Media Contacts
Mario K. Salazar

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


Washington, D.C. – Today, Senators James Lankford (R-OK) and Elizabeth Warren (D-MA) introduced the Truth in Settlements Act.  This legislation would increase transparency around settlements reached between federal agencies and corporations accused of wrongdoing.  When federal agencies enter into these agreements, they regularly tout the top-line dollar value of these settlements made to settle allegations of misconduct.  However, the public value of these settlements often decreases when corporations are able 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.

“Taxpayers have a right to scrutinize deals made by federal regulatory agencies with corporations who commit wrong, especially since 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 today’s bipartisan effort to allow the public to hold agencies accountable for the real value of these settlements.”

“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 U.S. Senator James 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.”

“When government agencies reach settlements with companies that break the law, they should disclose the terms of those deals to the public,” said U.S. Senator Elizabeth 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.”

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