Friday, April 3, 2015

State budget bill lets attorney general spend $6 million of lawsuit settlement

Posted By on Fri, Apr 3, 2015 at 9:54 AM

click to enlarge LESLIE RUTLEDGE: Gets to direct $6 million of lawsuit settlement spending.
  • LESLIE RUTLEDGE: Gets to direct $6 million of lawsuit settlement spending.
The omnibus revenue bill provides for the spending of the $21.5 million recently paid the state as a result of a Dustin McDaniel-era class action lawsuit settlement against Standard and Poor's for inaccurate financial rating information.

As I've reported previoujsly, the state won $21.5 million, paid to the attorney general's office's consumer fund. But the 2013 legislature put a $1 million cap on that fund, in part to curb McDaniel's penchant for spreading it around like a gubernatorial discretionary spending account. Attorney General Leslie Rutledge's office has been telling me that a final workout of how that money would be allocated was still pending talks with legislative leaders.

Now it has become apparent that the money contributed to the bigger-than-expected surplus in the General Improvement Fund, which, as I noted earlier, produced $20 million worth of pork barreling for the legislature.

The 2015 state spending law requires excess from the attorney general's fund to be deposited in the state treasury from where it flows into the General Improvement Fund, or surplus. From SB 691:

(f) Any funds provided by the Arkansas Attorney General from the Attorney General Consumer Education and Enforcement Account, received by the State of Arkansas through Settlement agreements or as designated by court order.

But, the workout of the deal left several million to be spent first by the attorney general's office.

This is the workout provided to me by the House speaker's office on use of money paid into the attorney general's office.

AG Settlement Funding

Standard & Poor $21.5 million

Additional Settlements (Duncan Shoes) $4.2 million

Total: $25.7 million

Less: $1 Million Balance in Consumer Education and Enforcement Fund

Total Available for Distribution: $24,700,000


Less: Expenditures Paid Directly from AG's Office

Crime Victims Reparation Fund: $2.5 million

Criminal Justice Institute (Safe Schools & Missing Persons): $600,000

Prescription Drug Monitoring: $500,000

Volunteer Fire Department (Rural Services): $500,000 (As with legislative spending of his nature, it lends itself to political interests, given the hyperlocal nature of the departments.)

Career Education and Training (Dept. of Career Ed): $2 million

Total Distributed by AG's Office: $6.1 million

Estimated Amount Deposited into the General Improvement Fund: $18.6 million

Rutledge's spokesman Judd Deere said he had not seen these numbers previously when I'd inquired about the spending of the settlement money. He said Friday that top office officials still said the agreement was not final, but he said he expected a formal announcement soon.

From the plain language of the law, it appears the money has been obligated  and that the attorney general, despite a $1 million consumer fund limit, will be able to take credit for some of $6 million of the largesse to a variety of agencies.

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