Crime Pays: Attorneys General

Rake In Cash For Struggling States

ALBANY, N.Y. (AP) — The office of the state attorney general in New York costs taxpayers $200 million a year. Last year, it returned $1.74 billion in fines, penalties and law enforcement settlements.

California’s attorney general has recovered more than $333 million for taxpayers since 1999, part of more than $2.4 billion returned to California consumers, energy ratepayers and charities. And California is among 45 other states reaping more than $200 billion from cigarette companies in settlements made since the late 1990s.

“There has been a steady upward trend in the amount we collect, not just for the state, by the way, but for individual victims,” said Connecticut Attorney General Richard Blumenthal, who is a Democrat.

In the 2002-03 fiscal year, Blumenthal’s office collected $260 million of which $218 million went to the general fund, and the balance to consumers.

In a time of corporate corruption and Wall Street abuse, crime pays for cash-strapped states.

“We never initiate a case in order to collect money for the state,” said New York Attorney General Eliot Spitzer, whose revenue from 2003 cases was 124 percent above 2002. “We begin the cases to enforce the law and one of the consequences where we find impropriety is the state gets back money in settlements and penalties and victims get restitution.

“I think the numbers reflect the degree with which we have been more aggressive in certain areas,” Spitzer said. “It’s not just the Wall Street cases, it’s nursing homes, it’s Medicaid fraud, all the areas where we have tried to be more sophisticated and creative and are recovering money for the state.”

Increasingly aggressive state attorneys general , filling what they say has been a void left by decentralized federal prosecution since the Reagan administration, have reaped hundreds of millions of dollars a year in enforcement for an array of misdeeds. The defendants have included Microsoft, Publisher’s Clearing House sweepstakes and Internet spammers.

The rising settlements and fines have come from cases involving misleading stock analysis, illegal after-market trading of mutual funds, nursing home abuses, fraudulent claims for Medicaid expenses and energy bill overcharges.