Justice Dept. approved diverting funds in Bank of America settlement

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.

Read on.

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