Otto Warmbier North Korea Nuclear Sanctions Act

Mr. Chair, I would only offer to say that there is not one Judiciary Committee Democrat on this so-called bipartisan bill. That is where you first start the bipartisanship: you work with members who may, in fact, believe that some of the issues that have been raised by my

good friend from California may have merit.

Maybe this bill could have been drafted in a way that would have responded to some of the failures, if there are some, such as evidenced by our good friend from New Jersey, who recalled a lot of failures not by Democrats but by Republicans. But when you start off with a bill talking about slush funds, then you negate the good work of so many organizations that have benefited to do the very good that the consent decree was intended to do.

Today, I stood with the Latinas Against Domestic Violence. They came here to stand against the violence against women that goes on and on and on. Some of them may be in the gallery.

But what I would say, Mr. Chairman, is: Why would we not want to give that organization funds if they were in line to get dollars to help prevent or intervene in the vileness of domestic violence?

So the idea that our friends on the other side are missing is the value some of these entities have been given.

The only word that I have heard over and over again, as I have heard from the administration, I have heard from the Attorney General, the former Secretary of Health and Human Services, is one word. In fact, I think the English language has been limited to one word on the floor of the House: Obama. I like to call him President Barack Obama. That is the respect I give him.

Every legislative initiative has come forward on the shoulders of a man who finishes 8 years, might I say, with a great deal of respect.

So here is what the bill the people are opposed to will do:

This bill would not give dollars to those victims who are harmed and could engage in workplace monitoring, as well as other payments to remedy generalized harm, including remedies designed to prevent the recurrence of sexual violence or discrimination in the workplace.

They wouldn't give it to an environmental remedy project, such as needed cleanup efforts following the hazardous toxic pollutant spills that spoil protected areas, preventing families and children from enjoying recreation on State lands designed for public use.

They wouldn't give it to federally certified housing counseling intermediaries by preventing housing counseling, relief to communities that have been preyed upon by financial institutions that have broken the law.

I even hate to use the term ``slush.'' They are dollars out of a consent decree that are managed and monitored by career professionals to those in need.

So I am opposed to the underlying bill, and I will offer an amendment.

I will also be on this floor offering letters opposing, again, not only this dastardly named legislation--who would want to see this in the Congressional Record: slush fund--undermining, as I said, the professionalism of our career employees in the DOJ and undermining American citizens and nonprofits who are working every day to make the life of America and America's children better.

This is a bad bill. Vote it down. It is not bipartisan. No Judiciary Committee Democrat saw fit for it to be legitimate.

Mr. Chair, I rise in strong opposition to H.R. 732, the ``Stop Settlement Slush Funds Act of 2017.''

The proposed legislation, as currently drafted, is intended to preclude all third-party payments in settlement agreements, other than restitution to identifiable victims.

Specifically, this legislation seeks to block federal law from including payments that provide relief in negotiated settlements to victims, such as in cases of predatory lending, employment discrimination and pollution through environmental hazardous.

For the average American, this harmful bill translates as thwarting settlement donations to legitimately harmed victims for:

1. Workplace monitoring, as well as, other payments to remedy generalized harm, including remedies designed to prevent the recurrence of sexual violence or discrimination in the workplace;

2. Environmental remedy projects, such as needed clean-up efforts following the hazardous, toxic pollutant spills that spoil protected areas, preventing families and children from enjoying recreation time on state lands designed for public use; or

3. Federally-certified housing counseling intermediaries by preventing housing counseling relief to communities that have been preyed upon by financial institutions that have broken the law.

This legislation fails to recognize the critical role and positive benefits that housing counseling organizations now play in addressing and ensuring that the discriminatory practices and abuses, like those that led to the housing and financial crisis, never happen again.

The Republican narrative suggests that this bill attempts to make technical changes to the way that courts operate; but in reality, for the everyday hard working American, this legislation along with its companion bills (H.R. 720, the ``Lawsuit Abuse Reduction Act,'' and H.R. 725, the ``Innocent Party Protection Act,'') is merely a concerted effort to chip away at Americans' ability to seek justice and, therefore, must be opposed.

This legislation is intended to cut off proceeds from government settlements to ``third-party'' entities, which would stop a critical source of funding for the nonprofit sector--including public interest community organizations, foundations or trusts and other similar groups.

Oftentimes, allowing these monies to be available to third-parties is the best way to assure harmed persons will be made whole.

By barring government settlements from directing payments to non- profit organizations, this legislation would thereby hamstring the parties' ability to fully remedy the wrongdoing underlying the lawsuit.

Congress lacks the time, expertise, and resources to properly review and make enforcement decisions on behalf of Federal agencies.

The cost of delays associated with this scheme would have devastating consequences for the public health, environment, and local communities.

H.R. 732 would greatly strain Congress' already limited legislative resources and scarce time, while opening the doors to industry influence and obstruction in routine enforcement matters.

This legislation pushes the everyday hard working American to the margins of the justice system by requiring restitution only in cases with a showing of actual harm directly and proximately caused by the party making the payment.

The bill's definition excludes any payment by a party to provide restitution for, or otherwise, remedy the actual harm, directly and proximately caused by the alleged conduct of the party that is the basis for the settlement agreement, including payments requiring monitoring and other payments for generalized harm.

This exception is too narrowly drawn to allow for numerous beneficial uses of settlement monies, especially for vulnerable plaintiffs trying to access the courts in search of restitution from legitimate harm.

As you know, following the subprime meltdown, the U.S. Department of Justice pursued lawsuits against mortgage lenders and banks that engaged in discriminatory lending practices, such as those targeted by this legislation.

Research shows that African Americans and Latinos were discriminated against and steered into subprime loans even when they qualified for conventional loans.

Moreover, African Americans and Latinos were two to three times more likely than white homebuyers to receive subprime loans which resulted in foreclosure rates 10 times that of conventional loans.

Pursuant to the settlement agreements, available under current law, the Justice Department ordered that financial institutions dedicate a portion of their settlement payments to U.S. Department of Housing and Urban Development (HUD) certified housing counseling intermediaries to provide consumer relief in the communities that were hit hardest.

HUD has approved thirty-seven housing counseling intermediaries that financial institutions have the discretion to choose as third-party providers of consumer relief under the terms of the Justice Department settlement agreements.

Additionally, these HUD-certified housing counseling providers deliver financial education and coaching to individuals to inform them of their home-buying options and rights, and to ensure they become and remain homeowners.

In fact, since 2008, 40 affiliates have provided housing counseling services--to date serving more than 200,000 clients in mostly underserved areas.

The success of housing counseling programs is undisputed.

Borrowers who have used housing counseling are one-third less likely to be seriously delinquent on their loan payments, and those who are in default are 60 percent more likely to save their homes.

The benefits of these programs are tangible and must continue to be made available to the public.

This example is particularly pertinent as Houston recovers from hurricane Harvey, a tragedy that displaced tens of thousands of my constituents.

There are still over 61 thousand people living in hotels throughout Texas.

The public has found itself in need of protection form environmental harms caused by absconding deep pocket defendants.

To ensure these protections, the Environmental Protection Agency (EPA) may request Supplemental Environmental Projects (SEPs) in settlement agreements to offset the harms of unlawful conduct by requiring parties to undertake an environmentally beneficial project or activity that ``is not required by law,'' but that a defendant agrees to undertake as part of the settlement of an enforcement action.

In workplace discrimination cases, victims are guarded by the Civil Rights Act passed by Congress in 1964 to remove discriminatory barriers and to promote equality in employment opportunities.

Cases, nonetheless, involving workplace discrimination claims often occur without identifiable victims and tend to affect the interests of persons who are not likely to receive compensation for unlawful conduct (e.g., unidentifiable victims such as former and future employees).

In these cases, a settling party that violated antidiscrimination laws may seek to resolve its civil liability through workplace monitoring or training programs that seek to remedy systemic unlawful conduct.

