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OVERSIGHT OF THE JUDGEMENT FUND: 

IRAN, BIG SETTLEMENTS, AND THE LACK 

OF TRANSPARENCY 

HEARING 

BEFORE THE

SUBCOMMITTEE ON THE CONSTITUTION 

AND CIVIL JUSTICE 

OF THE

COMMITTEE ON THE JUDICIARY 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

SECOND SESSION 

SEPTEMBER 7, 2016 

Serial No. 114–92 

Printed for the use of the Committee on the Judiciary 

( 

Available via the World Wide Web: http://judiciary.house.gov 
(II) 

COMMITTEE ON THE JUDICIARY 

BOB GOODLATTE, Virginia, Chairman 

F. JAMES SENSENBRENNER, JR., 

Wisconsin 

LAMAR S. SMITH, Texas 

STEVE CHABOT, Ohio 

DARRELL E. ISSA, California 

J. RANDY FORBES, Virginia 

STEVE KING, Iowa 

TRENT FRANKS, Arizona 

LOUIE GOHMERT, Texas 

JIM JORDAN, Ohio 

TED POE, Texas 

JASON CHAFFETZ, Utah 

TOM MARINO, Pennsylvania 

TREY GOWDY, South Carolina 

RAU ́ L LABRADOR, Idaho 

BLAKE FARENTHOLD, Texas 

DOUG COLLINS, Georgia 

RON DeSANTIS, Florida 

MIMI WALTERS, California 

KEN BUCK, Colorado 

JOHN RATCLIFFE, Texas 

DAVE TROTT, Michigan 

MIKE BISHOP, Michigan 

JOHN CONYERS, JR., Michigan 

JERROLD NADLER, New York 

ZOE LOFGREN, California 

SHEILA JACKSON LEE, Texas 

STEVE COHEN, Tennessee 

HENRY C. ‘‘HANK’’ JOHNSON, JR., 

Georgia 

PEDRO R. PIERLUISI, Puerto Rico 

JUDY CHU, California 

TED DEUTCH, Florida 

LUIS V. GUTIERREZ, Illinois 

KAREN BASS, California 

CEDRIC RICHMOND, Louisiana 

SUZAN DelBENE, Washington 

HAKEEM JEFFRIES, New York 

DAVID N. CICILLINE, Rhode Island 

SCOTT PETERS, California 

SHELLEY HUSBAND, Chief of Staff & General Counsel 

PERRY APELBAUM, Minority Staff Director & Chief Counsel 

SUBCOMMITTEE ON THE CONSTITUTION AND CIVIL JUSTICE

TRENT FRANKS, Arizona, Chairman 

RON DeSANTIS, Florida, Vice-Chairman 

STEVE KING, Iowa 

LOUIE GOHMERT, Texas 

JIM JORDAN, Ohio 

STEVE COHEN, Tennessee 

JERROLD NADLER, New York 

TED DEUTCH, Florida 

PAUL B. TAYLOR, Chief Counsel 

JAMES J. PARK, Minority Counsel 
(III) 

C O N T E N T S 

SEPTEMBER 7, 2016 

Page 

OPENING STATEMENTS 

The Honorable Trent Franks, a Representative in Congress from the State 

of Arizona, and Chairman, Subcommittee on the Constitution and Civil 

Justice ................................................................................................................... 1 

The Honorable Steve Cohen, a Representative in Congress from the State 

of Tennessee, and Ranking Member, Subcommittee on the Constitution 

and Civil Justice ................................................................................................... 3 

The Honorable John Conyers, Jr., a Representative in Congress from the 

State of Michigan, and Ranking Member, Committee on the Judiciary ......... 4 

The Honorable Bob Goodlatte, a Representative in Congress from the State 

of Virginia, and Chairman, Committee on the Judiciary ................................. 45 

WITNESSES 

Paul F. Figley, Professor, Associate Director of Legal Rhetoric, Washington 

College of Law—American University 

Oral Testimony ..................................................................................................... 6 

Prepared Statement ............................................................................................. 8 

Jeffrey Axelrad, Professor, Professional Lecturer in Law, The George Washington University Law School 

Oral Testimony ..................................................................................................... 32 

Prepared Statement ............................................................................................. 34 

Neil Kinkopf, Professor of Law, Georgia State University College of Law 

Oral Testimony ..................................................................................................... 37 

Prepared Statement ............................................................................................. 39 

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING 

Prepared Statement of the Honorable Chris Stewart, a Representative in 

Congress from the State of Utah ........................................................................ 46 

APPENDIX 

MATERIAL SUBMITTED FOR THE HEARING RECORD

Response to Questions for the Record from Paul F. Figley, Professor, Associate Director of Legal Rhetoric, Washington College of Law—American 

University ............................................................................................................. 54 

(1) 

OVERSIGHT OF THE JUDGEMENT FUND: 

IRAN, BIG SETTLEMENTS, AND THE LACK 

OF TRANSPARENCY 

WEDNESDAY, SEPTEMBER 7, 2016 

HOUSE OF REPRESENTATIVES

SUBCOMMITTEE ON THE CONSTITUTION

AND CIVIL JUSTICE

COMMITTEE ON THE JUDICIARY

Washington, DC. 

The Subcommittee met, pursuant to call, at 10:30 a.m., in room 

2237, Rayburn House Office Building, the Honorable Trent Franks, 

(Chairman of the Subcommittee) presiding. 

Present: Representatives Franks, Goodlatte, King, Cohen, Conyers, Jackson Lee. 

