WASHINGTON (Legal Newsline) - Republican lawmakers have reintroduced a bill that would prohibit the U.S. Department of Justice from keeping parts of fines and penalties and prevent federal agencies from requiring defendants to donate money to outside groups as part of settlement agreements.

Last week, House Judiciary Chairman Bob Goodlatte, R-VA, submitted the Stop Settlements Slush Funds Act of 2017, or H.R. 522. Goodlatte’s committee, sometimes referred to as the lawyer for the House, has jurisdiction over matters relating to the administration of justice in federal courts, administrative bodies, and law enforcement agencies.

Goodlatte said he has the support of every Republican House Judiciary Committee member as an original cosponsor.

“This bill is oversight and action. Congress must not tolerate Justice Department political appointees using settlements to funnel money to their liberal friends,” he said in a statement.

“This is also an institutional issue. Once direct victims have been compensated, deciding what to do with additional funds recovered from defendants becomes a policy question properly decided by elected representatives in Congress, not agency bureaucrats or prosecutors.”

The bill states explicitly that payments to provide restitution for actual harm directly caused, including harm to the environment, are permissible.

Goodlatte said the need for the legislation arose after an extended judiciary committee investigation found that the DOJ had engaged in a pattern or practice of systematically subverting Congress’ budget authority by using settlements from financial institutions to funnel money to what he describes as “left-wing activist groups.”

The House Judiciary Committee held two hearings, in February 2015 and May 2015, to question DOJ officials regarding the settlement practices.

Another hearing regarding the previous version of the bill was held last year. During that hearing, it was pointed out that in 2012, the DOJ forced Gibson Guitars to pay a $50,000 “community service payment” to the National Fish and Wildlife Foundation even though the foundation was not a victim of the alleged crime and had no direct connection to the case.

Also, it was mentioned, in 2006, the DOJ forced a wastewater plant that had been accused of violating the Clean Water Act to give $1 million to the U.S. Coast Guard Alumni Association. The association had no connection to the case and had suffered no harm, direct or indirect.

That bill -- the Stop Settlement Slush Funds Act, or H.R. 5063 -- passed the House in the last Congress by a vote of 241-174. With the GOP in control of both houses and a Republican president, there is hope the legislation this time will become law.

Shortly before the hearing last year, a major DOJ bank settlement with Goldman Sachs required $240 million in “financing and/or donations” toward affordable housing.

Some subcommittee members, including Rep. Hank Johnson, D-GA, expressed concern over the previous version of the legislation.

“H.R. 5603 would remove an important civil enforcement tool,” he argued at the hearing, adding that it would have “potentially disastrous” consequences.

Johnson said he feared the bill was an “unwarranted encroachment” on prosecutorial authority and would have only created more uncertainty, delay and litigation.

Both the House Judiciary and Financial Services committees have sent multiple oversight letters, including two to the DOJ, seeking documents and answers.

The probe by the two committees revealed that, in approximately the last two years, the DOJ used mandatory donations to direct nearly $1 billion to activist groups.

Goodlatte’s bill would end this practice and restore accountability to the appropriations process, the chairman said in a press release last week.

Earlier this month, the House Judiciary Committee sent a letter to the Justice Department requesting that it preserve all documents related to the department’s settlement practices.

Goodlatte said the investigation is ongoing.

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com

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