Rutledge Distributes Funds from S&P Settlement to Help Arkansans and Provide for Public Safety Needs
April 10, 2015
LITTLE ROCK – Arkansas Attorney General Leslie Rutledge announced today that the $21.5 million from the Standard & Poor’s (S&P) settlement will be distributed in accordance with Act 763 of 2013.
This follows her Feb. 3 announcement of the multistate settlement agreement, which stemmed from allegations that S&P misled investors when it rated structured finance securities leading up to the 2008 financial crisis.
“Arkansas received $21.5 million in a multistate settlement that demonstrated no company no matter its size can circumvent the law and take advantage of Arkansans,” said Attorney General Rutledge. “After weeks of deliberations and discussions with Governor Hutchinson, President Pro Tempore Dismang, Speaker Gillam and various stakeholders, I will distribute this settlement to help Arkansans receive workforce training to help the State better compete for good-paying jobs, as well as for public safety and law enforcement needs.”
“I greatly appreciate General Rutledge's plan to direct these settlement dollars toward urgent statewide needs, including the Crime Victims Reparation program, which has faced a funding shortfall in recent years,” said Gov. Asa Hutchinson. “From the beginning, she expressed to me and legislative leaders her desire to use these funds to support important needs of our state. I am grateful for the Attorney General’s cooperation and leadership through this process.”
“Arkansas youth, adults and persons with disabilities have a strong advocate in Attorney General Rutledge,” said Dr. Charisse Childers, director of the Arkansas Department of Career Education. “The department is grateful for these additional resources which will be used to grow our career and technical education and workforce development programs across the State. To grow Arkansas’s economy, we must ensure that workers have the skills to succeed and these funds will help achieve that goal.”
“This is an exciting time at the University of Arkansas System Criminal Justice Institute,” said Dr. Cheryl May, director of CJI. “I greatly appreciate the commitment of Attorney General Rutledge to help CJI build on the long-standing promise to make our schools safer by supporting law enforcement and educational professionals with training and resources. CJI looks forward to continuing this important partnership, which will build on the successes of the efforts of the Attorney General’s Office and the CJI Safe Schools Initiative. Together, we are going to create safer environments for our children to learn.”
“I want to thank Attorney General Rutledge for recognizing the important needs of Arkansas firefighters,” said Greg Gray, legislative chairman of Arkansas State Firefighters Association. “Volunteer fire departments are a critical part of ensuring that our local communities and neighborhoods remain safe and prosperous, and this investment will go a long way in helping provide much needed training and equipment.”
Pursuant to the settlement agreement, $21.5 million was directed to the Attorney General’s Consumer Education and Enforcement Fund. At the direction of Attorney General Rutledge, $20.5 million will be distributed to the State Treasury. Another $1 million will be retained in the Consumer Education and Enforcement Fund, an allocation permitted by Arkansas law.
The Attorney General will distribute $2.5 million to the Crime Victims Reparation Fund, with an emphasis on assisting victims of sexual assault; $2 million to the Department of Career Education to be used for education and training grants; $600,000 to the University of Arkansas Criminal Justice Institute to benefit the Safe Schools Initiative and Missing Persons Program; $500,000 to the Department of Health for the Prescription Drug Monitoring Program; and $500,000 to the Department of Rural Services to provide for the needs and training of local volunteer fire departments. The remaining $14.4 million will be distributed to the State Treasury and will be allocated for public safety and law enforcement programs, including resources to offset the overcrowding facing our local jails.
In early 2013, Arkansas joined the U.S. Department of Justice, the District of Columbia and 18 states in suit against S&P. The federal and state complaints against S&P alleged that despite S&P's repeated statements emphasizing its independence, S&P misled investors when it rated structured finance securities leading up to the 2008 financial crisis. S&P allowed its analysis to be influenced by its desire to earn lucrative fees from investment bank clients. While at the same time, investors and other market participants, including state regulators, relied on S&P's promises of independence and objectivity. The complaints alleged that the agency knowingly assigned inflated credit ratings to toxic assets packaged and sold by the Wall Street investment banks. The misconduct began as early as 2001 and became particularly severe between 2004 and 2007.