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Bombshell Lawsuit Exposes What Obama Did With DOJ Slush Fund

An Obama administration policy that funneled donations to left-leaning groups as part of settlements reached by the Department of Justice is the subject of a lawsuit by the conservative watchdog group Judicial Watch, the non-profit group announced Monday.

“Judicial Watch announced today that it has filed a Freedom of Information Act (FOIA) lawsuit against the U.S. Department of Justice for records relating to an Obama administration policy of settling agency lawsuits against corporate defendants by requiring that the corporations make ‘donations’ to left-wing interest groups La Raza, the Urban League and the National Community Reinvestment Coalition,” the group said in a statement.

“Judicial Watch submitted its FOIA request in the aftermath of an extensive investigation by the House Judiciary and Financial Services Committee that found the Obama Department of Justice had ‘engaged in a pattern or practice of systematically subverting Congress’ budget authority by using settlements from financial institutions to funnel money to left-wing activist groups.’”

According to a Department of Justice news release, the Obama-era policy “repeatedly required settling parties to pay settlement funds to third-party community organizations that were not directly involved in the litigation or harmed by the defendant’s conduct.”

While the policy was officially ended last week by Attorney General Jeff Sessions, questions remain about the groups that received money from settlements. According to Investors Business Daily, in just one $17 billion settlement with Bank of America, the Obama administration funneled money to:

  • La Raza: A far-left Latino organization which is known for pressuring banks to give loans to low-income Hispanics.
  • National Community Reinvestment Coalition: One of the top lobbying groups supporting the Community Reinvestment Act, a 1977 piece of legislation that’s a favorite of the left.
  • Operation Hope: A group from South Central in Los Angeles, it pressures banks to give “dignity loans” to individuals who would otherwise not qualify.
  • Neighborhood Assistance Corporation of America: A group whose leader called himself a “bank terrorist,” something that’s apparently a lot more acceptable since the days of Patty Hearst.

“When the federal government settles a case against a corporate wrongdoer, any settlement funds should go first to the victims and then to the American people — not to bankroll third-party special interest groups or the political friends of whoever is in power,” the attorney general said upon ending the program.

“Unfortunately, in recent years the Department of Justice has sometimes required or encouraged defendants to make these payments to third parties as a condition of settlement.  With this directive, we are ending this practice and ensuring that settlement funds are only used to compensate victims, redress harm, and punish and deter unlawful conduct.”

If American corporations have engaged in wrongdoing, it’s understandable that they should be held to account both legally and monetarily. However, the money from judgments and settlements shouldn’t be used as a political slush fund, channeling money to simpatico leftist organizations like La Raza.

The Obama administration’s third-party settlement plan was an inexcusable abuse of power that never should have been embarked upon. While the Trump administration made the correct decision in abruptly ending it, the practice still needs to be investigated.

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