Furthermore, the claim that the funding received by organizations to provide home counseling services to harmed individuals amount to a ``slush fund,'' is an egregious and shameless attempt to smear and impugn the integrity of longstanding and trusted nonprofits and civil rights organizations.

As the Justice Department has observed, remedies can correct both noncompliance and recidivism through settlement terms that require a party to undertake activity to prevent future misconduct.

Not only is this legislation an unnecessary intrusion into the province of the federal courts, it is a part of a larger push to limit Americans' ability to seek justice in a court of law.

An innocent-sounding name aside, this bill poses a grave threat to our court system--the nation's stronghold for protecting our democracy.

In the current political climate, where the justice system is the last line of defense for our nation's values, I urge my colleagues not to cede that ground.

Congress should applaud and elevate the benefits of housing counseling, and the good work of frontline organizations, in righting the injustices of the past and present.

The working men and women of America, as well as their families deserve fair and impartial access to real justice when major corporations, inadvertently as it may be, inflict harm.

It is our duty as guardians of the judicial system to ensure real restitution is available to all, including the most vulnerable.

For these reasons, I urge all Members to vote against H.R. 732.

Mr. Chairman, I include in the Record a letter from National Urban League and a letter from Public Citizen.

National Urban League,

New York, NY, February 1, 2017.

Re Opposition to H.R. 732--The Stop Settlement Slush Funds

Act of 2017.

Hon. Bob Goodlatte,

Chairman, Judiciary Committee,

Washington, DC.

Hon. John Conyers,

Ranking Member, Judiciary Committee,

Washington, DC.

Dear Chairman Goodlatte and Ranking Member Conyers: As

President and CEO of the National Urban League, the nation's

largest historic civil rights organization dedicated to

economic empowerment of African Americans and other

underserved urban communities, I write to urge you to oppose

H.R. 732, the Stop Settlement Slush Funds Act of 2017. This

legislation seeks to block federal law enforcement from

including in negotiated settlements payments that provide

relief to victims of predatory lending. Specifically, the

bill targets federally certified housing counseling

intermediaries such as the National Urban League by

preventing these organizations from providing housing

counseling relief to communities that have been preyed upon

by financial institutions that have broken the law. H.R. 732

fails to recognize the critical role and positive benefits

that housing counseling organizations now play in addressing

and ensuring that the discriminatory practices and abuses,

like those that led to the housing and financial crisis,

never happen again.

As you know, following the subprime meltdown, the U.S.

Department of Justice pursued law suits against mortgage

lenders and banks that engaged in discriminatory lending

practices. Research shows that African Americans and Latinos

were discriminated against and steered into subprime loans

even when they qualified for conventional loans. Moreover,

African Americans and Latinos were two to three times more

likely than white homebuyers to receive subprime loans which

resulted in foreclosure rates 10 times that of conventional

loans. Pursuant to the settlement agreements, the Justice

Department ordered that financial institutions dedicate a

portion of their settlement payments to U.S. Department of

Housing and Urban Development (HUD) certified housing

counseling intermediaries to provide consumer relief in the

communities that were hit hardest.

The National Urban League is one of thirty-seven HUD-

approved housing counseling intermediaries that financial

institutions have the discretion to choose as third-party

providers of consumer relief under the terms of the Justice

Department settlement agreements. The National Urban League

is accredited by the Better Business Bureau and has a 4-star

rating from Charity Navigator, placing it in the top 10

percent of all U.S. charities for adhering to good

governance, fiscal responsibility and other best practices.

As a HUD-certified housing counseling provider, the

National Urban League successfully delivers financial

education and coaching to individuals to inform them of their

home-buying options and rights, and to ensure they become and

remain homeowners. In fact, since 2008, 40 of our affiliates

have provided housing counseling services--to date serving

more than 200,000 clients in mostly underserved areas.

The success of housing counseling programs provided by

National Urban League and others is undisputed. Borrowers who

have used housing counseling are one-third less likely to be

seriously delinquent on their loan payments, and those who

are in default are 60 percent more likely to save their

homes. The benefits of these programs are tangible and must

continue to be made available to the public.

On a separate note, it has come to my attention the

National Urban League and National Council of La Raza have

been singled out during recent hearings on this legislation.

The claims made during congressional testimony that the

funding received by our organizations to provide home

counseling services amounts to a ``slush fund,'' is an

egregious and shameless attempt to smear and impugn the

integrity of longstanding and trusted nonprofits and civil

rights organizations. Congress should applaud and elevate the

benefits of housing counseling, and the good work of

frontline organizations, like the National Urban League, in

righting the injustices of the past and present.

Therefore, I respectfully urge you to oppose H.R. 732 and

any efforts to include similar provisions in legislation

moving through Congress.

Sincerely,

Marc H. Morial,

President and CEO.

Mr. Chairman, I have an amendment at the desk.

Mr. Chairman, I think, when we come to the floor, we are obligated to as much educate our colleagues who may be back in their offices or in meetings as it is to educate the general public.

The name of this bill is distorted and incorrect. I think it is important to note what happens when the Department of Justice engages in lawsuits on behalf of the American people, and they are the American people's lawyer, or they are sued.

In many instances, there is something called a consent decree and a settlement that generates funds that can be utilized for the betterment of the American people.

So why don't you view this side of the aisle with the betterment of the American people because we are questioning legislation that would eliminate the opportunity for those who are doing good work to be funded by career professionals in the Justice Department.

So the basis of this bill is to throw this money over into the Congress, of which I have great respect in terms of its Article I powers, requiring a congressional appropriation for each beneficiary fund established as relief in a lawfully negotiated settlement to victims, such as in the case of predatory lending, employment discrimination, pollution, environmental hazards, and would greatly strain Congress' already limited legislative resources and scarce time.

They want us to now, line by line, disseminate these funds that can be done by career professionals dealing with improving on the issue upon which the government was sued. It opens the doors to industry influence and obstruction.

I don't believe we have earmarks anymore. I happen to be a supporter of getting moneys to the community. We don't have an appropriations bill now, we don't have a budget now. So it is almost November, and the Congress has not yet appropriated funds to run the government nor have they passed a budget. That would be the maze of which you would throw a very proficient process of allowing these funds to be distributed.

The Jackson Lee amendment would exempt from this confused bill settlement agreements that would provide restitution to States that are not parties to the litigation. That means, for example, after Hurricane Harvey, there was an explosion at the Arkema chemical plant. Nine trailers exploded and several first responders went to the hospital. I would want to seek funds to be able to help them.

We also understand that there are many organizations representing the people. Public Citizen, a nonprofit membership organization, they are against it. The Urban League is against it. The counties have issued a resolution, local counties. They are against it.

I think there is no clearer evidence to vote this particular bill down, but to support the Jackson Lee amendment.

Mr. Chair, I reserve the balance of my time.

Mr. Chairman, this is my very point. My very point is a transparent and clear system of distribution of funds, and the career professionals determining what entities need those funds is a clearer system than what would occur if moneys were dumped onto Congress outside of the normal budgetary and appropriations process, of which we are having a very difficult time as we speak.

The process that we have now, my amendment says that these settlement agreements that provide restitution to States that are not parties to the litigation, they shouldn't be covered by the elimination of the right for the career professionals to distribute these funds.

It also acknowledges the respect for the Congress and the work that it has to do, but it also acknowledges counties like Jefferson County, Texas, the resolution to the National Association of Counties. They are against this bill because it would disallow funds derived from court settlements for injuries to the environment from being distributed to States, counties, and parishes, borrowers in proximity to the pollution event. These are real people representing real people right on the ground asking for us to not pass this legislation.

I would say to my good friend, why don't we use our Article I powers to begin investigations on the separation of powers relevant to the administration and its actions. Why don't we begin looking at whether there are high crimes and misdemeanors.

I mean, there are many things that our Article I powers can do, but, in this instance, I think that this has not proven to be a failure, and the only failure in it is the obsession that my friends have with the past administration.

