Cramer: House Passes Legislation Closing Settlement Slush Fund Loopholes

Press Release

Congressman Kevin Cramer announced the House of Representatives passed H.R. 5063, the Stop Settlement Slush Funds Act, which closes loopholes used by the Department of Justice to require defendants settling with the government to donate money to non-victim third-party activist organizations without consent from Congress.

Article I of the U.S. Constitution requires an appropriation be made by law in order to withdraw money from the Treasury. However, the Department of Justice has devised loopholes to bypass this Congressional spending authority by requiring the defendants who enter into settlement agreements with the federal government donate money to third-party activist organizations. In some cases, these donations are used by the Executive Branch to restore funds Congress specifically cut.

H.R. 5063 prohibits government officials from entering into or enforcing any settlement agreement for civil actions on behalf of the United States if that agreement requires the other party to the settlement to make a donation to a non-victim third party. This would ensure settlement money paid by defendants only goes to direct victims or to the U.S. Treasury for elected representatives in Congress to decide how best to appropriate these resources. This prohibition would not include payments to provide restitution or another remedy associated with the basis for the settlement agreement.

"It is troubling Executive Branch agencies continue to circumvent Congress by encouraging or requiring settlements be paid to groups aligning with the Administration's policies," said Cramer. "H.R. 5063 restores the Article I spending powers of Congress outlined in the Constitution. It holds the Administration accountable by ensuring this money is returned to the American people and not special interest groups."

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