Stop Settlement Slush Funds Act of 2026
- Bill Number
- H.R. 7387
- Origin Chamber
- House
- Congress
- 119th Congress, Session 2
- Policy Area
- Government Operations and Politics
- Status
- Introduced
- Latest Action
- 2026-02-05: Referred to the House Committee on the Judiciary.
- Last Updated
- 2026-04-20T23:28:56Z
AI-Generated Summary
Stop Settlement Slush Funds Act of 2026 (H.R. 7387)
Purpose
To prevent the use of settlement agreements involving the U.S. government from directing payments to third parties (non-government entities) except in cases of direct restitution for harm caused or payment for services related to the case, aiming to stop the creation of unregulated "slush funds."
Key Provisions
- Ban on third-party payments: Government officials cannot enter or enforce settlements requiring payments to anyone other than the U.S., unless the payment provides direct restitution (compensation for actual harm, like environmental damage, caused by the paying party) or covers services rendered in the case.
- Penalties: Violating officials face the same penalties as under 31 U.S.C. § 3302 (a law requiring government receipts to go to the U.S. Treasury).
- Effective date: Applies only to settlements entered on or after enactment.
- Reporting requirement: Federal agencies must annually report allowed third-party payments (for direct restitution or services) to the Congressional Budget Office (CBO), including details on parties, funds source, and distribution. No extra funding authorized; ends after 7 years.
- Audit requirement: Each agency's Inspector General (IG) must annually audit for violations, report to key congressional committees (Judiciary, Budget, Appropriations in both chambers), and post reports on a public website. No extra funding authorized.
Significant Changes to Existing Law
- Prohibits a common prior practice where settlements directed funds to nonprofits, advocacy groups, or others not directly harmed, without congressional approval.
- Introduces mandatory transparency and audits for exceptions, with penalties tied to existing miscellaneous receipts laws.
- Does not retroactively affect past settlements.
Potential Impacts
- Government agencies: Limits settlement negotiation flexibility (e.g., DOJ, EPA); requires new reporting/audits without added budget, potentially straining resources.
- Citizens and defendants: Ensures more settlement money goes to the Treasury (reducing deficits or available for Congress); allows direct victim compensation but blocks indirect uses like funding unrelated programs.
- No direct international relations impact noted.
Main Stakeholders
- Federal agencies and officials (e.g., DOJ, EPA litigators): Restricted in settlement terms; face penalties and reporting burdens.
- Defendants in civil suits (e.g., corporations): Cannot settle via third-party donations; may prefer direct U.S. payments.
- Third-party recipients (e.g., nonprofits, environmental groups): Lose access to settlement funds unless directly harmed.
- Congress and taxpayers: Gains oversight via reports/audits; potential increase in Treasury funds.
- Inspectors General: New annual audit duties.
Notable Legal, Constitutional, or Political Implications
- Legal: Reinforces Treasury control over government receipts; ties violations to established anti-misuse statutes for enforceability.
- Constitutional: Aligns with congressional power over spending (Article I); limits executive branch discretion in settlements without altering core litigation authority.
- Political: Enhances congressional oversight of executive settlements; targets perceived abuses but sunsets some reporting to balance burden.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (9)
Rep. Tenney, Claudia [R-NY-24], Rep. Rouzer, David [R-NC-7], Rep. Moore, Barry [R-AL-1], Rep. Tiffany, Thomas P. [R-WI-7], Rep. Roy, Chip [R-TX-21], Rep. Ogles, Andrew [R-TN-5], Rep. Palmer, Gary J. [R-AL-6], Rep. Fry, Russell [R-SC-7], Rep. McDowell, Addison P. [R-NC-6]
Recent Actions
- 2026-02-05: Referred to the House Committee on the Judiciary.
- 2026-02-05: Introduced in House
- 2026-02-05: Introduced in House
Bill Versions
- Stop Settlement Slush Funds Act of 2026 — issued 2026-02-05 — PDF (4 pages)