Volume 19

"Brother, Can You Spare a Million Dollars?": Resurrecting the Justice Department's "Slush Fund"

by Paul Larkin and Zack Smith

Attorney General Jeff Sessions put an end to the controversial Bush- and Obama-era practice of allowing corporations to settle claims brought against them by the federal government in exchange for making substantial “donations” to the administration’s favored non-profits or allocating money to pursue that administration’s favored policy goals. Unfortunately, the Biden Administration has suggested that it will revive this practice, which violates both the Constitution and several acts of Congress. It should not. In fact, doing so would be criminal.

The Article I Appropriations Clause prohibits any Executive Branch official from disbursing funds except as provided by an act of Congress, and no statute authorizes this giveaway of the public’s money. In fact, the Miscellaneous Receipts Act directs federal officers and employees to pay into the treasury any money they receive in the course of their official duties. Finally, the practice would also violate a statute known as the McDade Amendment, which subjects Justice Department lawyers to the same ethical standards governing the con-duct of other lawyers in the state in which an attorney is licensed. No private lawyer may ethically give away a client’s money without the latter’s express permission, so Justice Department lawyers also may not do so.

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