Elizabeth Warren Senate Floor 2014

Sen. Elizabeth Warren, D-Mass., talks on the Senate floor about legislation she's co-sponsored which would require federal agencies which settle with companies amid investigations into wrongdoing to make public all the details of a settlement, not just the dollar figure. She introduced the Truth in Settlements Act along with Sen. Tom Coburn, R-Ok., on Wednesday, Jan. 8, 2014. (Photo taken from C-Span)

WASHINGTON — With the aim of increasing the transparency around settlements reached with companies found to be in violation of federal laws, U.S. Sen. Elizabeth Warren, D-Mass., has teamed up with U.S. Sen. Tom Coburn, an Oklahoma Republican, to push a new bill.

The Truth in Settlements Act, as introduced by the bipartisan duo on Wednesday, comes amid steady concern in Washington that companies which settle with the government amid investigations into wrongdoing often cut deals to avoid more significant penalties. The legislation would require the federal agencies they settle with to make public all the details of a settlement, not just the dollar figure of estimated value often touted in press releases announcing such settlements.

"When government agencies reach settlements with companies that break the law, they should disclose the terms of those deals to the public," Warren said. "Anytime an agency decides that an enforcement action is needed, but it is not willing to go to court, that agency should be willing to disclose the key terms and conditions of the agreement. Increased transparency will shut down backroom deal-making and ensure that Congress, citizens and watchdog groups can hold regulatory agencies accountable for strong and effective enforcement that benefits the public interest."

Since entering the Senate and taking her place on the Senate Banking committee, Warren has criticized the Securities and Exchange Commission for settling with large financial institutions rather than taking them to court, despite their purported level of malfeasance.

In her first Senate Banking Committee hearing nearly a year ago, Warren bluntly asked "When did you last take... a large financial institution, a Wall Street bank, to trial?"

After much conjecture and discussion, the answer from SEC regulators was that no banks have actually been taken to trial despite the wrongdoings that led to the financial collapse of 2008. They routinely argue that the settlement, rather than a lengthy court case, is in the best interests of the American people. But if the bill passes, next time the SEC settles with a company, such as JPMorgan Chase & Co., details would need to be made public.

Warren’s press conference came one day after U.S. Treasury officials announced JPMorgan would pay more than $2.5 billion for ignoring obvious warning signs of Bernard Madoff’s massive Ponzi scheme, according to The Associated Press.

According to Treasury Department, the bank withdrew $300 million of its own money from Madoff feeder funds, but never closed the account or alerted U.S. officials about suspicions.

The agreement allows the bank to avoid criminal charges.

"It is important we hold our regulators accountable and this bill is all about accountability. If you're confident that your settlements are in the best interests of the public- fine. Hang it out there for the American people to decide if its adequate," Warren said in a conference call with reporters Wednesday afternoon. "Regulators are charged with holding companies accountable and the public should be able to hold them accountable."

While the Senate debates the bipartisan budget plan, Sen. Tom Coburn, R-Okla., a longtime deficit hawk, outlines his annual âWastebook,â which points a critical finger at billions of dollars in questionable government spending, Tuesday, Dec. 17, 2013, during a news conference on Capitol Hill in Washington. (AP Photo/J. Scott Applewhite)

Coburn, for his part in the bill, said that taxpayers deserve better than having federal agencies settle without clarifying exactly what the terms of such a settlement are.

"Since agencies are not currently required to disclose the financial structure of government settlements, too often the true value of those settlements is not known because often companies are allowed to deduct part of the payment," Coburn said in a statement. "Our bill gives taxpayers the transparency tools they need to access real information and numbers regarding enforcement settlements."

The Truth in Settlements Act would require that all public statements made in regards to such settlements includes an explanation of how those settlements are categorized for tax purposes and whether payments may be offset by "credits" for particular conduct. Additionally, companies would be required to file all details of settlements with the SEC and to post the agreements on their own websites.

To address inevitable claims that such disclosures would violate confidentiality, the bill would require government agencies to disclose basic information about the number of settlements they deem confidential each year and directs the Government Accountability Office (GAO) to conduct a study of confidentiality procedures and to provide additional recommendations for increasing transparency.