McDaniel makes parting gift of state money to ASU | Arkansas Blog

Thursday, December 25, 2014

McDaniel makes parting gift of state money to ASU

Posted By on Thu, Dec 25, 2014 at 6:34 AM

click to enlarge GRIP AND GRIN: McDaniel passes a check of state money to Dean Mixon. - ASU
  • ASU
  • GRIP AND GRIN: McDaniel passes a check of state money to Dean Mixon.
Attorney General Dustin McDaniel, in his final days in office, has doled out another bit of state money without appropriation to Arkansas State University, whose main campus is in his hometown of Jonesboro, for its engineering program.

For several years now, McDaniel has parceled off some money won by Arkansas in major class-action lawsuits (after private attorneys had their payday) to beneficiaries of his designation. Sometimes, he's gotten the use designated in a court-approved settlement. He thought an aging court precedent over spending of "cash funds" allowed this. Others thought the state's money — refunds of improperly gained money  — should be subject to the appropriation process.

In 2013, McDaniel got some legislative cover with a bill that gave the attorney general's office a slush fund of up to $1 million out of consumer protection division lawsuits (perhaps this is one of the tradeoffs  McDaniel got from Republican lawmakers in return for doing their bidding on abortion and gay rights cases). It allowed the money to be used to pay for the consumer protection division and for some cash expenditures, It allows the A.G. to designate money, for example, to a state agency with a "nexus," or connection, to the state agency beneficiary.

McDaniel, among others in the past, sent some money to a State Police foundation for a facility for state cops.

This week he announced a $100,000 grant from settlement of a lawsuit over pharmaceutical overcharges to the Arkansas State University College of Engineering. The apparent nexus as described in an ASU news release is that the money will go "ultimately" to benefit consumers. (Don't we argue that all state endeavors benefit consumers?)

Said Engineering Dean Paul Mixon:

"One of the initiatives that we have been looking into is the creation of a cyber-security area, either as a certificate program or as a master’s degree program," Mixon explained. "We believe this will be an excellent use of the funds, which also fulfills the intent of the gift. We know that internet fraud is a growing problem in the country, and pursuit of fraudulent business was a major part of the Attorney General's Office under Dustin McDaniel's leadership."

McDaniel explained his logic for directing the funds to A-State's College of Engineering.

"The law allows for reallocation of resources gained in legal actions for the people of Arkansas, and these funds were the result of consumer practices fines in our settlement with a major pharmaceutical firm,” McDaniel said. "All of the issues in this case involved engineers at some level, and I couldn’t think of a better way to help than to apply some of the recovered funds toward the education of more engineers here in the state of Arkansas.”

You can see from this that creative minds could likely find a consumer interest in any designation of the slush fund. A direct refund to the Medicaid program bilked would be a simpler solution.

A legislative act and some creative "nexus" definitions don't necessarily deal with the constitutional issues of direct spending by the attorney general on purposes of his choosing outside the legislative process.

But this may be the end of it. Incoming Attorney General Leslie Rutledge talked little about the robust class action lawsuits of recent years and more about deploying the state's law firm against the federal government.

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