The Justice Department has been empowered to use millions of dollars intended to go to victims of racial discrimination to enrich pressure groups with close White House ties. It’s another revelation of the means the Obama administration is using to divert funds to political cronies.

Information obtained by the public interest group Judicial Watch has exposed the details of this latest shady deal. On Dec. 28, the United States District Court for the Central District of California issued a consent order in the case of the United States v. Countrywide Financial Corporation et al. Under the terms of the settlement, Countrywide will pay $335 million to 200,000 blacks and Hispanics who took out home loans between 2004 and 2008. The Justice Department claims they were charged higher interest rates than white borrowers not because of poor credit scores but solely because of their race. The payment is intended to “compensate allegedly aggrieved persons for monetary and other damages they may have suffered.”

The aggrieved parties may not be the only beneficiaries of this substantial payout. According to the terms of the consent order, any money not distributed within two years will be given to “qualified organizations that provide services including credit and housing counseling, financial literacy and other related programs targeted at African-Americans and Hispanics.” This could include “non-profit community organizations that provide education, counseling and other assistance to low-income and minority borrowers … .”

The trick of course is defining what organizations are “qualified.” This matter is left to the Justice Department, which admits there are no particular guidelines governing who gets the handouts, and no follow-up as to how the money is actually being spent. This is a shocking lack of accountability, and the practice of giving awards to interest groups that weren’t parties to the original complaint is an affront to the American sense of justice.

Organizations beholden to the Democratic Party and to President Obama in particular stand to gain millions of dollars, which could then be shifted into use for political purposes. It’s another manifestation of the intentional, institutional corruption of American politics. The public has been forced to fund corporate handouts and sweetheart deals to political donors such as occurred in the Solyndra loan debacle. All these efforts are aimed at propping up those in power and seeking maximum benefits for their friends. It comes at the expense of working Americans, the economy and the legitimacy of the political system.

The Countrywide deal is the Justice Department’s latest contribution to reducing the United States to the status of a banana republic.