Sen. Elizabeth Warren demands transparency when feds settle claims against big banks
A new bill introduced by Sen. Elizabeth Warren (D-Massachusetts) would shine a light on corporate wrongdoing by allowing the public greater access to terms of settlements they reach with the government.
“When government agencies reach settlements with companies that break the law, they should disclose the terms of those deals to the public,” Warren said.
She said federal agencies should disclose the key terms and conditions of agreements reached with corporations at the close of investigations, and she also argued that tax deductions and other credits built into the settlements should be publicly disclosed.
For example, when the U.S. Federal Housing Finance Agency settled its lawsuit in May against Citigroup over false claims made to Fannie Mae and Freddie Mac, terms of the deal were not disclosed.
“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,” said Warren, who has pressed for more prosecutions of financial wrongdoing in court.
The Truth in Settlement Act, which was cosponsored by Sen. Tom Coburn (R-Oklahoma), would require more accessible and detailed disclosures about agreements over $1 million to be posted on government websites.
The bill also calls on public agencies to explain why they settled confidentially and to disclose each year the total number of settlements reached, including confidential settlements.
“Taxpayers deserve to know the settlement details corporations arrange with the government, and the best place for Congress to start is with policies that enhance transparency,” Coburn said.