CEI Praises Department of Justice Announcement Ending Third Party Payments

The U.S. Department of Justice (DOJ) announced Wednesday that it will end third party payments by banks and other companies, to outside groups that were neither parties nor victims in lawsuits, as a part of settlement agreements with the federal government. The practice has been derided as an attempt to bankroll special interests and advocacy groups. The Competitive Enterprise Institute (CEI) has been a longtime opponent of the practice and commends U.S. Attorney General Jeff Sessions’ decision.

William Yeatman, CEI Senior Fellow, congratulates the DOJ on the decision:

“This is welcome news. During the Obama administration, the EPA and Justice Department used regulatory enforcement to implement an unconstitutional end-run around the Congress’s power of the purse so as to fund the president’s failed green energy legislative proposals. In late 2016, for example, the federal government reached a settlement with Volkswagen pursuant to which the company set up a corporation to spend $1.2 billion on electric vehicle infrastructure. This is four times the amount of money that President Obama had requested from Congress for the same purpose—a request that was denied by lawmakers. Simply put, the president leveraged the judicial settlement to create its own power of the purse. All told, the EPA negotiated more than $1.5 billion in green energy spending across 16 settlements during the Obama administration. With today’s announcement, this sort of executive overreach should cease.”

Ted Frank, Senior Attorney and Director of CEI’s Center for Class Action Fairness, who testified on the issue in 2015, had this to say about today’s announcement:

“As I testified before Congress in 2015, the Obama administration Department of Justice used litigation settlements to divert billions of taxpayer dollars to preferred spending programs that Congress never would have authorized in violation of the separation of powers. I’m gratified to see this administration take steps to end this corrupt practice, and hope the policy is eventually enshrined in legislation.” 

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