Staff Present: (Majority) John Coleman, Counsel; Jake Glancy, 

Clerk; (Minority) Perry Apelbaum, Staff Director & Chief Counsel; 

James J. Park, Chief Counsel; Susan Jensen, Senior Counsel; 

Veronica Eligan, Professional Staff Member; and Matthew Morgan, 

Professional Staff Member. 

Mr. FRANKS. Hearing will come to order. Welcome to all of you. 

I will now recognize myself for an opening statement. Our Nation’s 

founding generation understood that the establishing popular control over government finance would provide an essential check on 

the executive branch. The tyrannical assertion of authority by the 

British Crown, as detailed in our Declaration of Independence, no 

doubt fostered this trust of unelected officials who were not directly 

accountable to the people. 

In order that the purse strings stay close to the people, Article 

I, section 9, clause 7 of the United States Constitution provides 

that, ‘‘No money shall be drawn from the treasury but in consequence of appropriations made by law, and a regular statement 

and account of the receipts and expenditures of all public money 

shall be published from time to time.’’ 

History shows that there was once a time that Congress took seriously its role as guardian of the public Treasury and developed 

an organized method of raising revenue, appropriating that money 

for specific use, and accounting for the propriety and legality of its 

use. 

Nevertheless, Congress has now ceded so much of its fiscal control to the executive branch. Early this year, Matthew Spalding of 

Hillsdale College testified before the House Budget Committee at 
2 

a hearing titled, ‘‘Reclaiming Congressional Authority through the 

Power of the Purse.’’ 

In his written testimony he stated, ‘‘Congress must hold the 

power of the purse not because it is necessarily better at exercising 

it than the President is—though it well may be—but because it has 

been given this particular power as a check on the executive. Even 

more important, Congress has an obligation to jealously maintain 

control of the nation’s purse because it is the guardian of the public 

treasure, and so the public good.’’ Today’s hearing is about the 

Judgment Fund, which is a permanent, indefinite appropriation to 

pay judgment awards against the United States, as well as settlement negotiated by the Department of Justice. 

This fund, which is administrated by the Bureau of Fiscal Service at the Department of Treasury, is indefinite because it sets 

aside an unlimited amount of money to pay judgments against the 

United States. It is permanent because Congress is not required to 

appropriate money to fund its use each year. 

Indeed, the Judgment Fund’s legislative history indicates that its 

purpose was to reduce the workload of Congress. For most payments, the Judgment Fund is an efficient means to ensure timely 

redress for those with legitimate claims against the United States. 

Yet, in cases settled under questionable circumstances in which it 

is not clear that the claim would have resulted in a monetary judgment in court, there is clear need for transparency. When the public wants information, including Congress, that information should 

be easily accessible. 

Now while the U.S. Department of Treasury provides an outline 

database for the ‘‘purpose of tracking the status of approved Judgment Fund payments,’’ it is difficult to search. The fields are incomplete, and it provides little information useful to the general 

public. The Treasury Department, at the request of the House of 

Representatives and the Senate Appropriations Committee, also 

submits an annual report to Congress, but it, likewise, provides 

completely inadequate information to easily identify a payment or 

to sufficiently provide for context for the payments listed. 

More recently, the public has sought information regarding a 

$1.7 billion settlement payment to the Islamic Republic of Iran related to the sale of military equipment, equipment stemming back 

to before the 1979 Iranian Revolution; $1.4 billion was purportedly 

paid from the Judgment Fund as an interest on the principal 

amount. 

I find the entire situation stunning, and I would like to submit 

for the record an August 27, 2016 article written by Andrew 

McCarthy that was published by the National Review. In this article, Mr. McCarthy details that an astonishing lack of information 

available to the public regarding this payment. My hope is that today’s hearing will bring some desperately needed transparency related to this matter. The Judgment Fund as a general issue, and 

what more may be done to reassert the appropriate and constitutional Congressional authority over the Nation’s purse strings, and 

I want to thank the witnesses again for being here today, and I 

look forward to their testimony, and I now yield to the Ranking 

Member for an opening statement. 
3 

Mr. COHEN. Thank you, Mr. Chair. We are back. That should be 

good: people’s representatives in Washington. It is not necessarily 

good, though, because this Committee is the Subommittee on the 

Constitution. And I was so proud to be a Member of the Judiciary 

Committee when I was elected to Congress that I asked; it was my 

first choice to be on the Judiciary Committee: so important, fundamental, Constitution law, guaranteed rights. 

And here we are in an election year and this Committee has not 

had one single hearing on the Voting Rights Act, maybe as important of a law as exists to give people the most fundamental right: 

the right to vote, to have a say in who they elect. 

That is what America is about. You go around the country, and 

what do people talk about? America, civil justice system, the rule 

of law, and people getting democracy and the right to vote. And 

this Committee has not had one hearing on the Voting Rights Act 

that the Supreme Court ruled unconstitutional, which means we 

need to come back and do something about it, which Jim Sensenbrenner well knows and a few other republicans. Not many. Not 

many. 

At one point, to be on the bill to reestablish a Voting Rights Act, 

the Democrats wanted you to get a Republican for you to get on, 

so it would not be imbalanced, so I went on the floor to people I 

knew and people I thought might be okay and people I worked 

with, gone on CODELs with, and thought might have some interest 

to find Republican Members, so I could be on the bill. I might as 

well have gone to the South Indian Ocean and tried to find that 

airplane. It would have been easier than to find a Republican who 

was willing to put his name on a Voting Rights Act. 

That is what this Committee should be dealing with, is extending 

the opportunity for people to vote, and when the Supreme Court 

struck down the Voting Rights Act it said that the States that were 

suspect needed pre-clearance. Times have changed. 

