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The $60,000 Question: How Dustin McDaniel Spends Legal Settlement Funds

Updated: Apr 13

When we last left Arkansas Attorney General Dustin McDaniel, questions abounded over his use of state legal settlement funds.

The short of it: McDaniel’s office collects lots of money from legal settlements. The AG then turns around and doles that money out to selected good causes that, by coincidence, benefit him politically.

Many believe McDaniel’s awarding funds to such projects, selected and approved by him and him alone, is highly questionable, unaccountable and inappropriate. And probably unconstitutional.

Not sure what all this means? You’re not alone! So let’s see if we can walk it back and make more sense of it by focusing on one aspect of how the money is spent.

(If you’re a smart Capitol insider type, you probably know all this. This post is a primer for those Arkansas Project readers who meet the clinical definition of “numbskull.” Which is most of us.)

Here’s how it works:

1) The AG signs on to multistate lawsuits against pharmaceutical companies, manufacturers or other deep-pocketed types who are alleged to have wronged the public in some way.

2) Rather than engage in lengthy and expensive litigation, the targeted companies pay multimillion dollar settlements to make the lawsuit go away.

3) The various state AG’s who were parties to the suit then split up the booty—i.e., the proceeds of the cash settlement. I think they get big canvas bags of money with dollar signs printed on them.

4) McDaniel then stuffs his share in a drawer in his office, probably. Then he gets to spend it as he sees fit, without approval from legislators or anyone else.

Here’s a recent report provided to lawmakers detailing how legal settlement funds have been used this year (link opens as Excel file). It shows some $1.22 million in expenditures from the AG’s “Consumer Education and Enforcement Fund.” If you comb through the entries, you’ll likely see a lot of things that look more or less kosher—payments for court filing fees, witness fees, etc.

But then there are the entries that you look at and say, “Wait, what?”

For example, the report shows two payments totaling $60,000 disbursed on June 30, 2011, to Craig Douglass Communications for an “Internet Predator PSA” [i.e., public service announcement]. There are two line items for that $60,000—one invoice for $2,350 and a second for $57,650.

I requested the invoices from the AG’s office. The expenditures break down as follows:

Invoice #7191 ($2,350 for Internet Predator PSA)

  1. Project Manager $1,200

  2. Creative Director 450

  3. Copywriter/Editor 200

  4. Media Planner 500

Invoice #7193 ($57,650 for Internet Predator PSA)

  1. Broadcast Television Time $43,892

  2. Cable Television Time 9,009

  3. Broadcast Production Services 406.25

  4. Audio Voiceover Services 342.66

  5. Prime Time Spot Buys 4,000

According to the invoices, McDaniel spent $60,000 to produce and broadcast those 33 seconds. Since it’s paid from cash settlement funds, the legislators who ostensibly control the state purse-strings through the appropriations process have no say in how those funds are dispensed.

Which essentially means that whatever that dude in the video is planning to do to that teenager is roughly analogous to what McDaniel’s doing to the citizens of Arkansas when he doles out cash settlement funds. Ho! Zing!

BONUS: Craig Douglass Communications has been in the news before. Former Democratic House Speaker Robbie Wills sought to hire Douglass to run communications for the Arkansas House to the tune of $5,000 per month a couple of years back.

And in this fine July 2010 Arkansas Democrat-Gazette article (subscription required), political editor Bill Simmons offers a treatise on the AG’s use of cash settlement funds and notes that “More than $350,000 went to Little Rock ad man Craig Douglass over recent years for professional services” that included PSA’s and television buys.

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