Nearly a decade after the crash of the U.S. Housing market, the Obama administration continues to pursue claims against large financial institutions accused of contributing to the crash. For instance, in the past three years the Department of Justice (DOJ) settled with JPMorgan Chase & CO. in November 2013, Citigroup Inc. in July 2014, and Bank of America in August in 2014. These settlements concerned allegations related to the issuance of residential mortgage backed securities, and collectively these three settlements alone have totaled $36.65 billion in payments from the banks to various federal, state, non-governmental organizations, and direct consumer relief.
In a report released on Thursday by the Senate Homeland Security and Governmental Affairs Committee detailing how the DOJ has essentially become a massive crime syndicate in the business of shaking down financial institutions, the report noted that the DOJ’s Housing settlements removed millions of dollars of third party payments from the Congressional appropriations process as well as judicial review. Of the settlement funds set aside for consumer relief, at least $640 million was set aside for third party payments to be disbursed by the banks according to the the settlement terms. By routing funds away fro the U.S. Treasury, the settlements have been able to circumvent congress’s spending authority as well as oversight.
Meaning, the DOJ unilaterally controlled the allocation of billions of dollars absent congressional and judicial involvement by forcing banks, under the terms of the settlement agreements, to distribute hundreds of millions of funds to third party organizations pre-approved by the Department of Housing and Urban Development (HUD). Moreover, the DOJ did not require third party disbursements to go to homeowners actually aggrieved by the alleged wrong doing. Of the $36.65 billion in total settlements reached by the DOJ with these three financial institutions alone, the DOJ earmarked $13.5 billion for “consumer relief,” of which hundreds of millions are to be dispersed to selected third party groups approved by the adminstration. Naturally, the third party organizations are all politically active radical leftists groups.
To understand how the shake-down works, the DOJ, as the federal government’s representative in Criminal and Civil suits affecting the interests of the United States, has the ability to enter into settlements with other parties. This isn’t the issue in question. What is in question is how the DOJ is using this power in order to execute settlement agreements requiring banks to disburse money to third party groups, rather than collecting fines that are appropriately subject to the Congressional appropriations process. The reason the DOJ is going this route, rather than imposing fines that would collect more money from the banks, is because under these settlement agreements the DOJ is allowed to act without any congressional oversight completely outside the purview of Congress itself.
For an example of how this works, in August 2014, Bank of America settled with the DOJ for $16.5 billion based on a settlement agreement that was premised on the DOJ’s inquiry into “the packaging, origination, marketing, sale, structuring, arrangement, and issuance of residential mortgage-backed securities and collateralized debit obligations.” The settlement agreement required Bank of America to pay more than $8.2 billion in civil monetary penalties to federal entities and individual states. Furthermore, the agreement also stipulates that Bank of America must pay more than $7 billion in “direct consumer relief.”
In order to fulfill it’s $7 billion consumer relief obligation, Bank of America is required to provide, “a minimum of $2.15 billion in first lien principal forgiveness, $50 million in donations to community development financial institutions, $30 million in state-based Interest on Lawyers’ Trust Account organizations, and $20 million in donations to HUD-approved housing counseling agencies.” In addition, Bank of America is also required to take a $100 million loss in support of affordable rental housing. Which means, the DOJ has required Bank of America to make a $100 million donation to selected third party organizations, $20 million of which is also required to go to HUD approved “housing counseling agencies.” This example with Bank of America alone follows virtually the same exact requirement stipulated in the settlement agreement that the DOJ reached with Citigroup Inc., a pattern which the DOJ has followed against major financial institutions.
Following this pattern the DOJ has required these banks to distribute portions of their settlement payments to certain third-party groups which the DOJ directly influenced which groups would receive disbursements. Specifically, the DOJ narrowed the list of entities eligible to receive funds by selecting “HUD-approved housing counseling agencies” as the only entities to which the banks could make disbursements for credit. As the Wall Street Journal outlined in a piece highlighting the DOJ’s liberal slush fund, “the department is in the process of funneling more than half-a-billion dollars to liberal activist groups.”
Among the radical leftist groups pre-approved by the settlement agreements to directly receive funds from the banks is none other than The National Council of La Raza, which bills itself as “the nation’s largest Hispanic activist organization.” Yet, a brief history lesson on the reality of La Raza, which literally translates to “the race,” shows us that the group has been connected to the Chicano Student Movement of Aztlan (MEChA), an extremist Mexican race hate group which firmly believes in exploiting illegal immigration to bring about ‘La Reconquista’, a violent overthrow of the southern U.S. states that would be absorbed into Greater Mexico. It should come as no surprise that La Raza is favored under these settlement agreements given that the racist organization supports the Democratic cause of open borders while Cecilia Munoz, a La Raza senior vice president, also serves on the White House Domestic Policy Council.
According to a February 2016 independent monitor report, there are 147 “HUD-approved counseling agencies” that make up these third party groups like La Raza that are currently receiving hundreds of millions of dollars directly from the banks under the DOJ settlement agreements. You can read the monitor report in full by clicking here.
