Introduction

In recent years, the Justice Department’s approach to legal settlements has sparked significant debate. Emily Bazelon and David French discuss these practices, highlighting how different administrations have handled settlement funds.

The Sessions Memo

Former Attorney General Jeff Sessions issued a memo in 2017 that prohibited the Justice Department from directing settlement payments to third parties not directly harmed by a lawsuit. This aimed to ensure that funds compensated only the victims involved in legal cases.

This memo responded to criticism from Republicans over how the Obama administration managed settlements. A notable case involved banks sued for their lending practices, which led to the 2008 financial crisis. Part of their settlement involved donations to organizations like the National Council of La Raza and NeighborWorks. These funds were used for legal aid and community development in affected areas.

The Trump Administration’s Actions

The Trump administration’s handling of settlements differs markedly from that of the Obama era. The Department of Justice recently revealed a $1.776 billion fund aimed at quelling a $10 billion lawsuit filed by Trump and his family against the IRS over leaked tax information.

In contrast to the previous practice, this fund appears more controversial. The acting attorney general granted immunity from tax investigations into Trump and his family indefinitely, as evident from the corresponding agreement document.

Discussion

David French describes the Trump administration’s actions as an effort to form a slush fund under Trump’s control. The size of the fund, $1.776 billion, could potentially enrich several Trump supporters.

The stark differences between these approaches raise questions about the transparency and propriety of settlement practices in the Justice Department.