Settling the Question: Did the Bank Settlement Agreements Subvert Congressional Appropriations Power?

The third-party payment conditions in the Bank Settlement Cases are an unlawful attempt to funnel money that belongs to the public to parties whom the Justice Department sees as its favorites. That practice enables Justice Department lawyers to disburse to third parties of their own choosing, or perhaps of the defendant’s, money that properly should be paid into the federal treasury, from which funds can be paid out only if elected federal officials make the relevant appropriations decisions. Congress should prohibit this practice altogether and ensure that government lawyers use their settlement authority only to compensate proven victims of wrongdoing, not the Administration’s cronies. These practices are, and should be declared to be, verboten.

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