The District’s first elected attorney general says his office needs more money and staff to carry out the will of voters — and he has a novel proposal for how to pay for it.
When Mayor Muriel E. Bowser (D) releases her budget proposal Thursday, D.C. Attorney General Karl A. Racine (D) wants her to include authorization for his office to retain up to $20 million annually from settlements and awards that have been received on behalf of District taxpayers.
Under current law, the attorney general must send all lawsuit-related revenue to the city’s general fund, to be used as the mayor and the D.C. Council see fit. Racine wants to use some of that money to reestablish a consumer protection fund and to pay for an additional 75 lawyers, support staff and technology to investigate and pursue companies and individuals suspected of defrauding city residents .
“In effect, the Attorney General’s office is now co-equal with the Office of the Mayor and the Council of the District of Columbia, and thus now stands as an essential check and balance in the District’s governmental structure,” says Racine’s budget request to Bowser, a copy of which was obtained by The Washington Post.
Designating money for the attorney general’s office could help Racine raise his own political profile and deliver on campaign promises, including litigation to protect affordable housing.
It is unclear whether Bowser will go along with Racine’s plan, which could cut into revenue that is available to pay for her priorities.
Bowser spokesman Michael Czin declined to comment, saying the administration would not discuss budget decisions until Thursday. Mark Tuohey, director of the mayor’s office of legal counsel, said he could not address whether the mayor would fund the expansion but stressed that he and Racine can work collaboratively.
“Karl is growing the attorney general’s office quite considerably,” Tuohey said. “From my own standpoint, I’d like to see him have the resources he needs.”
Racine’s proposal paints a picture of a win-win scenario for his office and that of the mayor.
Bowser cannot include settlement or award money in her annual budgets because the revenue is speculative. Therefore, the funds that Racine seeks do not take away from other programs, the proposal says. Also, Racine argues that reinvesting money in his office increases the likelihood of greater payouts for the city in the future.
As evidence of the returns possible, Racine points in the budget proposal to a $2 million increase in the office’s litigation budget over the past two years, in part to take on Standard & Poor’s. Racine recently announced that the city would receive $21.5 million from a multi-state settlement over allegations that S&P’s ratings misled investors about the safety of financial securities before the 2008 financial crisis.
Another ongoing case, involving back taxes owed to the District by online hoteliers Expedia and Priceline, could bring in an estimated $90 million for the District, Racine says. That money alone could fund Racine’s budget request and still send $70 million to city coffers.
Racine has asked Bowser to include in her budget a provision spelling out that if the lawsuit against Expedia and Priceline is settled, about $16.5 million would go to the attorney general’s office. The single payout “will provide the new Consumer Protection Fund with the start-up funding OAG needs . . . to make this fund self-sustaining,” the budget proposal states.
Council Chairman Phil Mendelson (D) said he would like to see the District’s attorney general become a leading advocate for consumer protection, on par with state attorneys general from New York and California. But he said the council may have to find another way to help fund the effort. The council last year earmarked most of the money expected from a potential settlement with Expedia and Priceline to go to future Metro capital costs, he said.
“It’s not completely on him” to find the funding, Mendelson said of Racine. “I hope the mayor will fund it, and I’m sure if she doesn’t, the council will take a look at it.”
Broadly, Racine’s budget plan notes that with an annual budget of about $55 million, his office is a net revenue generator for the city. With more money, it could do much more, the proposal says.
The proposal says Racine, who left a lucrative job as a white-collar defense lawyer, “wants to bring the private-sector philosophy of revenue generation” to the attorney general’s office.