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Funding for the Attorney General’s Office Rife with Conspiracy and Contention

Bill Britt

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By Bill Britt
Alabama Political Reporter

MONTGOMERY—Every year the State’s budget process turns into a sort of jousting match to enhance a department’s revenue. In some cases it’s a battle for survival and in others, it’s a contest of wills. In the case of the Office of the State’s Attorney General, it has even become a source of conspiracy theory.

For Fiscal Year 2015, the AG’s Office has requested funding at $23,700,000, but the line item on the Governor’s budget spreadsheet was zero.

But what are the actual facts behind the request by the Attorney General’s Office and the funding offered by the Governor and the House and Senate General Fund Budgets?

When looking at the State’s Education Trust Fund Budget or the General Fund Budget, the story is not to be found so much in the spreadsheet, but in the accompanying text.

Once again this year, the Governor’s Office submitted a General Fund Budget that had a zero in the line for appropriations for the Office of the Attorney General. In certain circles this has caused wild imaginings of a war between the Governor and the AG. Some have even gone so far as to spread a rumor that Governor Bentley was sending a political message that he wanted the Special Grand Jury investigation of Speaker of the House Mike Hubbard (R-Auburn) ended.

This is little more than fictitious court intrigue of the highest order. All public and back channel information says that the Governor is truly committed to seeing justice, not political brinksmanship, prevail, in the investigation into suspected wrong doings by Hubbard.

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According to Bill Newton, Acting Director of the Alabama Department of Finance, the general public thinks of only the State’s Education Trust Fund Budget or the General Fund Budget when they are talking about funds. Newton points out that there are, “…more than 200 funds,” to be considered.

“In State government you can think of a fund like a checking account. Each department has more than one fund (more than one checking account). When you talk about the General Fund appropriation, it is not all of the money that agency has to operate. It is just one of the sources.”

This is the case with the funds available to the Attorney General’s Office.

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Newton points out that the AG has a large pool of money available from the National Mortgage Settlement. This settlement is the largest consumer financial protection settlement in United States history.

According to the National Mortgage Settlement site:

“The agreement settles state and federal investigations finding that the country’s five largest mortgage servicers routinely signed foreclosure related documents outside the presence of a notary public and without really knowing whether the facts they contained were correct.  Both of these practices violate the law. The settlement provides benefits to borrowers in the signing states whose loans are owned by the settling banks as well as to many of the borrowers whose loans they service.”

Each of the 49 State’s Attorney’s General were permitted to write his or her own terms for allocations for the funds from the settlement received by the state. The award and distribution of funds for the State of Alabama is as follows:

EXHIBIT B2 ALABAMA

The Court awards the State of Alabama a judgment in the amount of $25,305,692, which shall be paid by electronic transfer to the Office of the Attorney General.

Of this amount, the Court awards $2,530,569 dollars in civil penalties (or 10% of the total) as defined by and in accordance with Code of Alabama, 1975, §8-19-11 for misconduct relating to the bank’s robo-signing in violation of Alabama’s Deceptive Trade Practices Act.

The remaining amount shall be used by the Attorney General, at his sole discretion, for costs of investigation and litigation, for law enforcement efforts to prevent and prosecute financial fraud, and/or for public protection purposes, such as to defray the operating cost of any function of the Attorney General’s Office that protects citizens, whether through investigation, representation, regulation, mediation, prosecution, victims’ assistance, or consumer education concerning consumer-related financial or other crimes, or, at the sole discretion of the Attorney General, to be used for housing programs, housing counseling, legal assistance, foreclosure prevention hotlines, foreclosure mediation and investigation of financial fraud or other wrongdoing overseen by any division of the Attorney General’s Office.

In addition, the Attorney General may distribute any amount from the funds, at his sole discretion, to other governmental entities or charitable organizations whose eleemosynary purposes benefit those affected by the aforementioned misconduct.

The Office of the Alabama Attorney General has held the position that the $25,305,692 from the settlement, cannot be used for general operational expenses. It is believed that the AG has over $17,000,000 of the settlement monies on hand in a separate banking account.

The Alabama Political Reporter has tried continually to receive direct information from the Office of AG Luther Strange, but the office has limited its communications to just a copy of the terms of the agreement.

The use of the $17 million from the National Mortgage Settlement has become quite a contentious issue.

According to the General Fund Budget passed by the House, “…there is hereby conditionally appropriated up to $8,000,000 from the State General Fund. These funds are conditioned upon the Office of the Attorney General depositing all available revenue into the State Treasury.”

The $8 million in appropriations plus the $17 million being held by the Attorney General, would meet the request from the AG’s office.

