More Bad News for AG Swanson

The Legislative Audit Commission met yesterday to discuss Legislative Auditor Jim Noble's look into the Attorney Generals office. What started as a look into employer/employee relations has turned into something deeper and potentially more serious for both AG Swanson and former AG Mike Hatch. While the initial reporting on the audit was quick to claim vindication for AG Swanson (which the report really didn't do) because the employer/employee relations weren't in the LA's perview, the report did uncover financial misdealings which ARE under the LA's perview.

Attorney General Lori Swanson and her predecessor, Mike Hatch, have come under question for their role in a court settlement that diverted money to a nonprofit whose political wing endorsed Hatch's bid for governor.

The Minnesota Independent reports on even larger allegations raised.

Workers in the Minnesota Attorney General’s office have alleged under oath that current AG Lori Swanson and her predecessor, Mike Hatch, may have illegally diverted federal monies meant to investigate Medicaid fraud, and that a legal settlement negotiated by Swanson and Hatch financially benefited a nonprofit organization that later endorsed Hatch’s campaign for governor.

Diversion of funds to private political entities by the office that is supposed to protect the state from that...lovely. What is even more lovely is that settlement in question was specifically negotiated to keep the money out of state coffers and routed to an organization that was friendly to then AG Hatch!

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.

Emphasis mine. The AG's office - led by then AG Hatch and his chief lieutenant Swanson - used the power of his office to reward political cronies. It confirms what many had suspected about the former AG.

Further investigations into the misuse of federal funds and the Capital One settlement will be part of the next normal annual review of the AG's office, scheduled for early next year. In the meantime, LA Nobles suggested that the legislature provide civil service protection to the AG office employees in lieu of the unionization. This seems like a common sense compromise to a very sticky situation.