When Obama finds a useful toolset, he likes to keep using it.
He got a lot done in secret for Iran with his pen, phone, and the U.S. Treasury Department Judgment Fund, kept topped off by the American taxpayer. By using the Judgment Fund, in an underhanded manner, Obama circumvented what he knew was the will of Congress for sanctions on Iran – that is, the good-faith enforcement of U.S. law.
Now, he wants to use the Judgment Fund for a purpose that would similarly circumvent Congress. He wants to raid the fund to bail out insurance companies that have taken huge losses on the failing Obamacare exchanges.
The Judgment Fund was set up in the 1950s to keep cash on hand for settling court judgments against the federal government. Although it has been used in the past to pay settlements against HHS, that doesn’t mean it’s an appropriate resource for addressing the Obamacare insurers’ situation.
For one thing, there is no court judgment for them. But according to the Washington Post, the Obama administration is already looking to use the Judgment Fund to bail them out.
For another thing, it’s doubtful there will ever be a court judgment for the insurers. The language of the Obamacare law itself means that the insurers are not entitled to the compensation they’re seeking.
If adequate funds for such compensation had been generated through the mechanism intended by the Obamacare law, it would be a different story. But that mechanism – reinsurance premiums collected from employers under the Obamacare law – did not generate adequate funds to shore up their losses.
The law says clearly that the insurers have to take a back seat to the prior claims of an Obamacare obligation to the U.S. Treasury. So far, the funds collected haven’t been sufficient to cover both. By law, the money collected is supposed to go to the Treasury. (Guy Benson spells it all out here.)
Now, fear not: Obama has already acted improperly and sent cash from the reinsurance fund to the insurance companies, instead of the Treasury. Du-uh. That’s how he rolls. But Congress has been calling him out on that.
And the GAO issued a legal opinion this week that what Obama’s been doing does, in fact, violate the Obamacare statute.
So Obama is looking for a way to circumvent Congress, and the GAO opinion, and send cash infusions to the insurance companies anyway – without having to get Congress’s agreement.
Naturally, after the way Obama used the Judgment Fund in the secret cash transactions with Iran, it shouldn’t surprise us that he wants to do something similar with Obamacare.
Judgment Fund skulduggery with Iran
Obama’s cash dealings with Iran were at each step a secretive, law-flouting process. The ultimate problem with them is that they violated the intent of U.S. sanctions law, provisions of which are still in force even under the JCPOA. The U.S. has never lifted the sanctions on Iran for terrorism sponsorship and arms proliferation, which specifically means that untraceable cash transfers to Iran cannot meet the intent of the U.S. sanctions law still in force. Such cash can very easily be used to pay for arming and supporting terrorists.
Obama actually had the choice of telling Congress he would exercise certain forms of discretion he does have under the sanctions law, to settle the old arms-sale judgment with Iran in January 2016. But he would have had to take heat for an overt waiver up front, and – if he acted in good faith – would have had to package the settlement so that Iran couldn’t promptly get hold of a big wad of untraceable cash. (E.g., put it in trust with a third-party trustee.)
Instead, Obama acted in secret. He literally piled the cash up through a series of withdrawals from the Judgment Fund of $99,999,999.99 – one penny under $100 million apiece, just like a drug money laundering scheme. He had the money laundered through foreign banks, and then some of it (although not all) flown via pallets of cash on unmarked Iranian planes to Tehran.
He explained months later, when news of these shenanigans emerged, that the cash had to be delivered this way because there was no way to make a wire transfer to Iran. But then it came out that, in fact, some of the $1.7 billion total had been transferred by wire. Not only that, Obama had been allowing wire transfers to Iran for other purposes since at least early 2015.
(Just this past week, we learned Obama told Congress recently that he had secretly waived other sanctions on Iran in January: sanctions related to ballistic missile development, which weren’t supposed to be lifted until 2023. The administration assured Congress last year that these sanctions would remain in place. The Obama pattern of acting in bad faith continues unbroken.)
This is how Obama used the Judgment Fund in his dealings with Iran: secretively, to Iran’s benefit, and in violation of his good-faith obligations to Congress and the American people. We can assume he would use the Judgment Fund to bail out Obamacare insurers in exactly the same manner – especially since he’s already misused Obamacare funds for such bailouts, in defiance of the provisions of his own law.
Time to pull the plug on the Judgment Fund. Obama can’t be trusted with it. And you can take it to the bank, pardon the pun, that Hillary can’t either, if she should reach the Oval Office. (Not that anything will even be left in it, come January.)