Rep. Steve Clouse the House Chairman of the General Fund Budget seems to be sending a message to the AG.

In an effort to come to a resolution on the matter Senator Author Orr (R-Decatur), Chairman of the Senate F&T General Fund Committee asked that Norris Green the Director of the Legislative Fiscal Office prepare a memorandum explaining the different sides of the argument.

In summary, it is believed that the Attorney General Office should use the funds it has on hand, until they are exhausted, at which time the AG can make a request for up to the $8,000,000 that would be held by the Alabama Department of Finance to fill out the rest of the needed funds.

It has been said “off the record” that the AG’s Office finds this method troubling, as it might make the AG subservient in someway to the Executive Branch.

This brings to mind the $7.9 million that Gov. Bob Riley transferred to in coming AG Luther Strange just days before leaving office. In a report in the Gadsden Times, Dana Beyerle wrote, “ Gov. Bob Riley on the Friday before he left office in January transferred $7.9 million to the attorney general’s office to help new Attorney General Luther Strange as he entered office. The money revenue received related to the BP oil spill clean-up. The rumors surrounding this transfer of funds has become legend around the Capitol.

Some say Riley cut a deal with Strange to go after gaming magnate, Milton McGregor. Other’s say it was a gift to keep the AG from ever looking into potential wrong doings by the Riley clan. But, like all rumors around the State House, they must be treated as mere gossip.

As for the funding for the Attorney’s Office: Acting Finance Director Newton says, “The Attorney General’s office has ‘other funds’ from which to operate in 2015. So, the Governor’s proposal did not zero out the Attorney General’s office, it zeroed the appropriation from the General Fund. It included a proposal for funding from these other funds, and they have quite a few over there.”

During the National Mortgage Settlement Agreement process, each of the 49 State’s Attorney’s General were allowed to write the conditions for allocations of their portion of the settlement.

According to the National Conference of State Legislatures,  Alabama used only $3,865,956 or about 15 percent of its settlement funds for mortgage or housing-related issues.

A Breakdown by USA Today showed that Texas put almost all of its entire $135 million into the State’s general fund budget and then spent it on non-housing issues. The State of Georgia set aside its entire $99 million for economic development and Nebraska placed its entire $8 million into its rainy day fund.

According to a synopsis by USA Today, “Connecticut, allotted $22 million of its $26 million on emergency mortgage assistance. While Colorado spent nearly half of its $50 million to help homeowners modify their loans, and the rest of the money on counseling and legal services. Also Pennsylvania set aside 90 percent of its $67 million for its housing finance agency.”

Strange’s Office has not made clear what it wants to do with what remains of the settlement it received. Again the AG’s office has refused request for information.

It appears that the Governor and the budget Chairs want to see Strange use the funds for operating his office.

Bill Britt is editor-in-chief at the Alabama Political Reporter and host of The Voice of Alabama Politics. You can email him at [email protected] or follow him on Twitter.

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Retired U.S. Marines general endorses Doug Jones

Krulak, a Republican, served as the 31st commandant of the U.S. Marine Corps and as a member of the Joint Chiefs of Staff.

Eddie Burkhalter

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Retired United States Marine Corps Gen. Charles Krulak has endorsed Sen. Doug Jones, D-Alabama.

Retired United States Marine Corps Gen. Charles Krulak has endorsed Sen. Doug Jones, D-Alabama, the incumbent senator’s campaign announced Tuesday. 

Krulak, a Republican, served as the 31st commandant of the U.S. Marine Corps and as a member of the Joint Chiefs of Staff. He’s also the former president of Birmingham-Southern College. 

“Although I am a life-long Republican, I’m urging you to vote for Doug Jones. His work on the Armed Services Committee supports our veterans and military families, and ensures that we have the best equipped military in the world,” Krulak said in a new ad from Jones’s campaign. “Senator Doug Jones’ strong record of getting things done for Alabama and our military has earned our vote.” 

Jones in 2018 filed an amendment to make U.S. Department of Veterans Affairs reports on VA-run nursing homes public, and in 2019, introduced legislation that eliminated the Military Widow’s Tax, which impacted an estimated 2,000 surviving military spouses in Alabama alone.

In September, Jones introduced a bipartisan bill to address veteran suicide.

Krulak commanded a platoon and two rifle companies during his two tours of duty in Vietnam, according to his U.S. Marine Corps University biography. He was assigned duty as the deputy director of the White House Military Office in September 1987.

Krulak was promoted to General on June 29, 1995, and became the 31st commandant of the Marine Corps on July 1, 1995. He retired from the Marine Corps in June 1999.

