Attorney General Jeff Sessions is reversing an Obama administration practice that encouraged and sometimes required banks and other companies to donate large amounts of money to outside groups as part of settlement agreements with the federal government.
In the Obama administration, the Justice Department negotiated settlements, especially with large banks in connection with the residential mortgage-backed securities crisis, that required the settling parties to pay funds to third-party community organizations, such as the National Council of La Raza, Habitat for Humanity and the National Urban League.
“These third-party organizations were neither victims nor parties to the lawsuits,” Sessions said in a memo sent Wednesday to senior Justice Department officials and U.S. attorney’s offices. Sessions said that, effective immediately, settlement payments to nongovernmental third parties, such as advocacy or housing groups, are prohibited.
“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 in a statement.
Source: TheWashingtonPost
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June 07, 2017 at 09:47PM
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