by Gongwer News Service
July 17, 2009

After months of what Attorney General Mike Cox calls “partisan attacks” on his office and what Democrats characterize as a push for more transparency in his spending practices, sparks flew when the sponsor of the bill to limit the attorney general’s spending practices and Mr. Cox faced off publicly at the House Judiciary Committee meeting.

Ever since early spring when word got out that Mr. Cox planned to use $500,000 from the state’s settlement with Countrywide Mortgage company to build parks in Grand Rapids, both chambers and especially Mark Brewer, the chair of the Democratic Party, have been pushing for spending limitations on the attorney general’s office and bills that would require settlement money to go through the appropriations process.

Rep. Mark Meadows (D-East Lansing) said in April when he introduced HB 4977, which calls for the Department of Attorney General to deposit settlement money with the Department of Treasury unless a consumer group that’s part of a class-action lawsuit is supposed to be the direct recipient, that he was “shocked” to learn of Mr. Cox’s plans for parks when wronged consumers only received cash payments of $1,800 and Detroit and Detroit-area organizations got some money to fight home foreclosures.

Also under the bill, the money in the treasury would be subject to the appropriations process and the attorney general would have to report to the legislature on a quarterly basis how many lawsuits had been settled and how much money was brought in.

Things definitely heated up this past week when committee chair Meadows introduced a resolution to extend subpoena power to the committee, charging he needed the authority to get documents he had requested from Mr. Cox several times.

Mr. Cox’s office staff said they hand delivered the documents the chair requested on Tuesday, but Mr. Meadows said his staff found them slid under the door when they arrived to work Wednesday morning.

Although Mr. Meadows had gotten word no one would be there to testify, Mr. Cox arrived about halfway through Wednesday’s House Judiciary meeting, saying he felt he had to show up in person to defend his office.

Mr. Cox, a candidate for the Republican nomination for governor, said he acted no differently than any other attorney general before him. In fact, a partisan assault such as this has taken place before, only the last time it was against then Attorney General Jennifer Granholm by Republicans, and she defended her office’s right to a freedom to the separation of powers, just as Mr. Cox said he is doing now.

Senate Republicans, it seems, agree with Mr. Cox’s assessment.

When Senate Democrats this spring attempted to get the attorney general’s budget amended to include the provision that settlement dollars must be appropriated, majority Republicans called it a political stunt.

Mr. Cox told the committee that while people are losing jobs, leaving the state and losing their homes, the legislature remains focused “on undermining the power of the attorney general’s office.” He called the committee’s actions to entertain a bill that would take away some of his authority “misguided, even malevolent and a power grab.”

“This charade is an assault on the attorney general’s constitutional authority, not on mine, but on the office’s,” Mr. Cox said. “While I only have 18 months left in office, I have the obligation to defend the authority of the attorney general’s office to litigate on behalf of the citizens of the state. The constitution doesn’t allow one branch to overstep its boundaries and attempt to hold any authority over another branch.”

But Democratic Party chair Brewer, one of the loudest critics of Mr. Cox’s settlement fund spending practices, said the idea to build parks in Grand Rapids was motivated by political donations and that no one can disprove his charge because there is no accountability or disclosure in the attorney general’s decision making process.

“The public never knows who he consults with or how he makes decisions to spend,” Mr. Brewer said. “Are his decisions political? We simply don’t know because there is no disclosure.”

But Mr. Cox declared it wasn’t he who had political motivations, but the committee, a point he said was further proven by Mr. Brewer’s very presence at the committee, instead of a more neutral Democrat such as former Attorney General Frank Kelley.

“Perhaps it was to get a YouTube clip out of it,” Mr. Cox quipped.

Mr. Meadows responded that anyone who wants to can put in a comment card and testify, and that he suspects that the reason for the party chair’s appearance is that “Mr. Brewer is interested in anything Mr. Cox does.”

And while Mr. Kelley did not testify, he did supply the committee with a letter on the legislation in which he was largely against the bill, especially the reporting requirements, which he called “onerous.”

