FOR IMMEDIATE RELEASE: Tuesday, March 24, 2015
MEDIA CONTACT: Caitlin Conant (Portman) | 202-224-5190
John LaBombard (McCaskill) | 202-228-6263
Washington, D.C. – Today, U.S. Senators Rob Portman (R-Ohio) and Claire McCaskill (D-Mo.), the Chairman and Ranking Member of the U.S. Senate Permanent Subcommittee on Investigations (PSI), initiated an inquiry into the federal government’s apparent failure to collect untold billions of dollars owed to taxpayers, investors, and others injured by wrongdoing. Portman and McCaskill sent letters to six federal agencies with major enforcement arms to learn more about the extent and causes of unpaid liabilities owed by convicted white-collar criminals and others.
“The problem of uncollected judgments is an issue of fiscal responsibility and basic fairness,” said Portman, who chairs the Senate’s principal investigative body. “Our inquiry seeks to uncover the extent of the problem and better understand why the federal government appears to be collecting a diminishing share of money owed to taxpayers, consumers, and investors injured by fraud and other wrongdoing.”
“The federal government’s apparent failure to collect on money that’s rightfully owed to consumers, taxpayers, and the U.S. Treasury is troubling,” said McCaskill, a former Missouri State Auditor and the top Democrat on the Permanent Subcommittee on Investigations. “We’ve got to shine a light on those processes to get at the full scope of the problem.”
Much like unpaid taxes, the problem of uncollected judgments is a significant fiscal loss for the U.S. Treasury, but it also comes at a cost to victims who are denied compensation and restitution. There is limited reporting of the amount of judgments that remains uncollected across the government, but the numbers that are publicly available are striking. For example, the Department of Justice alone reports $97 billion in unpaid judgments. The rate of collections also appears to be declining across a number of agencies. The Department of Justice’s judgment collection rate has been declining in recent years — from 28% in 2004 to 22% in 2013. The Securities and Exchange Commission has experience a similar trend — with its collection rate falling from 63% in 2007–2010 to 42% in 2010–2013.
In a series of articles in September 2014, the Wall Street Journal examined the extent of uncollected judgments and the ability of some convicted white-collar criminals to evade their financial obligations while living lavish lifestyles.
The text of the PSI letters can be found here.