One of the primary “talking points” used by the Department of Justice to defend its practice of systematically deeming corporate criminals above the law via its used of deferred prosecution agreements, has been an emphasis on how much money it has earned in fines from criminal corporations. These fines were supposed to be distributed to help victimized American citizens. Not any more.
The Wall Street Journal reports that:
WASHINGTON—The government’s just-approved budget deal takes $1.5 billion from a fund for crime victims and uses it instead to help pay for federal spending, drawing on a growing reserve collected from settlements with banks and major corporations.
The unprecedented transfer, part of closed-door negotiations between the Obama administration and congressional leaders, has raised the ire of advocates. They say it violates the integrity of a decades-old program that funds safe havens for domestic violence victims, counseling for abused children and financial aid for murder victims’ families, among other programs.
The administration and Republican congressional leaders averted a partial government shutdown by striking a two-year budget deal approved by Congress last week. As part of the pact the Crime Victims Fund will lose $1.5 billion to the general treasury, Obama administration officials said.
Since the fund’s creation in 1984 by the Victims of Crime Act, it has gathered money from fines imposed on criminals and set it aside to pay for services for crime victims.
But during the Obama administration, as major banks and corporations paid large sums to settle Justice Department investigations, the fund ballooned from about $3 billion to nearly $12 billion at the end of the 2014 budget year, according to the department.
The fund’s growing size has presented policy makers with a dilemma. When the fund began, the government paid out almost every dollar it received. But in 2000, Congress began capping the amount paid each year to ensure a steady stream of money for victims’ services.
From 2000 to 2008, the fund grew from $1 billion to $3 billion. As its balance kept rising, White House accountants were able to use the cash in an accounting move to offset government spending. Now, Congress and the White House have struck a deal to go further, by agreeing to withdraw some 10% of the money to directly fund the government.
Victims’ advocates say the move could set a dangerous precedent and encourage lawmakers to keep dipping into a pot of money intended to help crime victims, not to pay government bills.
Two years ago, the fund distributed about $745 million for victims services. That jumped last year to almost $2.4 billion, most in grants to state and local groups that provide counseling, aid or other services.
The proposed White House budget for fiscal 2016, which started Oct. 1, would give $1 billion to victim-services groups. Budget officials said it was a coincidence that the proposed reduction from last year’s $2.4 billion is about the same as the amount to be transferred out of the fund to general spending.
And once again, the U.S. citizenry gets steamrolled by its own corrupt government.
For related articles, see:
Bank of America Admits – Central Bank Policy Enriched Wall Street While “Steamrolling” Main Street
The Oligarch Recovery – U.S. Military Veterans are Selling Their Pensions in Order to Pay the Bills
The Oligarch Recovery – 30 Million Americans Have Tapped Retirement Savings Early in Last 12 Months
The Oligarch Recovery – Low Income Americans Can’t Afford to Live in Any Metro Area
The Oligarch Recovery – 30 Million Americans Have Tapped Retirement Savings Early in Last 12 Months
Another Tale from the Oligarch Recovery – How a $1,500 Sofa Costs $4,150 When You’re Poor
In Liberty,
Michael Krieger
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Actually this change might have good unintended consequences. Giving our government direct access to this money will give them an incentive to continue fining banks and other corporations for their misdeeds. The government will discover this funding source to be a veritable pot of gold, as most of these fines are the cost of doing business slaps on the wrist for big corporations. So let them eat their own!
Congrats on your new fatherhood Mike…
Thank you very much!
Even without news of a raided crime victim fund, the government’s propensity to seek only fines from corporate cretins (instead of pursuing criminal charges) amounts to extraction of “protection money” and makes the US DoJ the world’s largest ever Mafia organization.
jet setter, your analysis of incentives is not necessarily correct.
if the government is using this money network as a tax on corporations it means they need those corporations to stay in business for providing revenue.
this means they are partaking indirectly in the raqueteering of low interest rates, printing money, and bank led price manipulations of all major commodities, labor, and everything else.
this means that the government is now partner to fleecing the public even more.
this means the government is will encourage fleecing the public.
a tax on the banks will not put them out of business. the banks busienss model is price manipulation and fraudulent lending schemes.
if the government is incentivized to encourage those so that it can then collect revenue from fines, the banks will continue to rape .
unfortunately , what they said about the soviet union is that it failed when bribes no longer worked. why ? hyperinflation. if that is the only way bribery ends, rather than congress choosing not steal the fines from criminal activity, (another form of extortion and theft and negotiated bribery) than, that’s how it’s gonna be. but don’t think for a second these ‘fines’ are going to put the banks out of business.