>> c-span's road to the white house coverage continues tonight from iowa as hillary clinton meets with supporters in marshalltown. she's going to visit a middle school there. that's live beginning at cftc 9:30 eastern. and all of this ahead of next monday's iowa caucuses. campaign 2016 live monday, february 1, beginning at 7:00 p.m. eastern. both on c-span and c-span2. we'll bring you live precaucus coverage. taking your phone calls, tweets and texts. and then at 8:00 p.m. eastern, we'll take you live to a republican caucus here on c-span. and a democratic caucus on c-span2. all of that next monday night. site at c-span.org. joining us now is sean higgins examiner.washington he's their senior writer, and he has a couple of stories taking a process by the justice deputy, the treasury

department, and a lot of other people involved and groups involved. the title of the story is called fund." good h morning. thanks for joining us, sean higgins. guest: thanks for having me on. host: why do you call it a slush fund? guest: it's technically what it is. it's the amount of money the government has sort of seduded from the settlement with citi group and bank of america. basically not giving away to nonprofit groups that the government keeps. in other words, banks are encouraged to give money to lists. n these host: we hear a lot about these settlements. the justice department specially about the amounts that are involved. as far as the settlements are concerned, what happens once hose payments are made to the overall initial settlement that was made by the justice department? guest: well, the banks get donations that they make to these groups outside. what's interesting about it is actually get double credit.

these were settlements in the bel billion-dollar ranges but for they settlement they get, get $2 for the overall that they one deal as wo for far as banks are concerned and there's no limit in the amount of money on the deal they can give away to these groups so they can reduce the civil penalties, in the tens to hundreds of millions of dollars. it's pretty certain that bank of america has already gotten about that much and probably more, and it's not clear exactly how high it's going to go. ost: so specifically, what groups are these funds being directed to? guest: it's on a group called hud-approved -- it's -- the roup -- it's a listening team from housing and urban development, and it refers to groups that are involved in housing relief that they basically, the department has funds d as recipients of and various things. it includes a variety of different groups. it includes a lot of main stream

nonpartisan ones like catholic charities. it also includes liberal groups r leanings of liberal groups such as the national council of la raza and also local ones. least a ist is at couple of hundred institutions that but it's interesting some of those more liberal ones seem to be recipients of a lot of money involved. so just to look at bank of america, since you brought it up. the initial settlement was 16 million or so back in 2014. reporting, o your about 20 million of that went to groups, 50 million went to private community development groups. can you expand on that? there is no cap. they could give 100 million or 200 million to these groups if they want to. of the groups, i think it is

the middle one you mentioned, basically legal aid is a fairly, this kosher donation. maintainedare groups by local government. the third-party nonprofit groups. host: these donations get made and ended -- in return, they get deductions off the initial amount of the settlement. how much can they reduce the settlement by? theoretically, there is no limit. the settlements reached between the justice department and the banks, they do not cap the amount. they are -- there are only minimums. credit givenfor-1

to the banks for doing this. there is a total amount that bank of america has given. in the neighborhood of 60 million. i have the actual figure i cannot quite read. 160 million in credits they have gotten. turn onember, based in information back in august. the next report is due out next month. all the minimums in terms of the amount they will require, whether they see it or not is not clear. bank of america has already gotten more than a million of the penalties in exchange for what is less than half of that being paid out. that the house

judiciary committee has been looking into. they held a couple of hearings on it. i spoke with a couple of congressman who have been looking into this. they have not gotten a whole lot of answers yet. some people in the committee tell me the government is starting to be more cooperative. they're having difficulty finding out exact what documents requesting from the justice department. it is very unusual and sort of an esoteric subject. it is hard to clarify some of the things the committee wanted. it is something they have been looking into over a year. groupsaying for chairman as part of big settlements. you can ask about the process by giving a call --

