2017 Lane Reports

Jeff Sessions Abandons the Social Sector

The Lane Report, July 2017
Thursday, July 6, 2017 10:00 am
by Marc J. Lane

During Jeff Sessions’ four terms as a U. S. Senator from Alabama, his anti-abortion and anti-immigration positions were well known. He was skeptical of climate change and hostile to same-sex marriages. On criminal justice issues, he was a champion of “law and order,” stern marijuana prohibition and the unregulated use of civil forfeiture by law enforcement agencies. No wonder Sessions’ nomination as U.S. Attorney General was fervently opposed by progressives.

Now that he’s leading the Department of Justice, Sessions is no less controversial.

The Attorney General has been a vocal opponent of his Department’s long-standing practice of negotiating civil and criminal settlement agreements with corporate defendants that include donations to nonprofit organizations. He sees such payments as “slush funds” which have historically supported left-leaning social justice and environmental groups.

On June 5, while the nation’s attention was focused on the firestorm ignited by President Trump’s dismissal of former FBI director James Comey, Attorney General Sessions banned federal attorneys from reaching settlements in criminal and civil cases that require defendants to make payments to third parties. Settlement funds are now to be used, in Sessions’ words, only “to compensate victims, redress harm and deter unlawful conduct.”

Sessions has complained about settlement recipients including Republican boogeymen the National Community Reinvestment Coalition, which works to expand access to financial services in poor communities; the National Council of La Raza, or “The Race,” a Latino advocacy group which he claims supports mass illegal immigration; and the National Urban League, an iconic civil rights organization.

Backing the Attorney General General’s action, Tom Fitton, the president of Judicial Watch, the conservative public interest law firm, told Breitbart News, “The Justice Department should be in the business of upholding the rule of law, not misusing its powers to extort monies for favored interest groups.” Paul Larkin, a legal scholar at the conservative Heritage Foundation, goes even farther, suggesting that the practice may even be illegal in that “it allows the Justice Department to pick and choose among organizations that should receive federal funds without any guidance from Congress or any oversight by the Judiciary or Appropriations Committees in either chamber.”

The truth is that under both Republican and Democratic administrations over the last four decades, Attorneys General have used settlements to help fund advocacy groups that fight for people and communities hurt by the wrongdoing the Department of Justice was doing its best to reverse. As Lisa Foster, the former director of the Department's Office for Access to Justice, told HuffPo, “The Justice Department has an obligation to the people of the United States and when it brings affirmative litigation to correct wrongdoing by anyone, it should be thinking broadly about remedies that help correct the harm.”

That means funding groups to help the poor and minorities redress injustices. And it means paying for projects managed by community groups and nonprofit organizations that help compensate for illegal pollution by restoring wetlands and streams, protecting critical habitat, monitoring air pollution and treating asthma victims.

Let’s heed Mr. Larkin’s concern and, after next year’s election, urge the new Congress to override the Attorney General’s ill-considered edict. The social sector – and all of us – would be far better off.

Peterborough's problem was daunting: Sixty percent of prisoners serving short-term sentences historically had gone on to re-offend within a year after their release. But policymakers were confident that a solution was within their reach. They attracted private investment to pay experienced social service agencies to provide intensive, multidisciplinary support to short-term prisoners, preparing them to re-enter society and succeed outside the penal system. - See more at: http://www.chicagobusiness.com/article/20131007/OPINION/131009850/a-new-kind-of-futures-contract-for-illinois#sthash.ThgxeiFt.dpuf

The world's first social impact bond, or SIB, was introduced in 2010 to fund innovative social programs that realistically might reduce recidivism by ex-offenders in Peterborough, England, and, with it, the public costs of housing and feeding repeat offenders. Prudently building on the strengths of that initiative, Illinois Gov. Pat Quinn is rolling out SIBs to help solve some of the state's most vexing social problems.

A SIB isn't a traditional bond where investors are guaranteed a fixed return but a contract among a government agency that agrees to pay for improved social outcomes, a private financing intermediary and private investors. SIBs shift the risk of experimenting with promising but untested intervention strategies from government to private capital markets, with public funds expended only after targeted social benefits have been achieved.

Peterborough's problem was daunting: Sixty percent of prisoners serving short-term sentences historically had gone on to re-offend within a year after their release. But policymakers were confident that a solution was within their reach. They attracted private investment to pay experienced social service agencies to provide intensive, multidisciplinary support to short-term prisoners, preparing them to re-enter society and succeed outside the penal system.

The government decided which goals would be supported, but exactly how those goals would be achieved was left to the private sector. It was the investors, through a bond-issuing organization, who ultimately endorsed the allocation of investment proceeds — how much would be invested in job training, drug rehabilitation and other interventions.

If the Peterborough plan eventually shrinks recidivism rates by 7.5 percent or more, the government will repay the investors' capital and share the taxpayers' savings with them, delivering up to a 13 percent return. If the target isn't hit, the investment will have failed and the government will owe the investors nothing.

Illinois' SIB effort was spearheaded by the state's Task Force on Social Innovation, Entrepreneurship and Enterprise — the governor's think tank on social issues, which I am privileged to chair — with support from Harvard University's John F. Kennedy School of Government, the Rockefeller Foundation and the Aurora-based Dunham Fund. A request for information issued by the Office of Management and Budget on May 13 yielded responses from service providers eager not only to reduce recidivism here but also to create jobs, revitalize communities, improve public health outcomes, curb youth violence, cut high school dropout rates and alleviate poverty.

Now the governor has issued a request for proposals intended to spur better outcomes for Illinois' most at-risk youth — by increasing placement stability and reducing re-arrests for youth in the state's Department of Children and Family Services, and by improving educational achievement and living-wage employment opportunities justice-involved youth most likely to re-offend upon returning to their communities.

Kudos to Mr. Quinn for bringing SIBs to Illinois. May they soon start delivering on their promise.

- See more at: http://www.chicagobusiness.com/article/20131007/OPINION/131009850/a-new-kind-of-futures-contract-for-illinois#sthash.ThgxeiFt.dpuf
The world's first social impact bond, or SIB, was introduced in 2010 to fund innovative social programs that realistically might reduce recidivism by ex-offenders in Peterborough, England, and, with it, the public costs of housing and feeding repeat offenders. Prudently building on the strengths of that initiative, Illinois Gov. Pat Quinn is rolling out SIBs to help solve some of the state's most vexing social problems. - See more at: http://www.chicagobusiness.com/article/20131007/OPINION/131009850/a-new-kind-of-futures-contract-for-illinois#sthash.ThgxeiFt.dpuf

Marc J. Lane is a Chicago attorney and financial adviser and the vice chair of the Cook County Commission on Social Innovation.


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