Stop Settlement Slush Funds Act of 2023

The Stop Settlement Slush Funds Act of 2023 would prohibit federal agencies from requiring defendants in legal settlements to make payments to third-party organizations that were not directly involved in the dispute. Under current law, some settlements allow or require companies to donate to non-profit groups or community projects as part of their penalty; this bill would mandate that such funds go directly to the U.S. Treasury or be used only to compensate victims for actual harm.

For citizens, this change ensures that settlement money is handled through the standard congressional appropriations process rather than being directed to outside interest groups by executive branch officials. While the bill limits where settlement money can be sent, it maintains exceptions for payments that provide direct restitution to victims or repair specific environmental damage caused by the defendant. To ensure compliance, the bill requires federal agencies to submit annual reports detailing the distribution of all settlement funds.