Obama’s Weaponization of the DOJ

Obama’s DOJ Slush Fund used settlements from the 2008 financial crisis to fund left-wing activist groups that are still active today

Editors Note: Trump’s election victory has greater implications for Barack Obama than perhaps any other individual. In many respects, Trump’s entire platform centered around undoing what Obama had begun.

Starting this week, Truth Over News will publish a series of articles examining how Barack Obama systematically undermined U.S. democracy. While a comprehensive analysis of every aspect of Obama’s presidency could fill a library, we will concentrate on several key elements that defined his administration, including Iran, corrupting the Department of Justice, and the non-peaceful transfer of power in 2017.

The landslide victory by President Trump didn’t just end the hopes of Kamala and the larger DNC Establishment. It also shattered the hopes of former President Obama, who appeared to be seeking another puppet president he could manipulate.

Indeed, as Kamala's election hopes began to wane, Obama initiated a highly public and increasingly desperate campaign to enhance her chances. His decline in the final weeks of the campaign was very noticeable.

It wasn’t enough - and may have actually hurt Kamala’s presidential ambitions. Obama was exposed. He looked weak, almost frail, as he tried to exhort Americans to vote for Kamala and stop Trump’s resurgence. Go under any recent Obama post and you’ll find an overwhelming sea of negative comments. The magic is gone.

Obama’s push for a Kamala win went beyond his desire for a fourth term (or fifth depending how you count them). Obama has much to atone for. And much to be worried about. Obama initiated the Russia-Collusion narrative against President Trump and used it in an attempt to overthrow a duly-elected President of the United States.

Obama was involved in the coverup of Biden’s actions in Ukraine. Although his actions had more to do with preventing people from understanding what he knew about Biden’s actions in Ukraine - and when he knew it. Obama also had a vested interest in concealing the CIA’s involvement in Ukraine (including the 2014 Maiden Revolution) that exceeded his concerns about concealing Biden’s corruption. 

Everything Obama did, every step he took, was done with an eye to creating domestic division and strife. And he was all-too successful in his many endeavors. Obama’s approach to Iran haunts us to this day - as do the actions of his State Department which unleashed the onslaught of immigration into the West through instability he created in the Middle East. The actions taken by the Obama administration during Project Cassandra are an entire story unto themselves.

In addition to the many issues listed above, Obama weaponized the entire Department of Justice (DOJ) leading to the lawfare attacks that we see today. The rot was largely top-down. Pollute the DOJ and you ultimately pollute the Justice System.

Although the weaponization of the DOJ accelerated dramatically under Biden, the reality is that many of Biden’s top DOJ officials were former Obama officials who had previously been involved in promoting the Russiagate hoax. 

The two-tier justice system we see today began during Obama’s two-term administration, when the DOJ was fundamentally pushed to the left by Attorney General Eric Holder and then by his successor, Loretta Lynch.

Indeed, it was Lynch’s DOJ that established an impossibly high threshold for prosecuting Hillary Clinton during the the FBI’s investigation into her use of a private email server - requiring evidence of intent - effectively ensuring from the very outset that Clinton would not be charged.

The politicization of the DOJ was achieved through partisan hiring practices put into place by Obama and AG Holder. These hiring practices were highlighted in an extensive series of investigative articles by J. Christian Adams - a former DOJ official under President George W. Bush. 

Although the Justice Department is forbidden by federal law from hiring employees based on political affiliation, Adams found that the resumes of lawyers hired at the DOJ Civil Rights Division revealed a one-sided ideological hiring process, noting that the “matter-of-fact evidence should lead any reasonable observer to believe the DOJ has employed an illegal political litmus test during the interview process.”

The end result of this new hiring process established by Holder and Obama? 113 new leftist lawyers at the Civil Rights Division while not one single moderate, non-ideological, or conservative lawyer was hired. This process was extrapolated throughout the entire organization. The weaponization of the DOJ had begun.

During his tenure, Holder presided over a number of scandals, including the unlawful investigation of certain media members. Under Holder’s command, the Department of Justice secretly obtained two months of telephone records of reporters and editors for the Associated Press. The DOJ secretly monitored the personal email and phone of Fox News reporter James Rosen. Holder also refused to prosecute anyone involved in the IRS’s targeting of 426 conservative groups that took place during the Obama Administration. 