Well, times have changed in a way, indeed, and they were not 

all in the solid south from going around the Carolinas and Georgia 

and Alabama and Mississippi and Louisiana and Texas. There 

were a few places in the rest of the country, so times change because some of the rest of the country got to be bad, too. But those 

are the primary states that have done things to jeopardize people’s 

right to vote, so the courts have had to say, ‘‘North Carolina, your 

law is not good. You are going to have to go change it.’’ They also 

did one in the Midwest. I think it might have been Wisconsin, but 

anyway. 

That is what we ought to be doing, and some policeman are 

shooting people without due process. They are not resorting to the 

use of deadly force before using all other reasonable means of apprehension. 

And so the police do a lot of good work. The police are essential 

to government and an ordered society and liberty and freedom and 

all that stuff. But there has been a whole lot of African American 

folks killed and videoed, and it is no coincidence that they have not 

had videos around to see White people get killed because it is not 

happening. It is Black people getting killed, and that is a deprivation under color of law. And have we had one hearing about that? 

No, but we are here on some law passed when Ike was President, 
4 

when republicans were republicans: 1950’s. We got our priorities 

all messed up. 

We ought to be dealing with voting rights and due process and 

death, and that is what we ought to be instead of trying to pick 

a partisan fight with the Administration over bringing some people 

home from Iran and giving them back the money they gave us in 

the 1970’s to buy weapons they never got and less interest than 

they desired because we negotiated a good deal on the interest. 

Lucky we had that opportunity to bring those guys home. I commend the Administration for what it did to bring those people 

home, including the reporter; he got a lot of attention, but there 

were other Americans whose lives were just as valuable. 

So I wish, Mr. Chairman, we would have hearings on the Voting 

Rights Act, on police shootings, on deadly force, on due process, and 

on the rights and the fundamentals that makes this Committee the 

Committee that it is and not go off on obscure topics to find ways 

to try to politicize the Administration and the election, and with 

that, I yield back the balance of my time. 

Mr. FRANKS. I thank the gentlemen, and the Chair now recognizes the full Judiciary Committee Ranking Member, Mr. Conyers 

of Michigan for his opening statement. 

Mr. CONYERS. Thank you, Mr. Chairman. I begin by welcoming 

three professors: Professor Figley, Professor Kinkopf, and Professor 

Axelrad to our discussion this morning. I also commend our Ranking Subcommittee Member for his insight on directions that we 

might otherwise attend to in the course of this session. 

Now, the purpose of the hearing today is to examine the Judgment Fund of the Treasury Department created in 1956 to reduce 

its appropriations workload, and prior to establishing the fund, 

Congress devoted an inordinate amount of its time appropriating 

monies to satisfy run-of-the-mill, I would call them, legal judgments and settlements on a case-by-case basis. 

Today, the Fund permits agencies to obtain payment for legal 

judgments and settlements without having to request appropriations from Congress under limited, statutorily-prescribed circumstances. Unfortunately, some on the Committee are more interested in criticizing the Administration’s recent settlement of longstanding claims with Iran than in conducting an oversight of the 

fund. 

To begin with, it was legally permissible for the State Department to request that the payments come from the Judgment Fund. 

The payment settled a longstanding claim made before the U.S.- 

Iran Claims Tribunal that related to a curtailed arms deal between 

the United States and the prerevolutionary government of Iran. 

The tribunal was created to hear claims between our country and 

the Iranian nationals and their respective governments that arose 

as a result of the deterioration in relations following the Iranian 

Revolution. In order to avoid an adverse judgment before the tribunal, the State Department negotiated a $1.7 billion deal to settle 

the claim, of which $1.3 billion in interest payments came from the 

Judgment Fund itself. 

As Professor Figley points out in his testimony, this is legally 

permissible, and past Administrations going back decades have 

used the fund to settle claims with Iran. In addition to being per-
5 

fectly legal, the Iran settlement saved taxpayers billions of dollars. 

According to the State Department, negotiators determined that 

the United States could have possibly owed Iran billions more for 

over 30 years worth of interest on the $400 million principal had 

the claim been adjudicated before the tribunal. 

Rather than demonstrate that the Judgment Fund may encourage executive branch officials to negotiate profligate settlements, 

the Iran payments instead show that the State Department was 

acting to protect United States’ financial interest. 

And so finally, in terms of transparency, I note that the payments were disclosed to the public at the time that they were 

made, which was in January of this year, announced by the Obama 

administration itself. 

So while much has been made of the timing of the payments in 

relations to Iran’s release of American prisoners, it is undisputed 

that the Administration made no effort to hide these payments or 

that separate, unrelated teams carried out the negotiations for the 

settlement and the prisoner release. Although few would oppose 

greater transparency for government actions, the majority’s examples of purported executive branch overreach, and that is not all of 

the majority, but those that have in settlement negotiations fail to 

show that the Administration has misused the Judgment Fund. 

And so I look forward to the examinations and contributions of 

our witnesses we welcome here today, and I thank the Chairman. 

Mr. FRANKS. And I thank the gentleman, and without objection, 

other Members’ opening statements will be made part of the 

record. 

So now, let me please introduce our witnesses. Our first witness 

is Professor Paul Figley. Professor Figley teaches torts and legal 

rhetoric at American University’s Washington College of Law. Welcome, professor. 

Our second witness is Professor Neil Kinkopf. Professor Kinkopf 

teaches constitutional law, legislation, and civil procedure at Georgia State University College of Law. And welcome to you, professor. 

Our third and final witness is Professor Jeffrey Axelrad. Professor Axelrad is an adjunct professor at George Washington University Law School. And welcome to you, sir. 