host: is this practice legal? guest: it is a gray area. it is supposed to go directly to the treasury department and only congress. these deals are not doing that. the banks are making donations on their own without any of the money reaching the federal government. the deals are what is called deferred or delayed for banks. they reached the agreement before they ever went to court. basically what the government is saying is we never received the money. banks were voluntarily make donations. therefore it is not federal money and we do not have to turn

it over to the treasury department. violation but then the government would argue that these were never officially receive by the government and therefore we can do this. that is part of what the article is about. host: you quote from the u.s. attorney's management -- manual about the legality. not required to pay funds -- that sounds cut and dry to me. guest: directly involved in the harm, the entity of the charge. would go room but it is fairly clear. the government's argument is we never received the money so therefore this never did that. the justice department basically

lays out exactly how you would circumvent the rules. host: our guest from the washington examiner joining us. our call is from missouri, democrats line. good morning. go ahead. caller: i tell you what. why i am voting for bernie host: thousan-- host: that was our last subject. caller: all the big banks -- are we on or not? ok. clinton has got their hands in the finance is this their and they made millions from that budget. that is why i'm voting for bernie. i think he will straighten this mess of. taking money from big banks, how will you get justice if you do not have someone come in there and do something real? guest: i understand the point he is making.

great part of bernie sanders appeal is that he will be a lot tougher. endlessly in on these financial organizations. -- and less lenient on these financial organizations. good morning, america. i have a problem with giving the banks the opportunity to donate banks where they see that. all around me in williamsburg, the political class and the state and federal level all belong to the boards, like the boys and girls club, the state the association and the state teachers association and i see big chunks of change showing up from the state and charities, and see the for professional services

given to board members who happen to be professional appointees. i see a lot of unaccounted for outcomes. there are no outcomes they are aware of. everybody is to believe these folks are doing the work they say they are doing. the closeness of the classes is one of the issues in these things. it becomes a lot easier for people to strike the deals when they become familiar with the people sitting across the table. that is a consistent argument. host: republican line, pennsylvania. caller: how are you doing today? this looks to me like plain old

distortion or you demonize the banks. ofm not necessarily in favor what the banks do but there has been an ongoing process of demonizing the banks and then issuing big penalties and the problems were caused by the federal government themselves by forcing the banks to make these laws. then you go tell them you will get a $10 billion penalty and then you give it to our preferred groups out here who you minimize it. this is distortion, plain and simple. guest: even if he did not specifically mention it, the investment act requires tanks to make loans to people in the sort of community they live in, even if ordinarily they would not in

financials. it is one of the controversial aspects of the financial downturn when it happened in 2008. a lot of ink is spilled both ways and whether or not that is a factor in it, that was one of the angst. also, i would not go as far to say we should hang people for this, but one of the things about the case is the government encouraged bank of america to acquire two of the entities to ,cquire financial liabilities countrywide in merrill lynch. during the gray -- during the crisis, they failed and they would cease to exist and create a serious problem for financial recovery. the government turned around and charged for the violations that occurred. some of the violations were also ,he ones by bank of america

also completely clean, but most were these other two and these. purchased the liabilities as well as the assets. there was essentially -- who else would they charge? it is one of the ironic things about the settlement and the financial crisis in the way the government responded to it. bank of america, other big banks involved? thet: this was in settlement government did with j.p. morgan chase. once i was into that, details of the plea agreement were noticeably dissimilar to -- from the two i discussed here. the question is whether they will do this heading forward. christiee of chris when he was an attorney in new thing, doing a similar

and getting them to base the in ethics,irmanship ironically. there you go. from jacksonville, florida, you are next. republican line. caller: i just wanted to say they rely in the government to pay for a lot of these programs. the banks saying is are paying catholic charities and people who need help and it does not come from the government. it is coming from the bank. why do we call it an obama slush fund? guest: it is his administration and his justice department. the officials he put in charge of the justice department to arrange this. something made by the justice department to others.