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Crime

Alabama inmate dies after inmate-on-inmate assault

Edwin Wells, 29, died on Oct. 10 from injuries during an apparent inmate-on-inmate assault at the Easterling Correctional Facility, the Alabama Department of Corrections confirmed on Tuesday. 

Eddie Burkhalter

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A Prattville man became at least the 19th Alabama inmate to have died this year in a state prison of circumstances that were avoidable. 

Edwin Wells, 29, died on Oct. 10 from injuries during an apparent inmate-on-inmate assault at the Easterling Correctional Facility, the Alabama Department of Corrections confirmed on Tuesday. 

Wells death makes at least the 19th inmate to have died from either suicide, drug overdoses or homicide, according to records kept by the ACLU of Alabama’s Campaign for Smart Justice. His death is at least the seventh suspected homicide in state prisons this year. 

ADOC doesn’t typically publish information on an inmate death unless a reporter discovers the death through other means and requests the information, with the expectation of deaths of inmates who tested positive for COVID-19, which the department does regularly release. 

“The ADOC condemns all violence in its facilities, and the fatal actions taken against Wells by another inmate are being thoroughly investigated,” said ADOC spokeswoman Samantha Rose in a message to APR. “Wells’s exact cause of death is pending a full autopsy, and more information will be available upon the conclusion of the investigation into his death.”

A U.S. Department of Justice report in April 2019 found that Alabama’s overcrowded, understaffed prisons for men were likely in violation of the Constitution’s Eighth Amendment and its prohibition on cruel and unusual punishment, and that ADOC regularly failed to protect inmates from sexual and physical violence perpetrated by other inmates.

An expected followup report by the Department of Justice in July detailed why the federal government believes systemic use of excessive force within Alabama’s prisons for men violates the Eighth Amendment. 

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As of Tuesday, at least 29 state inmates and two prison workers have died after testing positive for COVID-19. There have been 453 confirmed coronavirus cases among inmates and 429 among prison staff as of Oct. 14, according to ADOC.

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Infrastructure

Alabama’s Black Belt lacks quality internet access, report finds

Twenty-two of 24 Black Belt counties are below the statewide average of 86 percent of the population who have access to high-speed internet, and two Black Belt Counties — Perry and Chocktaw — have no access at all. 

Eddie Burkhalter

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During an online video briefing Monday on a report about a lack of internet access in Alabama’s Black Belt, University of Alabama student Brad Glover warned reporters that he could get kicked off the briefing at any moment. 

That’s because he was talking during the video briefing by way of audio only, using his cell phone, as he does not have access to high-speed internet access at his Linden, Alabama, home in the Black Belt’s Marengo County. 

The COVID-19 pandemic that sent students home to study online left many in the Black Belt and other rural parts of Alabama in the lurch, without access to the high-speed internet enjoyed by so many other Americans, according to the latest report in the University of Alabama’s Education Policy Center’s Black Belt 2020 series. 

The latest report, titled “Internet Access Disparities in Alabama & the Black Belt,” found that 22 of 24 Black Belt counties, as defined by the Education Policy Center, are below the statewide average of 86 percent of the population who have access to high-speed internet, and two Black Belt Counties — Perry and Chocktaw — have no access at all. 

“It is still a terrible struggle for me to connect to get the things done that are required,” said Glover, who interned with the Education Policy Center. 

Stephen Katsinas, director of the Education Policy Center, said that in the 1930s, nine of ten rural homes lacked the electric service that urban American homes, by that point, had for 40 years. 

“The Rural Electrification Act was passed to address this abject market failure,” Katsinas said. “Today, as the COVID pandemic has shown, access to high-speed internet is as essential to rural Alabama as the REA was in the 1930s. Alabama must directly address the market failures that exist today to bring high-speech internet to every rural Alabamian, so that our rural workforce can access the lifelong learning skills they need, and our rural businesses can compete globally.” 

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The COVID-19 pandemic has also spotlighted the need to expand the growing area of telemedicine. 

Dr. Eric Wallace, medical director of Telehealth at UAB, told reporters during the briefing Monday that patients are largely doing telehealth from their homes, and explained that disparities in access to high-speed internet present a problem for them. 

“Since the COVID-19 pandemic began, UAB has done approximately 230,000 telehealth visits, and 60 percent of those were done by video,” Wallace said. 

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“Forty percent are audio only, and why is audio only? It’s because we do not have broadband,” Wallace said. “So it’s not just broadband. It’s broadband. It’s tech literacy. Socioeconomics, to have a device in your home. It’s all of that.”

Wallace said that the coronavirus crisis has made clear that telemedicine is a “100 percent necessity” and that patient satisfaction studies make clear it’s not going anywhere. 

