When the federal government resolves corporate criminal investigations, it often requires the company to make payments to a third party. This practice is very problematic and should be reformed, Heritage legal scholar Paul Larkin said last week in testimony before the House Judiciary Committee (link in PDF):
First, the Justice Department lacks the statutory authority to hand over government funds to parties of its own choosing. Second, the practice of required third-party contributions is inconsistent with the federal laws that supply financial assistance to the victims of crime. Third, third party contribution requirements circumvent the constitutional process for appropriating taxpayer dollars. Fourth, this practice denies the public the opportunity to know how public funds are spent and to hold elected officials accountable for their choices because it enables Representatives and Senators to shirk their fiscal responsibilities. Fifth, third-party contribution requirements are rife with opportunities for political cronyism because they allow the Justice Department to pick-and-choose among private organizations as to which ones will receive federal funds without any guidance from Congress or any oversight by the Judiciary or Appropriations Committees in each chamber. Sixth, third-party contribution requirements are not necessary for plea bargains, civil settlements, and nonprosecution or deferred prosecution agreements to work as a means of disposing of criminal or civil cases.
Do you think the government should be able to direct companies to spend money this way as a condition of agreements with prosecutors?