Congressman Brian Fitzpatrick, along with representatives from across the country, have introduced a piece of legislation aimed at prohibiting companies from claiming deductions related to sexual harassment or assault legal settlements.
The Settlement Tax Deductions are Over for Predators Act (STOP Act), would prohibit companies from filing legal settlements, fines, fees, and expenses related to sexual assault and harassment cases as business expenses and claiming tax related deductions. In allowing businesses to currently write off these expenses, the American taxpayer is subsidizing the cost of resolving legal issues related to sexual misconduct. The STOP Act would prohibit deduction of these expenses in cases where the allegations are public or in cases involving a non-disclosure agreement.
“Whether it’s Hollywood, Congress or a corporate boardroom, there is no place for sexual abuse or harassment in the workplace. Just as I’m committed to protecting taxpayer dollars from being misused in Washington to cover up sexual misconduct allegations, I’m also committed to preventing private sector businesses from using tax breaks to sweep these heinous acts under the rug,” Fitzpatrick, a Republican, said in a statement. “This Congress must stand with the victims of this harassment and take swift action to root out those who would sexually harass any other person, regardless of position or title.”
Currently, companies can deduct as ordinary and necessary business expenses any legal settlements, fines, fees, and expenses related to sexual assault and sexual harassment cases. In allowing businesses to write off these expenses, the American taxpayer is effectively subsidizing the cost of resolving legal issues related to sexual misconduct.
The Tax Cuts and Jobs Act, which is being considered by the U.S. Senate, includes similar language.
The introduction of legislation into the House comes after Fitzpatrick’s call for an investigation last month into the millions of dollars paid for more than 250 settlements to federal employees.
In mid-November, the Washington Post reported that Congress had made 264 settlements with Capitol Hill employees for various infractions, including sexual harassment. The newspaper said the settlements totaled $17 million over 20 years.
Since the Washington Post’s reporting on the settlements, BuzzFeed News broke the story that Democratic Congressman John Conyers of Michigan settled a complaint using funds from his office budget in 2015. The former employee said she lost her job after not falling for his sexual advances. Conyers announced this week that he will leave congress.
More recently, Republican Congressman Blake Farenthold of Texas was sued by his former communications director for sexual harassment in 2014. The matter was settled with the congressman denying any wrongdoing and using $84,000 in public funds to settle the case.
“It’s unbelievable – and unacceptable – that elected officials have been using taxpayer dollars to cover up sexual harassment suits for years. As if the American people needed another example of politicians playing by a different set of rules, this is an affront to the hardworking taxpayers forced to foot the bill for these heinous actions,” said Fitzpatrick.