AUGUSTA — The 19 states and attorneys general involved in a $1.37 billion legal settlement against Standard & Poor’s have varying plans and discretion to spend the money, according a review of the Feb. 3 agreement and subsequent press statements.

How Maine will spend its $21.5 million share has become the center of an ongoing political dispute between Republican Gov. Paul LePage and Democratic Attorney General Janet Mills.

On Friday, LePage ordered the transfer of the settlement money out of the attorney general’s account and into one controlled by one of his departments. Mills has said settlement funds have traditionally been controlled by the attorney general, but her office was unable to say Monday how prior settlements’ funds have been spent.

The governor’s move to give lawmakers – and potentially himself – more control over the largest legal settlement in state history comes as the Legislature increases its negotiations over his two-year budget proposal and tax overhaul plan. LePage’s plans for the money are unclear; he has said that his objection is that Mills is the only official with authority to determine how the money is spent.

Many of the attorneys general in the 18 other states involved in the multistate lawsuit have similar discretion in allocation of their settlement funds. The states were joined by the U.S. Department of Justice against the credit rating agency Standard & Poor’s Financial Services LLC and its parent corporation, McGraw Hill Financial Inc. The settlement, announced in February, follows allegations that S&P understated the risks of mortgage-backed security investments and other schemes that facilitated the 2008 financial crisis. The fallout from the crisis hit the states hard, increasing home foreclosures and, in some instances, tanking investments in public pension systems.

In several cases, the states’ settlement agreements reflect specific impacts. However, some states are spending their share of the settlement on initiatives seemingly unrelated to the lawsuit or pumping the money straight into their general funds.

California, for example, won $210 million in the lawsuit and will funnel $176 million of its settlement toward its public employee pension system, which invested in the flawed mortgage security scheme backed by S&P.

Pennsylvania’s $21.5 million share of the settlement is detailed in the agreement, including the $5 million it spent investigating and litigating the case.

In Washington, $18 million of the state’s $21.5 million share will go directly to the general fund, $500,000 will go toward investigation and litigation costs and $3 million will be spent at the discretion of Attorney General Bob Ferguson. Other states, including Indiana, Missouri, Mississippi and New Jersey, are not at all specific. The settlement agreement orders electronic payments directly to their respective attorneys general. In several instances, state attorneys general have said they plan to consult with state lawmakers.

Arizona Attorney General Mark Brnovich, in a press statement, said he “will work with legislative leadership to distribute settlement funds to essential programs for children, families, seniors and public safety.”

PLANS UNCLEAR

According to the settlement document for Maine, the payment will be used in “the sole discretion of the Attorney General” for reimbursement in attorney’s fees, “restitution, consumer protection, health and education, including financial literacy and student loan issues; law enforcement; litigation support; and efforts to remediate the effects of the mortgage and financial crisis.”

The Maine settlement has fewer details about how much money Mills plans to allocate for the initiatives. 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.

Also unclear is how the attorney general plans to calculate the effects of the mortgage and financial crisis in Maine.

Mills’ office was unable to say Monday how much it spent investigating and litigating the case.

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.”

However, tracking how that money has been spent is difficult. The Office of Fiscal and Program Review, the Legislature’s nonpartisan budget office, was unable to provide a historical overview of disbursements from the account into which the Office of Attorney General deposits proceeds from other legal settlements, such as actions against pharmaceutical companies, consumer scams or prosecutions against Medicaid fraud.

According to state law, the Legislature’s budget office can request an accounting of such funds. However, it’s unclear if lawmakers have ever done so and the information is not included in the Office of the Attorney General’s annual report to the Legislature. Tim Feeley, a spokesman for Mills, said a history of disbursements from the legal account was available, but he was unable to provide the information on Monday.

Alexandra Avore, an analyst with the Legislature’s budget office, said some court settlements specifically detailed how legal proceeds can be spent, such as increased spending on fraud prevention. Other settlements, she said, were less detailed and it’s not unheard of for the Office of Attorney General to direct settlement money into the General Fund or use the money help plug a hole in the budget.

In fact, LePage has previously attempted to direct money from the 1998 Tobacco Settlement away from tobacco cessation and prevention programs. Other states have been more prolific in using the tobacco money for non-tobacco initiatives. According to data from the Campaign for Tobacco-Free Kids, states collected $25.6 billion from the settlement and taxes, but spent only 1.9 percent on programs to prevent kids from smoking and help smokers quit.

In a letter to lawmakers on Friday, LePage said he doesn’t necessarily reject Mills’ plans to use the S&P settlement funds for consumer protection efforts and relief to homeowners going through foreclosure. However, he said, putting the money in an account controlled only by Mills is something he considered “repugnant to the Constitution and laws of this state.”

Democratic House Speaker Mark Eves of North Berwick defended Mills on Monday.

“AG Mills stood up for Maine taxpayers, took on Wall Street and won,” he said in a statement. “I urge the governor to stop politicizing the issue. His executive action is unprecedented, violates the court order and is inconsistent with past practices from Republican and Democratic attorneys general alike.”