Letter Rebuts Misleading Claims by Chamber of Commerce

It’s Better for Public to Know About Agencies’ Out-of-Court Settlements

U.S. PIRG

The Honorable Ron Johnson                                          The Honorable Tom Carper
Chairman                                                                       Ranking Member
Committee on Homeland Security and                          Committee on Homeland Security and
Governmental Affairs                                                    Governmental Affairs
United States Senate                                                     United States Senate
Washington, DC 20510                                                 Washington, DC 20510
 

Dear Chairman Johnson and Ranking Member Carper:

The U.S. Public Interest Research Group, Public Citizen, the Center for Effective Government, Consumer Action, and the Coalition for Sensible Safeguards strongly support S. 1109, the “Truth in Settlements Act of 2015” as a clear victory for American taxpayers.  We find error with assertions made by the U.S. Chamber of Commerce that the bill would harm businesses and regulatory agencies.

In their misleading letter dated May 1, 2015 and addressed to the U.S. Senate Committee on Homeland Security and Government Affairs leadership, the U.S. Chamber of Commerce stated that:

“S. 1109 would remove the incentive for investigation targets to settle and force the government to prove its assertions in the courts. This would increase court dockets and tie up agencies in litigation. Removing confidentiality provisions would limit the ability of agencies to address issues quickly. This bill also fails to provide any cost estimates to implement this searchable data base, nor are resources identified as to how this will be carried out.”

This is mistaken. S. 1109 would not limit out-of-court or confidential settlements; only prevent abuse of these settlements in ways that are otherwise unaccountable to the public. Agencies and businesses would not be hindered in any way from using out-of-court settlements and would only be unable to hide the outcomes of these settlements from the public.

There is, furthermore, no reason to believe that the legislation would lead to more cases going to trial. If agencies or companies were motivated to keep details of a case from the public, then a high-profile court case is the last thing they will seek. The reality is quite the opposite, as at present there may unfortunately be individual cases where agencies more readily agree to a settlement rather than continuing to negotiate on the public’s behalf precisely to keep the outcome from public view. Those are exactly the cases where public scrutiny is needed to hold agencies accountable.

Moreover, it is inaccurate to characterize S. 1109 as removing confidentiality provisions. Confidentiality provisions are still permitted under the bill, so long as agencies issue a public statement about what public interest is advanced by keeping a settlement confidential and why those interests outweigh the public’s right to know. This explanation does not require approval from any other body. In sum, confidentiality is wholly permitted under the bill, but requires explanation, a safeguard which will help ensure against using confidentiality purely as a way to avoid public accountability.

Additionally, the U.S. Chamber of Commerce stated that:

“S. 1109, the “Truth in Settlements Act of 2015,” would have collateral adverse impacts upon agencies and businesses harming the economy and the ability of regulators to create a level playing field for all market participants. Accordingly, the Chamber urges the Committee to reject this bill.”

In contrast to this statement, this bill will actually help markets by making information about the consequences of company actions evident to others, including shareholders and investors. This would level the playing field by ensuring that the largest companies with the biggest legal team, or those with closer ties to particular agencies, don’t get preferential treatment.

S. 1106 will allow American taxpayers to scrutinize settlement agreements made between government agencies and corporations.  This legislation will make it possible for the public to hold these parties accountable, especially in instances when taxpayers must foot a portion of a settlement’s costs in the form of corporate tax write-offs stemming from them.  This bill does not harm companies and agencies but rather makes them accountable to the American public.

Sincerely,

U.S. Public Interest Research Group

Public Citizen

Center for Effective Government

Consumer Action

Coalition for Sensible Safeguards

cc:        Members of the Committee on Homeland Security and Governmental Affairs