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Republicans complained of a lack of transparency in recent settlement payments to Iran, while Democrats accused them of politicizing the issue at a House Judiciary Committee hearing Sept. 7.
The hearing was intended to focus on the “Judgment Fund"—created by Congress in 1956—which allows the executive branch to pay for settlements and judgments against the U.S. without congressional review.
The fund—used for the payments to Iran—allows the executive branch to “pilfer taxpayer dollars” to fund its own goals without Congress’s consent, Rep. Bob Goodlatte (R-Va.) said.
It’s become apparent in recent years that little is known about individual payments from the fund, and that’s “unacceptable,” Goodlatte said.
Witnesses at the hearing expressed support for the Judgment Fund Transparency Act (H.R. 1669), which would require the Treasury Department to disclose details of fund payments.
The settlement payments to Iran totaled about $1.3 billion in interest, and related to $400 million in principal withheld in a decades-old dispute over military equipment sales.
A State Department spokesman told Bloomberg News in August that the $400 million was withheld as “leverage” to ensure the release of American prisoners.
The U.S. delivered that money hours after Iran released the prisoners.
But while much has been made of the payments’ timing, it’s undisputed that the Obama administration made no effort to hide them, Rep. John Conyers (D-Mich.) said.
Further, the settlement payments were “legally permissible,” and the U.S. might have owed billions more if it weren’t for the settlement, Conyers said.
Neil J. Kinkopf, a professor at Georgia State University law school, Atlanta, who has written about the separation of powers, agreed that the payments were legal.
The payments were not only within the letter of the Judgment Fund statute, 31 U.S.C. § 1304, but also “within the spirit of that law,” Kinkopf said.
Rep. Trent Franks (R-Ariz.) said the Treasury Department “provided no answers” to his questions about the interest payments.
Similarly, Goodlatte said that searching for individual payments in a database maintained by the department revealed little information.
The lack of transparency shows how the Judgment Fund can be used to subvert the separation of powers envisioned by the Founders, which gave spending authority to the House of Representatives, he said.
Hearing witness Paul Figley, a professor at American University law school, Washington, who has written about the fund, agreed that it has altered the balance of power between the branches.
Through the fund, Congress has ceded almost all authority over payment of judgments and settlements, and greatly reduced its ability to track those payments, he said.
But while few would oppose greater transparency concerning the fund, Republicans’ claims of executive branch “overreach” failed to show the administration misused it, Conyers said.
Some Republicans on the committee are more interested in criticizing the Iran settlement than conducting oversight of the fund, Conyers said.
Cohen suggested that Republicans were using the hearing as an election year political weapon.
They should focus on more important matters instead of “obscure,” politicized issues, he said.
Despite it being an election year, the committee hasn’t held “one hearing on the Voting Rights Act” found unconstitutional by the U.S. Supreme Court, he said.
The committee should be extending opportunities for people to vote, he said.
It should also focus on police brutality against blacks, he said.
Though police “are essential” to ordered society, there’s “been a whole lot of African-American folks killed” by police, as evidenced by video recordings, he said.
It’s “no coincidence” that there haven’t been similar videos of whites being killed by police, he said.
Further, Congress should focus on criminal justice reform because the U.S. is “the gulag of the world,” with unnecessary incarcerations for drug offenses, Cohen said.
Kinkopf said the Judgment Fund serves an important role.
He gave an example of the fund’s payment of “a valid discrimination” claim made by Hispanic, black and female farmers against the federal government.
The fund was also used to settle an unrelated Iran incident—the 1988 downing of Iran Air Flight 655 by a U.S. Navy cruiser—Kinkopf said.
Republican administrations dealt with the aftermath of that mistake, he said.
Kinkopf said that was an example of “just how broad” executive branch authority has been understood to be under the Judgment Fund statute, by administrations from both political parties.
Despite his praise of the fund, Kinkopf said its transparency issues should be addressed.
Greater transparency would help the public understand how the fund is used, and could deter future abuse, he said.
Jeffrey Axelrad, a professor at George Washington University law school, Washington, and former director of the Justice Department’s torts branch, agreed.
However, the proposed Judgment Fund Transparency Act needs one change, he said.
Congress should exclude a provision requiring the executive branch to make public a brief description of facts giving rise to claims paid by the fund, Axelrad said.
Because many payments are made when facts are disputed, that requirement would unnecessarily slow down payment of many claims, he said.
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