Holder ultimately became the first Attorney General to be held in Contempt of Congress - on both civil and criminal grounds - for his refusal to turn over documents in the Fast & Furious scandal. The vote was 255-67 with 17 Democrats breaking rank to side with the contempt vote.

Holder, who had served years earlier as Deputy Attorney General under Bill Clinton, ultimately resigned but was not prosecuted by the Department of Justice – unsurprising since it was Holder who had fundamentally restructured and shaped the department.

Holder also came up with the process for doling out huge settlements from the financial crisis to fund the Leftist activist groups that influence our political landscape and push progressive agendas to this day.

Holder created what came to be known as the DOJ’s Slush Fund, which arose through his establishment of the Working Group which was created in 2012 as a means of prosecution and punishment for those perceived to be responsible for the financial crisis of 2008.

At the formation of the DOJ’s working Group, Holder foreshadowed the new direction of the DOJ in a telling statement:

“Over the past three years, we have been aggressively investigating the causes of the financial crisis. And we have learned that much of the conduct that led to the crisis was unethical, and, in many instances, extremely reckless. We also have learned that behavior that is unethical or reckless may not necessarily be criminal. When we find evidence of criminal wrongdoing, we bring criminal prosecutions. When we don’t, we endeavor to use other tools available to us.”

Pay special attention to what Holder said at the end. “When we find evidence of criminal wrongdoing, we bring criminal prosecutions.  When we don’t, we endeavor to use other tools available to us.” This is an early admission by Holder that, in the absence of any crimes, Obama’s DOJ used coercion and pressure to achieve the ends and outcomes they desired.

Holder was using the brute force of the DOJ to punish behavior and activities that he didn’t like - even when those behaviors were not actually illegal. The “other tools” Holder referenced are usually civil sanctions and charges that generally result in large fines being paid by firms, often without a statement of true wrongdoing.

With the full weight of the DOJ behind it, the Working Group reached multi-billion dollar settlements with virtually every major bank in America. In total, $110 billion was collected in fines. A huge sum of money. So where did all these funds go? 

According to a Wall Street Journal report the money broke down as follows: $49 billion went to the Department of Treasury – some directly, but most funneled to Treasury through settlements with Fannie Mae and Freddie Mac. Spending of proceeds has not been specified. 

$45 billion was for Consumer Relief  – a vaguely defined category that includes borrowers but also includes “housing-related community groups“. Breakdowns are still not fully known. 

$10 billion went to “other recipients” – most appear to be federal in nature - which likely means that was cash that could be used by unknown federal agencies for whatever purposes they envisioned. Another $5.3 billion went to states to spend as they wanted. 

And finally, at least $450 million went to the DOJ. And, of course, the discretionary spending of those proceeds was also not specified. The lack of transparency is disturbing. Equally disturbing is the fact that funds which should have gone back to injured consumers were instead kept as a giant piggy bank for the government.

What followed is even more alarming. According to a Congressional Committee Report – Stop Settlement Slush Funds Act of 2016: “A year-long Committee investigation revealed that the DOJ was pushing and even requiring settling defendants to donate money to non-victim third-parties. Donations could earn up to double credit against defendants’ overall payment obligations, while credit for direct relief to consumers was merely dollar-for-dollar.”

In other words, not only was the DOJ pushing for donations to third parties chosen by the DOJ (we can’t emphasize that point enough) but they were also incentivizing these contributions by providing “extra credit” for doing so.

Documents obtained by Congressional investigators also showed that “groups that stood to gain from these mandatory donations actually lobbied the DOJ to include them in settlements.” Indeed, the “DOJ funneled third-party groups as much as $880 million dollars in just 2 years.”

These payments to third-party groups occurred entirely outside of the Congressional appropriations and grant oversight process. In some cases, the DOJ-mandated donations were even used to restore funding that Congress specifically cut.

Committee Chairman Bob Goodlatte and Subcommittee Chairman Tom Marino described how the DOJ circumvented Congressional spending cuts in their report: 

“In the most egregious cases, the DOJ is using the mandatory donations to restore funding that Congress specifically cut. In 2011, Congress eliminated $88 million in funding for HUD’s housing counseling assistance. The DOJ settlements require $30 million to go specifically to groups in the HUD grant program, so 36% is recouped directly. In addition, some HUD grantees will also be eligible for a portion of the remaining $120 million in mandatory donations, not to mention the $490 million in the tax relief fund. For example, NeighborWorks is an eligible HUD grantee, but will also receive $122 million from BoA’s Tax Fund since Congress extended the non-taxable treatment of loan forgiveness in December 2015.”