as of these are worthy charities and they are doing good work. i try to talk to the justice of artman to get them to do that and i expected they would make that argument. we doing good work with the. intervieweclined my request. why not say this if that is how they feel #art of the factor is they are skirting official rules with this and allowing the justice department to pull the money around. if you think that is fine now, here's is the question. would you become full with a different administration also saying we can circumvent the rules if we want to and direct money to places we think it ought to go? woulds the questionnaire you become a with president ted cruz or donald trump saying, i do not care if the money is supposed to go to that, i want to have it go to these places. that is why we have the rules in the first place.

host: are there defenders? guest: in the congressional hearings, yes. basically making the same argument the gentleman from jack built it, which is a bank did wrong and these organizations are doing well, what is the problem here? it is a fair point to make but it is circumventing the rules. why not just the more open about that if that is how they feel about it in the case of the government? host: a viewer on twitter says what do republicans do? they wanted to go to the treasury department simply so it could go to the normal appropriations process. the argument the congressman made, look, if there is something wrong with making donations to , it can be done as part of the appropriations process. it is part of the rules and the bounds of powers argument.

host: james is next, wilmington, delaware. democrats line. fund, in myhe slush opinion, every state has a slush fund. what is the big deal? the money goes to the banks. in my opinion, it should not go to the banks. guest: it comes from the banks, but anyway. ok, it comes from the bank then. being appropriate for different things, that is fine if they use it for what they are supposed to use it for instead of buying and selling more guns or whatever they're doing with the money. it should be divided individually to each state and let the state decide what to do with it. if the state keeps control of it in the state treasury, that is fine. the money is drawing interest there. but the federal government, i do not know if that is such a wise

idea. who knows what they will do with it. the problem with diverting it to the states is this is the money the federal department acquired. a congressman could put it into block grants and set it to states if they chose. write your congressman and tell them to do that i guess. host: los angeles, california, democrats line. good morning. i complained about the situation with the banks over a year ago. i got a response in the white house. they did nothing about it. is gettingn valley in on the property in the middle class black community, under president obama. no one is saying anything. i do not understand how this could happen underneath a black

resident. guest: regarding the situation with silicon valley, i am not certain what that is. i have not heard about it. is this practice only going to be regulated with big banks or can it be done with ?ther entities as well guest: the original memo i found i laid out how to do this would actually -- actually referred to prosecutions involving waste in that type of stuff. the idea that you could take some of the funds in the settlement for that. basically, the government took the rationale from the environmental crimes and applied it to the financial rod activity. it could he basically done to any type of settlement the government engages in. host: florida, republican line,

linda, your next. go ahead. our government is so big that the right does not know what the left is doing here it and it is very secretive. i want to know why some of the money cannot pay down the national debt. they just keep borrowing the money and raising the debt ceiling when they have all this money and they could just pay off some of it. i will hang up now and listen. thank you. guest: that is part of the argument the congressman was making was that we should be going to the treasury department and being used for those types of concerns, where could be done. obviously by diverting it this way, it cannot be used for that. it is nowhere near enough to retire the national debt, but for that purpose, yes. out: i'm interested to find

what your reaction was when you publish this story. what have you and since publishing this? the interesting thing is a lot of the stuff is not that the grit. google is most of the information -- most of the information came from publicly available sources. oris just not commonly known widely out there. it is kind of a tangled to get into and figure out. i had some serious problems together and it took a couple of weeks to get the information. trying to figure out a way to present it that is comprehensible. that is part of the issue with this type of activity to most of it is not really that the grit. it is just hard to your out because you have to delve into the details in the minutia of it. host: did you get any direct

response from the justice department on this? guest: neither one of them contacted me. do not their response is feel the fire or bring more attention to this. host: frank in new york, democrats line. you are on with sean higgins of the washington examiner. caller: good morning. hello? say thatnt to everybody is blaming obama was going on way before obama got into office. the lady that spoke before, the money is supposed to be going to lowering the debt. it is not going there because politics today is big money. is big money. [indiscernible] host: did not mean to cut you

