Should gov’t pay settlement money to groups, not taxpayers? New Mexico takes action

Should gov’t pay settlement money to groups, not taxpayers? New Mexico takes action

For more than a decade, the U.S. Justice Department has engaged in the dubious practice of giving away the public’s money when it settles a criminal or civil case.  Occasionally, the Justice Department has made a settlement offer contingent on a company agreeing to donate money to a cause or charity—sometimes one chosen by the government.

Last year, for example, the Justice Department settled cases with Bank of America and Citigroup over allegedly unlawful mortgage lending practices. The settlements required the banks to pay money to legal aid organizations and other outside groups.  In another instance, the Gibson Guitar Corporation had to contribute to the National Fish and Wildlife Foundation to end a criminal investigation.

That practice is legally and ethically improper.  Any money that the government receives as part of a plea agreement or civil settlement belongs to the public and should be deposited into the federal treasury.

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