Fox & Friends smears Justice Department settlement practice that funded groups working on behalf of low-income communities

Written by Media Matters Staff

Published

Fox & Friends co-host Steve Doocy cited a report from Breitbart to allege that settlement money from Department of Justice lawsuits against large corporations “is winding up in the pockets of people who have been politically aligned with the political left.” Breitbart's report is based on a July 28 internal memo obtained by the pro-Trump website regarding the department's new policy prohibiting civil and criminal settlements from including payments to non-governmental third parties. The memo instructs the associate attorney general to also “review past settlement agreements that included payments to non-governmental third parties.” As HuffPost pointed out, the new policy “will hurt nonprofit groups that provide services to communities hurt by corporate wrongdoing like mortgage fraud and environmental abuses,” including La Raza, the Urban League, the National Community Reinvestment Coalition, and Habitat for Humanity: 

In reality, the Department of Justice was using its settlements to help fund advocacy groups that fought for the people and communities hurt by the wrongdoing the DOJ was attempting to correct. Often, that meant funding groups that work to help the poor and minorities fight against foreclosure and help facilitate reinvestment in the communities devastated by bank fraud.

The logic of the settlement practice was that when, for instance, a mega-bank wreaks foreclosure havoc on a poor neighborhood through mortgage fraud, forcing the bank to pay groups that work on behalf of the victimized community would help repair some of the damage and make the community less susceptible to fraud in the future. 

Right-wing media have previously attacked the Justice Department's handling of these types of settlements and called payments to these organizations a “slush fund” for liberal groups. From the August 7 edition of Fox News' Fox & Friends:

STEVE DOOCY (CO-HOST): Our Attorney General Jeff Sessions is reportedly demanding information on more than $6 billion in taxpayer money given by the Obama administration to various left-wing organizations. According to an internal memo, published by Breitbart, the probe involves former attorneys general Eric Holder and Loretta Lynch and their role in funneling money as part of lawsuit settlements. Here with reaction and try to explain it former deputy assistant attorney general under George W. Bush, Tom Dupree. Tom, good morning to you. 

TOM DUPREE: Good morning, Steve.

DOOCY: OK, so the basic idea is, if people hear about great big settlements from corporations and stuff like that, and -- they have to pay millions or billions of dollars to victims, or the federal government. But, in this case, some of that settlement money is winding up in the pockets of people who have been politically aligned with the political left. 

DUPREE: Yes, and this is one of those things, Steve, that's very hard to explain sometimes to people outside of Washington, D.C. But that's how it works. When the Justice Department settles with a corporation, oftentimes they'll direct payments to the crime victims. Sometimes they'll direct payments to the U.S. Treasury. But in many cases, and frequently under President Obama, they would also direct that millions of dollars in payments go to some left-wing progressive activist group. 

DOOCY: Do we know of any payments -- settlement payments -- that went to right-wing groups or was it all to the left? 

DUPREE:  I'm not aware, in the last eight years, of many going to right-wing groups. I think typically these groups are politically activist groups who are affiliated with the administration or at least would share the political sensibilities of the administration. And, frankly, I think the Eric Holder Justice Department saw this as an opportunity to get some money into the coffers of these groups.