Moving on, the shake down continues as the DOJ, like every criminal enterprise, wants its cut of the funds agreed to under these settlements and under federal law they get it as the DOJ collects a three percent fee on each settlement agreement. Using the authorization granted to them by Congress in 1993 under the creation of the Three Percent Fund, the DOJ has been able to collect more than $1.5 billion through their Three Percent Fund from 2009-2015. According to the DOJ, “[t]he settlement funds subject to the Three Percent Fund are the federal payments in each settlement.” The DOJ may therefore collect three percent of every federal civil monetary penalty or settlement payment to a federal agency to settle claims before the funds make their way into the Treasury’s General Fund. Thus, these funds are never actually in the Treasury, and so they are not literally ―drawn from the Treasury, allowing the DOJ to circumvent congressional authority under the Appropriations Clause.
Further elaborating on this issue, Nicholas Quinn Rosenkranz, Professor of Law at Georgetown University, explained on Thursday in a hearing before the the United States House of Representatives Committee on Financial Services, “If the banks had paid this money to the United States—which is, after all, the plaintiff in these cases—then the money would have gone into the Treasury. And if, subsequently, the President or the Attorney General favored using this money to subsidize various ‘community development organizations,’ they would have had to request an appropriation from Congress.” But, “by providing for direct payment from the banks to [third party] organizations these settlement provisions evade the Appropriations Clause and cut Congress out of the loop.”
The DOJ has used this windfall in an unprecedented manner to operate outside of Congressional review. For instance, according to statistics compiled from a 2016 GAO report, the Three Percent Fund in 2009 had collected over $83 million, while in 2014 that number had increased six-fold to over $525 million. Moreover, the DOJ’s current intake of $575 million from only three settlements exceeds expectations from the funds 1993 inception by a factor of fifty. The GAO report concludes that the DOJ is depositing larger sums of money each year into its discretionary fund, distributing larger amounts each year to DOJ components, and continues to carry over a large balance not dedicated to any particular needs.
In short, the DOJ, leveraging the settlement process under threat of prosecution, has bypassed Congress and the Courts to secure settlement agreements to provide consumer relief funds to third-party radical leftist groups. Moreover, the DOJ has used a portion of the funds agreed to under the settlements to finance the administrations housing policy goals as the DOJ inserted its own spending priorities to pick certain groups, such as La Raza, to receive funds without any requirement that the funds be disbursed to aggrieved homeowners. Officials within the DOJ have also effectively skimmed off three percent from mortgage-related bank settlements and thus have been able to create a $500 million dollar slush fund allowing them to spend the money in whichever way they best see fit.
Like a criminal syndicate, the Obama administration shakes down banks, funds radical leftist organizations and makes themselves wealthy all the while using the power of the federal government under the guise of the DOJ acting with false pretenses to the law with purely political motivations.
You can follow Nick on twitter @politicalshort or email him at politicallyshort.com
Reblogged this on Exposing Modern Mugwumps and commented:
Reblogged this on Rifleman III Journal.
I’d love it if they would start hanging traitors again.
Now, more than ever, an outsider is needed to clean out the cesspool that is Washington D.C.
Or, put another way, “Rope, Tree, Bureaucrate. Some assembly required.”
So, I believe the biggest and most important question on people’s minds is: what’s going to be done about it? It’s one thing to report on an on-going crime, an a whole other story to actually do something about it. Personally, I’d love to see the whole lot spend the rest of their miserable lives behind bars!
So-called DOJ announced this procedure and outcome years ago, at the start. Your article made me think, “Yeah, this article was expected because the activity it details was pre-announced by the perps.” Horrible, horrible sedition and treason, yes, but it isn’t news. And Congress and Courts sustain it. Reason voters who love their country are desperate for leaders who do as well.
Reblogged this on eileengunsher and commented:
Interesting but how can such actions be stopped.
Do we even make enough rope? Or would we have to import?
The Revolution is closer than the elites realize.
Sadly, the DOJ has the power to make the banks “an offer they can’t refuse.”
One remedy is to prosecute everyone involved in the the theft, I mean reallocation. Seeing people doing hard time is good motivator towards proper behavior.
Reblogged this on Truth Troubles: Why people hate the truths' of the real world.
“Killary” will NOT win the election. The Chicago Syndicate would rather lose the election than allow Arkansas Syndicate to take White House.
Howdy! This post couldn’t be written much better!
Going through this article reminds me of my previous roommate!
He always kept preaching about this. I am going to forward this article to him.
Fairly certain he’ll have a great read. Thank you for sharing!
Where is the link to Facebook or Twitter to Post online?
This was one of the open secrets that also funneled monies into the OFA = Obama for America pockets. All of those involved made big bank aside from their favored radical entities. The Obamas became multi-millionaires overnight. on the other hand they left HUD in the hole of billions of dollars in the red and missing monies nobody can find.
Reblogged this on Free At Last.