Bill Would Shed Light on the Costs of Government Settlement Agreements to American Taxpayers


Washington, D.C. – Today, Representatives Bill Posey (R-FL) and Matt Cartwright (D-PA) reintroduced the Truth in Settlements Act.  This bill, which has already been reintroduced in the Senate by Senators James Lankford (R-OK) and Elizabeth Warren (D-MA), would increase transparency around settlements reached between federal agencies and corporations accused of wrongdoing. 

When federal agencies announce settlement agreements, they regularly tout the top-line dollar value made to resolve allegations of misconduct.  However, the public value of these settlements is diminished when corporations are allowed to receive massive tax write-offs and credits from these payments.  Many times, these agreements are deemed confidential and details are hidden from the American public.  This legislation would require detailed and publicly accessible disclosures of these settlement agreements and the tax write-offs that accompany them.

“Republicans and Democrats in both the U.S. House and Senate agree that American taxpayers should be able to scrutinize deals made between federal agencies and corporations who commit wrong when the public must foot a part of the bill in the form of tax credits and deductions,” said Mario Salazar, Legislative Director for U.S.  PIRG.  “We support the bipartisan effort to allow the public to hold federal agencies accountable for the real value of these settlements.”

“This much needed legislation would compel transparency from both corporations and federal agencies,” said Rep. Cartwright.  “Government has an obligation to disclose information when it is pertinent to the public’s interest and well-being.  If an agency chooses to reach a settlement with an offender, then that agency must be willing to disclose the terms of the agreement or come up with a good reason for not doing so.  We must hold offenders accountable for their actions.”

“Federal agencies have an obligation to operate in the sunshine, especially when enforcing federal laws,” said Rep. Posey.  “When the law is broken and federal agencies decide to settle cases and impose massive fines, the public has a right to know why and what the details of such settlement agreements are.  This legislation will provide a more transparent process and lead to more accountability for wrong doing in both the private and public sectors.”

You can read U.S. PIRG’s research report on the tax implications of legal settlements here: (link).