Biden Directs DOJ to Reinstate ‘Slush Fund’ Settlement Payments to Special Interest Groups
President Biden will call on the Justice Department to consider reinstating an Obama-era practice that allowed prosecutors to reach settlements in which defendants payed compensation to third-party groups instead of directly to victims, Fox News reported on Wednesday.
Biden’s request to revive this practice is part of an executive order, “Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis,” that the president plans to sign. The practice was initially halted by former Trump attorney general Jeff Sessions in 2017.
“When the federal government settles a case against a corporate wrongdoer, any settlement funds should go first to the victims and then to the American people—not to bankroll third-party special interest groups or the political friends of whoever is in power,” Sessions said at the time.
One of the more prominent slush fund cases involved a DOJ investigation into Gibson Guitar Corp., alleging that the company illegally purchased and imported ebony wood from Madagascar and rosewood and ebony from India. The case was settled in 2011, when Gibson agreed to pay a penalty of $300,000, as well as $50,000 to the National Fish and Wildlife Foundation for conservation efforts.
While Sessions forbade the practice, a Republican-backed bill to make it illegal—the Stop Settlement Slush Funds Act of 2017—was not passed into law.
Biden is planning a blitz of new executive orders to end various Trump administration policies. Besides calling to reinstate settlement payments to third-parties, Biden is expected to sign a mask mandate covering all federal property, and to rejoin the World Health Organization and the Paris Climate Accords.
