Justice Department Revives Slush Fund Settlements

William YeatmanIn 2011, President Obamaannounced a goal of putting one million electric vehicles on the road. To this end, hetwicewent to Congress seeking funds for electric vehicle infrastructure. Both times, however, Congress demurred. Thus rebuffed, the Obama administration turned to other means to achieve his preferred policy. In late 2016, the Justice Department and the Environmental Protection Agency reached a partial settlement with Volkswagen over “Dieselgate, ” which required the automaker to invest $1.2 billion on electric vehicle infrastructure—almost four times what the president unsuccessfully had sought from Congress. The upshot is that the Obama administration leveraged its prosecutorial discretion to perform an end‐​run around Congress’s power of the purse. More broadly, Obama’s EPA routinely resorted to these slush fund settlements to fund green energy projects, as I discussed in a 2017study for theCompetitive Enterprise Institute.The Obama administration reached similar settlements in enforcement actions against financial institutions after the 2008-09 financial crisis. For example, as part of the Justice Department ’s2014 settlement with Citigroup, the bank had to pay $25 million to progressive non ‐​profit groups. And in a $16 billionsettlement with the government, the Bank of America agreed to pay $50 million to progressive non ‐​profits. In return for making these payments, the banks faced smaller fines. In thi...
Source: Cato-at-liberty - Category: American Health Authors: Source Type: blogs