Each of the witnesses’ written statements will be entered into 

the record in its entirety. I ask that each witness summarize his 

or her testimony in 5 minutes or less. To help you stay within that 

time, there is a timing light in front of you. The light will switch 

from green to yellow, indicating that you have 1 minute to conclude 

your testimony. When the light turns red, it indicates that the witness’ 5 minutes have expired. 

Before I recognize the witnesses, it is the tradition of the Committee that they be sworn, so if you would please stand and be 

sworn. 

Do you swear the testimony you are about to give before this 

Committee is the truth, the whole truth, and nothing but the truth 

so help you God? You may be seated. Let the record reflect that all 

the witnesses responded in the affirmative. 

So I now recognize our first witnesses, Professor Figley, and if 

you would please turn on your microphone, sir, before beginning. 
6 

TESTIMONY OF PAUL F. FIGLEY, PROFESSOR, ASSOCIATE DIRECTOR OF LEGAL RHETORIC, WASHINGTON COLLEGE OF 

LAW—AMERICAN UNIVERSITY 

Mr. FIGLEY. Thank you, Mr. Chairman. The proposals before the 

Committee today are nonpartisan. They are grounded in our constitutional system of checks and balances. The Founders, following 

the English model, assigned the power of the purse to the legislative branch. With regard to paying judgments and settlements, 

Congress has made decisions over the course of decades that, in 

their cumulative effect, have resulted in a significant transfer of 

power from Congress to the executive. 

While this transfer was neither foreseen nor intended it is real. 

At this point, Congress has ceded almost all authority over the payments of judgments and settlements and greatly reduced its ability 

to track those settlements. Many of those decisions made sense at 

the time. 

Prior to the emergence of the Internet, Congress withdrew requirements and reports about payments and judgments about settlements to reduce the paperwork that was then inaccessible for 

most purposes. Because there are no requirements for publication 

of those payments now, tracking payments to particular recipients, 

events, or attorneys is unduly complicated. 

Databases on Treasury Department websites are posted on a voluntary basis and exclude the names of recipients and individual attorneys. The lack of mandatory publication of Judgment Fund payments obscures any public accounting of those payments. For example, it masked the payment of $1.3 billion to Iran last January. 

It also undermines the Administration’s Open Government Directive that calls for proactive dissemination of useful information ‘‘online in an open format that can be retrieved, downloaded, indexed, 

and searched.’’ 

These problems would be solved by enactment of H.R. 1669. Congress, through the Judgment Fund statute, has granted authority 

to the executive to pay judgments and settlements. Congress had 

largely controlled such payments until 1956 when the Judgment 

Fund, with a cap of $100,000, was enacted. 

Since 1977, there has been no limit on the size of Judgment 

Fund payments. The Judgment Fund was created for the simple 

task of paying judgments and settlements of claims against the 

United States. While it provided for the executive branch to make 

those payments without Congressional approval, it was never intended to bypass Congress’ authority to decide whether to fund programs or policy initiatives, but it has demonstrably been used in 

that way. 

The Judgment Fund as it now stands undermines Congress’ 

power of the purse by providing an unlimited, unreviewable source 

of funds for some executive branch initiatives. 

Republican and Democratic Presidents used it to further foreign 

policy goals by settling claims assorted by other countries. The 

Obama administration used it to quietly pay $1.3 billion to Iran to 

settle a class action suit for much more money than necessary and 

to fund a new claims program it created without Congressional approval or judicial supervision. But for the open-ended nature of the 
7 

Judgment Fund, those Presidents would have had to seek money 

from Congress for their initiatives. 

Congress, in the exercise of its power of appropriation, could 

have then chosen to provide the funding or not. As James Madison 

explained in Federalist No. 58, ‘‘the House of Representatives cannot only refuse, but they alone can propose the supplies requisite 

for support of government. They, in a word, hold the purse.’’ Congress can and should restore its authority to decide whether to approve huge payments to foreign countries, to establish generous 

compensation programs, or to fund other initiatives suggested by 

the executives that are somehow connected to some claim against 

the government. It can do so by placing limits on the size of payments that can be made from the Judgment Fund. Thank you. 

[The prepared statement of Mr. Figley follows:] 
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Mr. FRANKS. Thank you, professor. And I now recognize, as our 

second witness, Professor Axelrad. Sir, please turn on that microphone before speaking. 

TESTIMONY OF NEIL KINKOPF, PROFESSOR OF LAW, 

GEORGIA STATE UNIVERSITY COLLEGE OF LAW 

Mr. KINKOPF. Thank you, Mr. Chairman and Members of the 

Committee. It is a real honor to appear before you today. On July 

3, 1988, the U.S.S. Vincennes was patrolling the Straits of Hormuz 

in the Persian Gulf. It identified an incoming aircraft as a hostile 

F14 fighter. It made 10 attempts to make contact with that fighter 

jet to establish its identity. None of those contacts was responded 

to, so the Vincennes shot the plane down. 

It turns out it misidentified the plane. It was not an F14 fighter 

jet. It was Iran Air flight 655, a flight following its regular route 

from Tehran to Dubai. All 290 passengers aboard the plane were 

killed. The Reagan administration and following Bush administration dealt with the aftermath of this mistake. They settled claims 

filed by the Islamic Republic of Iran in the International Court of 

Justice ex gratia. Ex gratia means without admitting any liability. 

And in fact, there were very strong defenses. After all, we tried 

10 times to contact the plane, and it never responded. So, without 

admitting liability, the United States determined to make a payment to Iran out of the Judgment Fund for humanitarian purposes, 

and that was the expressed purpose of the payment, not to settle 

a valid legal claim, but for humanitarian purposes that would promote our foreign policy interests. 

