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Trump Would Envy This Deal with Bank of America

By  |  June 2, 2016, 12:05pm  |  @stevengberman


If we think Donald Trump is a master at “The Art of the Deal,” we haven’t seen what the Obama Administration has done.

In an outrageous series of deals whose legality remains fuzzy, the Obama Justice Department raised tens of millions of dollars for liberal causes by matching federal settlement funds due from banks like Bank of America for their mortgage fraud.

The Washington Examiner found this little-known provision in the settlement for BOA.

For every dollar the bank has given the nonprofits — none of which were victims of fraud themselves — it has claimed at least two dollars off the settlement. The deal ensured the Obama administration that a certain part of the settlement funds would go to friendly liberal groups, bypassing the normal congressional appropriations.

Among the groups receiving the money were Hispanic civil rights group the National Council of La Raza ($1.5 million), the National Urban League ($1.1 million) and the Neighborhood Assistance Corporation of America ($750,000).

Citigroup, Morgan Stanley, and Goldman Sachs have similar deals, where each dollar given to liberal groups specified in the settlements counts for $2 off the amount due to the Treasury. Of course it’s illegal for the government itself to convert funds from a settlement to anyone else, but this deal skirts that law because the deal allows the banks to make their donations “voluntary.” But with up to $2 for $1 matching from the government, it was a no-brainer.

The settlement has been a good deal for Bank of America, which is obligated to donate only $100 million to the nonprofit groups: $20 million to housing groups, $30 million to legal aid groups and $50 million to public or private community development funds.

There is no limit on the amount the bank can give, however, and the double credit it gets toward the settlement gives it a strong incentive to keep on donating. It got a second bonus for all consumer relief “offered or completed by Aug. 31, 2015.”

I suppose deals like this are what we can expect from a Trump administration, only the beneficiaries will change.