I want to have something that has worked for the county governments, people who live in counties and cities and States. If they were harmed during Hurricane Harvey, for example, by an explosion and 23 first responders went to the hospital and many houses were evacuated, I believe it would be appropriate to leave the system in which those dollars can go directly to those counties and cities and States and to improve the quality of life.

Mr. Chair, I ask my friends to support the Jackson Lee amendment.

Mr. Chair, the proposed legislation, as currently drafted, could be construed to preclude all third-party payments in settlement agreements, other than restitution to identifiable victims.

Requiring a congressional appropriation for each beneficiary fund established as relief in a lawfully negotiated settlement to victims, such as in cases of predatory lending, employment discrimination and pollution through environmental hazardous, would greatly strain Congress' already limited legislative resources and scarce time, while opening the doors to industry influence and obstruction in routine enforcement matters.

Congress lacks the time, expertise, and resources to properly review and make enforcement decisions on behalf of Federal agencies.

The cost of delays associated with this scheme would have devastating consequences for the public health, environment, and local communities.

Accordingly, the Jackson Lee Amendment would excecpt cases where funds are directed to states to remediate the generalized harm of unlawful conduct beyond harms to identifiable victims.

Specifically, the Jackson Lee Amendment would exempt from H.R. 732 settlement agreements that provide restitution to states that are not parties to litigation.

As you know, following the subprime meltdown, the U.S. Department of Justice pursued lawsuits against mortgage lenders and banks that engaged in discriminatory lending practices, such as those targeted by this legislation.

Research shows that African Americans and Latinos were discriminated against and steered into subprime loans even when they qualified for conventional loans.

Moreover, African Americans and Latinos were two to three times more likely than white homebuyers to receive subprime loans which resulted in foreclosure rates 10 times that of conventional loans.

Pursuant to the settlement agreements, available under current law, the Justice Department ordered that financial institutions dedicate a portion of their settlement payments to U.S. Department of Housing and Urban Development (HUD) certified housing counseling intermediaries to provide consumer relief in the communities that were hit hardest.

HUD has approved 37 housing counseling intermediaries that financial institutions have the discretion to choose as third-party providers of consumer relief under the terms of the Justice Department settlement agreements.

Additionally, these HUD-certified housing counseling providers deliver financial education and coaching to individuals to inform them of their home-buying options and rights, and to ensure they become and remain homeowners.

In fact, since 2008, 40 affiliates have provided housing counseling services--to date serving more than 200,000 clients in mostly underserved areas.

The success of housing counseling programs is undisputed.

Borrowers who have used housing counseling are one-third less likely to be seriously delinquent on their loan payments, and those who are in default are 60 percent more likely to save their homes.

The benefits of these programs are tangible and must continue to be made available to the public.

This example is particularly pertinent as Houston recovers from hurricane Harvey, a tragedy that displaced tens of thousands of my constituents.

There are still over 61 thousand people living in hotels throughout Texas.

Under current law, the Environmental Protection Agency (EPA) may include Supplemental Environmental Projects (SEPs) in settlement agreements to offset the harms of unlawful conduct by requiring parties to undertake an environmentally beneficial project or activity that ``is not required by law,'' but that a defendant agrees to undertake as part of the settlement of an enforcement action.

In 2012, the EPA and Justice Department resolved the civil liability of MOEX Offshore through a settlement agreement resulting from the Deepwater Horizon oil spill, that included funds to several Gulf states, including Texas, where Texas was not a party to the complaint, but received $3.25 million for SEPs and other responsive actions.

H.R. 732, would prohibit these agreements and many of the important benefits now provided by EPA.

The bill's definition excludes, ``any payment by a party to provide restitution for or otherwise remedy the actual harm (including to the environment), directly and proximately caused by the alleged conduct of the party that is the basis for the settlement agreement.''

This exception is too narrowly drawn to allow for numerous beneficial uses of settlement monies.

Thus, for example, the bill would appear to ban the following entirely legitimate, appropriate uses of settlement funds that are currently permitted by EPA:

(1) Pollution prevention projects that improve plant procedures and technologies, and/or operation and maintenance practices, that will prevent additional pollution at its source;

(2) Environmental restoration projects including activities that protect local ecosystems from actual or potential harm resulting from the violation;

(3) Facility assessments and audits, including investigations of local environmental quality, environmental compliance audits, and investigations into opportunities to reduce the use, production, and generation of toxic materials;

(4) Programs that promote environmental compliance by promoting training or technical support to other members of the regulated community; and

(5) Projects that provide technical assistance or equipment to a responsible state or local emergency response entity for purposes of emergency planning or preparedness.

Each of these programs provide important protections of human health and the environment in communities that have been harmed by environmental violations.

However, because they are unlikely to be construed as redressing ``actual (environmental) harm, directly and proximately caused'' by the alleged violator, the bill before this committee would prohibit every one of them.

On August 31, 2017, in the aftermath of Hurricane Harvey, dangerous chemicals at the Arkema chemical facility in Crosby, Texas, exploded and burned.

Nine trailers at the plant contained organic peroxides that first exploded and burned, sending 23 first responders to the hospital. In addition, despite a 1\1/2\ mile radius evacuation from the chemical releases, dozens of residents were effected for days by the noxious fumes, including headaches, dizziness, vomiting, and burning eyes.

This recent incident is a prime example of how restitution to a community under an enforcement settlement should work. EPA should (not sure if they are) engage in enforcement activities against Arkema, including civil fines and restitution to the community. There were

clear health impacts on many in the community and a settlement could, as an example, fund health care assistance short term, or even long term monitoring of lung health. However, if H.R. 732 were law, only first responders would likely have the ability to seek restitution. This is not okay. It utterly fails to help make a community whole after such a terrible event.

Background facts:

23 first responders were sent to the hospital due to exposure to chemical fumes.

Residents within a 1\1/2\ mile radius were asked to evacuate, though in this low-income neighborhood in the aftermath of the storm, many were unable to.

Congressman Ted Poe (R-TX), and original cosponsor of H.R. 732 and representative of the district that plant and affected community are located in, at the time told ABC News as events were unfolding that the situation was ``very dangerous . . . (and) . . . the worst-case scenario is that this chemical plant could explode.''

For these reasons, I urge my colleagues to join me in support of the Jackson Lee Amendment.

Proposed Resolution on the Stop Settlement Slush Funds Act

A resolution from Jefferson County, Texas to the National

Association of Counties seeking to maintain the status quo

for states, counties, parishes and boroughs being able to

receive damages payments for environmental crimes in

proximity to them (e.g., Exxon Valdez and Deepwater Horizon).

Issue: H.R. 732, a bill that may restrict or disallow

Department of Justice Supplemental Environmental Plans from

benefiting states, counties, parishes and boroughs in

proximity to pollution events that result in court

settlements for environmental damages.

Proposed Policy: The National Association of Counties

(NACo) opposes any provisions within the final version of

H.R. 732 that would disallow funds derived from court

settlements for injuries to the environment from being

distributed to states, counties, parishes and boroughs in

proximity to the pollution event.

Background: On Jan 30, 2017, Representative Goodlatte,

along with 34 other cosponsors, introduced the Stop

Settlement Slush Funds Act of 2017 (H.R. 732) which could ban

or restrict the current practice involving Supplemental

Environmental Projects' distribution of court settlement

proceeds to states, counties, parishes and boroughs.

H.R. 732 has been referred to the U.S. House of

Representatives Judiciary Committee and assigned to the

Regulatory Reform, Commercial & Antitrust Law Subcommittee.

Members of the Committee are unclear about H.R. 732's

provisions relating to payments to remediate direct harm,

including environmental harm, done by defendant's wrongful

activity.

This is particularly important in the environmental

context, in which the injury to the environment may be

diffuse and there may be no identifiable victims.

Currently, the U.S. Department of Justice and the Congress

may both have roles in determining eligibility for states,

counties, parishes and boroughs in proximity to a pollution

event for receiving funds from a settlement agreement.