I raise this not because I want to engage in some kind of tit-fortat or say, ‘‘Well, Republicans do this; Democrats do this.’’ That is 

not my point. My point is that this illustrates just how broad the 

Judgment Fund’s legal authority is and how it has always been understood over the span of decades by Administrations from both political parties. 

Moreover, during that span, Congress has amended the Judgment Fund on numerous occasions, and in none of those amendments has it indicated a contrary view of the power granted by the 

Judgment Fund. Everything that the Obama administration has 

done is well within not only the letter of the Judgment Fund law, 

but within the spirit of that law. Paying a valid discrimination 

claim when the United States has admitted that, for decades on 

end, it discriminated on account of race against Native American, 

Hispanic, and female, and African American farmers and ranchers 

is not an abuse of the Judgment Fund. All right? 

The United States has admitted liability in those cases and compensating victims of that kind of constitutional deprivation is a 

valid function of the Judgment Fund. In fact, it is why it is there. 

So, the Obama administration has not acted in any way contrary 

to the letter or the spirit of the law. Now, Professor Figley has 

raised, I think, very important transparency issues with respect to 

the Judgment Fund. 

I think those issues should be addressed, and I think the legislation pending before this Committee with respect to the disclosure 

provisions would be salutary, would help the public to understand 

how the Judgment Fund is being used, and could provide a deter-
33 

rent against abuse that might take place at some point in the future. Thank you. 

[The prepared statement of Mr. Kinkopf follows:] 
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Mr. FRANKS. Thank you, Professor. I will take a moment here to 

apologize for mis-introducing you. We had these turned around up 

here, and Professor Axelrad, the apology goes to you because I introduced you, and the other gentleman was in line to speak, so I 

apologize to both of you. But, Professor Axelrad. 

TESTIMONY OF JEFFREY AXELRAD, PROFESSOR, PROFESSIONAL LECTURER IN LAW, THE GEORGE WASHINGTON UNIVERSITY LAW SCHOOL 

Mr. AXELRAD. Thank you for providing this opportunity to share 

my views on the Judgment Fund and on H.R. 1669. H.R. 1669 proposes needed amendments to provisions the Judgment Fund statute. My testimony is based on the basic principles and legislative 

history of statutory provisions applicable to payment of judgments 

and settlements that are outlined in Professor Figley’s statement. 

H.R. 1669 seeks to provide transparency when the Judgment 

Fund is the means of transferring funds from the public treasury 

to claimants and litigants with the exception of one provision, 

which I will discuss. Transparency of the bill is a sensible, modest 

requirement and furthers the public interest in learning who is receiving the payments. 

Moreover, it is appropriate that Congress reclaim its role in appropriating funds in each instance when the largest payments are 

made. I also suggest one provision of H.R. 1669 be deleted because 

the provisions value is less than the unintended consequences. 

The unintended consequences are predictable, significant confusion and diversion time and effort of government personnel. The 

Judgment Fund does have specific limits on its availability. An indispensable condition is the judgment or settlement be payable 

under certain sections of the United States Code. The Attorney 

General is charged with implementing the most significant of these 

statutory keys to the Judgment Fund. 

The usual key for payment of non-contractual disputes is 28 

U.S.C. section 2414, which gives the key to the Attorney General. 

This provision imposes a high and important responsibilities on the 

Attorney General. Most agencies do not have a direct fiscal incentive to guard against excessive payments from the Judgment Fund 

and that payments from the Judgment Fund do not reduce agency 

appropriations available for their programs. 

It is the Attorney General’s special duty to guard against unauthorized or excessive payments. Incentive to yield to their perceived 

special need du jour is all too evident. It is to the Justice Department that the unpopular, hard task of guarding the Judgment 

Fund against abuse falls. Eternal vigilance and reason careful 

analysis must be the hallmark of the Justice Department’s exercise 

of this responsibility. 

The revisions of H.R. 1669 and Professor Figley’s proposed 

changes to H.R. 1669 further these vital functions and likely will 

enhance the ability of the Justice Department to stand firm against 

abuse of the Judgment Fund unless it is particularly clear that a 

payment is authorized. 

For the most part, the requirements of H.R. 1669 are straightforward. One proposed requirement should be removed. That requirement is the bill’s provision to create and make public a brief 
38 

description of the facts that gave rise to the claim. Many payments 

are made when the facts giving rise to the claim are disputed. The 

exercise of stating facts will slow down the process of seeking payment for all claims. 

The delay will be due not only to the additional burdens, but to 

efforts to avoid criticisms when the facts are debatable, as is often 

the situation of ordinary claims and litigation. Consideration of 

how to phrase the facts that gave rise to the claim would save a 

more than trivial amount of agency time and resources, which, in 

my view, can be devoted to more worthwhile activities. 

H.R. 1669 serves the goal of transparency in the expenditure of 

public funds by providing basic information on who receives the 

funds when the funds are paid pursuant to a settlement or a judgment. If the one subsection I have discussed is removed H.R. 1669 

can achieve a salutatory outcome without significant cost. I would 

be happy to answer any questions. 

[The prepared statement of Mr. Axelrad follows:] 
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Mr. FRANKS. I now recognize the Chairman of the full Committee, Mr. Goodlatte, for a statement. 

Mr. GOODLATTE. Thank you very much, Mr. Chairman. James 

Madison, in the Federalist No. 58 stated, ‘‘The House of Representatives cannot only refuse, but they alone can propose the supplies 

requisite for the support of government. They, in a word, hold the 

purse, that powerful instrument by which we behold in the history 

of the British Constitution, an infant and humble representation of 

the people gradually enlarging the sphere of its activity and importance and finally reducing as far as it seems to have wished all of 

the overgrown prerogatives of the other branches of the government. 