off. onlyoint, is this practice this administration or i have other administrations done this? guest: as far as this particular maneuver, yes, i believe something the obama administration came up with. i do nothing previous administrations have done it. i'm not aware of prior incidences. it is possible that it has happened here i would not pass -- put it past officials but onically, there are limits just what executive agency can do on its own. one of the things about this administration is a are constantly pushing the envelope in terms of what its powers are regarding executive action and executive authority. they have made it a habit of reinterpreting old rules and pushing novel legal theories. i covered labor employment issues and national labor

relations board is pushing an expanded definition where one employer is responsible for workforce law and violations because they are connected. previously, they had to have direct control over the workers. now there are expanding the definition. -- is used one of the things the administration has done is decided it will just push the limits of executive authority. again, that is fine if you are sympathetic to the administration and its goals. as i pointed out earlier, the problem with this type of activity is they create precedents that could be used by subsequent administrations. he will only be president for about another year or is no.

a new administration will take over, maybe one that is not a sympathetic to you and your goals. they may decide to use the discretion in entirely different ways. that is the question people need to ask. host: illinois, teresa is up next. sean higgins of the washington examiner. go ahead. support poor people? it sounds like that is what the money is going for. it sounds a people have lost homes. ,epublicans with the sequester that has put off so much needed funds in the banks are so greeted they could not care less about how they decimated the economy. with the help of wall street. support --nse to the this reporter's's characterization of obama's slush fund. it sounds like he is benefiting.

let's not forget, millions of people lost due to foreclosure. [indiscernible] banks and wall street profited through this behavior and now we have a congress -- all americans can't -- have gone through this because of the banks recklessness and greet. it sounds like a good use of money for a change and because republicans hold the purse money, obamae recognizes this and it is a way to help those people. thank you. again, that was the basic argument made by democrats when the committees held hearings on this. again, it's a reasonable position to make on its own terms. i would make the argument that it is also an expansion of executive authority beyond what it is capable of doing and if you are fine with obama being able to do this, are you fine with any other administration being able to do the same in? iat is the sort of question

raised and i pointed out previously. ohio, patrick, good morning, democrats line. caller: i did not catch all of the earlier discussion but are some of these agreements supervised by courts or federal judges? guest: they have independent monitors agreed to by the bank and federal prosecutors, that is my understanding. host: massachusetts, lou, independent line. caller: a couple of questions for you. the first was tax wise. for the sake of argument, it is -- if it is $109 penalty, is the penalty tax deductible from the operation's viewpoint and conversely, if it is a $60 is the contribution,

contribution tax deductible? if it is an let's say the 50% tax bracket, then the actual tax cost them -- i mean the 25tribution costs them million, the penalty would have been 25 million if it were not tax-deductible. that is actually a good question. i did not look into whether these groups are also tacked -- tax deductible. it would seem odd if the administration would allow them to also be tax-deductible in addition to everything else. aey are already getting substantial benefit from the fact that they are getting two dollars off the overall penalty they have to pay the government for every dollar they donate. if they are tax-deductible -- i honestly do not think to look into that and i'm glad you raised the question. host: when it comes to the donation, the recipient,

financial institutions. elaborate on this. $15 million in donations plus, that turns into $38 million, plus, when it comes to legal assistance, it is $29 million in donations. that turns into $68 million. and credit amount. counsel agencies, $30 million in donations, that turns into $31 million plus. is money being taken off the top of financial penalties. if you thought it was great the government was having all these from theof dollars banks, understand they are also allowing them to get a lot of that any taken away through the donations. in the figures you referred to there, those are from the monitor's report on the bank of america settlement, and this is the one that came out in november. i believe the next one is coming out in february. those are figures based on the ones you just quoted, those are

from the middle of last year, i think august. the numbers are probably significantly higher. they just have not been reported yet. joe inet's hear from lewis, colorado. republican line. good morning. caller: good morning. i have a few questions. wills why is it the banks not make you whole? hello? you know, when you get into a civil situation and you are sued, we have to make that person hole and put them back the way they were. -- whyld the banks wouldn't the banks be required to pay back to the victims? is, why is itone a technicality can make a lie of truth? guest: they were required to write down substantial -- the bulk of the agreement was , thesely writing down

