Attorney General Eric Schneiderman gets much of the credit for the $13 billion national settlement with JPMorgan over mortgage fraud that fueled the housing market collapse and foreclosure crisis, but why does he think he deserves sole discretion over how to spend New York’s $613 million share of it over the next four years?
There may be precedent for New York’s attorneys general (including Andrew Cuomo) to commandeer proceeds from such settlements and distribute them at their whim, but spending state money should be the Legislature’s prerogative.
Schneiderman’s insistence that 85 percent of the settlement money be earmarked for housing and fi nancial fraud-fighting programs was not unreasonable; in fact it was a good way to compensate JPMorgan’s victims and protect consumers from future financial fraud. But there had to have been a way for the money to be put into the state’s general fund with such strings attached. (Indeed Gov. Cuomo, who has reportedly been at odds with Schneiderman over control of the money, promised to honor the spirit of the AG’s agreement, and Schneiderman has agreed to cut him in for half of New York’s $163 million fi rst-year share.)
But this dispute will resume next year, and the year after, and the year after that (assuming these two remain in office) because 1) they don’t particularly like each other, and 2) they want the political benefits that accompany control of a windfall like this.
Yes, Schneiderman is mostly responsible for it, but that shouldn’t give him (or the governor) the right to control it.