President Trump’s $1.8 billion Anti-Weaponization Fund has drawn criticism as a slush fund for political allies — but in many ways it resembles Obama-era initiatives that steered billions of dollars to Democratic-aligned groups.
The Obama Justice Department would sue large banks for discrimination and then divert the settlement funds to left-wing organizations that backed President Obama. Fearing bad publicity from being branded racist, the banks paid out millions in settlements that would have gone back into the Treasury Department’s coffers.
A second Obama-era practice distinct from the mortgage settlements became known as “sue and settle.” Environmental advocacy groups would sue the Environmental Protection Agency, accusing it of failing to fulfill its obligations. Rather than contesting the lawsuits, the EPA would settle and pay the groups. The EPA would then enact whatever policy changes the environmental group sought.
The two Obama programs and the Trump fund are all linked by each administration’s use of executive tools to dole out money while sidestepping Congress.
Molly Nixon, a senior fellow at the libertarian Cato Institute, said there are some similarities but also critical differences between the Obama maneuvers and Mr. Trump’s fund.
“One of the big differences is that the transfer of money from the bank settlements was the Justice Department telling one party to pay another third party. They’re sending one private entity’s money to another private entity,” she said. “So it’s one degree removed from the Trump administration setting up a fund with taxpayer money.”
Ms. Nixon drew comparisons between the creation of the Anti-Weaponization Fund to settle Mr. Trump’s lawsuit with the IRS and Mr. Obama’s “sue and settle,” because in both cases, government agencies settled lawsuits at the behest of the executive branch without challenges.
“The similarities are arguably the collusive nature of the Trump IRS settlement and the sue-settle lawsuits,” she said.
Banks paid out millions to liberal groups. In some cases, the settlements would include a clause crediting the bank with $2 for every $1 paid out in the multibillion-dollar settlements, allowing the banks to pay less when paying liberal groups.
The big bank shakedown created unprecedented funding for Democratic groups that were not victims of the discrimination. A 2016 report by the Government Accountability Institute estimated that $37.3 billion was redirected to the groups. Judicial Watch, a conservative watchdog organization, identified at least $3 billion in payments to Mr. Obama’s backers.
The liberal organizations that benefited from the bank settlements include the National Council of La Raza, the National Community Reinvestment Coalition and the National Urban League.
Emails obtained by the House Judiciary Committee revealed that high-ranking DOJ officials were instrumental in steering the settlement money toward favored organizations and blocking conservative groups from receiving any payments.
Republicans at the time charged that the Obama administration had schemed to appropriate what was supposed to be federal funds to the groups without congressional approval.
It is a similar charge that has been lodged against the Trump administration since the Anti-Weaponization Fund was announced Monday. Democrats complained that a committee of unelected Justice Department officials would be handing out taxpayer dollars without consent from Congress. They’ve howled that an unelected committee chosen by Justice Department officials will decide how the money will be spent.
Over eight years of “sue and settle,” the Obama EPA chose not to defend itself in more than 100 lawsuits and paid out $13 million in attorneys’ fees to the suing organization. The EPA also enacted more than 60 major regulations that arose from the settlements.
