Jan. 8, 2014
Public Citizen Applauds ‘Truth in Settlements Act,’ Calls for Greater Disclosure by Justice Department in Major Settlements
WASHINGTON, D.C. — Public Citizen applauds the “Truth in Settlements Act” introduced today by U.S. Sens. Elizabeth Warren (D-Mass.) and Tom Coburn (R-Okla.). The bill would require greater disclosure from federal agencies concerning the deals struck by offenders, including the true after-tax value of the penalty.
Just yesterday, the Department of Justice settled a mammoth case with JPMorgan Chase & Co. involving mortgage fraud and its failure to detect the massive Madoff Ponzi scheme operating within its own bank.
“True justice takes place in a public court,” said Lisa Gilbert, director of Public Citizen’s Congress Watch division. “Settlements may be struck by cronies in the back room.”
Gilbert recently co-authored an op-ed with Cato economist Mark Calabria discussing the need for more transparency around large financial institutions and deferred prosecutions.
Public Citizen hopes to work with Warren, Coburn and other allies to increase disclosure, especially when enforcement agencies reduce penalties for megabanks based on fears that prosecuting them would jeopardize the financial system.
“If certain institutions are being provided preferential treatment under the law, then Congress should require the Justice Department to publicly acknowledge that that is the case, as well as its reasoning for doing so,” said Bartlett Naylor, financial policy advocate for Public Citizen’s Congress Watch division.
“There is an urgent need for transparency regarding why the Justice Department continues to use deferred prosecution agreements to address criminal activity at megabanks as it did with HSBC and just this week with JPMorgan,” added Amit Narang, regulatory policy advocate for Public Citizen’s Congress Watch division. “The Justice Department owes the public an explanation as to why JPMorgan and other megabanks receive only slaps on the wrists instead of being held accountable for their criminal actions in court.”