H.R. 732 is unclear on this issue, prompting dissenting

opinions about whether the bill prevents states, counties,

parishes and boroughs in proximity to pollution events (e.g.,

the Exxon Valdez and Deepwater Horizon oil spills) from

receiving funds derived from court settlements.

NACo should oppose any provision in H.R. 732 that modifies

or restricts current practice in distributing proceeds from

court settlement agreements for environmental damage events.

Fiscal/Urban/Rural Impact: Congressional concurrence with

this NACo resolution upholds the status quo practice in court

settlement agreements for environmental events.

Sponsor: Jeff R. Branick, Judge, Jefferson County, Texas

Mr. Chair, I yield back the balance of my time.

Mr. Chair, I demand a recorded vote.

Mr. Chairman, I yield myself such time as I may consume.

At this time, I would like to include in the Record a number of exhibits:

Exhibit A, in which under oath we had testimony that said the Department of Justice did not want to be in the business of picking or choosing organizations that may or may not receive any funding under an agreement.

Yet, exhibit B, in which the number three at Department of Justice under President Obama said, ``Can you explain to Tony the best way to allocate money toward organizations of our choosing,'' in a $9 billion settlement.

And in exhibit C, in which they specifically said they had concerns, including not allowing Citibank to pick a statewide intermediary like Pacific Legal Foundation that does conservative causes.

exhibit a

Chairman GOODLATTE. Well, let me just add that this

committee will not stand silent, nor will, I am sure, the

Financial Service Committee, and you can expect that this

will escalate if you do not provide the documentation that we

requested over 2 months ago.

Secondly, did anyone at the Department of Justice ever

consider the serious appearance of impropriety in requiring

banks to make available to activist organizations the lion's

share of funding that Congress has previously cut off to

them? That is one of the reasons why we want to see the

communications. We want to know what considerations went into

making this decision to take this action.

Mr. GRABER. Thank you, Mr. Chairman. Again, understand the

concern. And I can tell you that one of the reasons that the

Department wanted to use a preexisting list, the one that I

believe you are referring to, the HUD approved counseling

agency list, is because that list is preexisting. The

Department did not want to be in the business of picking and

choosing which organization may or may not receive any

funding under the agreement.

Chairman GOODLATTE. No, but it is the Congress'

responsibility to appropriate funds, and the Congress'

responsibility to be picking and choosing who gets

appropriations for expenditures. And we want to know what

connection there is between the fact that cuts were made and

. . .

exhibit b

From: Taylor, Elizabeth G. (OAAG)

Sent: Wednesday, November 06, 2013 10:58 AM

To (OLC); Seitz, Virginia A (OLC)

Cc: Martinez, Brian (OAAG); Graber, Geoffrey (OAAG) (OLC)

Subject: back again with questions

I'm sorry to be a pest. We keep tinkering with the

settlement agreement and I want to make sure that we are

doing it right. I also am not sure that I am a good messenger

between you and Tony because he asks me follow up questions

that I'm not sure I can answer. Do you have a few minutes

today to meet with Tony and let him ask you questions

directly?

Here are our current issues:

Can you explain to Tony the best way to allocate some money

toward an organization of our choosing? We have been

discussing having the agreement provide that JPM agreed to

pay $9 billion but that, if, by the time we sign the

settlement agreement, JPM has given $60 million to x

organization, they will only have to pay $8.04 billion. I

think that's ok. We understand that we would have no control

over what x organization does with the money.

Thanks

exhibit c part i

From: Frimpong, Maame Ewusi-Mensah (OAAG)

Sent: Wednesday, July 09, 2014 1:07 PM

To: (A2J)

Subject: RE: new language

Thanks! We made the proposal. They had one question

whenever you have a moment.

From: (A2J)

Sent: Wednesday, July 09, 2014 9:47 AM

To: Frimpong, Maame Ewusi Mensah (OAAG)

Subject: RE: new language

You go girl. The prospective settlement was on NPR this

morning, in case you didn't have your radio on . . .

Acting Senior Counselor for Access to Justice

U.S. Department of Justice

From: Frimpong, Maame Ewusi Mensah (OAAG)

Sent: Wednesday, July 09, 2014 9:42 AM

To: (A2J)

Subject: RE: new language

Cool. I will keep you posted.

From (A2J)

Sent: Wednesday, July 09, 2014 9:34 AM

To: Frimpong, Maame Ewusi Mensah (OAAG)

Cc (A2J)

Subject: RE: new language

Importance: High

Got it. Ok, this will hopefully address the concerns we'd

like to avert:

Donations to state-based Interest on Lawyers' Trust Account

(IOLTA) organizations (or other statewide bar-association

affiliated intermediaries) that provide funds to legal aid

organizations, to be used for foreclosure prevention legal

assistance and community redevelopment legal assistance.

Concerns include: a) not allowing Citi to pick a statewide

intermediary like the Pacific Legal Foundation (does

conservative property-rights free legal services) or a

statewide pro bono entity (will conflict out of most

meaningful foreclosure legal aid) we are more likely to get

the right result from a state bar association affiliated

entity; b) making

exhibit c part II

sure that it's legal assistance provided, not a scenario

where the bank can direct IOLTA or other intermediary to give

to even a legal aid organization but to do only housing

counseling, for example, under the umbrella ``foreclosure

prevention assistance.''

This get you closer?

Acting Senior Counselor for Access to Justice

U.S. Department of Justice

From: Frimpong, Maame Ewusi Mensah (OAAG)

Sent: Tuesday, July 08, 2014 6:10 PM

To (A2J)

Subject: new language

Mr. Chairman, I yield 5 minutes to the gentleman from Texas (Mr. Poe).

Mr. Chair, I yield an additional 1 minute to the gentleman.

Mr. Chairman, I yield myself such time as I may consume.

If the minority has not gone through the discovery that we have, that we placed in the Record, I will be glad to give Mr. Cicilline or anyone else a copy.

I am just going to repeat, though, after receiving testimony that they didn't pick winners and losers, what we are marking as exhibit B and exhibit C make it clear they were, and specifically choosing, to exclude a ``conservative group.''

I think the important things here, though, Mr. Chairman, are if they want to have money in a settlement, such as the Deepwater Horizon tragedy, they certainly could, as long as it directly provides aid to the victims; which, of course, cleanup did. But when we look at these others, one of the great things is if they want to put it into a victim's fund as part of it, a government-controlled fund, they can if they want.

If the Department of Justice wants specific authority the way they do, for example, in water settlements, particularly related to Native American Tribes, they offer a deal, they put one together, and, Mr. Chairman, they come to Congress. This Congress, in the last Congress, settled multiple longstanding disputes with Tribes. What is interesting is they made sure the money went to those who had been harmed when they came to Congress and said: Please codify this agreement.

But in the many agreements that seems to go on in the Obama administration--and we now have the smoking gun of that--they made political decisions. Making political decisions is why you have to put this back in the light of day and with real congressional oversight.

What is amazing is, during the markup of this bill, there were a number of Members of the other party who specifically talked about not trusting the current occupant of the White House and the current Attorney General. It baffles me that they would not want to take back this authority knowing that the Department of Justice could bring to us a request for a bill that would authorize a specific settlement that could have outside groups or grant authority on a case-by-case basis.

The reality is the slush fund system has to stop. That is why Chairman Goodlatte's bringing this bill today was so critical.

Mr. Chairman, I reserve the balance of my time.

It is majority. Yes, you have copies of it.

Mr. Chairman, the gentleman asks for a colloquy.

Although I don't have them, I am sure they prove the same point: that the light of day, the cleanliness of sunlight, and congressional oversight and appropriation would have protected against the abuses the gentleman is probably describing.

Mr. Chairman, I yield myself such time as I may consume.

Mr. Chairman, the gentleman's points are good. I am afraid his conclusion may be the part I have to differ slightly with, Mr. Chairman.