This power of the purse may in fact be regarded as the most 

complete and effectual weapon with which any constitution can 

arm the immediate representatives of the people for obtaining a redress of every grievance and for carrying into effect every just and 

salutatory measure.’’ 

Today, we examine the effects that occur when this power is 

usurped by the executive branch. Indeed, in its current form, the 

Judgment Fund allows the executive branch to pilfer taxpayer dollars to fund its overgrown prerogatives, without requiring any Congressional action. 

Congress must check these abuses by conducting rigorous oversight and determining whether additional legislation is required to 

curb abuses of the Judgment Fund. In recent years, however, it has 

become apparent that little information is known about individual 

payments from the Judgment Fund, particularly with regard to the 

payment of settlements. Searches for individual payments from the 

Judgment Fund in a database maintained by the Treasury Department reveals little about the underlying facts, how the funds were 

uses, and even who received them. In a system of government in 

which Congress is accountable for the way in which taxpayer dollars are spent, this is unacceptable. 

I look forward to the witnesses’ testimony today and to their recommendations regarding how Congress, the immediate representatives of people, can improve its oversight of this permanent, indefinite appropriation as well as improve transparency for the public. 

And I look forward to the questions, which will now ensue, with regard to that testimony. Thank you. 

Mr. FRANKS. And I thank the Chairman. And before I begin my 

question time here, I would like to first ask for unanimous consent 

to submit for the record a statement by Representative Chris Stewart of Utah, who is sponsor of H.R. 1669, the ‘‘Judgment Fund 

Transparency Act of 2015.’’ 

I want to thank Mr. Stewart for his leadership on this issue and 

for his submission to this Committee. And without objection, it will 

be entered into the record. 

[The prepared statement of Mr. Stewart follows:] 
46 

Prepared Statement of the Honorable Chris Stewart, 

a Representative in Congress from the State of Utah 

Thank you Mr. Chairman for allowing me to include this written statement for 

today’s important oversight hearing of the Judgment Fund. 

The Judgment Fund is the mechanism that Congress established in 1956 to pay 

settlements and judgments issued against the United States. It is a ‘‘permanent, indefinite appropriation’’ that is available to make payments without any review from 

Congress. By now we’re all familiar with the Administration’s decision to take $1.3 

billion out of the fund, convert it to cash, and deliver it to Iran. Yet this isn’t the 

only recent egregious use of the fund. Three years ago, the New York Times reported 

on what was likely an illegal billion dollar payout to thousands minority farmers 

who never even sued the government. 

The Treasury Department files a yearly report on the Judgment Fund with Congress and also maintains a webpage that can be searched. However, the cryptic and 

otherwise limited information related to each payout has made the database almost 

entirely useless. There is no information on what the government did wrong nor is 

there information on who benefited from a payout. Journalists and transparency 

groups revealed last month that between 2009–2015, the Federal Government paid 

over $25 million out of the Judgment Fund to ‘‘unnamed’’ or ‘‘redacted’’ recipients. 

It is unacceptable to leave the American people in the dark about how so much of 

their money is being spent. 

To address the shortcomings of the current Fund, I’ve sponsored legislation, H.R. 

1669. This legislation will require Treasury to make public any payment from the 

judgment fund and include: The name of the agency named in the judgment; the 

name of the plaintiff or claimant; the amount paid in principal liability and any ancillary liability such as attorney fees, and interest; and a brief description of the 

facts which led to the claim. 

This bill is especially urgent given the Administration’s brazen dishonesty with 

the American people about the circumstances behind the payment of $400 million 

worth of foreign currency to the Iranian regime. Not only has the President 

emboldened our enemy and provided cash to them despite the fact that they are determined to kill Americans and attack our country and allies, but he hid his actions 

from the American people. It took months for the Administration to admit the payment was ‘‘leverage’’ for the release of Americans held hostage. And yet even now, 

the Judgement Fund’s website does not list the payment of this ransom to Iran. 

The Judgment Fund Transparency Act may not prevent bad decisions, but it will 

help expose those decisions to the American people. I hope that though this hearing, 

the Committee will be informed on how to improve this process and make the Judgment Fund a tool for the American public to understand the decisions made by their 

government. I urge the committee to pass this bill and send it to the floor. 

Mr. FRANKS. I will now proceed under the 5-minute rule of questions, and I begin by recognizing myself for 5 minutes. 

Professor Figley, if I can, I will begin with you, sir. I would like 

to share a portion of the investigative journal Claudia Rossett’s review in the New York Sun in which she reported that the sum of 

$1.3 billion in interest paid by the United States to the Islamic Republic of Iran was not clearly identified on the Department of 

Treasury’s website. 

‘‘The 13 payments that may explain what happened are found in 

an outline database maintained by the Judgment Fund. A search 

for Iran, since the beginning of this year, turns up nothing, but a 

search for claims in which the defendant is the State Department 

turns up 13 payments for $99,999,999.99.’’ 

Boy, you might be able to round that up pretty easily. ‘‘They 

were all made on the same day, all sharing the same file and control reference numbers, all certified by the U.S. Attorney General, 

but each assigned a different identification number. They add up 

to $1,299,999,999.87 or 13 cents less than the $1.3 billion Misters 

Obama and Kerry announced in January. 
47 

Together with a 14th payment of just over $10 million, the grand 

total paid out of Treasury from the Judgment Fund on that single 

day, January 19th, for claims pertaining to the State Department 

comes to roughly $1.31 billion. Treasury has provided no answers 

to my queries or anyone else’s about whether these specific payments were made for the Iran settlement, nor why these transfers 

comprised 13 payments, each of which was 1 cent under $100 million, nor whether the $10 million related to the same matter. 

