Gov. Paul LePage upped the ante in his ongoing dispute with Maine Attorney General Janet Mills on Friday by ordering the transfer of $21.5 million in disputed settlement money out of the attorney general’s account and into one controlled by one of his departments.

The money is the state’s share of a settlement against Standard & Poor’s stemming from the credit rating company’s practices in the lead-up to the financial crisis of 2008. It’s the largest one-time court settlement in state history and Mills has said she wants Maine’s share to go toward consumer protection efforts and relief to homeowners going through foreclosure.

Timothy Feeley, the spokesman for the AG’s office, said Friday night that the settlement order specifies that the money be disbursed “in the sole discretion of the attorney general.”

But LePage said it shouldn’t be up to Mills to decide how the money should be spent, and on Friday, he ordered the state controller to move the money from an account created by the attorney general to one called “other special revenue,” which is controlled by the Department of Administrative and Financial Services.

Feeley couldn’t confirm that the money had actually been transferred and an email seeking clarification from LePage’s spokeswoman was not answered.

Maine Controller Douglas E. Cotnoir is the state official who would transfer the money. A phone message left at his house was not returned Friday night.

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LePage also wrote to legislative leaders Friday and told them he acted “to protect these funds from expenditure until the Legislature makes a decision about whether it will check the attorney general’s exercise of self-delegated discretion or not.” He said lawmakers need to say whether they want Mills to have the authority to spend the settlement money as she sees fit.

“If so, you need to make that intention clear and public because at this point in time, I do not believe the relevant laws or the Maine Constitution give her such broad and unrestrained discretion,” LePage said in the letter.

The governor went on to say that putting the money in an account controlled only by Mills is something he considered “repugnant to the Constitution and laws of this state.” The letter to the Legislature said he wasn’t necessarily rejecting Mills’ plans for the money, but “I am simply maintaining that the decision is yours to make, not hers.”

In a statement issued Friday night, Mills’ office said the practice of depositing settlement funds into accounts controlled by the attorney general goes back decades and that the law was clarified in 1991 “to ensure that consumer settlements would be deposited in a protected account free from political interference.”

Senate President Michael Thibodeau, R-Winterport, said Friday night that he had not seen LePage’s letter, but that he already had met with Mills and asked her to voluntarily transfer the money to an account that would allow legislators to determine how it should be spent.

He said that would defuse the dispute over who controls the money and let an elected body determine how to best use it. He said Mills reiterated to him that she believes control over the funds is hers, although she has previously said she plans to put together a committee of legislators, other public officials and financial experts to advise her on how to spend the money.

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A message seeking a response from House Speaker Mark Eves, D-North Berwick, wasn’t returned Friday night.

The dispute is the latest between LePage and Mills, a Democrat who was elected attorney general in 2012 and again last year by the Legislature, which has a narrow majority of Democrats.

When the governor sought to have 6,000 low-income young adults removed from Maine’s Medicaid rolls in 2012, Mills refused to defend the state when the federal government rejected that plan. Mills said she didn’t believe the case was winnable. Although she approved LePage’s request to hire outside lawyers to defend the administration’s plan, Mills’ office filed papers opposing LePage’s effort.

The 1st U.S. Circuit Court of Appeals upheld the federal government’s rejection of LePage’s plan, but the administration has asked the U.S. Supreme Court to hear an appeal of that ruling.

LePage also asked the Maine Supreme Judicial Court whether he needed to seek approval from the AG’s office before hiring outside lawyers and whether the AG’s office can control spending on outside counsel when he does so.

While the court said this month that the law requires the governor to get approval from the AG’s office to hire outside lawyers, it also said the AG’s office can’t control how much is spent on counsel if it opposes the governor in the litigation.

Both sides claimed victory after the advisory opinion was handed down.


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