2017: Schweikert Voted To Ban Third Party Settlement Agreements Except If The Settlement Is For Restitution To An Affected Party Or Is A Direct Remedy For Harm. In October 2017, Schweikert voted for legislation that would have, according to Congressional Quarterly, "prohibit[ED] settlement agreements involving the U.S. government from requiring the non-governmental party to make a payment or loan to any party other than the U.S. government. Prohibitions would not [have] appl[ied] if the payment or loan under the settlement is for restitution to affected parties or is a direct remedy for actual harm." The vote was on passage. The House passed the bill by a vote of 238 to 183. The Senate took no substantive action on the legislation. [House Vote 580, 10/24/17; Congressional Quarterly, 10/24/17; Congressional Actions, H.R. 732]
Certain Federal Agencies Have Used Negotiated Settlements To Fund Community Service Projects, Such As When JP Morgan Credit Against Its Settlement For By Donating To Community Redevelopment Organizations. According to Congressional Quarterly, "Beginning in the 1980s, various federal enforcement agencies, including the Commodity Futures Trading Commission, Nuclear Regulatory Commission and Environmental Protection Agency (EPA), have wanted to use money from negotiated financial settlements to fund community service projects. [...] Beginning in 2013, the Justice Department entered into a number of agreements with large banks to settle issues surrounding the banks' mortgage practices. The settlement with JP Morgan offered the bank credit against its settlement obligations for donations to community redevelopment groups. In 2014, settlements with both Citibank and Bank of America required $150 million in donations to housing nonprofits. These donations earned double credit against the banks' overall obligations. Meanwhile, credit for direct forms of consumer relief remained dollar-for-dollar." [Congressional Quarterly, 9/2/16]
Opponents Of Third Party Claim That These Settlements Subvert Congress' Power Of The Purse. According to Congressional Quarterly, "Supporters of the bill, primarily Republicans, say Congress' power to control spending has been subverted by the diversion of monetary settlements from lawsuits to groups favored by the executive branch, often in direct contradiction to enacted spending bills. They say the Justice Department, in particular, has directed settlement dollars to favored groups, and that since those payments often counted double toward a settlement (allowing defendants to lower their total settlement costs) there was a strong incentive for defendants to make them, directly circumventing the congressional appropriations process. The Justice Department, they say, should focus its existing authority on obtaining redress for victims harmed by defendants, and that once those victims have been compensated the decision on what to do with any additional funds extracted from defendants should be properly decided by Congress." [Congressional Quarterly, 10/20/17]
2016: Schweikert Voted To Ban Third Party Settlement Agreements Except If The Settlement Is For Restitution To An Affected Party Or Is A Direct Remedy For Harm. In September 2016, Schweikert voted for legislation that would ban the government from entering into settlement agreements that include to suitable third parties. According to Congressional Quarterly, the legislation would have "prohibit[ed] settlement agreements involving the U.S. government from requiring the non-governmental party to make a payment to any party other than the U.S. government. Prohibitions would not [have] appl[ied] if the payment under the settlement is for restitution to affected parties or is a direct remedy for actual harm." The vote was on passage. The House passed the bill by a vote of 241 to 174, but the Senate took no substantive action on the legislation. [House Vote 488, 9/7/16; Congressional Quarterly, 9/7/16; Congressional Actions, H.R. 5063]
Certain Federal Agencies Have Used Negotiated Settlements To Fund Community Service Projects, Such As When JP Morgan Credit Against Its Settlement For By Donating To Community Redevelopment Organizations. According to Congressional Quarterly, " Beginning in the 1980s, various federal enforcement agencies, including the Commodity Futures Trading Commission, Nuclear Regulatory Commission and Environmental Protection Agency (EPA), have wanted to use money from negotiated financial settlements to fund community service projects. [...] Beginning in 2013, the Justice Department entered into a number of agreements with large banks to settle issues surrounding the banks' mortgage practices. The settlement with JP Morgan offered the bank credit against its settlement obligations for donations to community redevelopment groups. In 2014, settlements with both Citibank and Bank of America required $150 million in donations to housing nonprofits. These donations earned double credit against the banks' overall obligations. Meanwhile, credit for direct forms of consumer relief remained dollar-for-dollar." [Congressional Quarterly, 9/2/16]
Opponents Claim That These Settlements Subvert Congress' Power Of The Purse. According to Congressional Quarterly, "Congressional Republicans have charged that these payments to third parties were systematically subverting Congress' spending power by using settlements to funnel money to third-party groups. They've argued that these mandatory donation provisions reinstate funding that Congress specifically cut and that these funding decisions should be made only by an accountable Congress instead of through a unilateral decision of an executive branch agency." [Congressional Quarterly, 9/2/16]