OCTOBER 26, 2017
An Obama-era scheme that forced companies sued by the government to fund leftist groups overtly excluded conservative organizations, according to internal Department of Justice (DOJ) records obtained by Judicial Watch. As part of settlements, the DOJ would often give the corporations—mainly big banks—double credit if they gave money to leftwing interest groups handpicked by the administration instead of paying the government. The new records demonstrate a collaborative effort among high-level officials in the Office of the Assistant Attorney General (OAAG) and the Office of Legal Counsel (OLC) to ensure conservative groups did not receive any settlement cash.
The operation is known as a DOJ “slush fund” that filled the coffers of Obama-allied nonprofits such as the National Council of La Raza, Urban League and National Community Reinvestment Coalition. Earlier this year Judicial sued the DOJ for records relating to the problematic Obama administration policy of settling government lawsuits against corporate defendants by requiring that the corporations make “donations” to leftwing interest groups. Back in 2010 Judicial Watch sued the DOJ over a similar program in which the agency’s Civil Rights Division directed large sums of cash settlements in discrimination lawsuits to organization that were not officially connected to the lawsuits. Recipients were also leftist groups that aligned with Obama’s ultra-liberal agenda.
The new batch of DOJ records shed more light on how conservative nonprofits were not only banned from receiving money, but also singled out. One electronic mail from a redacted DOJ source to a pair of officials in the OAAG reads: “Concerns include: a) not allowing Citi to pick a statewide intermediary like the Pacific Legal Foundation (does conservative property-rights free legal services)…” Another email, from the same OAAG officials to the Office of Public Affairs (OPA) says: “Here are some examples of consumer relief items that we believe require the banks to do more than they would be economically motivated to do on their own in Citi…” The examples are redacted but one line reads: “Make donations to categories of entities we have specified (as opposed to what the bank might normally choose to donate to).”
A House Judiciary Committee investigation determined earlier this year that the DOJ used the mandatory donations to direct almost a billion dollars to liberal activist groups in just two years. It gets better. The congressional probe found that “activist groups which stood to gain from mandatory donation provisions were involved in placing those provisions in the settlements.” Thankfully, Trump Attorney General Jeff Sessions put an end to the madness over the summer, writing in a memo that the DOJ will no longer engage in the practice. “Effective immediately, Department attorneys may not enter into any agreement on behalf of the United States in settlement of federal claims or charges, including agreements settling civil litigation, accepting plea agreements, or deferring or declining prosecution in a criminal matter, that directs or provides for a payment or loan to any non-governmental person or entity that is not a party to the dispute.”
A new administration could reverse the directive however, so the chairman of the House Judiciary Committee, Virginia Republican Bob Goodlatte, introduced a bill that will ban all federal agencies from funneling money to third parties that weren’t victims in government lawsuits. The measure appears to have bipartisan support and does not affect payments to provide restitution to victims that have suffered harm. “It was obvious from the outset that mandatory donation provisions create opportunities for abuse,” Congressman Goodlatte says in a statement. “That such abuses actually occurred is now proven.”
The Obama administration also used the Internal Revenue Service (IRS) as a political tool to target conservatives. Judicial Watch uncovered that major scandal and sued to obtain droves of government documents that show how the agency singled out groups with conservative-sounding terms such as patriot and Tea Party in their titles when applying for tax-exempt status. The Obama IRS also illegally colluded with another government agency—the Federal Election Commission (FEC)—to crack down on conservative nonprofits during the 2012 election cycle.
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