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Feds Spent Billions to Resolve Suits in 2012
The National Law Journal
The federal government spent more than $4 billion to resolve lawsuits last year, a $1.3 billion increase from spending in 2011, an analysis of government records shows.
The 7,000 payments, which are detailed in an obscure database overseen by the Treasury Department known as the Judgment Fund, tell a story of the federal government's inner workings. They highlight often devastating mistakes made by government workers such as the air-traffic controller who was allegedly making a personal phone call when a small plane and a helicopter collided and reveal how much the government paid in recompense in that case, $18.7 million to a woman whose husband and son were among the dead.
Other payments reflect profound policy failures, notably $1 billion authorized by the Department of Energy for breaching its contracts with multiple utilities to store spent nuclear fuel. The government was supposed to begin storing the fuel in 1998, but has no prospect now of doing so after the Obama administration terminated a proposed site in Nevada in 2010.
Still, other Judgment Fund payments shine a light on a legacy of institutionalized discrimination. The Interior and Treasury departments spent a combined $2.5 billion in taxpayer funds last year as part of a landmark $3.4 billion class action settlement. The case, Cobell v. Salazar, was brought by Native Americans who claimed that the federal government cheated them out of land royalties for decades by mismanaging their trust accounts. The settlement included $99 million in legal fees.
Some fund payments seem almost trivial. The No. 1 reason people sue the government, Judgment Fund records show, is not for high-minded constitutional violations. It's for traffic accidents suits against government workers who, on duty, crashed government cars. Payments ranged from a few thousand dollars to $10 million after an Immigration and Customs Enforcement agent ran a stop sign during a pursuit and killed three women. The Federal Bureau of Investigation seems plagued with particularly accident-prone drivers, with 210 car crash settlements last year.
Legal payments by cabinet agencies in 2012 were the most in at least six years, though expenditures can vary wildly by agency from year to year. In 2011, for example, the Department of Agriculture requested $698 million from the fund, almost all of it to settle a class action brought by Native American farmers alleging lending discrimination. In 2012, the department spent just under $17 million on lawsuits, a 98 percent decline.
Unlike in the private sector, agencies feel little direct pain from their legal expenses. That's because Judgment Fund payments are not part of the appropriations process. With a few exceptions, legal payments don't come out of the agencies' budgets.
Instead, the fund is more like a bottomless well of taxpayer money that agencies can draw from as needed. "The Judgment Fund is a permanent, indefinite appropriation to pay judicially and administratively ordered monetary awards against the United States," the fund's website states, as well as "compromise agreements negotiated by the U.S. Department of Justice." The fund was established by Congress in 1956 to allow for speedy legal payments and as a way to reduce the assessment of interest against the United States. It also means agencies don't have to scrounge for money to settle lawsuits or pay legal judgments.
This article originally appeared in The National Law Journal.