The reasons for disparities in access to high-speed internet are myriad, explained Noel Keeney, one of the authors of the report and a graduate research assistant at the Education Policy Center. 

Keeney noted a study by BroadbandNow that estimates there are 154 internet providers in Alabama, but there are 226,000 Alabamians living in counties without a single provider, and 632,000 in counties with just a single provider. 

Even for those with access to internet providers, Keeney said that just approximately 44.4 percent of Alabamians have internet access at a cost of $60 monthly or below. 

“If we really care about our rural areas, we need to make an investment, and it needs to cut off that cost at a very low rate,” Wallace said. 

Katsnias said there’s a growing consensus on the part of Alabama’s political leaders that access to high-speed internet is an important issue, noting that Gov. Kay Ivey in March 2018, signed into law the Alabama Broadband Accessibility Act, which has given internet access to nearly 100,000 Alabama students. 

“In March, Gov. Ivey awarded $9.5 million in broadband expansion grants, with a significant amount going to Black Belt communities,” the report reads. “This was followed by $5.1 million in additional grants in May.” 

“The State of Alabama also allocated $100 million in federal CARES Act-related dollars for “equipment and service for broadband, wireless hot spots, satellite, fixed wireless, DSL, and cellular-on-wheels to increase access for K-12 students undergoing distance learning,” the report continues. 

An additional $100 million in CARES Act funds were made available to facilitate virtual learning across Alabama’s K-12 schools, researchers wrote in the report, and another $72 million in federal aid went to the state’s colleges and universities. 

Katsinas said however those federal funds are spent, the state still needs a long term plan for how to address the disparities in access to high-speed internet. 

“We need a long term plan and we need to do what we can do immediately,” Katsinas said

Read more of the Education Policy Center’s reports in the “Black Belt 2020” series here.

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Economy

Governor announces auto supplier IAC plans Alabama expansion

IAC is committing $34.3 million in new capital investment to expand its new manufacturing facility located in Tuscaloosa County.

Brandon Moseley

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Gov. Kay Ivey announced Monday that International Automotive Components Group North America Inc. plans to invest over $55.9 million in expansion projects that will create 182 jobs at two Alabama facilities.

“International Automotive Components is a leading global auto supplier, and I am pleased that this world-class company is growing significantly in Alabama and creating good jobs in Cottondale and Anniston,” Ivey said. “IAC’s growth plans show that Alabama’s dynamic auto industry continues to expand despite today’s challenging environment.”

Nick Skwiat is the executive vice president and president of IAC North America.

“Alabama was the logical choice due to its skilled workforce and proximity to the customer,” Skwiat said. “We are excited to see the continued growth of the automotive industry in Alabama and we plan to grow right along with it. We thank the Governor and Secretary Canfield for their leadership in this sector.”

IAC is committing $34.3 million in new capital investment to expand its new manufacturing facility located in Tuscaloosa County. This facility will produce door panels and overhead systems for original equipment manufacturers. That project will create 119 jobs at the production site in Cottondale.

IAC also plans to invest $21.6 million at its manufacturing facility located in the former Fort McClellan in Anniston. That East Alabama project will create another 63 jobs.

This project builds on a milestone 2014 expansion that doubled the size of the Calhoun County facility. There IAC manufactures automotive interior components and systems. Key components produced at the Anniston plant include door panels, trim systems and instrument panels for original equipment manufacturers.

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IAC Group is a leading global supplier of innovative and sustainable instrument panels, consoles, door panels, overhead systems, bumper fascias and exterior ornamentation for original equipment manufacturers.

IAC is headquartered in Luxembourg and has more than 18,000 employees at 67 locations in 17 countries. The company operates manufacturing facilities in eight U.S. states.

“With operations around the globe, IAC is the kind of high-performance company that we want in Alabama’s auto supply chain to help fuel sustainable growth,” said Alabama Commerce Secretary Greg Canfield. “We look forward to working with IAC and facilitating its future growth in this strategic industrial sector.”

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Danielle Winningham is the executive director of the Tuscaloosa County Industrial Development Authority.

“International Automotive Components is a valued part of Tuscaloosa County’s automotive sector,” Winningham said. “We are grateful for IAC’s investment in our community and the career opportunities available to our area workforce as a result of their investment.”

“The City of Anniston is excited that IAC has made the decision to expand here. I have enjoyed working with the leadership at IAC, the Calhoun County EDC, and the state of Alabama to get this project finalized,” said Anniston Mayor Jack Draper. “This is even further evidence that Anniston is indeed open for business.”

Only Michigan has more automobile manufacturing jobs than the state of Alabama. Honda, Mercedes, Hyundai, Polaris, Toyota and soon Mazda all have major automobile assembly plants in the state of Alabama.

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