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Monday, June 30, 2008

The buck stops here

The $1 apparently knocked off the Capital One Bank settlement to allow then-Attorney General Mike Hatch to direct the proceeds speaks volumes.

For anyone who missed it, the AG's Office settled a lawsuit against the well-known credit card issuer in 2006 for an oddly precise $749,999. Had the case settled for a dollar more, the money would have gone into the general fund for the Legislature to distribute. Because it fell a hair's breadth beneath the $750,000 threshold, Hatch was able to direct the distribution of two-third of the proceeds to two nonprofits -- $250,000 to the Legal Aid Society (a good cause, but also a politically popular one) and $249,999 to the community action group ACORN (which reportedly later endorsed Hatch in his gubernatorial bid). The other third of the settlement went to the state to cover the costs of investigation.

As with most of the various controversies that have cropped up around the AG's Office over the last 15 months or so, I am not sure there is anything illegal here, but something stinks to high heaven. It reminds me of those individuals you'd sometimes hear about who would withdraw just a little bit less than $10,000 out of banks to avoid the transaction being reported to the IRS. Eventually, the federal government had to outlaw conduct engaged in to skirt the federal reporting requirement,

There is a certain amount of hubris in making the settlement $749,999 -- an amount that can have almost no logical basis but to avoid the $750,000 threshold -- instead of some other amount, such as $700,000, which could at least arguably have some basis in the case. Alternatively, a part of me now can't help wondering whether Capital One would have paid more -- such as $800,000 -- but the higher amount was not sought because that money could not have been distributed in a way politically advantageous to the AG.

Ordinarily, a buck chiseled off a settlement for political reasons would not cause me to lose much sleep. However, in this case, it's yet another indignity in a long string of them. Just once I would just like to see someone in a leadership role in the AG's Office stand up and take responsibility for any of the numerous issues that have cropped up. If you admit a problem is there, at least you can start to deal with it. However, I fear that such an acceptance of accountability will never come -- or, if it ever does, it will likely be a day late, and a dollar short.

4 comments:

Anonymous said...

Over at the Minnesota Independent there's a longer story detailing yesterday's hearing. My favorite part - though by no means the most damaging - concerns all of those AG-generated comments that popped up on this blog a while back. Remember that? Well, here's the MN Independent story on Rep. Simon's questioning of Nobles:

"Specifically, Simon spoke of an employee who said he had been approached by Hatch (who, after Hatch’s gubernatorial defeat and Swanson’s AG victory in the 2006 elections, was serving as Swanson’s deputy) to create a blog post favorable to Swanson, a post Hatch had already composed for him. The employee said he refused to do this, but that Hatch posted it under the employee’s name anyway—and then wanted the employee to falsify his vacation time to cover the period when the blog post was made. Simon surmised that Nobles believed this matter lay outside his purview because the vacation time in question belonged to the employee, not the State of Minnesota, and thus could not be seen as misusing public funds. Nobles then replied that Simon’s account “was an accurate reflection of the testimony under oath,” and one corroborated by other sources."

Mark Cohen, editor said...

Yeah -- Charly Shaw, the Legal Ledger reporter who was there, also has that in his original story. We ultimately went with a more abbreviated version for the Minnesota Lawyer site.

The electronic ballot-box stuffing (i.e. entry of positive comments under false pretenses) that was apparently attempted on this blog is troublesome to me on a couple of fronts. First of all, it was a frontal attack to the integrity of this blog, which we set up to benefit the entire Minnesota legal community. Secondly, it's a horrendous mistreament of employees to either force them to blog (and adding insult to injury, make them do it "on their own time") or to falsely blog under their name. As I said at the time, as far as I know, it's the first known case of involuntary blogitude. Ironically, Mr. Hatch not long ago told MinnPost that he makes it a policy not to provide comment to blogs -- apparently that policy only applies when he is commenting under his own name.

bobby b said...

I'm not fond of Hatch at all - but I can see the grain of possible truth in the proffered explanation. If the AG's target says no way, no how are we gonna pay any money to the State as a fine, ever, without a full-blown case and trial, you have a line in sand, and so you look for creative ways that allow both sides face while ending expensive investigation and litigation.

Of course, I'd jail Hatch just based on the asinine choices of charities. Might as well have chosen "MN DFL Party".

Mark Cohen, editor said...

You make a lot of factual suppositions with your comment, but if all the facts you posit were actually shown to exist, I would concur with your conclusion.

As far as ACORN goes, I have no real opinion one way or the other if that was a good cause.