DoJ redirecting damage awards to favored groups?

posted at 10:55 am on August 5, 2010 by Ed Morrissey

Remember when asking for the resignations of political appointees equated to somehow-intolerable “politicization” at the Department of Justice?  Those days seem quaint and courtly compared to the successor DoJ in the Obama administration.  Byron York reports that Justice has begun redirecting jury and court awards to “qualified organizations” that weren’t party to the claims at all — but may have ties to the administration:

In the past, when the Civil Rights Division filed suit against, say, a bank or a landlord, alleging discrimination in lending or rentals, the cases were often settled by the defendant paying a fine to the U.S. Treasury and agreeing to put aside a sum of money to compensate the alleged discrimination victims. There was then a search for those victims — people who were actually denied a loan or an apartment — who stood to be compensated. After everyone who could be found was paid, there was often money left over. That money was returned to the defendant.

Now, Attorney General Eric Holder and Civil Rights Division chief Thomas Perez have a new plan. Any unspent money will not go back to the defendant but will instead go to a “qualified organization” approved by the Justice Department. And if there is not enough unspent money — that will be determined by the Department — then the defendant might be required to come up with more money to give to the “qualified organization.”

The arrangement was used in a recently-settled case, United States v. AIG Federal Savings Bank and Wilmington Finance. The Justice Department alleged that AIG violated the Fair Housing Act and the Equal Credit Opportunity Act by allowing third-party wholesale mortgage brokers to “charge African-American borrowers higher direct broker fees for residential real estate-related loans than white borrowers.” The financial institution denied any wrongdoing, and there was no factual finding of wrongdoing. Nevertheless, under the terms of a March 19, 2010 consent decree, AIG agreed to pay $6.1 million to “aggrieved persons who may have suffered as a result of the alleged violations.”

That is standard procedure in such cases. But then AIG also agreed, in the words of the consent decree, to “provide a minimum of $1,000,000 to qualified organization(s) to provide credit counseling, financial literacy, and other related educational programs targeted at African-American borrowers.” The money would come from unspent funds in the victim-compensation fund. But if it turned out that, after paying off the victims, there was less than $1 million left in the victim-compensation fund, AIG agreed to “replenish the settlement fund so that it contains $1,000,000 for distribution for those educational purposes.”

This should sound familiar, at least to Minnesotans.  Former Attorney General and erstwhile gubernatorial candidate Mike Hatch concocted a similar scheme in 2006.  As AG, Hatch negotiated odd settlement amounts that happened to just barely leave the funds within his discretion for disbursements — and then favored a familiar organization:

A Minnesota government investigator has questioned whether former Attorney General Mike Hatch was out to aid a political ally in a 2006 settlement with a credit card company that steered nearly $500,000 away from the state treasury and toward nonprofit groups.

According to an inquiry by the legislative auditor made public Monday, Hatch’s office agreed to drop its deceptive-advertising case against Capital One Bank that February in exchange for $749,999 — a dollar short of a statutory threshold for automatic deposit of settlement funds into state coffers.

Instead, Hatch’s office and the defendant were able to pick other recipients for two-thirds of the proceeds: the Minnesota chapters of the Legal Aid Society and the Association of Community Organizations for Reform Now, known as ACORN. The state got $250,000 to cover its investigative costs.

Less than a month later, Hatch appeared as a gubernatorial candidate at a news conference to accept the endorsement of ACORN’s Minnesota-based political action committee, which is legally distinct from the nonprofit group’s official work.

Presumably, ACORN’s successor organizations would qualify as one of the DoJ’s select list of recipients of these funds.  After all, the description is practically written to fit the original ACORN, from a case in LA: “qualified organization(s) mutually agreed upon by the United States and defendants…for the purpose of conducting fair housing enforcement or educational activities in Los Angeles County.”  It’s a dodge designed to provide federal funds for community organizers.

Senator Charles Grassley has demanded an explanation from AG Eric Holder, but has yet to receive a response.  As York notes, the issue goes far beyond the potential recipients of the funds:

The new Civil Rights Division tactic represents a departure from a fundamental principle of such cases, which is the pursuit of justice on behalf of actual victims. “If the Department of Justice recovers funds for alleged civil rights violations, the money should go to compensate victims or to the Treasury,” says Bob Driscoll, who was a top official in the Civil Rights Division during the first two years of the George W. Bush administration. “The practice of the Civil Rights Division steering settlement funds to favored advocacy groups is at odds with both civil rights laws and common sense. If Congress wants to fund certain advocacy groups or set up grants for agencies to award in order to promote non-discrimination, it can. But allowing the Civil Rights Division to steer a defendant’s money to its ideological allies is offensive.”

