The $1 apparently knocked off the Capital One Bank settlement to allow then-Attorney General Mike Hatch to direct the proceeds speaks volumes.
For anyone who missed it, the AG’s Office settled a lawsuit against the well-known credit card issuer in 2006 for an oddly precise $749,999. Had the case settled for a dollar more, the money would have gone into the general fund for the Legislature to distribute. Because it fell a hair’s breadth beneath the $750,000 threshold, Hatch was able to direct the distribution of two-third of the proceeds to two nonprofits — $250,000 to the Legal Aid Society (a good cause, but also a politically popular one) and $249,999 to the community action group ACORN (which reportedly later endorsed Hatch in his gubernatorial bid). The other third of the settlement went to the state to cover the costs of investigation.
As with most of the various controversies that have cropped up around the AG’s Office over the last 15 months or so, I am not sure there is anything illegal here, but something stinks to high heaven. It reminds me of those individuals you’d sometimes hear about who would withdraw just a little bit less than $10,000 out of banks to avoid the transaction being reported to the IRS. Eventually, the federal government had to outlaw conduct engaged in to skirt the federal reporting requirement,
There is a certain amount of hubris in making the settlement $749,999 — an amount that can have almost no logical basis but to avoid the $750,000 threshold — instead of some other amount, such as $700,000, which could at least arguably have some basis in the case. Alternatively, a part of me now can’t help wondering whether Capital One would have paid more — such as $800,000 — but the higher amount was not sought because that money could not have been distributed in a way politically advantageous to the AG.
Ordinarily, a buck chiseled off a settlement for political reasons would not cause me to lose much sleep. However, in this case, it’s yet another indignity in a long string of them. Just once I would just like to see someone in a leadership role in the AG’s Office stand up and take responsibility for any of the numerous issues that have cropped up. If you admit a problem is there, at least you can start to deal with it. However, I fear that such an acceptance of accountability will never come — or, if it ever does, it will likely be a day late, and a dollar short.