AG Hood’s Financial Literacy Program Unconstitutional

Op-ed printed in The Clarion Ledger Sunday December 17th
 
By Shadrack White
 
For years, the Obama administration’s Justice Department would sue companies, reach a settlement agreement with those companies and then use these settlements to create slush funds for left-leaning groups. In doing so they secretly discriminated against organizations with different political views. Recently released internal emails show Obama administration officials discussed how settlement agreements should be drafted so that the funds could never be used for “conservative property-rights free legal services” — heaven forbid!
 
Unfortunately, Mississippi is also using settlement shakedowns aimed at funneling money to pet projects. Several weeks ago, the Clarion Ledger reported that Mississippi Attorney General Jim Hood obtained $2.5 million in a settlement with banks and credit rating bureaus and that money would be spent on a financial literacy program for Mississippians. The move is unconstitutional, and even if it weren’t, it’s bad policy.
 
The AG’s plan is bad policy because it invites unilateral control of spending by one person or a small group. Taxpayers deserve to have spending done in the open by the people that we elect to do that job, the Legislature.
 
“But Shadrack, isn’t the money going to a good cause?” you might ask. There are many good causes — public education, transportation, health care — competing for state funding. This is all the more reason to make sure that money is not being appropriated in the dark by bureaucrats but rather in light of day where it can be weighed against alternative ways to spend the money.
 
If you are inclined to disagree, think of this: what if the AG were a conservative who sued and obtained a settlement from Planned Parenthood and then set up a fund that paid for a pro-life crisis pregnancy center? I might like that idea, but my guess is others would then suddenly see the value in a different process for appropriating the money.
 
The rule of law is about setting up processes that function the same way every time — fair rules for everyone — regardless of whether you happen to like the person in charge and what they are doing. And, as required by the state constitution, this means any settlement money must be sent to the Legislature’s General Fund. Article 4 of the Mississippi Constitution indicates no branch other than the Legislature is given appropriating powers.
 
If it feels like you’ve heard this argument about settlements before, you have. In 1998, then-Attorney General Mike Moore filed a suit against and then reached a settlement with the big tobacco companies. The money from that settlement was used to fund a nonprofit established by Moore called The Partnership for a Healthy Mississippi. In 2005, Gov. Haley Barbour intervened in the AG’s tobacco suit and claimed the AG’s settlement illegally steered money away from the Legislature and to the Partnership.
 
The governor’s challenge went all the way to the Mississippi Supreme Court. The court stated that one thing was obvious: “(t)he Legislature holds the purse strings” and “the right of the Legislature to control the public treasury . . . is firmly and inexpugnably established in our political system.”
 
Of course, every case is different, and the AG seems to believe some loophole allows him to spend this current settlement money without legislative approval. But governing and spending by loophole is poor policy. Moreover, the tobacco settlement case shows the state Supreme Court would take a dim view of other elected officials circumventing the appropriations process. 
 
The Mississippi Supreme Court could clarify that these settlements are unconstitutional, but to do so they would have to wait for a case about this question to reach them. The Legislature and governor could also do this through a statute.
 
If they did, they would be following the lead of the Trump administration, which has now put a stop to the sue-and-settle tricks so prevalent under Obama. At the federal level, settlement money must now go directly into the federal budget and be properly appropriated by Congress. The U.S. Senate even has a bill to codify the Trump policy into law. No doubt, the federal budget process, as well as the state budget process, could use some improvement. But at least there is a constitutionally protected process in place. Elected officials here could follow the Trump administration and respect this process instead of determining for themselves how to spend money that is not theirs.

Shad White

Shad White is the Director of the Mississippi Justice Institute.