Stop Settlement Slush Funds Act of 2026

The Stop Settlement Slush Funds Act of 2026 restricts federal agencies from entering into settlement agreements that require payments to third parties unless those funds directly remedy actual harm or compensate for services rendered. This law prohibits officials from directing settlement money to entities other than the United States for purposes such as slush funds or unrelated projects. To ensure compliance, the bill mandates annual reports to the Congressional Budget Office detailing the distribution of settlement funds and requires federal Inspectors General to publicly report any violations to congressional committees. These reporting requirements are set to expire seven years after the bill is enacted.