The DoJ is basically conducting an end run around Congress on appropriations of federal funds.  If we had a Congress interested in protecting its Constitutional authority, we would see hearings commence immediately, with subpoenas for DoJ officials and records.  Perhaps we’ll have such a Congress after the midterms, because we certainly need one.


Related Posts:

Breaking on Hot Air

Blowback

Note from Hot Air management: This section is for comments from Hot Air's community of registered readers. Please don't assume that Hot Air management agrees with or otherwise endorses any particular comment just because we let it stand. A reminder: Anyone who fails to comply with our terms of use may lose their posting privilege.

Trackbacks/Pings

Trackback URL

Comments

Duh… YA THINK?

CynicalOptimist on August 5, 2010 at 10:57 AM

The Obama administration is just a criminal organization given the reigns of absolute power.

AUINSC on August 5, 2010 at 10:59 AM

How much political corruption activism does Holder commit engage in before the MSM takes notice?

cartooner on August 5, 2010 at 11:02 AM

Holder is a punk. Politics and justice do not mix.

tim c on August 5, 2010 at 11:03 AM

Holder = Racial coward and cheap street thug.

JammieWearingFool on August 5, 2010 at 11:04 AM

Why isn’t there investigations and hearings into this!!

canopfor on August 5, 2010 at 11:04 AM

“Obama’s the name … redistribution’s the game.”

JerseyJeff on August 5, 2010 at 11:04 AM

The Department of Social Justice

Disturb the Universe on August 5, 2010 at 11:04 AM

No different than the Mafia.

Just more power, that’s all.

Defeating these criminals isn’t enough.

notagool on August 5, 2010 at 11:05 AM

CRIMINALS!

cmsinaz on August 5, 2010 at 11:05 AM

The media won’t say anything about this, but when the next Republican president comes along and kicks these hacks to the curb, sure enough we will hear endlessly from the MSM about a “politicized DOJ.”

Joe Caps on August 5, 2010 at 11:06 AM

We need an Alberto Gonzales “Miss me yet?” billboard.

gitarfan on August 5, 2010 at 11:06 AM

Senator Charles Grassley has demanded an explanation from AG Eric Holder, but has yet to receive a response.

and he’ll never get one….

the bloody audacity of this DOJ is just infuriating

if W did this part 4,359

cmsinaz on August 5, 2010 at 11:07 AM

Yep, a street gang has been installed in this administration; I’m mildly surprised that Holder and PBHO aren’t wearing blue bandannas and flashing gang signs to one another.

Bishop on August 5, 2010 at 11:07 AM

Democrat/Socialist administration looking for more “backdoor” ways to redistribute private wealth

Another ‘Dog bites Man’ story. Nothing to see here, keep moving.

listens2glenn on August 5, 2010 at 11:07 AM

From the headlines version:

There is a certain group that operates in a very similar fashion, except they call the funds ‘protection money’.

Vashta.Nerada on August 5, 2010 at 9:53 AM

Vashta.Nerada on August 5, 2010 at 11:07 AM

The media won’t say anything about this, but when the next Republican president comes along and kicks these hacks to the curb, sure enough we will hear endlessly from the MSM about a “politicized DOJ.”

Joe Caps on August 5, 2010 at 11:06 AM

right on

cmsinaz on August 5, 2010 at 11:07 AM

Bishop on August 5, 2010 at 11:07 AM

probably under their suits…

cmsinaz on August 5, 2010 at 11:08 AM

Corruption is a bottomless pit ….

This is the same story told since the beginning of time. How could people not have seen it coming?

tarpon on August 5, 2010 at 11:10 AM

So, what is ACORN calling itself now?

Anybody putting together a list?

forest on August 5, 2010 at 11:10 AM

Republicans taking the house in the midterms would lead to the all important subpoena power. They better use it.

Daemonocracy on August 5, 2010 at 11:10 AM

er, is this legal?

scream it from the rooftops

kelley in virginia on August 5, 2010 at 11:11 AM

Looks like we need to file RICO charges against the DOJ….it has gotten that bad.

