Sessions Ends Controversial Third-Party Settlement Payments

Attorney General Jeff Sessions today ended a controversial Department of Justice practice from the previous administration in which portions of settlement payments were directed to third-party nonprofit or advocacy groups. Under the now-banned practice, many settlements — including some related to the financial crisis — saw defendants make payments to DOJ-selected groups. The new policy will prevent DOJ attorneys from entering settlement agreements that include payments to non-government, third-party groups that were not directly harmed by the conduct at issue.

“When the federal government settles a case against a corporate wrongdoer, any settlement funds should go first to the victims and then to the American people — not to bankroll third-party special interest groups or the political friends of whoever is in power,” said Sessions. “Unfortunately, in recent years the Department of Justice has sometimes required or encouraged defendants to make these payments to third parties as a condition of settlement. With this directive, we are ending this practice and ensuring that settlement funds are only used to compensate victims, redress harm and punish and deter unlawful conduct.”