Payments were included in settlements the Department of Justice (DOJ) negotiated with banks and other companies sued for wrongdoing.
In a July 28 memo obtained by Breitbart news, Sessions called on all component heads and U.S. attorneys to provide a tally of payments made to these third parties in the previous 10 years.
Those payouts total billions of dollars and were paid to groups with no connection to the lawsuits at hand. The practice allowed the administration to bypass the Republican-dominated House and fund groups whose policies aligned with the administration.
Sessions formally called for the practice to be ended in a June 5 memo.
“Effective immediately, department attorneys may not enter into any agreement on behalf of the United States in settlement of federal claims or charges […] that directs or provides for a payment or loan to any nongovernmental person or entity that is not a party to the dispute,” it read.
Now Sessions is trying to uncover exactly how much and to whom monies were paid.
While the practice originated in the 1970s, it increased under Obama and coincided with the House cutting federal funding for housing counseling organizations in 2011.
Judicial Watch uncovered the practice by suing the Department of Justice (DOJ) in 2010 to obtain information about the policy.
The group discovered the department had no guidelines on who got money, nor did it monitor how the money was used. This led to congressional Republicans and others describing the payouts as a political slush fund since they did not include the kind of oversight and reporting associated with normal government grants and funding mechanisms.
When the payouts were included in a $17 billion settlement with Bank of America, an editorial by Investors Business Daily described it as “extortion.”
“Buried in the fine print of the deal, which includes $7 billion in soft-dollar consumer relief, are a raft of political payoffs to Obama constituency groups. In effect, the government has ordered the nation’s largest bank to create a massive slush fund for Democrat special interests,” it read. “The attorney general is actually perverting justice by extorting billions of dollars from the largest banks in the country and giving it away to the president’s political friends and favorite political causes.”
In one instance, $3 billion of the multibillion-dollar 2013 agreements with Citigroup and Bank of America went to community-organizing groups.
The list included groups like National Council of La Raza (renamed Unidos US) that advocate on behalf of illegal immigrants, and left-leaning housing lobbyist groups like the National Community Reinvestment Coalition, and the Mutual Housing Association of New York, a spinoff of the Association of Community Organizations for Reform Now (ACORN).
Although the tally is just beginning, the New York Post reports there is $6 billion in legal settlement money that the Obama administration steered toward “progressive causes and allies in left-wing advocacy groups.”
During settlement negotiations under President Obama, Former Attorneys General Eric Holder and Loretta Lynch would direct major corporations to donate to the groups to end federal lawsuits over banking, environmental, discrimination, and other suits.
Republicans said the groups had no right to the cash because the groups were not victims or parties to the lawsuits.
In Sessions’s June 5 memo, he reminded U.S. attorneys that settling a lawsuit could ensure justice while saving taxpayers the cost of lengthy lawsuits or criminal prosecutions but had to be done responsibly.
“The goals of any settlement are, first and foremost, to compensate victims, redress harm, or punish and deter unlawful conduct,” he wrote.