What this really meant was that the DOJ’s mandatory donations, negotiated directly in consultation with HUD - were restoring at least $152 million to HUD grantees to replace the $88 million reduction that was mandated by Congress. Nearly a doubling of the funding Congress had specifically cut.

The Committee also noted the Justice Department’s stonewalling tactics, writing that “The DOJ is ignoring Congress’ concerns, increasing the use of third-party payments, even as Congress objects. For over a year, the DOJ provided none of the requested internal communications pertaining to the controversial settlement provisions. Rather, the DOJ provided just sixty pages of emails between DOJ and outside parties. Furthermore, because of duplicative email chains, those sixty pages amounted to fewer than ten distinct emails.” 

The lies from the DOJ continued when they claimed in September 2015 not to have understood that internal communications were sought, despite unambiguous language in Committee letters and hearing questions.

Fifteen months after the initial Congressional request, the DOJ finally relented and agreed to let the Committee review the internal documents, but only at the DOJ, and subject to restrictions on releasing the documents’ contents. As the Committee noted in their review, “the internal documents confirmed that the DOJ [Holder] conceived of the mandatory donation provisions.” 

After another nine months of further investigation, Chairman Goodlatte sent a letter to Attorney General Loretta Lynch (Holder’s replacement), revealing the full scope of the DOJ’s actions. And they were bad. Really bad.

Among other things, the DOJ had used the $2 billion Volkswagen settlement to fund Obama’s electric vehicle initiative after Congress had refused to authorize funding on two separate occasions. According to Goodlatte, Obama even used the Judgement Fund to pay interest in Obama’s settlement with Iran.

But there was another use of those funds as well. As Goodlatte’s letter noted, “A Judiciary Committee investigation has revealed that, in just the last two years, DOJ has directed nearly $1 billion to activist groups, entirely outside of Congress’s spending and oversight authority”

In other words, the DOJ was using those settlements to funnel money to Left-wing activist groups instead of consumers.

We were unable to find a complete breakdown of all the “activist groups” that received funding from the DOJ’s Slush Fund, but the Wall Street Journal’s Kimberly Strassel noted that they included the following groups (we added links):

“The National Council of La Raza, The National Urban League, The National Community Reinvestment Coalition and NeighborWorks America (which awards grants to left-leaning community organization groups, and has often been compared with scandal-plagued ACORN - or Association of Community Organizers for Reform Now)”. 

NeighborWorks, a sponsor of Black Lives Matter, was singled out in the Congressional report we cited earlier and was also the subject of a scathing report by Bloomberg News. It’s also worth noting that these groups never really die. They simply reformulate themselves under new, nice-sounding names.

The hard reality is that none of these groups provided any assistance to homeowners hurt in the financial crisis. Nor were they non-partisan groups. They were, as Congressman Goodlatte rightly noted, “left-wing activist groups” that were the direct recipients of settlements that were intended to help taxpayers who were injured in the financial crisis.

Obama’s DOJ was using the Working Group to extract huge settlements from banks through civil suits which were then dispersed into other parts of the federal government. Moreover, the use of that money appeared to be largely discretionary - with nominal or no oversight.

Where all of that money actually went is largely unknown. What is clear is that every Settlement Dollar that made its way to one of these Leftist Special Interest Groups was a Settlement Dollar diverted away from actual victims or taxpayers.

Obama’s Justice Department took proceeds that were intended to benefit homeowners harmed during the 2008 financial crisis and used those settlements to directly fund left-wing political organizations they favored – their political allies. Indeed, many of the left-wing political activist groups that are so prevalent and active today received direct funding from the DOJ’s Slush Fund.

The weaponization of the DOJ which began under Obama, has now accelerated dangerously during the Biden regime. It is important to note that the immediate and intentional sidelining of Trump’s first Attorney General, Jeff Sessions, by Obama operatives like James Comey meant that there was never any DOJ cleanup during Trump’s first term. Sadly, the DOJ has been so severely politicized that it no longer has any claim to the word "Justice".