Thread: GOP wants to eliminate shadowy DOJ slush fund bankrolling leftist groups

**This is a National disgrace! The biggest recipients of Obama's bank bail-out funds went to National Council of La Raza, the National Community Reinvestment Coalition and the National Urban League.

GOP wants to eliminate shadowy DOJ slush fund bankrolling leftist groups

March 01, 2017

The Obama administration funneled billions of dollars to activist organizations through a Department of Justice slush fund scheme, according to congressional investigators.

“It’s clear partisan politics played a role in the illicit actions that were made,” Rep. John Ratcliffe, R-Texas, told Fox News. “The DOJ is the last place this should have occurred.”

Findings spearheaded by the House Judiciary Committee point to a process shrouded in secrecy whereby monies were distributed to a labyrinth of nonprofit organizations involved with grass-roots activism.

“Advocates for big government and progressive power are using the Justice Department to extort money from corporations,” Judicial Watch’s Tom Fitton told Fox News. “It’s a shakedown. It’s corrupt, pure and simple.”

There is a recent effort by Republicans to eliminate the practice, which many believe was widely abused during the Obama administration.

When big banks are sued by the government for discrimination or mortgage abuse, they can settle the cases by donating to third-party non-victims. The settlements do not specify how these third-party groups could use the windfall.

So far, investigators have accounted for $3 billion paid to “non-victim entities.”

Critics say banks are incentivized to donate the funds to non-profits rather than giving it to consumers.

“The underlying problem with the slush funds is we don’t know exactly where the money is going,” Ted Frank, director of The Competitive Enterprise Institute Center for Class Action Fairness, told Fox News. “Using enforcement authority to go after corporate defendants, DOJ bureaucrats are taking billions away from taxpayers to fund their pet projects overriding congressional preferences.”

**Click link to see chart
http://www.foxnews.com/politics/2017...st-groups.html

Frank said the money should go to the Treasury Department and the process subverts the legislative branch’s essential spending power. The Justice Department has argued that money is allowed to bypass Treasury because the banks’ donations to the groups are voluntary.

Both the Government Accountability Office and Congressional Research Service have concluded that the settlement agreements do not violate Congress’ power of the purse. But others disagree.

“This is real abuse of power,” adds Franks.

For example, in the FY16 Enacted Congressional Appropriation, Congress allotted $47 million for the HUD Housing Counseling, but the Citi and Bank of America settlements shipped in an additional $30 million in funding. The Legal Services Corporation was allocated $385 million from Congress but is getting an additional $412 million in taxpayer dollars from the third-party settlement practice.

The recent Volkswagen settlement, which requires a $1.2 billion investment into zero emission technology, was not only twice denied by Congress but is now expected to receive four times the amount originally requested by the Obama administration.

A sample of the left-leaning organizations benefiting from the largesse include the National Council of La Raza, the National Community Reinvestment Coalition and the National Urban League.


The NCLR and NCR did not return phone calls seeking comment.

** Read full report: http://www.foxnews.com/politics/2017/03/01/gop-wants-to-eliminate-shadowy-doj-slush-fund-bankrolling-leftist-groups.html

THE JUSTICE DEPARTMENT’S HOUSING SETTLEMENTS:
MILLIONS OF CONSUMER RELIEF FUNDS DISBURSEDWITH NO GUARANTEES OF HELPING HOMEOWNERS

A Majority Staff Report of the Committee on Homeland Security and
Governmental Affairs United States Senate Senator Ron Johnson, Chairman

EXECUTIVE SUMMARY

Nearly a decade after the crash of U.S. housing markets, the Obama Administration continues to pursue claims against large financial institutions accused of contributing to the crash.

The crash had profound effects on American homeowners, and disproportionately affected minority homeowners. In recent years, the Administration has settled claims with multiple financial institutions, resolving allegations relating to housing finance. The settlement negotiations between the DOJ and the banks, however, have been shrouded in secrecy and the terms of the eventual settlement create a number of constitutional and policy concerns. In particular, the settlements require the distribution of millions of dollars of consumer relief funds with no guarantee that the funds will assist individuals who lost their homes in the housing crash.

The DOJ settled with JPMorgan Chase & Co. (JPMorgan) in November 2013, Citigroup Inc. (Citigroup) in July 2014, and Bank of America Corporation (Bank of America) in August 2014. These settlements concerned allegations related to the issuance of residential mortgage-backed securities. Collectively, these three settlements totaled $36.65 billion in payments from the banks to various federal, state, non-governmental organizations, and direct consumer relief.

In March 2015, Senator Ron Johnson, Chairman of the Senate Homeland Security and Governmental Affairs Committee, began oversight of the DOJ’s settlements with large financial institutions. As chairman of the chief investigative committee of the Senate, Chairman Johnson requested information from the DOJ and the designated independent monitors of the three settlements. The purpose of this majority staff report is to promote broad transparency and accountability in the disbursement of billions of dollars of settlement funds flowing outside of the Congressional appropriations process.

