For the third time in the last four years, Sen. Elizabeth Warren, D-Mass., is leading a bipartisan push to shed some light on how the government reaches the occasionally massive settlements with businesses for various forms of misconduct.
Warren’s office announced this week that Warren, along with Sen. James Lankford, R-Okla., reintroduced a bill entitled the “Truth in Settlements Act.”
The bill, according to Warren’s office, would require the government to provide much more transparency around the settlements reached by federal enforcement agencies.
“When closing investigations and settling cases, federal agencies frequently tout the dollar amount obtained from the offender,” Warren’s office said in a statement.
“These numbers are often misleading because the payments may be tax deductible or may include ‘credits’ the settling party can earn toward the settlement amount,” Warren’s office continued. “Sometimes agreements are deemed confidential, with key details or the settlement itself remaining undisclosed, further obstructing public transparency.”
And those are all things that the Truth in Settlements Act would address.
According to Warren’s office, the Truth in Settlements Act would require federal agencies to post “basic” information about major settlements and provide copies of those agreements on the agency’s website.
Additionally, the bill would require that any written public statement issued by a federal agency about the dollar amount of a major settlement include an explanation of how the settlement payments will be categorized for tax purposes and whether those payments may be satisfied via “credits” for consumer relief or other actions.
Companies that settle with federal agencies would also be required to disclose in their filings with the Securities and Exchange Commission whether they deducted any or all of the amount of the settlements from their taxes.
The bill would also require that the federal agencies in question “openly explain” why the terms or details of a settlement need to remain confidential.
The 2017 version of this bill marks the third time it has been introduced in the Senate.
Warren, along with Sen. Tom Coburn, R-Okla., first introduced the bill in 2014. The bill was reintroduced by Warren and Lankford in 2015. And now they’re trying again.
“Government accountability requires transparency, and that's what this bipartisan bill provides,” Warren said in a statement.
“The Truth in Settlements Act will shut down backroom deal-making by shining a light on federal agency settlements with lawbreaking companies,” Warren continued. “More transparency means Congress, citizens and watchdog groups can better hold regulatory agencies accountable for enforcing laws so that everyone — even corporate CEOs — are equal under the law.”
In a statement, Lankford said that taxpayers “deserve an open and transparent government that is accountable” to the people.
“The Truth in Settlements Act will ensure the federal government is held accountable for investigations and settlements that are often decided behind closed doors,” Lankford added. “Federal agencies work for the American people, agencies should show how they protected the taxpayer and followed the law, unless confidentiality is required.”
