed by the wrongdoing of the big banks. There is no legislative appropriation there because there is no public money. It is private money, but it is being redirected to those from whom it was wrongfully taken. That is what makes this legislation so hurtful to the process.
I would ask my colleagues to, again, be in opposition to it.
Mr. Chairman, I yield the balance of my time to the gentleman from Michigan (Mr. Conyers), my chairman--or my ranking member. I say ``chairman'' in a very hopeful way.
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Mr. JOHNSON of Georgia. Mr. Chairman, I yield back the balance of my time.
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Mr. JOHNSON of Georgia. Mr. Chairman, with increased opportunities for private organizations to obtain, maintain, and disseminate sensitive private information of citizens, it is critical that we not prevent or delay enforcement of consumer protection laws designed to protect Americans' privacy rights.
As Professor David Uhlmann of Michigan Law noted during the hearing on H.R. 5063, this measure ``fails to adequately address the fact that generalized harm arises in civil cases,'' including cases brought under consumer protection laws under section 5 of the Federal Trade Commission Act.
H.R. 5063 only exempts payments to parties other than the government to provide restitution for actual harm ``directly and proximately caused by the party making the payment.'' Congress has expressly granted authority to the Federal Trade Commission, however, to resolve complaints against corporations for unfair or deceptive acts or practices under section 5 of the FTC Act.
As part of resolving potential civil liability of corporations for unlawful conduct, FTC settlement agreements typically require parties to address generalized harms of unlawful conduct by adopting a privacy program, employee training and monitoring requirements, third-party auditing, regular testing of privacy controls and procedures, and other reasonable steps to maintain security practices consistent with the underlying settlement.
The protection of Americans' privacy is not a Democratic or a Republican issue. Indeed, it is one of the few that those across the political spectrum have long embraced, including my friends on the other side of the aisle. Yet, notwithstanding these shared concerns, this bill could impose burdensome requirements on settlement agreements that are intended to protect privacy.
I voice my support for the amendment.
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Mr. JOHNSON of Georgia. Mr. Chairman, I rise in opposition to the amendment.
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Mr. JOHNSON of Georgia. Mr. Chairman, this amendment would limit the ability of the prevailing party to receive reasonable attorneys' fees for services rendered in connection with a settlement agreement.
Where citizens, through a private enforcement action, hold the government or a private party accountable, Congress has authorized payments for reasonable attorneys' fees.
Bringing meritorious claims to hold corporate wrongdoing accountable is often time consuming and expensive. In many cases, Congress has already authorized reasonable attorneys' fees specifically to encourage these types of lawsuits to ensure a level playing field and an accessible justice system.
This amendment would limit these fees to outdated rates--$125 an hour; that is ridiculous--and that will discourage citizens from bringing these important lawsuits. Accordingly, I encourage my colleagues to oppose this amendment.
I yield the balance of my time to the gentleman from Virginia (Mr. Goodlatte), the chairman of the Committee on the Judiciary.
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Mr. JOHNSON of Georgia. Mr. Chair, I yield back the balance of my time.
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