Hood tries to circumvent Legislature to spend funds on financial literacy program

January 12, 2018

 

 

 

 

A recent financial literacy initiative announced in September by Attorney General Jim Hood and state Treasurer Lynn Fitch was done without the required permission of the Legislature, according to documents obtained by the Mississippi Independent.

 

The program, known as Making Sense of Your Dollars and ₵ents, is funded by legal settlements with three credit rating agencies and two financial institutions for violations of consumer protection laws.

 

Fitch and Hood announced the creation of the $2.5 million program after the chairmen of both the House and Senate appropriations committees told the Department of Finance and Administration that a decision to authorize spending the settlement money would have to be made during the Legislature's session. According to the treasurer's office, they were given assurances from the AG's office that the funds could be used for the project. 

 

The program, says Mississippi Justice Institute president Shadrack White, is unconstitutional because the money was appropriated without the Legislature's approval. 

 

"Mississippi’s Supreme Court sounded the alarm on using settlement money for pet programs when they ruled on the Partnership case years ago," White said. "Either AG Hood chose to ignore those warnings or simply launched his program without bothering to see if he had the power to create his program. And either way it’s wrong.

 

"The bottom line is that, regardless of how you feel about financial literacy in Mississippi, our politicians have to follow the law when it comes to spending money. There are too many instances of politicians or agencies in Jackson simply ignoring the law because they can get away with it."

 

 

Timeline

Oct 19, 2016 — Hood announces settlements with the nation's three credit reporting agencies — Equifax, TransUnion and Experian — that earn the state $7.175 million. Hood sues the trio to end what his office considers "deceptive business practices."

 

 

 

 

 

 

 

According to Fitch's office, the treasurer was approached by the AG to use the settlement funds to finance an economic education initiative. Proposals were later filed by Mississippi State University and the Mississippi Center for Economic Education to provide teachers with training to educate students on financial literacy.

 

June 28, 2017 — Hood's office sends a request to the Department of Finance and Administration to establish a new fund for the financial literacy initiative with the settlement money. The AG's office says in the letter that it no longer has the ability to implement the requirements of court-ordered agreements since its special fund spending authority was taken away by the Legislature.

 

 

 

 

August 9 — Laura Jackson, the director of the Department of Finance and Administration, emailed Fitch's chief of staff, Michelle Williams. Jackson told Marston that she had no problem with making the settlement money available if legislative leaders authorized it. She also said she had reservations about applying the settlement funds to the financial literacy program and that Gov. Phil Bryant told her to "stand firm."

 

Jackson also tells Williams — barring approval from the appropriations chairmen in the Legislature — that the DFA could place the settlement funds in the AG's budgeted fund and that the money could be spent that way.

 

 

September 19 — In a letter signed by state Sen. Eugene "Buck" Clarke and state Rep. John Read, the chairmen of the Legislature's appropriations committees, the two legislators tell the DFA that they will address the special funds issue with the AG's request in the upcoming session.

 

September 22 — Hood and Fitch announce the Making Sense of Your Dollars and ₵ents initiative at the Mississippi Council for Economic Education Forum on American Enterprise. The news release says the program will utilize $2.5 million over two years in settlements from legal action by the AG's office against the three credit ratings bureaus and two nationwide banks.

 

In an email later that afternoon, Jackson tells Robert Kersh, the director of administration in the attorney general's office, that the DFA won't be creating the fund and that the AG's office needs to deposit the settlement funds in the budgeted special fund so it can be accounted for in the state treasury.

 

 

September 29 — Williams tells several recipients that the funding issue is not resolved and that Hood advised Fitch not to spend any of the money until it can be figured out. According to the treasurer's office, the program was suspended pending approval of the Legislature.

 This story was changed to reflect the timeline and the treasurer's role in procuring the settlement funds

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MississippiMatters is a news blog of cooperative writers, videographers and podcasters published by  The Well Writers Guild, a 501c3 devoted to mentoring Mississippi writers and to addressing uncovered or under-covered topics.  MississippiMatters focuses on offering creative "takes" on our state's culture, ideas, events and more.