Bank of America was able to wipe about $225 million off its record $16.6 billion Justice Department mortgage fraud settlement by making donations to nonprofit and legal groups approved by the Obama administration.
But the bank only had to make $100 million in donations to do that, thanks to little-known provisions in the settlement, included at the Obama administration's insistence.
Groups receiving the money include liberal organizations such as Hispanic civil rights group the National Council of La Raza ($1.5 million), the National Urban League ($1.1 million) and the Neighborhood Assistance Corporation of America ($750,000). Another $4.3 million went to the Local Initiatives Support Corporation, a nonprofit where former Clinton administration Treasury Secretary Robert Rubin is chairman.
The bank disclosed all of the donations made and credit received in a document published online Wednesday. The more than 2-for-1 credit was a key part of the deal the Justice Department offered to get the bank to settle. For every $1 the bank has given the nonprofits, it has claimed at least $2 off the settlement, sometimes more. The Obama administration included the provision to ensure that some of the settlement funds would go to friendly liberal groups, bypassing the normal congressional appropriations process.