The “Stop Settlement Slush Funds Act” would restrict the flexibility of the government to resolve claims and make it harder to assist broad categories of people hurt by corporate malfeasance.
WASHINGTON, D.C. – (RealEstateRama) — Congressman Jerrold Nadler (D-NY), senior member of the House Judiciary Committee and Ranking Member of the Subcommittee on Courts, Intellectual Property and the Internet, delivered the following remarks on the House Floor opposing Republican legislation that eliminates critical public interest protections when the government enters into a settlement agreement with corporate wrongdoers.
The creatively named “Stop Settlement Slush Funds Act” undermines the ability of agencies to adequately provide complete restitution for violations of the law, as well as the ability to tailor remedies to address damages to unidentifiable victims, the public health, or the environment.
Below is the prepared text of Rep. Nadler’s statement delivered on the House Floor, with full video found here:
“Mr. Chairman, I rise in strong opposition to H.R. 5063, the so-called “Stop Settlement Slush Funds Act.”
“The Republican Majority likes to put creative names on their legislation, but what they call slush funds are really voluntary settlements between the government and corporate wrongdoers. These settlements sometimes include payments to third parties to address the generalized harms caused by corporate bad actors. But this bill would prohibit any payments to a third party unless they will use that money to help the people directly harmed by the defendant, not those who may have been harmed on a broader level by their actions. This is unnecessarily narrow and restrictive when trying to address the harm inflicted by corporate wrongdoers.
“Furthermore, it would restrict the flexibility of the government to resolve claims, and make it harder to assist broad categories of people who are hurt by corporate malfeasance.
“For example, in the wake of the mortgage foreclosure crisis, the Department of Justice sued several big banks responsible for egregious misconduct that threw millions of people out of their homes, and put millions more in peril, while the banks reaped massive profits. The banks agreed to resolve their claims by paying record-setting fines to the government in recognition of the tremendous damage they had caused. Under well-established legal authority, some of these settlements also included modest payments to certain community organizations responsible for assisting homeowners and the communities devastated by the foreclosure crisis.
“These payments have had a dramatic effect. In New York State, thanks to the consumer relief funds from these settlements, more than 60,000 people have received housing counseling and legal services free of charge over the last four years. Almost one-third of these homeowners has received a mortgage modification, or has one pending.
“Other funds have gone to support community development institutions like Land Banks, which are non-profit organizations formed by local and county governments. These Land Banks help cities address vacant and abandoned properties known as “zombie homes” that were created by the foreclosure crisis. Land Banks acquire these properties, secure them, and rehabilitate them for resale as affordable housing, thereby increasing the tax rolls, reducing crime, and preserving property values for neighboring homeowners. In just the last 3 years, Land Banks in New York have acquired more than 1,300 vacant and abandoned properties.
“Mr. Chairman, homeowners and cities are still struggling with the aftermath of the foreclosure crisis, and the third-party donations included in legal settlements are vital in helping both those directly affected, and those secondarily harmed by the banks’ actions. These payments were mutually-agreed upon terms in a legal settlement – But the Majority calls them “slush funds”. They went to nationally recognized community organizations doing important work to help homeowners in crisis – But the Majority sneers and calls these organizations “activist groups”. And the Majority was so outraged by these payments that they launched a burdensome investigation that yielded not a single shred of evidence of any wrongdoing. I don’t know what the Majority calls that, but I call it a waste of time.
“This legislation is a waste of time too, and I urge all my colleagues to vote no.
“I yield back the balance of my time.”
