1-17.000 – Settlement Payments to Third Parties

The goals of a settlement agreement between the Department and a private party are to compensate victims, redress harm, and/or punish and deter unlawful conduct.  It is generally not appropriate to use a settlement agreement to require, as a condition of settlement, payment to non-governmental, third-party organizations who are not victims or parties to the lawsuit.  Department attorneys shall not enter into any agreement on behalf of the United States in settlement of federal claims or charges, including agreements settling civil litigation, accepting plea agreements, or deferring or declining prosecution in a criminal matter, that directs or provides for a payment to any non-governmental person or entity that is not a party to the dispute.

Department attorneys may only enter into such agreements in three specific situations:

  1. When the otherwise lawful payment or loan provides restitution to a victim or otherwise directly remedies the harm that is sought to be redressed (for example, harm to the environment or from official corruption).
  2. When payment is directed towards legal or other professional services rendered in connection with the case.
  3. When payment is expressly authorized by statute, including restitution and forfeiture.

This policy applies to all civil and criminal cases litigated under the direction of the Attorney General and includes civil settlement agreements, cy pres agreements or provisions, plea agreements, non-prosecution agreements, and deferred prosecution agreements. 

Department attorneys should consult memoranda or other publications from their component for additional guidance regarding payments to third parties. Any questions may be directed to the Office of the Associate Attorney General.

[new April 2018]

Updated September 19, 2018