GnuBreed on August 5, 2010 at 11:11 AM

I was already a Republican. But now I have adopted this stance: Never, Ever vote for a Democrat again.

kelley in virginia on August 5, 2010 at 11:12 AM

According to an inquiry by the legislative auditor made public Monday, Hatch’s office agreed to drop its deceptive-advertising case against Capital One Bank that February in exchange for $749,999 — a dollar short of a statutory threshold for automatic deposit of settlement funds into state coffers.
Instead, Hatch’s office and the defendant were able to pick other recipients for two-thirds of the proceeds: the Minnesota chapters of the Legal Aid Society and the Association of Community Organizations for Reform Now, known as ACORN. The state got $250,000 to cover its investigative costs.
Less than a month later, Hatch appeared as a gubernatorial candidate at a news conference to accept the endorsement of ACORN’s Minnesota-based political action committee, which is legally distinct from the nonprofit group’s official work.

Missing from the story is the dollar amount ACORN gave in campaign contributions to Hatch. Clever extortion racket.

Vashta.Nerada on August 5, 2010 at 11:12 AM

From BachmannOverDrive!
=============================

Obama Is Running A “Gangster” Government
Michele Bachmann

http://www.youtube.com/watch?v=cjwEBrAWMu4

canopfor on August 5, 2010 at 11:12 AM

I’m really thinking when the next Republican president takes office, this guy needs to be put in jail

lm10001 on August 5, 2010 at 11:12 AM

crr6 approved.

MadDogF on August 5, 2010 at 11:13 AM

Holder is a punk. Politics and justice do not mix.

tim c on August 5, 2010 at 11:03 AM

But politics and social justice sure do. I say we just start calling it the Department of Social Justice (DoSJ).

There’s really nothing this Regime can’t turn into a redistributionist scheme.

Heck, they’ve even managed to re-brand welfare transfer payments as “tax cuts”, and media parrots it.

forest on August 5, 2010 at 11:14 AM

Haven’t you heard? The Constitution doesn’t matter and the Feds can do anything they want. This outrage is just todays example.

MTF on August 5, 2010 at 11:16 AM

Are a banana republic yet? Seriously, it just feels that way.

abobo on August 5, 2010 at 11:17 AM

So, what is ACORN calling itself now?
Anybody putting together a list?
forest on August 5, 2010 at 11:10 AM

Crips, Bloods, and BGF have already been taken, give them time to come up with something new.

Bishop on August 5, 2010 at 11:17 AM

DC = District of Chavistas
DOJ = Department Jail your A$$ if you don’t agree to my extortion!

bluemarlin on August 5, 2010 at 11:17 AM

Forgot the “we”, oh well….

abobo on August 5, 2010 at 11:18 AM

Just can’t be true.

Holder testified at his confirmation hearing that he would end the corrupt practice of politicizing the DOJ as was done under the evil reign of Bush.

Holder wouldn’t lie about that, would he?

novaculus on August 5, 2010 at 11:18 AM

Imagine if this crime organization in charge can get control of the election process, as happens regularly in South America. We’ll never get rid of the socialists and communists, and each crime boss will be more corrupt than the last one.

RBMN on August 5, 2010 at 11:19 AM

ACORN is,was,the DEFRAUD CANARY IN HOPEY’S
GET’n Even-ism With-ism REPARATIONS MINE!!

canopfor on August 5, 2010 at 11:20 AM

Reparations. Every piece of legislation and act of the goobermint is directed towards that end.

Why do you think Jesse Jackson and Sharpton have been stone cold silent over the last year?

rickyricardo on August 5, 2010 at 11:23 AM

Extortion.
It has really come to this?

Count to 10 on August 5, 2010 at 11:24 AM

The Republicans have been allowing ACORN to rob the government blind under their watch as well.

There is no on watching the store.

rickyricardo on August 5, 2010 at 11:24 AM

So, what is ACORN calling itself now?
Anybody putting together a list?
forest on August 5, 2010 at 11:10 AM
Crips, Bloods, and BGF have already been taken, give them time to come up with something new.

Bishop on August 5, 2010 at 11:17 AM

Bishop: Looked up fraud related to Obama,and I’ve haven’t
seen a site like this!!:)
===================================

http://dailymusings.spaces.live.com/blog/cns!EBAB74DA8F94C559!5456.entry

canopfor on August 5, 2010 at 11:26 AM

Obama did say he wanted to spread the wealth around.

This is just wealth redistribution.

Felonious Monk on August 5, 2010 at 11:28 AM

The race hustlers are in charge. Elections mean things. Get in the face of all your “moderate” friends and co-workers. These next two election cycles are a tipping point for this country.

Hummer53 on August 5, 2010 at 11:29 AM

This is nothing short of a government-sanctioned protection racket and extortion of private funds.

