The Judgment Fund: The government’s secretive, unlimited bank account

The Justice Department’s negotiation of six figure settlements is shining a light on a little known government account called the Judgment Fund, which pays out billions every year. While some settlements are controversial, others compensate for egregious errors by the federal government.

Senate Republicans introduced multiple bills that, if passed, would block money from being paid to people who entered the United States illegally. They’re targeting a reported possible settlement of $450,000 per person to immigrant families separated at the border during Donald Trump’s presidency. The ACLU is leading the negotiation on behalf of the families.

The Judgment Fund will also be used to pay $130 million dollars to victims of the Parkland shooting, where 17 people were killed at Marjorie Stoneman Douglas High School in Florida. Investigations revealed the FBI failed to act on tips that the perpetrator was planning a school shooting, including a message on his YouTube channel stating: “I’m going to be a professional school shooter.”

What is the Judgment Fund?

To quote the Bureau of Fiscal Service, the Judgment Fund is a “permanent, indefinite appropriation available to pay final money judgments and awards against the United States.” Put another way, it’s an unlimited bank account to pay for government screw ups in perpetuity. 

Congress created the Judgment Fund in the 1950s so the United States could automatically pay settlements and judgments against the government. Before its creation, Congress had to individually approve and appropriate money for each settlement. There are thousands every year.

“It was established by Congress by statute and is a very rare, permanent, indefinite appropriation,” said Jeffrey Axelrad, former Director of the Justice Department’s Torts Branch. 

Another former DOJ attorney described it as a bucket that replenishes itself automatically.

How much does it pay out?

Here are some yearly totals from the last decade: 

• 2011: $2,913,427,142
• 2015: 8,594 payments cost $2,588,215,567.94
• 2020: nearly 7,500 payments totaled $14,239,825,270.32

The biggest expenses are federal tort claims, medical malpractice, and breach of contract. 

Why is it described as secretive? 

Information about payments is often redacted and occasionally put under seal. Redacted information can include why a payment was made, the department responsible, and the amount. 

Sen. Deb Fischer (R-NE) introduced the Judgment Fund Accountability Act, which would block money to people who entered the country illegally. The bill would also require a description of the alleged wrongdoing that lead to each claim.

“I think it’s important for Congress to have oversight when it comes to an obscure government fund that seems to be very secretive,” Fischer said.

Why is the fund criticized? 

The settlements paid by the fund are supposed to be for real damages incurred as a result of failures by the federal government. Some critics contend the fund is not always used as originally intended.

In 2017, former DOJ litigator Paul Figley testified before the House Judiciary Committee about settlements that cost taxpayers more than 100 million dollars. 

“Each paid much more money than the government was likely to lose in court. Decisions to settle them on generous terms appear politically motivated,” Figley told the committee. 

Axelrad explained that as head of the DOJ’s Torts Branch, he sent multiple settlement proposals back to agencies for renegotiation.

“Government attorneys have a job to do, and that is to seeing settlements are not excessive or raids on the treasury,” Axelrad said. 

Axelrad explained those proposals were either too expensive or an inappropriate use of the fund. 

“I dealt with many, many instances over my career of agencies wanting to use the judgment fund where it was not authorized to be used by the statute,” Axelrad added.