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The Justice Department's recent $16.6 billion deal with Bank of America over crisis-era mortgage fraud has raised fresh questions over a perceived lack of transparency in the settlement process.
August 29
WASHINGTON - The Senate passed a bill this week by Sen. Elizabeth Warren, D-Mass., designed to improve transparency around major corporate settlements.
Lawmakers approved late Monday the Truth in Settlements Act by unanimous consent. The bipartisan bill, which is also sponsored by Sen. James Lankford, R-Okla., requires the Department of Justice and regulatory agencies to settlement details that potentially lower a payout below the headline settlement figure, such as tax deductions. The Homeland Security and Governmental Affairs Committee approved the measure by voice vote in May.
"The idea behind this bill is straightforward: If the government is going to cut deals on behalf of the American people, the American people are entitled to know what kind of a deal they're getting," Sen. Warren said in a press release. "This legislation will shut down backroom deal-making and ensure that Congress, citizens and watchdog groups can hold regulatory agencies accountable for strong and effective enforcement that benefits the public interest."
The bill would require federal agencies to make basic settlement information public and post the information on their websites, including how settlement amounts are impacted by tax deductions and other credits. Agencies must also provide justification for settlements they elect to keep confidential and tabulate the number of settlements they decline to make public. The legislation also directs the Government Accountability Office to conduct a study about confidentiality procedures in settlements and make further recommendations about improving transparency.
