Well, here we go again: The Gray Lady is outraged.
The Trump administration is considering the establishment of a $1.7 billion fund to compensate the president’s allies and others investigated by the Justice Department under President Joseph R. Biden Jr., creating an ethical and political minefield for Republicans and the department’s leadership. The unusual plan, which Democrats and former government officials criticized as a vast political slush fund financed by taxpayers, is being fast-tracked. . . .
According to the Times, this potential settlement is “an ethical and political minefield,” and the plan for a compensation fund is “unusual” or, in another place, “highly unusual.” But is it, asks Francis Menton.
The Times piece strongly insinuates that this potential settlement is improper because the Justice Department is not really adversarial to Trump at the current moment when he is their boss, and also that setting up a compensation fund for political allies as part of a legal settlement is something unique. But the Times doesn’t provide the reader any further context to make an independent judgment about whether this settlement is “highly unusual” versus the norm for the agency, going by the dubious name of “Department of Justice.”
Sue and Settle
The Manhattan Contrarian offers some context. Yes, indeed, prior administrations regularly used litigation settlements to accomplish goals they couldn’t get enacted by Congress, “including setting up large slush funds to hand out to political allies.”
In times past, this strategy was almost entirely a phenomenon of Democratic administrations. Conservative critics have dubbed the strategy “sue and settle.”
The strategy particularly took off during the Obama presidency, and then exploded under Biden.
According to FM, he is unaware of the New York Times ever criticizing any of this as long as it was done by the NYT’s ideological allies in support of causes that the paper approved.
There are several variants of the “sue and settle” game.
1. Where the government gets sued by an ideological ally of the bureaucracy, seeking some outcome that they would like to implement.
“A quick collusive settlement with the plaintiff avoids the difficulty of going through a notice-and-comment rule making process, let alone the necessity of getting a statute passed by Congress.”
Perhaps the most notorious, notes Mr. Menton, have been instances where lawsuits by environmental groups have been used to restrict economic development of public lands.
For example, here is a piece from Real Clear Investigations in February 2024 reporting on Biden administration agreements to remove certain federal lands from oil and gas leasing. The agreements were in apparent contravention of Congressional intent, but accomplished through the form of settlement of lawsuits brought by environmental groups friendly with the administration, reports Mr. Menton.
When the Biden administration announced in 2022 that it would remove some 4 million acres of federal land in Western states from oil and gas exploration, environmental groups hailed the decision as a milestone in their fight against global warming. . . . The administration’s move was part of a private settlement of a lawsuit filed by WildEarth and others over the objections of energy consortiums, whose efforts to intervene in the matter were dismissed. . . . A similar thing happened last August, when the Biden administration announced, it had agreed to exclude 6 million acres of the energy-rich Gulf of Mexico seabed from exploration to settle a lawsuit brought by environmental groups, including the Sierra Club – an announcement that triggered operational delays for the industry and expensive litigation to overturn.
Administration critics say these moves reflect the resurgence of a practice embraced by the Obama administration . . . “sue and settle.” The tactic is simple: An advocacy group sues a federal agency for failing to enforce laws or regulations. Agency officials and the plaintiffs then come to a private agreement and that deal is ratified by the courts via a binding consent decree.
2. Another variant of the Obama/Biden “sue and settle” program involved the creation of huge slush funds to pass out to political allies.
As one big example, after the 2008/09 recession, the Obama administration brought a series of completely phony cases blaming the recession on big banks. All of them settled, many for multi-billions of dollars. Here is a report from James Copland of the Manhattan Institute from March 2015 discussing several of those settlements. One big settlement was with Bank of America. From Copland’s description of that settlement:
“The $16.65 billion Bank of America settlement resolves civil claims with the federal government and various states; $9.65 billion of this amount is allocated [to government agencies] as follows: . . . On top of these government payouts, the Bank of America settlement forces the bank to allocate $7 billion to “consumer relief” credits, including:”
As the Manhattan Contrarian reports, “So no, New York Times, there is nothing ‘unusual,’ let alone ‘highly unusual,’ about the government using settlement of a litigation to set up a slush fund to pass out to political friends and allies.
The only thing unusual is the use of this strategy by a Republican President. It took him a while, but it looks like he finally figured out that two can play this game.a’
