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Attorney: State illegally spent $600M in stimulus funds

Attorney: State illegally spent $600M in stimulus funds

Journal Record  -  November 5, 2009

OKLAHOMA CITY – Oklahoma officials illegally spent about $600 million in federal stimulus money during the 2009 legislative session because the funds were not certified by the State Equalization Board, attorney Jerry Fent told an Oklahoma Supreme Court referee Wednesday.

The state board certifies how much money the Legislature can appropriate each fiscal year. Fent said when he filed his lawsuit in September that he is not asking for the money to be returned to the federal government, just that officials follow appropriate procedures.

Fent, of Oklahoma City, told referee Greg Albert that an amendment to the Oklahoma Constitution approved by voters in 1985 requires certification.

“We added federal funds to the budget process,” Fent said.

He said the new language expanded a 1941 version of the law that required the Equalization Board to certify revenue going into the general revenue fund and each special revenue fund.

Fent said there are numerous special funds. If money going into them is not certified, he said, appropriations from the funds are null and void.

“The State Equalization Board must certify those amounts before they can be spent,” Fent said.

A 1973 Oklahoma court case required that federal funds be certified, he added.

Fent said that not putting stimulus funds through the traditional budget process, beginning with certification, means that “low-level bureaucrats” are in charge of the federal money “and we have no idea how they’re spending it.”

“I want that illegal spending stopped,” he said.

Fent said the same issues apply to about $100 million in federal money over which the governor’s office was given discretionary authority.

Fent also questions the authority of a coordinating council appointed by Gov. Brad Henry to oversee the use of Oklahoma’s stimulus funds.

Assistant Attorney General Scott Boughton said the 1985 constitutional amendment was approved during a time when an increased amount of federal funding was coming into the state, and there were several court cases addressing how to handle the money.

Boughton said Oklahoma court cases from that period determined that federal money restricted to specific purposes, such as highways, did not have to be certified by the Equalization Board. He said the 1985 law covers unrestricted federal funds, not funds subject to restrictions. Boughton said stimulus funds are subjects to many pages of requirements as to what the states have to do regarding them.

Fent disagreed, arguing that the amendment approved by voters in 1985 added all federal funds to the certification requirement. He said a court decision to the contrary would violate the equal protection provision of the 14th Amendment to the U.S. Constitution by not fully protecting taxpayers.

Fent said the question is who has authority over such funds coming into Oklahoma, the state or the federal government. He said the attorney general’s office was arguing for the latter.

“This case is sovereignty versus federalism,” he said.

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