are the troubled loans that came out. they were in that sense required to do that. i'm talking about one part carved out, not the entirety of the deal. it is a relatively small part of it in terms of the overall amount. charles, connecticut. good morning. go ahead. independent line. caller: good morning. i have one question and a quickie. my first question is is there a time frame for the bank of america distribution for the moneys? time goes on and the dollar gets cheaper. guest: they have goals they are supposed to meet in terms of when they are supposed to do it. i do not believe there is a penalty in terms of not making it. there is some leniency in terms of doing it. in any event, i have been told people expect to meet their

.inimum requirements at that point, they will be relieved of any potential penalty. as i noted earlier in the program, there is no actual cap on the donation amount they could get here they get two dollars off every dollar donated. there is a strong incentive for them to continue to do it. host: do you have a follow-up? caller: yes. does this cause any pain for bank of america? well, the overall penalty, we are talking billions of dollars. it is a significant chunk of change as far as they are concerned. the particular provision actually reduces that, so, is a fair the penalty thing for the government to have forced banks to do. they did illegally -- acquire these other companies that were responsible for a lot of what went out. they acquired the liabilities as well as the asset. that is recently got the way.

no one is arguing they should not have paid out these, or at least i am not, for the loans that went out. this questioning some of the details involved in the deals. new jersey, independent line. caller: i would like to know why we're fun doing faith based charity initiatives since 2004 and also funding this through the bank slush funds. what is the real answer? well, a lot of the nonprofit groups that received funds, the way they are done is they may be affiliated with religious groups, but they are nevertheless independent nonprofits. catholic charities have long had a tradition in keeping the charitable aspects separate from the rest of the organization. in a legally sufficient way. i am us doing most of the other people, if they are religiously oriented, follow similar models. a place online

that spells out specifically where the charities -- guest: yes. you can go to the housing and urban development website and find the list on there. findy be a little hard to because like most government websites, it is not very easy to navigate, but it is on there and it is heavily available. from michigan, independent line, margaret, go ahead. caller: one of the questions i had, talking about the testability stuff, that was part of my question. the other part i found out about, i was wondering can they make donations toward that as cash? for instance, bank of america, they foreclosed on the house and maybe not such a good area. could they may be have an accelerated rate and donate a house and then have that count toward their penalty, which in turn would get off their books,

donate something and getting better deduction and they should already? are you following my train of thought? guest: that scenario is possible. i'm not sure whether it happened. habitat for humanity is one of the organizations on the list. your scenario is possible. host: one more call. this is from texas, independent line. caller: hello. fundingshould minimize these politicians. because, for example, the second term of the clinton administration, it was not caused by the works of resident clinton nor mrs. clinton. was it was caused by me. guest: was caused by you?

i'm not quite sure i understand. i taught america how to grow gdp by 5% by putting people to work. to congressman jackson. c-span not putting this talk of mine with the congressman up? why are you hiding it? not directly related to what we're talking about. where do we go from here? will we see other types of deals? what do you look for going forward especially in light of what you found out? terms of this administration, i do not know of any subsequent deals. there is only another year left before it moves on. or, wins theinton nomination of the president the,

you just keep your eye out for the deals when they happen. the story is available on the washington examiner's website. sean higgins wrote this >> the island caucuses are just six days away and tonight on c-span we bring you democratic presidential candidate bernie sanders talking to united steelworkers in des moines. after that, katrina and global of the nation magazine on campaign 2016. like the 9:30 p.m., we join hillary clinton campaigning and marshalltown, iowa. next, democratic president candidate bernie sanders speaks at a local chapter of the united steelworkers in des moines, iowa. he talks about trade policy, expanding unions, and point out his differences with hillary clinton. this is 40 minutes.