For more than a decade, the U.S. Justice Department has engaged in the dubious practice of giving away the public’s money when it settles a criminal or civil case.  Occasionally, the Justice Department has made a settlement offer contingent on a company agreeing to donate money to a cause or charity—sometimes one chosen by the government.

Last year, for example, the Justice Department settled cases with Bank of America and Citigroup over allegedly unlawful mortgage lending practices. The settlements required the banks to pay money to legal aid organizations and other outside groups.  In another instance, the Gibson Guitar Corporation had to contribute to the National Fish and Wildlife Foundation to end a criminal investigation.

That practice is legally and ethically improper.  Any money that the government receives as part of a plea agreement or civil settlement belongs to the public and should be deposited into the federal treasury.

That money is not the Justice Department’s to give away.

A private lawyer cannot shortchange a client by giving part of a settlement to someone else.  The federal government’s lawyers also should not be able to hand out the public’s money as they see fit.

New Mexico is now on the brink of partially outlawing that practice.

House Bill 560 would revise the state’s criminal forfeiture laws.  One provision would prohibit this third-party payment practice in criminal cases.  Section 7 would add a section prohibiting a court from accepting a plea (or other) agreement in which a defendant “contributes or donates property to a person, charity or other organization in full or partial fulfillment of [its] responsibility[.]”

That provision would effectively keep the prosecution from requiring a defendant to make a payment to any third party, whether or not it is a charitable organization. It would also prevent a defendant from making any such payment as part of a plea agreement in order to escape full responsibility for a crime.

Put differently, that provision would keep the government from engaging in cronyism (by requiring a third-party payment to a person or organization chosen by the government) and would prevent a defendant from avoiding a just punishment (by paying off a charity).  That would be a valuable improvement to the criminal process.

The New Mexico bill may not completely solve this problem.  Why?  Well, sometimes the federal government enters into so-called “nonprosecution agreements”—agreements not to file charges against a company—if the business agrees to take several steps that the government finds necessary.  Sometimes, those actions include third-party payments.  The New Mexico bill would not seem to apply to nonprosecution agreements because no judge accepts a guilty plea in those cases because no charges are ever filed.

But the perfect should not be the enemy of the good.  Perhaps New Mexico prosecutors will not use nonprosecution agreements to evade the evident purpose of this law:  namely, to prevent government cronyism and special private deals.  In the meantime, Section 7 of House Bill 560 would improve the criminal justice system in the Land of Enchantment.