From the article:

The financial institution denied any wrongdoing, and there was no factual finding of wrongdoing.

How can this theft be justified?

Rev-rund Jack$son and Rev-rund $harpton taught these shakedown artists well. Holder and any other co-conspirators should be fired and jailed under RICO.

onlineanalyst on August 5, 2010 at 11:31 AM

The trust of the American people was put into the hands of Black American leaders… Now we have corruption the likes of which is setting new standards; levels of racism the likes of which we have not seen in a few generations… It’s as if these black leaders are out to get even for past acts of racism that occurred long before anybody that is living today. It’s as if these black leaders actually have hatred for America and her people.

This is a very dark period in American history.

Keemo on August 5, 2010 at 11:32 AM

Senator Charles Grassley has demanded an explanation from AG Eric Holder, but has yet to receive a response.

Maybe Senator Grassley would like to extend an invitation to Eric Holder to appear before a Senate committee to explain his idiotic jackass actions here. And perhaps along the way, someone can figure out how to fire this simpleton!

pilamaye on August 5, 2010 at 11:33 AM

Following November, there had better be years of investigations and prosecutions. We must be a land of laws that apply to all citizens, including the political establishment, and most certainly including the media heads.

Keemo on August 5, 2010 at 11:35 AM

Every freaking day, more and more corruption…

WisCon on August 5, 2010 at 11:35 AM

This is a very dark period in American history.

Keemo on August 5, 2010 at 11:32 AM

Keemo: So true,but where was Obama educated,still remains
a mystery!!:)

canopfor on August 5, 2010 at 11:35 AM

er, is this legal?

scream it from the rooftops

kelley in virginia on August 5, 2010 at 11:11 AM

AIG agreed to it in the settlement, so I don’t see how it’s not legal. The question is why would AIG agree to such a settlement?

holygoat on August 5, 2010 at 11:45 AM

Well it is a good thing someone booked all the rooms at Ritz in Marbella. I would have found this out otherwise! I mean we all book at the Ritz, don’t we?

bluemarlin on August 5, 2010 at 11:46 AM

So the current DoJ policy is:

So buddy, you can spend $15 mil on legal fees for this lawsuit; or you can pay my buddy Steve a “donation” of $5 mil and this will all go away.

I get paid whether we have this lawsuit or not, and regardless of who wins; I’m paid by the government so you make whatever choice you want… do you want to pay now, or may more over the next year?

Nice, they’re really improved since I learned this bit:

Nice place you’ve got here, a bit flammable though; be a shame if anything happened to it

Good to see an organized crime style shakedown has moved on with the times and gotten more creative. Hate to see them just rehash the same-old same-old over and over again.

gekkobear on August 5, 2010 at 11:48 AM

I would not have found this out….

bluemarlin on August 5, 2010 at 11:48 AM

When are CEO’s going to grow and set and tell people like Holder and Shakedown Jackson to do a physically impossible act on themselves?

GarandFan on August 5, 2010 at 11:55 AM

Thievery.

AZCoyote on August 5, 2010 at 11:56 AM

A thug is in charge of DoJ.

Schadenfreude on August 5, 2010 at 11:56 AM

I approve! This is why I wanna be a lawyer!

crr6

Del Dolemonte on August 5, 2010 at 12:01 PM

Eric Holder is both a racist and a criminal. I hold nothing against him for his racism (it is unpalatable, but not illegal), but his criminality is objectionable. So far, it appears that he has managed to walk a tightrope on the line that separates legal from illegal. My guess is that, with enough digging, you could find historical events where he clearly crossed the line. Of course, going forward, it is a certainty that the line will be crossed (leopards, spots, etc.). But who prosecutes the chief prosecutor?

lionheart on August 5, 2010 at 12:06 PM

This is the ACORN Presidency

faraway on August 5, 2010 at 12:07 PM

Redistribution-spread the wealth.

rjoco1 on August 5, 2010 at 12:08 PM

BTW: is Byron York a kick-a** reporter or what?

BuckeyeSam on August 5, 2010 at 12:12 PM

This is theft, plain and simple — it’s amazing at how in your face and open it is, too. I hope the establishment media dies a faster death so it can be replaced by honest stewards of information that will expose this type of crooked behavior so we can deal with it.

EasyEight on August 5, 2010 at 12:17 PM

This has a very Shockwave Rider feel to it. Step right up to our new science fictional dystopia. John Bruner was prescient for 1975.

