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Court Blocks Use of Tobacco Settlement As Slush Fund

The Mississippi Supreme Court has just upheld a court ruling blocking the diversion of $20 million a year from Mississippi's multi-billion dollar tobacco settlement to a private entity, the Foundation for a Healthy Mississippi. The money was diverted by the state's former attorney general, Mike Moore. The Foundation was created after the tobacco settlement precisely so that the state attorney general could siphon state money to it. The court ruled such appropriation of public funds could only be authorized by the state legislature -- not the state attorney general -- and that the state attorney general's diversion of the funds violated state law (Miss. Code § 43-13-405). The court could just as easily have relied on the constitutional doctrine of separation of powers, which recognizes that the state legislature that has the exclusive authority to appropriate public funds, and that other branches of government, like the state attorney general, cannot spend public funds without its consent. Only Justice Oliver Diaz, who has ties to wealthy trial lawyers and a history of ethical controversies, dissented. The court's decision in Partnership for a Healthy Mississippi v. State of Mississippi is here. It is also too common for a state attorney general to use money obtained in a settlement as a private piggy bank or slush fund. For example, former Kansas attorney general Carla Stovall diverted tobacco settlement money to foundations managed by her own relatives. West Virginia attorney general Darrell McGraw turned a state settlement with a pharmaceutical company into a political slush fund, illegally diverting money from it to trial lawyers and entities with ties to political cronies. The federal government is now trying to recoup the money for the Medicaid program.