by Mitch Kokai
Senior Political Analyst, John Locke Foundation
George Leef’s latest Forbes column contends that the Obama administration’s disrespect for the rule of law has hit a new low.
The lawlessness of the Obama administration has been astounding.
Entire books have been written about President Obama’s notion that he should be and is free to do whatever he wants (such as Lawless by Professor David Bernstein, which I wrote about here). No doubt more will be.
One remarkably brazen instance I recently learned about is his administration’s funneling of money from lawsuit settlements into the pockets of left-wing activist groups. It makes you wonder if there is anything this administration won’t try to get away with.
Following the collapse of the housing bubble, the federal government initiated several grandstanding, politically motivated lawsuits against big banks for their allegedly fraudulent conduct with regard to secondary market mortgage-backed securities. Rather than fight the feds and their almost bottomless well of taxpayer dollars, several of the defendants decided to cut their losses and settle.
That enabled federal prosecutors to claim victory and wave some prominent scalps. Siphoning off billions of bank capital is bad enough, but the rule of law problem emerges in two of the settlement agreements, under which the banks (Citigroup and Bank of America) were able to reduce their penalties by making “donations” to favored left-wing activist groups.
Citigroup agreed to donate at least $50 million to “community organizing” groups including NeighborWorks and La Raza and for every dollar above that, the bank gets two dollars knocked off its total settlement sum of $2.5 billion. With Bank of America, the settlement calls for a $100 million contribution to housing-related groups and, again, a two-for-one reduction for donations to community organizing groups.