More legislative control urged over spending of state lawsuit settlement funds

(Getty Images)

LINCOLN — A state senator is seeking more legislative control over how legal settlement funds collected by the State of Nebraska are spent.

Danielle Conrad introduces legislation before a legislative committee

State Sen. Danielle Conrad of Lincoln introduces legislation that would change transparency for public records requests, including policy body cameras, on Thursday, March 2, 2023, in Lincoln, Neb. (Zach Wendling/Nebraska Examiner)

State Sen. Danielle Conrad of Lincoln testified Thursday that a state settlement “cash fund” has grown to $28.1 million and said the State Legislature, which appropriates state funds, should decide how to use the money, not the state’s top lawyer, the Nebraska attorney general.

“I see this proposal as a classic good-government measure,” Conrad told the Legislature’s Executive Board, adding that it was not aimed at any particular attorney general.

She said that her Legislative Bill 696 would restore the Legislature’s power to allocate the money that was taken away by a 2011 law.

Shouldn’t go in ‘slush funds’

The funds, Conrad said, should be directed toward the “harm” that prompted the lawsuits, rather than paying for salaries of lawyers and other staff, which should be paid by state general funds.

Nebraska Attorney General Mike Hilgers (Courtesy of the Nebraska Attorney General’s Office)

She said those monies shouldn’t go into a “slush fund.”

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But Attorney General Mike Hilgers told lawmakers that Conrad’s LB 696 was largely unnecessary.

He said that his office has the right to use cash funds for the public good and that the money has been used for personnel needs and its customer protection division. But, he added, the Legislature can, and has, tapped the fund for other purposes in the past.

Past controversy over funds

Controversy has arisen over use of state funds by the Attorney General’s Office in the past.

In 2011, then-Attorney General Jon Bruning, who was then running for U.S. Senate, granted $100,000 to a group formed by the Nebraska Farm Bureau, called “We Support Agriculture.”

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The grant raised eyebrows because it came from an environmental protection fund administered by the AG’s Office and was financed via fines levied for violations of environmental laws.

The state collects funds when it wins a lawsuit, and Nebraska has been very active in multi-state lawsuits in recent years.

Attack on Biden debt-relief plan

The Attorney General’s Office has joined lawsuits attacking practices of the pharmaceutical companies, retailers and social media corporations, and, more recently, joined legal action opposing President Joe Biden’s student-debt relief plan and the federal government’s “Waters of the United States” rule.

Some of the settlement funds are placed in a trust fund, and their use is dictated by the terms of the lawsuit settlement. Examples would include the tobacco settlement funds, which must be directed toward health-related uses, and the opioid settlement fund, which has a committee to decide how to use the money to prevent or treat addictions.

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But a second cash settlement fund doesn’t have restrictions.

$12 million more last year

Conrad applauded former Attorney General Doug Peterson for successfully increasing such multi-state litigation and settlement funds. An additional $12 million in settlement funds came in last year. The senator added that she expected Hilgers to continue aggressively pursuing such litigation.

But, she said, such funds should not be used to “prop up” a particular office.

The Executive Board took no action on LB 696 after the public hearing.

The post More legislative control urged over spending of state lawsuit settlement funds appeared first on Nebraska Examiner.

As reported by Nebraska Examiner

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