The gentleman from Tennessee is right to note past and other indiscretions. That is why we have this bill before you today. In fact, it is why passage is so important.

We don't want to have anybody of either party--the current occupant of the White House is from my party, a Republican. The current Attorney General is from my party, a Republican and former Republican Senator. The fact is that now is the time not to necessarily disparage any past activity but to stop it.

We are not a body that is supposed to trust as much as we are a body to have some trust and to verify. When we find wrongdoing, it is our job to make sure it doesn't happen again. This bill, including the comments of the gentleman from Tennessee, seeks to do that. I am convinced that it is good for that reason, and it is even good for the example that Mr. Cohen suggests.

Mr. Chairman, I reserve the balance of my time.

Mr. Chairman, I yield myself such time as I may consume.

Mr. Chairman, I would like to make sure I provide a little clarity. We are not talking about leftwing, rightwing, or other groups who get it. What we are talking about is a basic question of fungibility of money.

If something has been done wrong and a judge or the Department of Justice has X amount of determination of wrongdoing, the first question is: How much of that money can get to the victims? In a perfect world, the victims are made 100 percent whole. In a perfect world, 100 percent of the money passes from the perpetrator to the victim.

The Department of Justice making a decision not to a left- or rightwing group, but a political decision to give $1 million to the Coast Guard, to their charitable foundation, was a decision that clearly was not part of the mitigation but, rather, a general charitable decision. That was $1 million that did not go to the victim, did not go to the general Treasury, but it went to the whims of a bureaucrat.

We seek to make sure that, if that is an appropriate action, they come to Congress with that and not decide that charity begins with some unelected individual in the Department of Justice.

Mr. Chairman, I reserve the balance of my time.

Mr. Chairman, I yield myself 1 minute in short response.

Mr. Chairman, sometimes the obvious is missed in the debate. The gentleman from Georgia talks about locking down power. Quite frankly, Republicans do have a majority in the House and a slim majority in the Senate, and the current occupant of the White House is from my party. So when we are trying to reduce potential misconduct by the executive branch, we are not doing it to take any money away.

As a matter of fact, this law would clearly cause more money to flow from the same amount of initial payment, more money to flow to the victims. So we are trying to flow more money to the victims. We are in no way reducing any aspect of settlements other than, if the current occupant of the White House, the President, and the Attorney General want to give to the charity of their choice, they can either do it with their own money or they can come to Congress for authority.

Mr. Chairman, I reserve the balance of my time.

Mr. Chairman, I yield myself such time as I may consume.

Mr. Chairman, I want to take a moment to agree with the gentleman from New Jersey. The idea that you can pay a fine to get out from underneath criminal prosecution is one that I would like to see either eclipsed to where it is almost invisible and rarely used or done away with altogether. I would certainly agree to join with the gentleman in finding further prohibitions to that practice.

It has been too often that a corporation able to pay large amounts of money not only escapes its actions, but, of course, it escapes the prosecution of key individuals who may, in some cases, be responsible for the loss of life and/or health.

So I want to join with the gentleman from New Jersey. That is not what this bill is about. It doesn't deal with it, nor does it fail to deal with it. It is not the subject of the bill.

I urge the gentleman, who does agree with a portion of what we have to say, to work with me. I will be happy to be his cosponsor on a piece of legislation to try to curtail that practice.

Today, we are trying to curtail a practice in which we have examples of both Republicans and Democrats in the Office of the Attorney General, their justice departments, from making settlements that seem to have political bias. And that is what we are here to stop.

Mr. Chair, I reserve the balance of my time.

Mr. Chairman, I yield myself such time as I may consume.

The gentlewoman spoke quickly, and I know she had a lot of important information there. Some of it simply was wrong.

One of them is that she touched on environmental cleanup. Very clearly, nothing in this legislation would limit the cleanup related to the wrongdoing or the damage. Not so. A third party could be hired to do the cleanup.

Additionally, nothing stops a settlement from requiring a company to have counseling or other mitigation. It simply stops the Department of Justice from picking a charity of its choosing to go do it.

Now what I would really like the gentlewoman--who may not be on the floor any longer--to understand is that the Department of Justice has grant authority and does multiple grants every single month of the year to some of the very same groups under its authority that these settlements are going toward. Congress has allowed it a certain amount of money to provide grants for general harm.

Additionally, every year, Congress allocates hundreds of millions of dollars to some of the very same groups and efforts the gentlewoman knows that we are talking about.

So, although her speech was quick, the thing that she said that may have misled some people here in the Chamber I think needs to be corrected. Direct harm will be mitigated. It can be done by anyone. A company can agree and be forced under supervision to mitigate and to hire people to help in that effort.

Very clearly, many of the groups being talked about here today already receive money through the grant process or through direct appropriation by Congress. That is the right way to do it. It is the reason this is a bipartisan bill and this is an effort by our Congress to make sure that we hold the reins of authority where they should be under the Constitution.

Mr. Chairman, I reserve the balance of my time.

Mr. Chairman, I yield myself 2 minutes.

Mr. Chairman, I am putting this sign up not for the people in the Chamber, because people in the Chamber on the other side have continued to read the same talking points from their leadership that says there is no evidence.

This is in the record. This is a bigger part of it. So for the people in their offices who will come down to vote, if there is not a motion to recommit, they are not going to get an opportunity to see this.

So I hope that they will look just now and realize this is one of those things you don't normally get. As Chairman Goodlatte said, this is a smoking gun. This is a clear statement that an ideological bent against a nonprofit was very specifically there, while other emails in the same chain of emails shows that they were picking who they wanted.

That is the politics that was going on. It is the politics we are trying to prevent. As I said in my previous statement, the Department of Justice is given a number of dollars for grant programs, and we may not always agree with how those grant programs are run, but we give them that.

Additionally, the Congress appropriates a tremendous amount of money, much of it going to the same groups. A little over 1\1/2\ years ago, 2 years ago, this body came together on the reauthorization on Violence Against Women, which has and will continue to do very good work in exactly the area that people are talking about.

This is the reason we have legislation before us today. We have had political activity that has been going on, according to the Democrats, by Republican Attorneys General; according to this document, by the last Attorneys General. The fact is, we need the legislation. We have to have it.

Mr. Chairman, I reserve the balance of my time.

Mr. Chairman, I yield myself such time as I may consume.

Mr. Chairman, in closing, I don't believe there is any question at all but that the minority has missed the point. In no way, shape, or form are we changing. We intend to make sure the Department of Justice prosecutes wrongdoing, both criminal and civil.

The gentleman from New Jersey (Mr. Pascrell) rightfully said we shouldn't have money paid in lieu of criminal prosecution; it should be both. I agree with him.

What we are dealing with here is a recognition that, under Republican and Democratic administrations, we have had mandatory donations that, in fact, went to charities, if you will, or organizations of the choice of those political entities. The fact is what we are doing is reining in--reining in--wrongdoing that is actual and has been observed, nothing more.

One of the challenges we face every day and one of the reasons I am imploring both sides to come together on this vote, one of the challenges we face is how much of our obligation we have ceded to the executive branch, often then only to be horrified when, behind closed doors, unelected, unaccountable people make decisions that would never be made on the House floor or the Senate floor, and this is one of them.

We are scrutinized when we pick nonprofits to provide funding to on the left, on the right, or, if there is such a thing left in America, in the middle. We are scrutinized. But when we scrutinize the Department of Justice's action, according to my colleagues, under Republicans, there has been clear wrongdoing. According to the documents that we put in the Record today and showed on the floor, in the last administration, there was clear partisan politics.

We are simply saying, if they want to make that kind of a settlement, bring it to Congress; otherwise, it is very clear that they must--and I repeat, must--stop the action of taking money that would otherwise go to the victims and moving it to nondescript third parties of their choosing, no matter how benevolent they might be, including the Coast Guard Foundation. It can't continue to happen. We have to have the money that is in settlements flow to the victims or flow to the Treasury.