Mr. Cox asked if the legislation were sound, why wouldn’t Mr. Kelley, a Democrat, support it?

Mr. Cox described Mr. Kelley’s views as wholly against the bill; while Mr. Meadows said Mr. Kelley has shared with him that he is against the reporting requirements included in the legislation but not entirely unsupportive with some changes, which Mr. Meadows said he is willing to make.

Mr. Kelley was unavailable for comment directly, but in his letter he said the litigation in question constitutes such a small amount that misunderstandings could be worked out through communications between the attorney general and appropriate legislative committees.

While also speaking to the “particularly onerous” reporting requirements in the bill, Mr. Kelley wrote, “It is my view that the legislature’s interest in future settlements would not be aided by HB 4799.”

Getting back to the exchange between the attorney general and the committee chair, Mr. Cox said the committee has wasted precious resources with the months-long battle in defending his office’s constitutional right to separation of powers.

“Shame on you, Mr. Chairman, simply because you know better; shame on any of you on this committee who would go along with this for wasting my hard-working staff’s time,” Mr. Cox said, adding that what’s most egregious about the bill is that should it pass, it could rob residents of settlements because courts won’t agree to put money into the general fund when the state isn’t a party to a lawsuit.

For instance, Chief Deputy Attorney General Carol Isaacs has said if the House legislation were in effect when the tobacco settlements were handled, it would have prevented Michigan from joining with other states in the largest settlement in history on behalf of citizens and would prevent the state’s top lawyer from settling many other cases.

Ms. Isaacs said because the bill would direct the attorney general to only collect cash in settlements and because that cash would go to the state, many types of settlements that send goods or services to people who have been harmed would be prohibited. Further, she said, it isn’t always appropriate for the state to get money from settlements because it isn’t always the “wronged party.”

In the case of the tobacco settlement, it would have violated the bill because some of the money went into separate funds, she said.

Mr. Meadows said claims from the attorney general that he wouldn’t be able to settle cases for non-cash settlements or that courts wouldn’t direct money into the general fund are all “crap.”

“The office would still have broad authority,” he said.

He went on to say that “shame goes both ways.”

He said in his 27 years working with Ms. Granholm and Mr. Kelley in the attorney general’s office, he isn’t aware of any settlements that seem as questionable as those under Mr. Cox’s rein.

Besides, he said, the bottom line isn’t whether Mr. Cox did good works with the money and that the attorney general has done many great things in his tenure. The simple fact, he said, is that there should be a process for appropriations because one person shouldn’t have so much discretion over such a large amount of money.

As one legislator put it, Mr. Cox shouldn’t get to “play Santa Claus, deciding who’s been naughty and who’s been nice,” on who gets money and who doesn’t.

Mr. Cox answered criticism by saying that although he has some level of discretion, in cases where it is impossible to identify each person who has been wronged, his office tries to identify a cause to give the money to that would best address the issue.

For example, they donated money to a cancer institute when they won a health care lawsuit.

The chair said the bill is still open to negotiations, but so far he hasn’t gotten much cooperation from the attorney general’s office on crafting a better bill.

Instead, Mr. Meadows said, the message from Mr. Cox seemed to have been to dump the bill, not that he would work to make it better.

As for the Countrywide settlement that started it all, the money never went to any parks, according to Ms. Isaacs, who said it went to United Way in communities most affected by foreclosure, such as Detroit and Grand Rapids, and to foreclosure prevention workshops after going to people who lost their homes as a result of Countrywide’s mortgage practices.

But she added that because lawyers in the office found that parks enhance communities, it still wouldn’t have been a bad way to spend the money.

Mr. Meadows ended the meeting saying he still has a lot of unanswered questions and that’s where subpoena powers would come in useful. He plans to follow up with many more questions, he said, including finding out why Mr. Cox didn’t try to independently identify victims of Countrywide’s fraudulent practices instead of relying on the bank and then spending the rest of the money at his office’s discretion.

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