Senators Warren, Lankford Introduce Truth in Settlements Act to Make Federal Agency Settlements More Transparent
WASHINGTON, DC - United States Senators Elizabeth Warren (D-Mass.) and James Lankford
(R-Okla.) today introduced bipartisan legislation to increase transparency
around major settlements reached by federal enforcement agencies. When
federal agencies close investigations and settle cases, they often tout
the dollar amount obtained from the offender, but in many cases that amount
is misleading because of tax deductions and other "credits"
built into the settlement that reduce the settlement's true value.
Worse, sometimes agreements are deemed confidential, with key details
or even the fact of a settlement hidden from the public. The Truth in
Settlements Act will require more accessible and detailed disclosures
about these agreements to allow the public to hold regulators accountable
for the true value of these deals.
"When government agencies reach settlements with companies that break
the law, they should disclose the terms of those deals to the public,"
said Senator Warren. "Anytime an agency decides that an enforcement action is needed, but
it is not willing to go to court, that agency should be willing to disclose
the key terms and conditions of the agreement. Increased transparency
will shut down backroom deal-making and ensure that Congress, citizens
and watchdog groups can hold regulatory agencies accountable for strong
and effective enforcement that benefits the public interest."
"The Truth in Settlements Act is needed to hold the federal government
accountable for the investigations and settlements that it negotiates
on behalf of American taxpayers,"
said Senator Lankford. "An open and transparent government will lead to an accountable government.
Federal agencies should not hide behind top-line settlement figures -
the taxpayers deserve to access how settlement decisions are made, what
the true post-tax settlement dollar amount is, and why confidentiality
is justified in a case."
Under the Truth in Settlements Act, federal agencies will be required
to post basic information about major settlements and provide copies of
those agreements on their websites. Any written public statement that
an agency issues about the value of a major settlement must include an
explanation of how those settlement payments are categorized for tax purposes
and whether payments may be offset by "credits" for particular
conduct. Companies that settle with federal agencies will be required
to disclose in their Securities and Exchange Commission (SEC) filings
whether they have deducted any or all of the dollar amounts of their settlements
from their taxes.
To address concerns about confidentiality, the Truth in Settlements Act
also requires agencies to explain publicly why confidentiality is justified
in any particular instance. The Act also directs agencies to disclose
basic information about the number of settlements they deem confidential
each year and directs the Government Accountability Office (GAO) to conduct
a study of confidentiality procedures and to provide additional recommendations
for increasing transparency. These and other provisions of the Truth in
Settlements Act will increase the transparency of government settlements
and permit greater public scrutiny.
The bill was previously introduced in the last Congress by Senators Elizabeth
Warren and Tom Coburn (R-Okla.), and advanced through the Senate Homeland
Security & Governmental Affairs Committee by voice vote.
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