Mr. Chairman, I urge passage of the bill, and I yield back the balance of my time.

Mr. Chairman, I claim the time in opposition to the amendment.

Mr. Chairman, the amendment is unnecessary because it would exempt certain discrimination settlements from the bill's ban on third-party payments. But nothing in the underlying bill prevents a victim of discrimination from obtaining relief, and that is the important point.

The Stop Settlement Slush Funds Act of 2016 explicitly permits remedial payments to third-party victims who are directly and proximately harmed by the defendant's wrongdoing. Nor does the bill preclude wider conduct remedies used in discrimination cases.

For example, nothing in the bill bars the Department of Justice from requiring a defendant to implement workplace training and monitoring programs. The ban on third-party payments merely ensures that the defendant remains responsible for performing these tasks itself and is not forced to outsource set sums for the work to third parties who might be friendly with a given administration.

Accordingly, I urge my colleagues to oppose this amendment, and I yield back the balance of my time.

Mr. Chairman, I demand a recorded vote.

Mr. Chairman, this amendment is unnecessary because it would exempt settlements that direct funds to remedy indirect harm resulting from violations of the Clean Air Act and other violations. But that is precisely the problem.

How best to address indirect harm is a policy question that is properly decided by the elected representatives of Congress only and not by agency bureaucrats or prosecutors.

An example that highlights this is the $2.7 billion mitigation fund that the Department of Justice required in its settlement of claims against Volkswagen. That fund mitigated direct harm, which is permitted under this bill.

The problem was that, through a second fund, the Obama Justice Department required Volkswagen to spend an additional $2 billion on an administration electric vehicle initiative after Congress twice refused to appropriate funds for it. It is that subversion of Congress' power of the purse that this bill is designed to target. Nothing in this bill lets corporate polluters off the hook, and it is nonsense to say otherwise.

If direct remediation of the harm is impossible or impractical, the full penalty is still paid, but it goes to the Treasury. After that, the decision on how best to use it is left to the people's elected representatives in Congress rather than the executive branch.

Accordingly, I urge my colleagues to oppose this amendment, and I reserve the balance of my time.

I yield to the gentleman from Rhode Island.

I have the script right here. Let me tell you how I define them.

I don't know. Bureaucrats. You tell me.

Mr. Chairman, reclaiming my time about the brilliant amendment, it is, again, not necessary.

And in response to the question, the court does not always approve every one of these; and that is the point.

The gist of this amendment and the purpose of the bill is to restore and strengthen our Article I power under the Constitution. You may not like the way Congress operates, you may not like all of the decisions that are made here, but in their infinite wisdom, this is how the Founders designed our system. It has worked very well, and it will continue to do so. For that reason, I oppose the amendment.

Mr. Chairman, I yield back the balance of my time.

Mr. Chair, I rise in opposition to the amendment.

Mr. Chairman, the amendment would exempt settlements providing restitution to a State, the idea presumably being that the State could then distribute money as it sees fit for generalized harm to its citizens, but nothing in this bill prevents Congress from making block grants to States to address generalized harm. Indeed, Congress regularly appropriates money to States to deal with challenges, including environmental cleanups. Examples of this include the EPA Superfund and the Brownfields grants.

This bill merely insists that decisions on when such grants are appropriate and in what amounts, that those decisions be made by accountable representatives in Congress and not agency bureaucrats and prosecutors.

Compensating direct victims is a job for the Justice Department. Broader projects are a policy question that should be decided by Congress.

Mr. Chair, accordingly, I urge my colleagues to oppose this amendment, and I reserve the balance of my time.

Mr. Chair, I would just respond to my learned colleague by quoting a renowned liberal legal scholar, the late Abner Mikva, who explained in a law review article back in 1986, that even if it were less efficient to go through Congress, that would be no reason to cede the point of principle. This is what he wrote:

``To ensure that Congress would act as the first branch of government, the constitutional Framers gave the legislature virtually exclusive power to control the Nation's purse strings. . . . They knew that the power of the purse was the most far-reaching and effectual of all governmental powers. . . . Doubtless they understood that a collection of diverse individuals representing diverse interests . . . would less efficiently and less coherently devise fiscal policy than would a single `treasurer' or `fiscal czar.' Yet they chose, for good reason, to suffer this cost and bear its risks.''

That is from a liberal legal scholar, and, of course, conservatives agree.

The system that the Founders set up, the reason and purpose for Article I, is to allow these major decisions to be made by the elected Representatives of Congress, and, for that reason, we oppose the amendment.

Mr. Chair, I yield back the balance of my time.

Mr. Chair, this amendment would exempt settlements resolving allegations of predatory or fraudulent conduct involving residential mortgage-backed securities, as we have heard. Ironically, it creates an exception in the very situation in which the abuses we highlighted earlier arose.

The key point here is that nothing in the underlying bill prevents direct victims of mortgage fraud from obtaining relief.

The concern of this amendment is that there may be cases of generalized harm to communities that cannot be addressed by restitution, but this misses the fundamental point.

The Department of Justice has authority to obtain redress for victims. Federal law defines victims to be those ``directly and proximately harmed'' by the defendant's acts.

Once those victims have been compensated, deciding whether additional moneys, other than for penalties, should be allocated to address related problems becomes a policy question properly decided by elected representatives in Congress and not agency bureaucrats or prosecutors.

Indeed, Congress already funds homeowner assistance programs through the annual appropriations process, balancing it against competing priorities.

As we have repeated throughout this debate, the spending power is one of Congress' most effective tools in reining in the executive branch. This is true, by the way, no matter which party is in the White House.

This amendment would weaken that essential congressional power, and, for that reason, we urge Members to oppose it on institutional grounds.

Mr. Chair, I reserve the balance of my time.

Mr. Chairman, I would just respond by saying that those compelling policy arguments should be made appropriately in this Chamber, and it is the elected representatives of the people in this Chamber who can make those fateful decisions. There may be good arguments. There may be things that we need to do, but the point is that we are the persons who have the constitutional authority to make those decisions, not bureaucrats, not prosecutors.

Mr. Chair, for these reasons, I oppose the amendment, and I yield back the balance of my time.

Mr. Chairman, I rise in opposition to the amendment.

Mr. Chair, this amendment undercuts Congress' power. It is another attempt to do so, and it should be opposed for that reason.

It would exempt settlements that direct funds to remedy indirect harm resulting from lead in drinking water. It is a terrible problem. The amendment is forced to focus on indirect harm because nothing in the bill prevents remediation of direct harm.

But settlement provisions addressing indirect harm are precisely why this bill is needed. The bill's guiding principle is that once direct victims have been compensated, deciding the best use of additional funds to address related problems--whether that is addressing indirect harms or otherwise--is, again, a policy question properly decided by elected representatives in Congress and not agency bureaucrats or prosecutors.

We have proven the point. Last year, Congress actually acted on this. Congress appropriated $120 million to address drinking water problems in Flint, Michigan. If there is further need, Congress can make additional appropriations. The Department of Justice should not be permitted to augment those funding decisions entirely outside of the congressional appropriations and oversight processes because they are important to protect and preserve.

Again, the spending power is one of Congress' most effective tools in reining in the executive branch, and we cannot afford to weaken that essential congressional power.

Mr. Chair, for these reasons, I urge all Members to oppose this amendment on institutional grounds, and I reserve the balance of my time.

Mr. Chairman, I would just respond by saying that no tragedy, however sad and however large, justifies us deviating from our Constitution, from the way the Founders set up this system and the way that this body operates. There is a reason that these responsibilities were given to us as Members of Congress. Each of us has the same challenge. When there is a tragedy or a mishap or a natural disaster or anything that affects our districts, our job is to come here and convince a sufficient number of our colleagues to support those appropriations to handle those measures. The system is designed with safeguards in place. It is designed so that the interests of the entire Nation can be represented here in this Chamber. For that reason, this amendment would bypass that. It would bypass the design. It would bypass article I, and it would create a whole different way of governing. We simply can't allow that.

