The Wall Street Journals Editorial Board praises Attorney General Sessions effort to protect taxpayer money by ensuring settlement funds go to victims, not special interest groups. The Death Of Obamas Slush Funds Editorial The Wall Street Journal June 8, 2017
The misuse of settlement slush funds was one of the Obama Administrations worst practices, which it used to end run Congresss constitutional spending power. After the GOP took the House and tried to cut spending for liberal interest groups, the Obama Justice Department began to force corporate defendants to allocate a chunk of their financial penalties to those same groups.
Banks were made to fund left-wing activists such as NeighborWorksthough these groups were neither victims nor parties to lawsuits. In 2015 JP Morgan was required to pay $7.5 million to the American Bankruptcy Institutes endowment for financial education. In 2016 Volkswagen was required to invest $2 billion in zero-emissions technology and promote zero-emissions cars. Government enforcement became an income redistribution mechanism without having to go through Congress.
Mr. Sessionss brief memo instructs Justices 94 U.S. Attorneys to immediately halt the practice. It correctly notes that financial penalties are designed to punish and provide relief to victimsnot to generate political payola. Save for limited exceptionssuch as payments expressly authorized by statutethe memo instructs that future settlement money will go directly to victims or to the U.S. Treasury.
Read the full editorial here.