'Smoking Gun' Email Shows Obama DOJ Blocked Conservative Groups From Settlement Funds

(Photo: Reuters/James Lawler Duggan)U.S. Attorney General Eric Holder addresses the Justice Department's findings in two investigations regarding the Ferguson, Missouri shooting of Michael Brown by Darren Wilson in Washington, March 4, 2015.

House Judiciary Committee Chairman Bob Goodlatte, R-Va., says he has obtained an internal email that serves as a "smoking gun" proving that the Obama Justice Department under former Attorney General Eric Holder used legal settlements with banks as a "slush fund" that excluded conservative groups and only benefited liberal groups.

Speaking before the House of Representatives voted on Tuesday to pass the "Stop Settlements Slush Funds Act of 2017" that he introduced in January, Goodlatte declared that the Judiciary Committee obtained internal emails showing that the Obama Justice Department circumvented Congress by requiring financial organizations to make payments to affordable housing nonprofits and legal advocacy organizations in order to comply with legal settlements resulting from illegal lending practices.

"It is not every day in congressional investigations that we find a smoking gun," Goodlatte explained on the House floor, according to Fox News. "Here, we have it."

An investigation over the course of the last two years by the House Judiciary Committee and Financial Services Committee revealed that during the last two years of President Barack Obama's administration, the Department of Justice used mandatory donations in legal settlements with financial institutions to direct nearly $1 billion to activist organizations.

Expand | Collapse
Congressman Bob Goodlatte, R-Va.

In a release after the bill passed by a tally of 238-183 on Tuesday, Goodlatte's office explained that "internal documents reveal that the third-party organizations were actively involved in lobbying DOJ to receive settlement money, and that DOJ went out of its way to exclude conservative groups."

In a statement, Goodlatte accused the Justice Department of "using settlement agreements to direct money away from victims [and] toward organizations of their choosing and away from those they disliked."

"DOJ's actions contradict the spending power given explicitly to the Legislative Branch and undermine Congress' most effective tool to hold the Executive Branch accountable," Goodlatte said. "Regardless of which party is in the White House, subverting Congress to funnel money to outside organizations is unacceptable and unconstitutional."

Fox News reports that in one email from July 2014, a Justice Department official expressed "concerns" about what organizations would be receiving donations from Citigroup.

The senior official, whose name was redacted but whose title was "acting senior counselor for access to justice," stated that they didn't want the Citigroup money going to the Pacific Legal Foundation, an organization that offers conservative property a legal rights services.

"Concerns include: a) not allowing Citi to pick a statewide intermediary like the Pacific Legal Foundation (does conservative property-rights legal services)," the official wrote.

In his speech on the House floor, Goodlatte criticized former Associate Attorney General Tony West, who is now the executive director of PepsiCo Foundation.

"Aiding their political allies was only the half of it," Goodlatte asserted. "The evidence of the Obama DOJ's abuse of power shows that Tony West's team went out of its way to exclude conservative groups."

According to Forbes, Rep. Alcee Hastings, D-Fla., criticized the efforts of Goodlatte and the Judiciary Committee, saying that the investigation "yielded no credible evidence." He also called Goodlatte's legislation "pointless and partisan."

Goodlatte, however, believes that the new documents obtained "tell a different story."

The documents also indicate that outside groups lobbied the Justice Department directly for the settlement funding.

Forbes notes that in March of 2014, activists met with a senior official from West's office to "make the case" that the department should require that donations be mandatory when settling mortgage-lending cases.

The documents also indicate that activists sent a letter asking the Justice Department to give banks "enhanced credit" for donations, a move the department made official months later, according to the Forbes report.

Additionally, recipients of the settlement donations were more than appreciative of West's efforts, Fox News relays.

"Now that it has been more than 24 hours for us all to try and digest the Bank of America settlement, I would like to discuss ways we might want to recognize and show appreciation for the Department of Justice and specifically Associate Attorney General Tony West," Charles R. Dunlap, executive director of the Indiana Bar wrote in an August 2014 email, adding that West is the "one person most responsible."

"Frankly, I would be willing to have us build a statue [of West] and then we could bow down to this statute each day after we get our $200,000," an email in response to Dunlap stated.

Earlier this year, Attorney General Jeff Sessions ended the Obama-era practice of awarding legal payouts to outside organizations.

The Stop Settlement Slush Funds Act, which passed the House on Tuesday, would ensure that federal agencies would be banned from "requiring defendants to donate money to outside groups as part of settlement agreements, and requires that settlement money goes either directly to victims or to the Treasury."

Follow Samuel Smith on Twitter: @IamSamSmith
Follow Samuel Smith on Facebook: SamuelSmithCP