Judicial Watch takes DOJ to court on government's settlement gifts to outside groups

Judicial Watch has filed suit against the Department of Justice for failure to respond lawfully to the non-profit watchdog group's Freedom of Information Act request for documents concerning the government's policy of giving funds from settlements obtained in civil right discrimination suits to outside groups with no connection to the cases.

“Judicial Watch filed separate FOIA requests with the DOJ on August 6 and August 31 seeking information about the controversial use of the funds as well as the general policies regarding the selection of 'qualified organizations,'” the organization said in a news release announcing the suit.

“DOJ acknowledged receipt of both requests and was required to respond by September 14 and October 5 respectively. But to date, Judicial Watch has received no documents and no indication when documents will be forthcoming” Judicial Watch said.

Judicial Watch's FOIAs were sparked by two cases in which the government directed millions of dollars from settlement funds to groups with no official link to the cases.

In the first case, a California landlord was accused of discrimination by prospective Korean tenants. The landlord denied the charges, but entered into a settlement with an agreement to pay the plaintiffs and other alleged victims $2.65 million.

“If enough victims could not be located, the remaining funds would be distributed to 'qualified organizations.' The DOJ elected the California Housing Rights Center to receive a portion of the funds,” according to Judicial Watch.

In the second case, insurance giant AIG was accused of charging black custmers a higher borrowing fee than it charged whites. AIG denied the charge but settled by agreeing to pay $6.1 million to alleged victims.

The settlement stipulated that $1 million would go qualified organizations that provide “credit counseling, financial literacy, and other related educational programs targeted at African-American borrowers,” Judicial Watch said.

Providing such financial counseling services has long been a favorite tactic used by ACORN and other left-wing groups to secure government and corporate funding for political activism in minority communities. For more information on this process, go here for The Examiner's recent special report on the Greenlining Institute.

These settlements appear to be variations on an increasingly common tactic by class-action trial lawyers who bring suits against selected targets in the hope of forcing them into a consent decree or out-of-court settlement. When there are leftover funds that cannot be sent to alleged victims, judges typically select beneficiaries as recipients in a process known as a “cy pres” action.

“This policy effectively allows the Justice Department to use its vast resources to initiate baseless lawsuits and funnel huge financial rewards for its leftist allies, including potentially groups such as ACORN. And, as our lawsuit shows, the Obama-Holder team wants to funnel this money in secret. Let’s hope our federal lawsuit stops the cover up,” said Tom Fitton, president of Judicial Watch.

For more on cy pres actions, go here and here. For more from Judicial Watch, go here.

 

 

Beltway ConfidentialEric HolderOpinionUS

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