So, professor, Ms. Rossett’s digging only turned up more questions really. And it is clear that the public has a right to know how 

its taxpayer dollars are being spent. And while the same information is publicly available on the Treasury Department’s website, it 

lacks sufficient detail to identify specific claims. What information, 

in your opinion, should be provided so that every American, if they 

so wish, can find out about specific payments from the Judgment 

Fund? 

Mr. FIGLEY. If the Treasury Department Judgment Fund search 

database had columns for recipient and attorney, then we would 

have a lot more information than we have now. When I say that 

the Judgment Fund masked the payment of the $1.3 billion, it did 

so by allowing the payment to be made without identifying who the 

money went to. 

Mr. FRANKS. All right. Thank you, professor. So, Professor 

Axelrad, I will ask you; in your written testimony, you state that 

most agencies do not have a direct fiscal incentive to guard against 

excessive payments from the Judgment Fund and that payments 

from the Judgment Fund do not reduce agency appropriations 

available for their programs, kind of a disincentive right there. 

I mean, we have already as a Congress ceded so much of our Article 1 powers, which is a government is what it spends. This is of 

profound significance, and for agencies to be disincentivized to reduce these payments is kind of a lining up of the planets. It is the 

Attorney General’s special duty to guard against unauthorized or 

excessive payments. Can you elaborate on this duty? And specifically, what are the statutory limitations on the Attorney General’s 

authority with regard to the Judgment Fund? 

Mr. AXELRAD. There are two kinds of limitations imposed on the 

Attorney General. First of all, the Judgment Fund statute itself 

must include a provision for the payment. 2414 of Title 28 is such 

a key. It provides for payments where the Attorney General approves a settlement or decides not to further appeal from a judgment of a Federal court. 

In that event, the settlement must be under the underlying substantive statute. For instance, under the Federal Tort Claims Act, 

a lot of payments are made. If the claim is for a disputed claim 

where there might have been an accident or potential medical malpractice, the administrative procedure authorizes the payment even 

without litigation. But the Federal Tort Claims Act was a balance 

statute. It includes a number of exceptions. 

If an exception applies, the Attorney General cannot settle the 

claim using the Judgment Fund because Congress has limited the 

reach of the underlying substantive statute. The same rule applies 

under other substantive statutes. 
48 

Mr. FRANKS. Thank you, professor. My time is up, so I now recognize Mr. Cohen, our Ranking Member, for 5 minutes of questions. 

Mr. COHEN. Thank you, Mr. Chair. As I said in my opening 

statement, I thought we should be dealing with and continue to 

feel we should be dealing with Voting Rights Act and deprivation 

of rights under color of law, the shooting of citizens, using all other 

forms of apprehension instead of resorting to deadly force. 

I think those are the issues we should care about, and criminal 

justice reform where people are being kept in jail for longer and 

longer periods of time, people not having their opportunity to have 

freedom when it is unnecessary to have6them incarcerated for long 

times for drug offenses: crack cocaine which we have found there 

is—we passed a bill to say it was an 18-to-1 ratio instead of 100- 

to-1 ratio on crack and cocaine. President signed it; it is law. So 

for probably the only time in history, there has been a governmental body that has lessened the amount of evidence and, therefore accordingly, the sentence for a law that had been put on the 

books before. 

So, you know, we dealt with that a little bit, but that is part of 

criminal justice sentencing reform to try to say that our sentencing 

today should be commensurate with the crime, that we should not 

be the Gulag of the world which we pretty much are, putting more 

people in prison than any other country. And so those are the 

things I think we ought to be doing. 

Let me ask the three professors here, since we do not have the 

three tenors; we have three professors. None of you all think anything—the President or the Administration did in regard to Iran 

was illegal, do you? Anybody think it is illegal? No. I did not think 

so. 

And it is interesting that we have this hearing today. We come 

back after the longest recess in modern history, almost 2 months 

away. Zika, opioids, Flint, Michigan, Voting Rights Act, Black Lives 

Matter; we come back with this. And coincidence, what a coincidence; Washington Post last night. ‘‘Congressional Republicans 

want to censor the Obama administration for sending $400 million 

in ransom to Iran on the same day as American prisoners were released, an issue that will play big on the campaign trail 2 days before the election.’’ 

And it goes on to say that there is a resolution that has been introduced, and we may vote on it, et cetera, et cetera. It is a great 

coincidence that they have this resolution, and they want to cite 

the President and the Administration and censor them for something that we have three professors here, the scholars chosen, two 

by the majority party and one by us, that says they did not do anything wrong. 

But this is all part of the same game. We need to govern. We are 

not here as just a place to talk about issues and flame our electorate to see, maybe we can find an issue, and maybe they will 

elect our candidate, even though he is not in line with most of us. 

But maybe we will find a way to do it. It is pathetic. 

I yield to Ms. Jackson Lee if she would like. I know she is not 

a Member of this Committee, but if you would like to finish up my 

time, I yield to you for that purpose without objection. 
49 

Ms. JACKSON LEE. Mr. Ranking Member you are very kind and 

your question—— 

Mr. FRANKS. The gentlelady needs to stand, please. Please continue, I am sorry. 

Ms. JACKSON LEE. As I say, the Ranking Member is very kind. 

Thank you to the Chairman of the Subcommittee and the Chairman of the full Committee. Thank you to Mr. Conyers. 

As I was proceeding, I am glad that you already asked the question, Mr. Cohen, as to whether or not the expending of the Iran 

funds was illegal. It was not illegal. I am reading the history of the 

whole claims process here in the beginning, as interpreted by one 

of the—one of the individuals. But let me raise the question with 

Mr. Kinkopf. 

