Delaware GOP: Finance panel’s action unconstitutional

DOVER — A vote by budget-writing lawmakers to earmark $2.1 million from mortgage-related bank settlements to boost the attorney general’s crime prevention plan might be unconsititutional, some Republican legislators say.

The money, obtained through settlements with Bank of America and Citigroup, currently is held by the Department of Justice.

Under the terms of the vote, it will flow through Attorney General Matt Denn, with $579,000 going to Dover and $1.52 million to Wilmington.

The aim, proponents say, is to use those funds to support police patrols in the state’s two largest cities.

In a Friday letter to Joint Finance Committee co-chairs Sen. Harris McDowell, D-Wilmington, and Rep. Melanie George Smith, D-Bear, Republican leaders expressed concerns that JFC’s decision was unconstitutional.

“We believe that the actions of the committee were completely outside the bounds of the constitution and Delaware

Daniel Short

Daniel Short

Code, and set a dangerous precedent for the future of the process,” wrote minority leaders Sen. Gary Simpson, R-Milford, and Rep. Danny Short, R-Seaford; and minority whips Sen. Greg Lavelle, R-Sharpley, and Rep. Deborah Hudson, R-Hockessin.

Several lawmakers wondered during Wednesday’s hearing whether the committee had the power to provide funds or if members needed to wait for the full General Assembly to convene in January.

“The question is still here whether we have the authority to do this, and I don’t know that we do,” Sen. Dave Lawson, R-Marydel, said. “I’m not convinced.”

Despite some doubts, all 12 legislators — eight Democrats and four Republicans — supported the move when it came time for a vote.

After returning to their caucuses and hearing questions from lawmakers who were not present, Republican members began to have further doubts regarding the vote, leading to Friday’s letter.

Both Mr. Denn, a Democrat, and Office of Management and Budget Director Ann Visalli weighed in during the course of the discussion Wednesday, offering their opinions the transfer was legal and did not need approval from the entire legislative body.

Gov. Jack Markell, a Democrat, also is in support of the plan and has “no doubts” as to its constitutionality, a spokeswoman for the governor’s office said.

Ms. Visalli said Wednesday the money can be moved from the Department of Justice to the Neighborhood Building Blocks Fund, which was previously established by the legislature.

“You would not need any additional legislative authority to do that. You wouldn’t be creating something now, you’d just be moving cash around with the Controller General’s Office, as we often do,” she told committee members.

Mr. Denn outlined the situation and the legal bearing behind it in a November memo shared with lawmakers.

“The Department of Justice has the legal authority to distribute funds from settlements of litigation and potential litigation it pursues on behalf of Delawareans,” he wrote. “The funds are currently in an escrow account controlled by this office, and it is the obligation of this office to ensure that the funds are directed in a manner consistent with the language in the settlement agreements.

“Because of DOJ’s legal authority, the JFC certainly has the authority to enter into an agreement with DOJ as to how

Gregory F. Lavelle

Gregory F. Lavelle

the funds should be disbursed. In doing so, the JFC would simply be agreeing to forego recommending to the General Assembly that the General Assembly affirmatively enact legislation to confiscate those funds from the settlement account where they now sit.”

But GOP leaders are unconvinced. In the letter to the JFC co-chairs, they posed six questions relating to the constitutionality of the vote.

Their queries are: where the state constitution says JFC is allowed to allocate money by itself; whether, because of an apparent conflict of interest, Mr. Denn had received outside counsel; why the Bank of America and Citigroup settlements were treated differently from prior settlements; why the funds went not to the state’s General Fund but to the attorney general; if, by providing for the allocation, JFC was restricting the General Assembly from controlling the money; and why no other cities are receiving funding.

“There are two terrible precedents being set here, and they are both worthy of debate and discussion,” Sen. Lavelle said in a statement. “First, the attorney general is claiming that he can hold and disburse funds from the settlement without the approval of the legislature. Second, the JFC is claiming the authority to appropriate funds outside an act of the General Assembly, as the constitution requires.”

GOP lawmakers are also looking at drafting legislation to clarify the role of JFC and the attorney general in regard to spending.

Sen. McDowell and Rep. George Smith could not be reached for comment Friday afternoon.

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