A bill has been introduced into Congress that will ban federal agencies from funneling money to third parties which are not victims of government lawsuits. The intent is to curb the Obama Administration practice of requiring companies losing lawsuits to direct fines to civic organizations – usually left leaning political groups.

While it was undoubtedly a practice little known to most Americans, it was abruptly stopped under the Trump Administration.

According to Judicial Watch it was a “scheme” that forced companies sued by the government to fund leftist groups, while it “overtly excluded conservative organizations.”

According to Department of Justice (DOJ) records obtained by Judicial Watch “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 document also show that there was “ a collaborative effort” among high-level officials in the Office of the Assistant Attorney General (OAAG) and the Office of Legal Counsel (OLC) to make sure conservative groups did not receive any settlement cash.

Judicial Watch reported that, known as a DOJ “slush fund,” the operation 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 Watch 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.

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 leftist groups  that were not officially connected to the lawsuits.

The new batch of DOJ records shed more light on how conservative nonprofits were not only banned from receiving money, but also singled out.

Judicial Watch reported, “A House Judiciary Committee investigation determined 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.’”

 Attorney General Jeff Sessions put an end to the practice, directing, “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.”


However, noting that a new administration could reverse the directive the chairman of the House Judiciary Committee, Virginia Republican Bob Goodlatte, introduced a bill that to specifically prohibit the practice.

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. . . That such abuses actually occurred is now proven.”