The framework of the Constitution designates Congress as the sole entity empowered to allocate public funds, either directly or through delegation to the agencies. The judicial system, similarly, is the mechanism for adjudicating disputes and remedying wrongs. The DOJ’s housing settlements, however, removed millions of dollars of third-party payments from the congressional appropriation process as well as from judicial review. Of the settlements funds set aside for consumer relief, at least $640 million was set aside for third-party payments, to be disbursed by the banks according to the settlement terms. By routing funds away from the U.S. Treasury, the settlements circumvented Congress’s spending authority and eliminated Congress’s ability to decide how to distribute the funds. While reasonable people may disagree on the merits of these settlements, it is concerning nonetheless that the DOJ unilaterally controlled the allocation of billions of dollars absent Congressional and judicial involvement.

The majority staff report finds that as the banks disbursed settlement funds to third-party organizations, there were no guarantees that the funds would help homeowners who lost their homes. From the billions of dollars that each bank agreed to pay under the terms of the settlement, specific sums were earmarked for third-party groups approved by the Department of Housing and Urban Development. The DOJ did not require the third-party disbursements to go to those homeowners actually aggrieved by the alleged wrongdoing. Instead, the DOJ required the banks to disburse the funds to these third-party groups without requiring any proof of how the funds would be spent. Moreover, the independent settlement monitors charged with overseeing the settlements have no way of knowing how the third-party groups spent the funds they received through the settlements.

In addition to funding broader housing policy outside of the Congressional and judicial processes, Chairman Johnson has found that the DOJ collected more than $575 million for its own purposes through the three settlements. The DOJ has the ability under federal law to collect a three percent fee on settlement funds related to its civil enforcement efforts in order to pay for processing debt litigation. Since the creation of this authority in 1993, however, the DOJ’s total collections—and, correspondingly, the three-percent payments to the DOJ—have grown over time. To date, the DOJ has retained a total of $575.7 million from the housing settlements with JPMorgan, Bank of America, and Citigroup—a remarkable sum considering that the agency collected only $158.3 million in three-percent payments as recently as fiscal year 2013.

The findings of this majority staff report are admittedly limited by the information available to the Committee. Because Chairman Johnson’s inquiry was a broad examination of the settlements, the Committee has not tracked the use of the settlement funds beyond the DOJ and the independent settlement monitors. Nonetheless, concerns are apparent in the DOJ’s housing settlements. Chairman Johnson’s oversight has found:

• Of the $36.65 billion in total settlements, the DOJ earmarked $13.5 billion for “consumer relief,” of which hundreds of millions of dollars are to be disbursed to selected third-party groups approved by the Administration. (pages 20-25)

• Of the $13.5 billion in consumer relief funds, there is no requirement for every dollar to be first distributed to any homeowners actually aggrieved before any money is spent on broader housing-related policy goals. (pages 20-25)

• The settlements did not require any proof of how the third-party groups spent consumer relief funds, and the independent settlement monitors have no visibility into the use of those funds. (pages 25-30)

• The DOJ has retained $575.7 million from three housing settlements for its own use as part of the “three percent fund”—an amount that could easily fund oversight of multiple housing regulators. (pages 32-35)


• The DOJ’s use of the housing settlements to indirectly effectuate housing policy ignores Congress’s power of the purse to appropriate funds for policy purposes. (pages 16-20)

• The third-party consumer relief entities chosen by the DOJ include politically active and controversial groups. (pages 25-27)

• The sole entity designated by the DOJ to receive undesignated surplus consumer relief funds has been struggling with “management shortcomings,” “contracting issues,” and other issues. (pages 27-30)

I. INTRODUCTION

In March 2015, Senator Ron Johnson, Chairman of the Senate Committee on Homeland Security and Governmental Affairs, initiated an inquiry into the Department of Justice’s (DOJ) settlements with large financial institutions and credit rating agencies related to the 2008 financial crisis. Chairman Johnson sent a total of six letters requesting data and information about the settlements. On March 11, 2015, Chairman Johnson requested information from the DOJ about its settlements with Bank of America, Citigroup, JPMorgan, and Standard & Poor’s (S&P).1 After receiving an incomplete response from the DOJ,2 Chairman Johnson sent a follow-up letter on May 4, 2015.3 On May 29, 2015, the DOJ responded with more specific information about the amount of funds in each settlement and explained how each bank maintained responsibility for distributing consumer relief funds.4 In response to this letter, Chairman Johnson sent a third letter to DOJ on July 28, 2015, requesting specific information about the DOJ’s Three Percent Fund, how the DOJ tracked expenditures retained in the Three Percent Fund, and the DOJ’s involvement in selecting housing counseling agencies.5 The DOJ responded on August 24, 2015.

Separately, on July 28, 2015, Chairman Johnson wrote individually to the independent monitors tasked with overseeing each settlement, seeking information about how the banks were distributing consumer relief funds and which entities had received funds to date.7 On August 7, 2015, Joseph A. Smith, Jr., the monitor for JPMorgan, responded to the Chairman’s letter. On August 11, 2015, Eric D. Green, the monitor for Bank of America, and Thomas J. Perrelli, the monitor for Citigroup, each responded to the Chairman’s letter.

