Warren, Coburn seek end of 'back-room' settlements

Sens. Elizabeth WarrenElizabeth Ann WarrenGillibrand unveils bill to offer banking services at post offices Warren challenger sues to keep displaying 'fake Indian' signs Dems demand end to waivers used to pay people with disabilities below minimum wage MORE (D-Mass.) and Tom CoburnThomas (Tom) Allen CoburnPension insolvency crisis only grows as Congress sits on its hands Paul Ryan should realize that federal earmarks are the currency of cronyism Republicans in Congress shouldn't try to bring back earmarks MORE (R-Okla.) are pushing to eliminate the “back-room dealmaking” that occurs when federal regulators strike settlements over charges of wrongdoing.

The liberal-conservative duo introduced a bill Wednesday that would require federal agencies to disclose the terms of any settlement they reach, or provide a public explanation for why the terms of an agreement were kept private. The bill would also require the government and any companies involved to announce publicly if any fines are tax deductible.

The bill comes as many lawmakers, particularly Democrats, have grumbled about the government’s unwillingness to take major Wall Street actors to trial.

“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,” Warren said. “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."

The bill seems inspired by recent deals the government has struck with major banks, much to some lawmakers’ chagrin. Many on the left openly complained when it was revealed that a $13 billion settlement the government struck with JPMorgan included roughly $4 billion in tax writeoffs.

Under tax law, corporations can deduct any portions of a settlement that are considered restitution or compensation, but not for penalties or fines.