Senators Elizabeth Warren and James Lankford have introduced the Truth in Settlements Act into Congress. The legislation requires companies and federal agencies to disclose additional information about settlements exceeding $1 million.
It is aimed at giving the American public a better idea of the costs businesses are paying for corporate wrongdoing and whether our regulators are effectively punishing these companies. A summary on Senator Warren’s website highlights a number of aspects of the legislation, including:
- Federal agencies would have to explain the classification of settlement payments for tax purposes and credits for routine conduct.
- Companies would have to disclose tax deductions from settlement payments in SEC filings.
- Requires copies of settlements to be posted online as well as key details disclosed.
- Explanations for confidential settlements and aggregate annual statistics on those settlements.
- Commissions a GAO study on handling confidential settlements.
These summaries were pulled from what I imagine is the version of the legislation introduced into Congress last year. If you agree that greater information about settlements entered into between companies and the Federal Government is a good idea, please write to your Congressional representatives!