Attorney General Tim Griffin told state lawmakers on Wednesday that his office has determined his predecessor, Leslie Rutledge, spent more than $25 million in cash funds from lawsuit settlement fees in the current fiscal year, and that exceeds the $25 million limit that the Legislature set in state law.
Griffin said the attorney's general office spent about $11.1 million more in cash funds from settlement fees than state law allows in fiscal 2023 before he took office in January.
"I just learned that a few days ago," Griffin told the Joint Budget Committee's personnel subcommittee.
He said he has hired a certified public accountant, who is also an attorney, to oversee "our audit of everything that has been spent." Griffin said "we got $10 [million] back from [the state Department of Finance and Administration] because $10 million ... was opioid money that we had to get back because of legal restrictions" on the spending of that money.
"We are currently over [the $25 million spending limit in fiscal 2023] and we are trying to figure how we can get some money back that went out, so that we are no longer over, and that will help get us through the end of the fiscal year," Griffin said.
Rutledge said in a written statement that "During my tenure as Attorney General, money obtained from lawsuit settlements and then transferred to other state agencies as well as to the General Revenue for use by the General Assembly was completed in accordance with the law."
"Money from these lawsuit settlements was transferred to other state agencies to support law enforcement, veterans, internet safety and substance abuse programs," she said.
Griffin and Rutledge are both Republicans. Griffin, the state's former lieutenant governor, was sworn in as attorney general Jan. 10. Rutledge, the state's former attorney general, was sworn in as lieutenant governor Jan. 10. Both candidates announced their bids for the Republican nomination for governor before opting to run for other offices in the 2022 election.
In a letter dated Tuesday to the Legislative Budget Committee Co-Chairs Sen. Jonathan Dismang, R-Searcy, and Rep. Lane Jean, R-Magnolia, Griffin said Rutledge disbursed a total of $27.5 million in cash funds from settlement funds on Jan. 6 in clear violation of the $25 million limit in Act 54 of 2022.
Griffin wrote that this limitation on the spending of cash funds from settlement fees is relatively new in the law.
"It was first added to the Attorney General's appropriation (Act 47) during the Fiscal Session of 2020," Griffin wrote.
"That fiscal year, the Attorney General disbursed approximately $2.4 million in cash funds from settlement fees. The following fiscal year, the Attorney General disbursed approximately $12.4 million in cash funds from settlement fees."
He told lawmakers Wednesday that the attorney general's office has spent about $2 million of the cash funds from settlement fees "since I got there because we had to pay attorney fees in about that amount in a case that we were involved with."
He said there is $10 million in cash funds from Google settlement funds that were transferred from the attorney general's office to the state Department of Finance and Administration under Rutledge's administration.
"We are seeking to get enough of that back to get us legal [under $15 million] and have a little bit of a buffer to get us through the end of June in case we get another $2 million bill for whatever, attorney fees," Griffin said.
Afterward, finance department spokesman Scott Hardin said the $10 million in Google settlement funds "remains in the holding fund."
"There has not been any activity since it was initially transferred from the AG's Office (and then directed to the holding fund)," he said in a written statement. "We are awaiting direction from the AG's office."
Griffin told the personnel subcommittee he is proposing limiting the attorney general office's appropriation for spending of cash funds on settlement fees to $15 million in fiscal 2024.
He said Rutledge's administration spent almost $9 million in ads on public service announcements out of lawsuit settlement fees, but "I have a public service announcement budget of zero."
Griffin said his office has approved two radio ads because the previous administration contracted for radio ads through the end of this fiscal year on June 30.
"I do not want my name, likeness and image on them," he said, so he reached out to the Arkansas State Police for suggestions for messages for the radio ads. He said one of the radio ads deals with the consequences of fleeing from police and the other deals with the dangers of not checking what children are doing on the phone.
"You may hear those. That is not money I committed to," Griffin said.
Sen. Kim Hammer, R-Benton, asked whether Griffin would pursue any legal action against Rutledge over Griffin's contention that Rutledge exceeded spending limits or "are you just saying it is just poor money management."
In response, Griffin said "this is ultimately something that is in your wheelhouse."
Hammer questioned what are the repercussions of exceeding state spending limits.
Griffin pointed out that "this would not be subject to an illegal exaction suit by a taxpayer."
"If we get some money back, we'll be under the cap, so we are working to remedy that ASAP," he said.
Hammer questioned whether there is a penalty for exceeding appropriation limits or whether Rutledge gets called on the carpet over the matter.
In response, Kevin Anderson, assistant director of Fiscal Division at the Bureau of Legislative Research, said that "this is a pretty complicated issue." He said he doesn't want to guess about the answer to Hammer's question without doing more research.
"There is a lot of moving parts to this that would really require a little better research before I opine on this," Anderson said.
Hammer asked for the the Bureau of Legislative Research staff to conduct the research and "for something to be prepared to be brought to this committee or delegated to the appropriate committee, just so there would be clarity brought" to the matter.
"Because names have been mentioned or indicated I think it is only fair that this be looked at and something in writing be referred out," he said.
At that point, Griffin said "to be fair, I think that there are some who may have the belief that if they transferred money within the government it doesn't count toward the [$25 million] cap.
"We see no basis for that belief," he said, "but I will give it the benefit of the doubt and say that [there] has been a good faith belief of some people that if you, for example, sent the money [to the finance department] then for some reason that wasn't going to count toward the cap."