Mr. Chair, this is about preserving the original intent of the Constitution, preserving the power of this body. For that reason, I oppose the amendment, and I yield back the balance of my time.

Mr. Chairman, I yield myself such time as I may consume.

Mr. Chairman, the Stop Settlement Slush Funds Act would prohibit the Federal Government from entering into or enforcing any settlement agreement requiring donations to remediate harms that are not ``directly and proximately'' caused by a wrongdoer's unlawful conduct.

I, regretfully, oppose this measure for several reasons. To begin with, the bill would prohibit these types of settlement agreements even though they have been successfully used to remedy various harms, particularly those caused by reckless corporate actors.

For example, these settlement agreements helped facilitate an effective and comprehensive response to the predatory and fraudulent mortgage lending activities of financial institutions that nearly caused the economic collapse of our Nation, and that led to the Great Recession.

In fact, settlement agreements with two of these culpable financial institutions, Bank of America and Citigroup, required a donation of less than 1 percent of the overall settlement amount to fund foreclosure prevention and remediation programs to help harmed consumers.

Now, contrary to the majority's claim, the Justice Department did not use any of these settlement agreements to fund active groups. Notwithstanding the production of hundreds of pages of documents by the Justice Department, along with hundreds of pages of documents produced by private parties, we have not seen a shred of evidence that the government included unlawful or politically motivated terms in its settlement agreements with Bank of America or Citigroup.

The majority also asserts that these settlement agreements are used by the Justice Department and other agencies to circumvent the congressional appropriations process. But existing law already prevents agencies from augmenting their own funds.

By law, donations included in settlement agreements must have a clear nexus to the prosecutorial objectives of the enforcement agency. And both the Government Accountability Office and the Congressional Research Service have concluded that settlement agreements providing for secondary remediation do not violate Congress' constitutional power of the purse.

Finally, H.R. 732 would prevent the remediation of systemic harms in civil and criminal enforcement actions.

These settlement agreements allow parties to resolve their civil or criminal liability by voluntarily remediating the harms caused by their unlawful conduct. For some types of unlawful conduct, such as discrimination based on race or religion, secondary remediation of harms may be the only remedy available for systemic violations of the law.

The victims of such conduct are typically not themselves parties to the underlying action. Therefore, secondary remediation in the form of voluntary compliance and training programs serves as an important tool in these cases to protect victims of discrimination. Yet H.R. 732 would effectively prohibit such relief.

Given these serious problems and some others presented by the bill, I strongly am led to oppose H.R. 732.

Mr. Chairman, I reserve the balance of my time.

Mr. Chairman, I yield 5 minutes to the gentleman from Rhode Island (Mr. Cicilline), a distinguished member of the House Judiciary Committee, who is ranking member on the Subcommittee on Regulatory Reform, Commercial and Antitrust Law.

Mr. Chairman, I yield 30 seconds to the gentleman from Tennessee (Mr. Cohen).

Mr. Chairman, I yield the gentleman from Tennessee an additional 30 seconds.

Mr. Chairman, I yield 3 minutes to the gentleman from New York (Mr. Nadler), who is the ranking member on the Subcommittee on Courts, Intellectual Property, and the Internet.

Mr. Chairman, I yield 3 minutes to the distinguished gentleman from Georgia (Mr. Johnson), who is a member of the Judiciary Committee.

Mr. Chairman, I yield 30 seconds to the gentleman from Georgia (Mr. Johnson).

Mr. Chairman, I yield 3 minutes to the distinguished gentleman from New Jersey (Mr. Pascrell).

Mr. Chair, I yield an additional 30 seconds to the gentleman.

Mr. Chairman, I yield 3 minutes to the gentlewoman from Texas (Ms. Jackson Lee), the ranking member of the Crime, Terrorism, Homeland Security, and Investigations Subcommittee of the Judiciary Committee.

Mr. Chair, I yield an additional 20 seconds to the gentlewoman.

Mr. Chairman, I yield 2 minutes to the gentleman from New York (Mr. Meeks).

Mr. Chair, I yield an additional 1 minute to the gentleman.

Mr. Chairman, in closing, I note that a broad coalition of public interest organizations, including Public Citizen, Americans for Financial Reform, the National Urban League, among others, strongly oppose H.R. 732. They warn: ``This measure would undermine law enforcement goals by reducing the availability of suitable remedies to address these kind of injuries to the public caused by illegal conduct.''

This bill is, in effect, a gift to lawbreakers that comes at the expense of families and communities impacted by injuries that cannot be addressed by direct restitution, and so I have to ask: Why are we giving a gift to lawbreakers in the guise of H.R. 732?

If you value, as I do, upholding the rule of law, then you will join me and many others in opposing this seriously flawed measure.

I thank everyone who has participated in this discussion, and I yield back the balance of my time.

Mr. Chairman, I rise in opposition to the amendment.

Mr. Chair, Members of the House, this amendment makes a bad bill even worse. To begin with, it would prohibit cy-pres distributions pursuant to which parties attempt to find the next best use of funds that remain after a class action settlement has been finally administered. Cy-pres is especially important in actions where the recovery is so small for an individual class member that he or she may not bother to make a claim or where a distribution is not practical.

For example, courts under cy-pres may permit unclaimed settlement funds to provide indirect compensation to the class, such as future price reductions or remediation efforts. As a result of this amendment, however, the unclaimed settlement funds would be returned to the very entities that caused the injury in the first place. Simply put, this amendment would benefit the wrongdoers to the detriment of the victims they harmed.

In addition, this amendment would restrict the amount of compensation a victim could receive under a settlement agreement to the extent the victim was actually harmed by the wrongdoer. The amendment completely ignores the pragmatic realities of systemic harms, such as widespread long-term or latent environmental damage like lead-contaminated public water drinking systems--think of Flint, Michigan--where the extent of a victim's exposure to such harms may be difficult and, perhaps, even impossible to quantify.

In a letter opposed to this amendment, a group of public interest organizations, including Earthjustice, Public Citizen, Alliance for Justice, the Center for Justice & Democracy, and the American Association for Justice, said it is terrible public policy because wrongdoers would benefit from a windfall for cheating and harming consumers, undoing the accountability or deterrence function of the entire settlement. This is absolutely the wrong result, and so I urge that this amendment be rejected.

Mr. Chairman, I yield back the balance of my time.

Mr. Chair, I have an amendment at the desk.

Mr. Chairman, my amendment would exempt from H.R. 732 settlement agreements that direct funds to remediate the indirect but catastrophic effects of unlawful conduct resulting in lead contamination in public drinking water.

Lead contamination in public drinking water is potentially a national public health crisis as older cities continue to rely on aging lead pipes for the delivery of public drinking water.

A report from the American Water Works Association estimates that this problem could potentially affect millions of water service lines. For example, Highland Park, located in my district, has been dealing with issues resulting from aging lead pipes. Just last month, officials closed public water fountains and fixtures due to unsafe samples of lead in public drinking water.

The well-publicized Flint water crisis is another painful example of the disastrous consequences of lead contamination in public drinking water.

The director of the pediatric residents at Hurley Children's Hospital in Flint wrote: ``To understand the contamination of this city, think about drinking water through a straw coated in lead. As you sip, lead particles flake off into the water and are ingested. Flint's children have been drinking water through lead-coated straws.''

The Flint water crisis has generated numerous lawsuits by individuals, local and State agencies, and public interest organizations such as the Natural Resources Defense Council and the American Civil Liberties Union.

While these cases tend to involve numerous victims directly affected by unlawful conduct, they can also affect the interests of persons who are not parties to the case or are likely to receive compensation for unlawful conduct.

Given the systemic nature of lead contamination in drinking water, settlement agreements resolving civil and criminal liability related to the Flint water crisis may require setting aside funds for unidentifiable victims, directing payments to address generalized harm, or establishing an environmental compliance program to avoid lead contamination in the future.

