Stop Settlement Slush Funds Act of 2023

HR 788, the Stop Settlement Slush Funds Act of 2023, prohibits federal agencies from entering settlement agreements that direct payments to third parties (other than the U.S. government) unless the payment directly reimburses actual harm caused by the defendant or covers services related to the case. It requires agencies to report annually on such settlements to Congress and mandates annual audits by agency Inspectors General to ensure compliance. The law applies to all federal agencies entering settlements after its enactment and includes a 7-year sunset provision. This directly affects how federal agencies handle settlements in civil cases, limiting their ability to divert settlement funds to external entities without clear, direct justification.