NaCly dog on August 5, 2010 at 12:17 PM

This is like the tax non-Muslims have to pay to fund mosques & madrases in many sharia nations.

itsnotaboutme on August 5, 2010 at 12:37 PM

Attorney General Holder just declared war on Somalia.

nogooddeed on August 5, 2010 at 12:41 PM

You know, I’m just soooo shocked that minorities would take over the Justice Department and turn it into a shakedown operation. Sooo shocked.

OxyCon on August 5, 2010 at 12:48 PM

BTW for anyone who missed it (because the MSM basically had an embargo on the story to protect Dear Leader), Holder’s predecessor was quietly vindicated by DOJ a couple weeks ago in the US Attorney firings.

Del Dolemonte on August 5, 2010 at 12:51 PM

This sort of thing is done all the time in class action cases. You do not want the wrongdoing defendant to benefit from the fact that the victims of the wrongdoing cannot be found. So, you give the ill gotten gain to a charity of some sort. It is such an old legal doctrine it has a fancy latin name (actually Norman French): cy pres

tommylotto on August 5, 2010 at 12:56 PM

This story has the putrid stink of ACORN and Bammie all over it. These companies paying the damages should go back to court to stop misallocation of their money.

slickwillie2001 on August 5, 2010 at 12:58 PM

This is Kenyan politics. It is called backsheese in the area. The Judges are rewarded bribes from the parties to do the job they are already paid to do. I would be surprised to see King Obama not demand it.

jimw on August 5, 2010 at 1:11 PM

During the pre-2008 elections so many people here and elswhere predicted that shady, questionable and outright corrupt politics would appear at the highest levels if Barack was elected. How prophetic!!

jeanie on August 5, 2010 at 1:31 PM

Why in the world does this not get any attention from all media and all of Congress. I am amazed that this acceptable to the equally power hungry. This makes me crazy.

Cindy Munford on August 5, 2010 at 1:53 PM

All animals are equal, but some animals are more equal than others.

ihasurnominashun on August 5, 2010 at 2:17 PM

This sort of thing is done all the time in class action cases. You do not want the wrongdoing defendant to benefit from the fact that the victims of the wrongdoing cannot be found. So, you give the ill gotten gain to a charity of some sort. It is such an old legal doctrine it has a fancy latin name (actually Norman French): cy pres

tommylotto on August 5, 2010 at 12:56 PM</blockquote

Do the "victims" to be compensated in class action suits have to provide verifiable evidence of being victims of said injustice?

Who determines the recipients of said charity?

onlineanalyst on August 5, 2010 at 3:07 PM

victims = “African-Americans”
qualified organization = Those who raise funds to elect democrats

maryo on August 5, 2010 at 3:15 PM

Holder and his ilk feel entitled. Entitled because somewhere in their lineage someone may have been a slave.
We see this sense of entitlement throughout the Congressional Black Caucus as well. Our president feels it too, though his ancestors had not been enslaved outside of their own continent.
No one alive today had anything to do with slavery, yet we are expected to continue to atone for it. Billions of dollars spent on welfare for the entitled has created the most dangerous segment of society – hopeless uneducated children birthing more children indiscriminately and all growing up with anger and a sense of entitlement.

maryo on August 5, 2010 at 3:39 PM

AIG agreed to it in the settlement, so I don’t see how it’s not legal. The question is why would AIG agree to such a settlement?

holygoat on August 5, 2010 at 11:45 AM

Many of these judgments are agreed to by corporations as a protective measure since they know that the power of the government can be used against them if they don’t.

It is the same as giving campaign donations to politicians to espouse anti business policies. The hope is that the money will buy them influence to protect themselves from legislation that will harm them.

It’s a pathetic and hurtful relationship that harms the American citizens enormously.

Jvette on August 5, 2010 at 4:09 PM

I was already a Republican. But now I have adopted this stance: Never, Ever vote for a Democrat again.

I’m still a liberal on social/cultural issues. And I’d like to stay an independent. But I also vowed to never vote for a Democrat again. My final straw came after Pelosi went to meet Assad, with that stupid headscarf. Like a rebellious child defying Daddy, instead of a mature adult obeying the law.

YehuditTX on August 5, 2010 at 7:52 PM

This has a very Shockwave Rider feel to it. Step right up to our new science fictional dystopia. John Bruner was prescient for 1975.

We’ve been living in a Stand on Zanzibar world for quite a while. Except for the monofilament wire

YehuditTX on August 5, 2010 at 7:57 PM