GOP Accuses Democrats of Extorting Corporations

By - March 2, 2017
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A 2017 congressional investigation charges that the Obama administration was funnelling billions of dollars to left wing organizations through a slush fund at the Department of Justice.

According to Rep. John Ratcliffe (R-TX), the Obama administration was playing partisan politics with the slush fund.

Findings that were uncovered by the House Judiciary Committee indicate a process that was shrouded in secrecy. The committee states that monies were given to many nonprofit organizations with a left wing bent. The committee argues that the money was effectively extorted from business groups and given to left wing organizations without any say from the Congress.

Judicial Watch adds that left wing agitators and big government groups were using the Department of Justice to engage in extortion from private businesses.

Since President Trump took office, there has been a strong effort to eliminate the slush fund and shady activities, which are believed to have occurred often under the Obama administration. Efforts to end the practice are underway in both the House and Senate as companion bills were recently introduced.

The way the slush fund worked would be for a big bank to be sued by the government for something illegal, such as mortgage abuse or discrimination. The bank could settle the case by donating to a third party. The settlement would not specify how the third party group would use the money.

Federal investigators have found $3 billion that was paid to third parties who were non-victims of various illegal activities. Critics charge that the Obama administration was pressuring banks to donate the money to these nonprofit left wing groups rather than turning the money over to consumers.

According to the Competitive Enterprise Institute Center for Class Action Fairness, the issue with the slush funds was that we did not really know where the money was going. By using DOJ enforcement authority to go after business defendants, the DOJ were taking away billions from taxpayers and using it to fund left wing projects.

The institute states that the money should be given to the Treasury Department and that the process is circumventing the spending power of the legislative branch. The Justice Department claims that the money can bypass Treasury because the donations by the banks are strictly voluntary.

For example, in FY2016, Congress gave $47 million to HUD Housing Counseling, but the Bank of America and Citi gave $30 million more in funding. The Legal Services Corp was given $385 million from the legislature but it is getting $412 million more in taxpayer funds from the 3rd party settlement practice.

The VW settlement, which mandates $1.2 billion invested into zero emission technology, was two times denied by Congress, but is now expected to get four times the amount that was asked for by the Obama administration.

Some of the left wing groups that have benefited from the payments have been the National Council of La Raza, the National Community Reinvestment Coalition and the National Urban League.

According to a Senate majority staff report, the NCRC has a history of promoting illegal immigration and advocating for benefits for illegal aliens. The other groups are also known to be involved in a variety of left wing activities.

The staff report also discovered that the DOJ went around Congress to use part of the settlements to finance the housing policy of the Obama administration.

Legislation on this practice did not pass last year, but lawmakers have now brought it back. They want to see the practice stopped with bills in both the House and Senate.

Some in the GOP say that the Democrats thought it was an attack on the president. But they note that this is not a partisan issue. They maintain it is an issue of good governance. They believe that actions that are settled by the federal government should have monies returned to the taxpayer.

The GOP have introduced the Stop Settlement Slush Fund Act of 2017 in the Senate and a companion bill has been proposed in the House.

Many legal experts think that the practice is unethical if not outright illegal. Legal experts contend that because everything the federal government does costs money, the appropriation power is the strongest check that the legislature has on executive power overreach. They call it the ultimate backstop against an aggressive and willful president.

They say that if a president can disburse tax payer funds without appropriation, the separation of power is thrown into doubt. The Washington Post reported in summer 2016 that President Obama relied on disbursements that go around the appropriations clause. But the US District Court for Washington DC found that the administration often did illegally disburse billions of dollars without a proper congressional appropriation.