Taxpayers pay the federal government to sue itself

Taxpayers pay the federal government to sue itself

November 23, 2010
Originally published in The Daily Caller

The federal government is paying environmental advocacy organizations billions of dollars — to fund lawsuits against itself. When the government has to pay or settle, the green groups dip into the public trough yet again.

Yes, you read that correctly. Tax-exempt advocacy groups are double-dipping and funneling huge fees to lawyers and lobbyists, to get federal agencies to enact policy changes which many agency staffers already favor, but which Congress has not approved. The only losers here are the nation’s taxpayers.

Government agencies’ “judgment funds” act as a slush fund for lawyers and special interests. These funds set money aside to fund lawyers’ costs for lawsuits and the payouts from these suits, which benefit lawyers and agencies.

Taxpayers are paying both sides — and we don’t even get to see the numbers. Actual award and settlement amounts are often kept confidential when the suits are filed under legislation like the Clean Water Act, the Endangered Species Act, and other public laws that allow the winning side to recover costs and attorney’s fees. Specific amounts and payouts squirreled away in judgment funds are also kept secret. Agencies do not report any record of any dollar amounts set aside, or who are the beneficiaries of these settlement sums.

Oregon State Senator Doug Whitsett (R-Klamath Falls) reports that the eight most litigious environmental organizations have filed about 1,600 lawsuits against the federal government in the past 15 years. The Center for Biological Diversity alone has filed or appealed one or more federal lawsuits every week for the last nine years.

Neither the federal agencies nor the environmental groups track the amounts transferred as payouts. On the judgment fund’s own “background” website, the US Treasury spells out the lack of accountability: “The Judgment Fund has no fiscal year limitations, and there is no need for Congress to appropriate funds to it annually or otherwise. Moreover, disbursements from it are not attributed to or accounted for by the agencies whose activities give rise to awards paid.”

Yet this should be a matter of public record, because both the costs of litigation and the payout sums are funded with taxpayer dollars.

Lawsuits and lawyers are expensive, and payouts to environmental pressure groups average about $112,000 per suit. That can add up quickly. Whitsett cites a report from Oregon’s Budd-Falen Law Offices, recording more than $4.7 billion paid out from federal judgment funds over nearly 42,000 claims between January 2003 and July 2007.

Litigious environmental groups enjoy a steady stream of tax revenue thanks to this double-dipping scheme. If a green pressure group wins, it can recover attorney’s fees and costs from the losing government defendant. If it settles for a sum that “substantially favors” its side, it recovers attorney’s fees and costs.

It would be one thing to spend millions of dollars on litigation that provided real benefits to the public, but Judgment Fund-financed litigation does not even pretend to benefit taxpayers. In fact, other legislation forbids government defendants from recovering tax dollars wasted in these lawsuits.

When a taxpaying individual or corporation is injured by government non-enforcement of environmental laws, the individual entity has standing to file a lawsuit on its own behalf. An entity only files for recovery when an injury costs more than the anticipated cost of a suit. The cost bar prevents frivolous suits and unnecessary expense for taxpayers.

By funding both litigation and winnings with taxpayer dollars, the Judgment Fund makes lawsuits seem artificially inexpensive. In reality, charging costs to taxpayers just passes on the cost to the entire country.

The Judgment Fund — a mere line-item in the federal budget — encourages environmental activist groups to litigate much more than they would otherwise. This arrangement not only wastes taxpayer dollars, it also undermines democracy, by allowing environmental lawyer-activists and administrative agencies to enact policies while bypassing Congress. Thankfully, Congress has the authority to put a stop to this madness. It should do so.