The FINANCIAL — Permitting federal and state prosecutors to retain billions of dollars in law enforcement settlement money allows the profit motive to trump the public interest and undercuts legislative spending authority, according to a new study released on March 25 by the U.S. Chamber Institute for Legal Reform (ILR) during the 9th annual Capital Markets Summit.
Enforcement Slush Funds: Funding Federal and State Agencies with Enforcement Proceeds also calls for curbing the practice at the federal and state levels.
“This new paper underscores how ‘prosecution-for-profit’ undermines the public interest and circumvents legislative authority to control the government’s purse strings,” said Lisa A. Rickard, president of ILR. “Congress and state legislatures should determine how settlement proceeds are spent, not government officials who bring these enforcement actions.”
The study examines how the chase for revenue perverts the justice system; how federal and state enforcement officials are increasingly using their authority to steer settlement money to favored third-party organizations without legislative authorization; and, how these practices raise serious constitutional concerns. It was prepared for ILR by Mayer Brown LLP; and Skadden, Arps, Slate, Meagher, & Flom LLP.
ILR seeks to promote civil justice reform through legislative, political, judicial, and educational activities at the national, state, and local levels.
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