Today, U.S. Congressmen Matt Cartwright (D-PA-17) and Tom Cole (R-OK-4) introduced the bipartisan Truth in Settlements Act of 2014. The legislation would require federal agencies to publicly disclose the terms of non-confidential settlements obtained from offenders. U.S. Senators Elizabeth Warren (D-MA) and Tom Coburn (R-OK) have introduced the legislation in the Senate.
This legislation would require federal agencies to disclose whether any portion of a non-confidential settlement is potentially tax deductible and post information about these settlements on their websites. Additionally, federal agencies would be required to provide an explanation if a settlement is deemed confidential.
Federal agencies often tout the topline amount of settlements obtained from offenders. All too often, this value is misleading because tax deductions built into the settlement reduce the settlement's true value. Worse, agencies can deem settlements confidential without explanation, preventing public scrutiny altogether.
"This much needed legislation would compel transparency from both corporations and federal agencies," said Cartwright. "Government has an obligation to disclose information when it is pertinent to the public's interest and well-being. If an agency chooses to reach a settlement with an offender, then that agency must be willing to disclose the terms of the agreement or come up with a good reason for not doing so. We must hold offenders accountable for their actions."
"I am pleased to introduce the bipartisan Truth in Settlements Act because encouraging transparency in government is the responsible thing to do. While it should go without saying, taxpayers deserve to know how their hardworking dollars are being utilized with unclassified projects. This legislation helps do that by requiring federal agencies to make taxpayers aware of not only the settlements reached on their behalf but the terms and conditions of those settlements as well." said Cole.
"When government agencies reach settlements with companies that break the law, they should disclose the terms of those deals to the public," said Warren. "Anytime an agency decides that an enforcement action is needed, but it is not willing to go to court, that agency should be willing to disclose the key terms and conditions of the agreement. Increased transparency will shut down backroom deal-making and ensure that Congress, citizens and watchdog groups can hold regulatory agencies accountable for strong and effective enforcement that benefits the public interest."
"I am pleased a companion bill has been introduced in the House," Dr. Coburn said. "Taxpayers deserve to know the details of settlements arranged with the federal government, including how much of the assessed penalties are tax deductible. Bringing these transactions into the light will provide Congress and the public with an accurate understanding of their true financial benefits and penalties."