The information obtained from the DOJ and independent settlement monitors informs the conclusions articulated in this majority staff report. From this information, it appears that billions of dollars have flowed through these opaque negotiations of each settlement without explicit accounting for actual damage done or a direct provision of assistance to those homeowners who already lost their homes. Providing help to those struggling to stay in their homes is a worthy policy goal. The DOJ’s settlements with these major financial institutions, however, show how the Obama Administration unilaterally made funding choices that effectuated broad housing policy with no oversight or little accountability for how the funds were ultimately spent.

II. AN OVERVIEW OF THE ADMINISTRATION’S HOUSING SETTLEMENTS

The subprime mortgage and financial crises that occurred from 2006 to 2009 had profound effects on homeowners. According to a Pew Center study, the housing crash had a disproportionate effect on minority homeowners, with inflation-adjusted median net worth falling by 66 percent for Hispanic household and 53 percent for African-American households. There has been ample literature and media coverage of the housing crash. Congressional committees—including a subcommittee of this Committee—investigated the root causes of these problems, attempting to determine why and how they happened. In addition, the DOJ initiated law-enforcement investigations of the major mortgage servicers. On February 9, 2012, the DOJ announced a $25 billion agreement with the five largest mortgage servicers to settle claims related to mortgage loan servicing and foreclosures. The agreement mandated that the

financial institutions—Bank of America Corporation, JPMorgan Chase & Co., Wells Fargo & Co., Citigroup Inc., and Ally Financial, Inc.—collectively pay “$20 billion toward various forms of financial relief to homeowners.”

After the 2012 settlement, the DOJ shifted its focus to claims related to each bank’s role in the “issuance of residential mortgage-backed securities.” This focus led to three additional major settlements: JPMorgan Chase & Co. (JPMorgan) in November 2013, Citigroup Inc. (Citigroup) in July 2014,17 and Bank of America Corporation (Bank of America) in August 2014. Collectively, the three new settlements totaled $36.65 billion in payments from the banks to various federal and state entities, non-governmental organizations, and in direct consumer relief. The three settlement agreements shared a number of identical provisions, though each agreement had distinct variations in certain provisions.

The principal similarity among all three settlements is the DOJ’s reliance on 12 U.S.C. § 1833a, the civil penalties provision of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA). Prior to the 2009 financial crisis, the FIRREA civil remedy was a rarely-used enforcement tool to target fraud in the savings and loan industry. Since 2009, however, this enforcement tool has emerged as the DOJ’s “remedy of choice to investigate and prosecute cases arising out of the recent financial crisis.” Using this authority, the DOJ collected a total of $11 billion in FIRREA civil penalties from the JPMorgan, Citigroup, and Bank of America settlements to be “deposited in the General Fund of the United States Treasury.” Any funds deposited into the General Fund are subject to the congressional appropriations process governed by Article I of the U.S. Constitution.

The banks also resolved claims brought by federal regulators such as the National Credit Union Administration, Federal Deposit Insurance Corporation, Federal Housing and Finance Agency, Federal Housing Administration, and the Securities and Exchange Commission.

In addition to the FIRREA civil penalties, all three bank settlements include provisions related to claims bought by individual states, and each bank is required to disburse a specific amount of money for the purposes of consumer relief. The settlement agreements did not require these funds to be deposited in the Treasury’s General Fund—unlike the FIRREA civil penalties. Accordingly, these portions of the settlement funds were not subject to any congressional review or control.

**Read Full Report: http://www.foxnews.com/politics/2017/03/01/gop-wants-to-eliminate-shadowy-doj-slush-fund-bankrolling-leftist-groups.html
***END***

A Senate majority staff report, from the Committee on Homeland Security and Government Affairs, released last spring notes the NCRC’s “checkered history” of promoting “illegal immigration and advocating for benefits and driver’s licenses for undocumented immigrants.”

The group voiced strong opposition to the confirmation of Attorney General Jeff Sessions. The NCRC has photos of a Sessions protest on its homepage.

The Senate majority staff report also found the “DOJ bypassed Congress to use a portion of the settlements to finance the administration’s housing policy.”

While legislation sputtered last year, lawmakers have resurrected an effort to quash the practice with companion bills in the House and Senate.

“Democrats thought it was an attack on Obama,” said Sen. James Lankford, R-Okla., speaking to Fox News. “This is not a Republican or Democrat issue, but one of good government.

Actions settled by the federal government should go back to the federal government, back to the taxpayer.”

Lankford has introduced the Stop Settlement Slush Fund Act of 2017 while House Judiciary Chairman Bob Goodlatte, R-Va., submitted similar legislation in the House.

“Congress must permanently end the abuses Obama’s Justice Department exploited to use settlements to funnel money to their liberal friends,” Goodlatte said in a statement.

As lawmakers face protests in their home districts, the issue of shadow subsidies underscores the foggy nature of taxpayer dollars used in partisan politics.

“The protests are as organic as a plastic cup,” says Fitton. “There is a massive left-wing infrastructure in place trying to protect the monstrous government created by the Obama administration.”

http://www.foxnews.com/politics/2017...st-groups.html

Why is our government giving money to any organization?

We need to stop funding anything but government business.

I think we could fix the national debt in jig time.