As you know in the early 1800’s, we had Committees, Standing 

Committees reviewing every claim. And so let me just basically say 

the feasibility of doing that, even though we have a court of claims, 

the feasibility of Committees in Congress looking at claims, whether it be international or domestic, how feasible is that? 

Mr. KINKOPF. Not feasible at all. 

Ms. JACKSON LEE. And the basis upon which I understand the 

most recent—well, the previous expenditure of funds dealing with 

the Iran nonnuclear proliferation had to do with an existing judgment. Am I correct? 

Mr. KINKOPF. That is correct. 

Ms. JACKSON LEE. And so how would you interpret those expenditure of funds? As I read the Constitution, it says, ‘‘On the basis 

of an existing judgment.’’ 

Mr. KINKOPF. The expenditure of those funds was perfectly legal 

and authorized by the law, by the Judgment Fund law. 

Ms. JACKSON LEE. And so is there something that we can improve? Is there a basis for us to review, taking and separating 

apart the legitimate expenditure of funds under the Iran agreement and that expenditure? Is there something else that we should 

be looking at? 

Mr. KINKOPF. Well, I think it is legitimate to look at the transparency of the fund, you know? It is interesting, going to your first 

question, that no one has proposed that this authority be taken 

back to Congress, right? But, rather, that Congress do a better job 

of its oversight function with respect to the Judgment Fund. 

And I think that that is true, right? Congress’ oversight role is 

important, not only with respect to the Judgment Fund, but with 

respect to all authority that is delegated to the executive branch, 

which is vast and necessary. So the Judgment Fund is but one instance of that broader phenomenon of governing. And your role is 

to exercise oversight, make sure the laws are being administered 

in a way that you approve of, and if not, then to legislate to get 

them to be what you want them to be. 

Ms. JACKSON LEE. So finally, in this instance, they were done appropriately with those funds. Is that yes? 

Mr. KINKOPF. Absolutely. 

Ms. JACKSON LEE. And so I have no quarrel with our reasoned 

review. But as I end, as my colleague has said, I do want to put 

on the record that we are in great need of the voting rights restoration. I hope that we will be doing a number of other elements from 
50 

Zika to Flint and other things that I hope we will be able to do in 

a bipartisan way as well. With that, I yield back. Thank you. 

Mr. FRANKS. And I thank the gentlelady, and I apologize for interrupting her earlier. And we now recognize the Ranking Member 

of the full Committee, Mr. Conyers. 

Mr. CONYERS. Thank you, Mr. Chairman, and welcome the observations of the gentlelady from Texas. Could I ask, Professor 

Kinkopf, do you think that we should limit high-dollar judgments 

from going before the Judgment Fund, or if an agreement is particularly high or unpopular, even, that we should do something different from what is being done? 

Mr. KINKOPF. Well, I think your question points to a problem 

with putting a cap based on dollar amount. One of the major problems of having Congress perform this function is one that history 

demonstrated, and that is getting your claim paid had more to do 

with your political connections than the merits of your claim, right? 

And so, putting a dollar cap on the Judgment Fund will return 

claims to Congress’ jurisdiction, to Congress’ power. And those 

same kind of political games that were played over a century before 

the adoption of the Judgment Fund can be played out again. 

And I think in the years since the Judgment Fund was adopted, 

it would be fair to observe that, if anything, sort of the ability of 

Congress to get along and not politicize matters has gone down 

rather than up. 

Mr. CONYERS. Professor Figley, do you have an additional view 

that you would like to share with us on this? Please do. 

Mr. FIGLEY. Yes, sir. The Judgment Fund works very well when 

it is used to pay individual claims. At some point, it is available 

for other purposes, and it is—I absolutely agree that the Obama 

administration had the authority under the Judgment Fund statute to pay and settle the Iranian claim for interest. 

But that is not to say that that was not a decision that had political overtones or something that Congress did not have an interest 

in. When you look to the use of the Judgment Fund to set up new 

programs, then I think there is a real problem, and that is what 

the Administration did with regard to the Hispanic and women 

farmers and ranchers process. The Judgment Fund was never intended to give discretion to any Administration to create new programs without financing obtained from Congress. I think a cap 

would solve that problem. Whether the cap should be $500 million 

or $2 billion I do not know. 

But very few individual cases are worth that much money. And 

if Congress must spend some time dealing with those very large 

cases, it may be time well spent. There are very few things we can 

track back and see that John Quincy Adams, Abraham Lincoln, 

and Millard Fillmore agreed upon. But they all agreed that legislative people should not be deciding individual claims. 

However, when it comes to major decisions involving huge 

amounts of money, Congress has an obligation, and the fact that 

the Judgment Fund has worked very well for many years on the 

vast majority of cases does not mean that Congress should not reassert its authority of this otherwise uncapped source of money. 

Mr. CONYERS. Thank you, Mr. Chairman. 
51 

Mr. FRANKS. And I thank the gentleman. This concludes today’s 

hearing. I want to thank all of the witnesses for attending. I want 

to thank the audience, and I thank the Members. 

And without objection, all Members will have 5 legislative days 

to submit additional written questions for the witnesses or additional materials for the record. And with that, this hearing is adjourned. 

[Whereupon, at 11:26 a.m., the Subcommittee adjourned subject 

to the call of the Chair.] 

(53) 

A P P E N D I X 

MATERIAL SUBMITTED FOR THE HEARING RECORD
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Response to Questions for the Record from Paul F. Figley, Professor, Associate Director of Legal Rhetoric, Washington College of Law—American 

University 
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