Unfortunately, these entirely legitimate forms of indirect remediation of environmental harms would be prohibited by H.R. 732.

Mr. Chair, accordingly, I urge my colleagues to support the amendment, and I reserve the balance of my time.

Mr. Chairman, I yield the balance of my time to the gentleman from Michigan (Mr. Kildee).

Mr. Chair, I yield back the balance of my time.

Mr. Chair, I demand a recorded vote.

Mr. Speaker, I demand a recorded vote.

Mr. Chair, I thank the gentleman for yielding.

Mr. Chair, I rise in opposition to H.R. 732, the inaptly titled Stop Settlement Slush Funds Act of 2017, which would flatly ban the enforcement of any settlement agreement that seeks to remedy the general harms caused by unlawful conduct.

This prohibition would broadly apply to all civil and criminal settlements with limited exception, encroaching on the Justice Department's longstanding legal authority to negotiate and enter settlement agreements.

Since its establishment in 1870, the Justice Department has possessed plenary authority to litigate on behalf of the government in all civil and criminal litigation except as otherwise provided by law.

Since at least as early as 1888, the Supreme Court has upheld this broad grant of authority, holding that it extends to settling litigation on behalf of the government or making enforcement decisions in light of priorities and resources.

In Heckler v. Chaney, for example, the Court held in 1985 that, in many cases, enforcement decision within the Justice Department's expertise make it ``far better equipped than the courts to deal with the many variables involved in the proper ordering of its priorities.''

This rationale also extends to the terms of settlement agreements, which ``involve numerous complicated technical issues as well as important judgments respecting the use of limited prosecutorial resources'' and are ``best left in the hands of expert agencies and prosecutors, rather than dictated by Congress or the Federal courts,'' as environmental law professor Joel Mintz has noted.

H.R. 732 undermines this longstanding policy by strictly curtailing the enforcement discretion of the Justice Department and the other enforcement agencies when resolving a party's civil or criminal liability on behalf of the Federal Government.

As the Justice Department observed last Congress in the context of a substantively similar bill, ``limiting the Department's discretion to negotiate appropriate terms of settlement, which are voluntary and agreed to by the parties, may result in fewer settlement agreements, protracted litigation, and delays for victims who need the relief.''

Without this discretionary authority, the Department concluded that, ``the government may not be able to adequately address the full scope of the harms that a defendant's illegal actions caused.''

In contrary to the arguments of the gentleman from Virginia, despite 2 years of investigation by the Judiciary Committee into the Justice Department's use of settlement agreements, no evidence was found to show that the mortgage fraud settlements contain terms that were politically motivated. But we did learn that the sole mission of the Justice Department's settlements under the prior administration was to aid the families whose economic security was jeopardized by reckless Wall Street behavior and prevent them from losing their homes due to fraudulent mortgage practices.

There are many examples where generalized harm is impossible to calculate or impractical to quantify in the courts. Without this ability by the Justice Department to enter into these settlement agreements, corporate wrongdoers are going to be free to do whatever they want.

I give you one example: Deepwater Horizon, which destroyed the coastline. As part of that settlement, there was State-based cleanup that was provided. There was funding for the National Fish and Wildlife Foundation for remediation; things that were directly responsive to the harm caused. But you couldn't quantify to an individual person, and that is what this legislation will prevent.

Mr. Chair, I urge my colleagues to oppose this measure.

Will the gentleman yield?

Mr. Chairman, I just want to ask the gentleman a question.

You made reference to the decision of--I forget the word you used to describe bureaucrats.

I think you said some pejorative word describing bureaucrats.

But I just want to ask the gentleman--the settlements that are described or the subject of this legislation, of course, are settlements that would require court approval and enforcement. So I think in fairness, when you say it is so that a bureaucrat doesn't get to decide this, this is pursuant to litigation which the parties come to an agreement that then the court must approve.

So this is really about respecting the ability of the court to assess the propriety of a judgment. And I think there was a very famous decision where one of the courts said the purpose of the Clean Water Act was not to endow the Treasury, but to prevent harm. So the idea is not just to generate money for the government, but to actually remediate and respond to the harm that was caused by the corporate wrongdoer.

I think that is why Mr. Johnson's amendment is important, brilliant, and deserves our support.

Mr. Chairman, I have an amendment at the desk.

Mr. Chair, I rise in support of my amendment, which would exempt from H.R. 732 any settlement agreement that directs funds to reduce the effects of the mortgage foreclosure crisis through foreclosure prevention assistance programs.

There is little debate that predatory and fraudulent activity in the residential mortgage securities market was the primary cause of the mortgage foreclosure crisis.

As U.S. District Court Judge Max Cogburn observed in 2014, one need not ``be an expert in economics to take notice that it was the trading of toxic RMBS''--residential mortgage-backed securities--``between financial institutions that nearly brought down the banking system in 2008.''

The financial crisis blighted entire cities and communities, resulting in more than 13 million Americans losing their homes between 2006 and 2014, an average of 850,000 per year.

Beyond the life-changing hardship and stress placed on families by unlawful conduct in the housing market, the exponential rise in foreclosures imposed significant external costs on families and communities across the Nation.

Fraudulent activity in the housing market depressed home and commercial real estate values, undermined economic development and municipal revenue, deprived communities of public services, and resulted in increases of violent crime in communities of significant foreclosure activity.

Leading studies have also documented the contagious effects of foreclosures, and not just the neighborhood immediately affected by the foreclosures, but nearby vicinities as well, underscoring the diffuse and systemic impacts of unlawful mortgage securities practices.

In response to the financial crisis, President Obama announced in 2012, the creation of an investigatory unit within the Justice Department to: `` . . . hold accountable those who broke the law, speed assistance to homeowners, and help turn the page on an era of recklessness that hurt so many Americans.''

This unit secured more than $40 billion in civil penalties, compensation, and consumer relief through settlement with five financial institutions for alleged misconduct involving the packaging, marketing, and sale of residential mortgage-backed securities.

Geoffrey Graber, who directed this effort within the Justice Department,

testified in 2015 that these settlements meaningfully addressed the vicious cycle of harm caused by fraud in the housing market by achieving accountability from financial institutions that engaged in wrongdoing related to residential mortgage-backed securities, and to the extent possible, bringing some measure of relief to homeowners who suffered as a result of the financial crisis.

In addition to civil penalties, these settlements included statements of fact describing the pervasive fraud that permeated the mortgage market. In just one example, a bank employee stated that he would not be surprised if half of these loans went down, and that the banks should start praying.

The settlements also included consumer relief provisions designed to enable many Americans to stay in their homes by directing funds to distressed homeowners, community reinvestment and stabilization, and income-based lending for borrowers who lost homes to foreclosure.

The Department's settlement with Citigroup and Bank of America additionally directed $50 million in funds to charitable housing council programs and legal aid organizations to provide counsel to homeowners entitled to relief under the settlement because they were directly affected by the fraudulent and predatory conduct of the settling banks.

As the Center for American Progress has noted, these funds account for less than 1 percent of the overall amount of each settlement, and will support services provided by housing counselors and other trusted intermediaries that enable consumers to access the consumer relief to which they are entitled under the settlements.

We should be doing everything in our power to keep American families in their homes and off the streets, not letting big banks off the hook for their predatory and fraudulent practices, and so I urge my colleagues to adopt this amendment that will address this very important issue.

Mr. Chair, I reserve the balance of my time.

Mr. Chair, if I might just say briefly, the notion that Congress can just do these appropriations itself sort of misses the point. It is the responsibility of Article III courts to hear disputes, supervise litigation, and enforce settlements.

It is an odd moment for Congress to take on the work of another branch of government when we can't even do our own work here.

Mr. Chair, I yield the balance of my time to the gentleman from Michigan (Mr. Kildee).

Mr. Chair, I yield back the balance of my time.

Mr. Chair, I demand a recorded vote.